By Chris Trotter*
In a year of important elections, some already held, some yet to come, one common factor has become very clear. The ideological shift that rescued mainstream political parties from the seemingly endless crises of the 1970s has, in the intervening decades, become a serious electoral liability.
Neoliberalism may have provided the political mainstream with the circuit-breaker it was looking for in the 1970s and 80s, and its success in burying the social-democratic orthodoxy of the post-war era may have provided mainstream politicians with a field cleared of credible opponents, but the problems its adoption was supposed to solve have not disappeared. Indeed, many have grown.
Certainly, 40 years on from the Snap Election of 1984 and the neoliberal revolution it ushered in, New Zealand’s mainstream parties stand in urgent need of a new circuit-breaker. If a tsunami of radical populism is not to roll over the centre ground, then a new set of answers is required to the key questions of democratic politics: “What is possible – and what is not?”
Since the late-1980s, for example, nationalisation, or even significant public ownership of key infrastructure and services, has been rejected outright as politically impossible, or been characterised with some asperity as the least effective alternative to untrammelled private ownership. At virtually level of government, and regardless of the manifest severity of key infrastructural failures, both legislators and administrators continue to shy away from the most obvious and financially rational solutions.
Since the state is far ahead of all other borrowers in terms of how much it can borrow and at what cost, it makes obvious sense for it to take over New Zealand’s “three waters” and carry out the necessary upgrading and extension projects that long ago exceeded the ability of local authorities to finance. Cost recovery could be negotiated with the local government sector over a period of sufficient length to render it fiscally bearable. Easy-peasy?
Apparently not. That the option of straightforward nationalisation was never considered seriously by either Labour or National bears testimony to the remarkable persistence of the neoliberal vision. Even in the United Kingdom, where the privatisation of water is an accomplished fact, the abject failure of the experiment – as attested to by the open sewers that were England’s rivers and streams – has been insufficient to make nationalisation the preferred option of anybody except the voting public.
Restoring the organised working-class as one of the great “estates” of the realm has similarly been dismissed as impossible by the neoliberal clerisy. Their reticence on this subject is understandable, since it was the growing power of the trade unions in the advanced capitalist states of the 1960s and 70s – especially their real or potential influence over the major parties of the Centre-Left – that made the identification and introduction of an ideological circuit-breaker so urgent.
New Zealand’s destruction of organised labour in the early 1990s was of a thoroughness unequalled in the democratic West. Over a period of 30 years, union density declined from just under half the workforce to less than 10 percent. Take out the unions representing teachers, nurses, salaried medical specialists and public servants, and the percentage of private-sector workers enrolled in trade unions shrinks away to something not much better than nothing.
Except that, as is so often the case with the neoliberal “reforms” of the past 40 years, the cure for the apprehended “socialist” disease has proved to be worse than the complaint. The elimination of union power removed one of the most powerful drivers of productivity. By making it possible for employers to keep wages low, investment in more efficient plant and machinery, and the uplifting of employee skill levels, could be more-or-less permanently deferred.
The consequences of making it possible for businesses to ‘live’ with low productivity are clearly illustrated in the widening gulf between wage levels in New Zealand and Australia. That this differential (upwards of 30%) acts as a powerful magnet for what skilled workers New Zealand has left, not only strips the country of the people best placed to lift its productivity, but also entrenches its status as a low-skill, low-wage economy. The downward spiral becomes self-reinforcing.
The stripping-out of New Zealand’s manufacturing base, justified by the neoliberals’ unbreakable attachment to the Eighteenth Century economic doctrine of “comparative advantage”, may have offset the effects of declining real wages by lowering the price of manufactured goods, but it also robbed the New Zealand working-class of the pride and dignity that attaches to those who make real things in the real world. Emptying container-loads of manufactured items is a poor substitute for the satisfaction derived from participating in their creation.
Allowing your best and brightest workers to seek a better life elsewhere, while allowing the self-esteem and skill levels of those who remain to fall in unison, is a recipe for socio-economic polarisation. It encourages those positioned higher on the socio-economic ladder to look down on those below them – a disdain which is all too easily translated into self-reproach and self-loathing by those so regarded. Just because the comfortably positioned in the social hierarchy do not have to endure the hidden injuries of class does not make them any less real.
New Zealand was once a society in which the exploitation of citizens was deemed unacceptable. The most dramatic illustration of this determination to be a nation in which few were rich and none were poor may be found in the story of Dunedin’s “sweated” tailoresses – women paid starvation wages for sewing garments all day and late into the night.
An 1888 sermon, “The Sin of Cheapness”, penned and delivered by local clergymen, the Rev. Rutherford Waddell, inspired a local journalist to take up the tailoresses’ cause in The Otago Daily Times. At a public meeting the following year middle-class and working-class activists, acting together, decided to form the Tailoresses Union. In 1890, the New Zealand Government felt sufficiently pressured to set up a Royal Commission of Inquiry into “sweated labour”. Legislation followed.
A Christian preacher, a crusading journalist, a conscience-stricken middle-class, an energised working-class, New Zealand’s first union for women, a Royal Commission, legislative reform, socio-economic change. In 1888, all these factors contributed to defining the realm of the possible in New Zealand.
It was precisely to reduce the constantly expanding scope of what was considered possible, and to address the radical implications of such expansion for the social and economic future of the nation, that persuaded so many powerfully placed New Zealanders to unleash the neoliberal revolution of 1984-1993.
Few would argue that they did not succeed in lowering Kiwis’ expectations of what their society, their government, and they, themselves, were capable of achieving. This shrugging-off of what were depicted as excessively onerous collective responsibilities made it much easier to believe that individual success had been made correspondingly easier, and that individual failure, while regrettable, was no longer society’s business.
But, 40 years on, are we really better off for living in a political environment where so little is considered achievable? What would it be like to live in a country where a single sermon could prick the conscience of the comfortable? Where a journalist could rouse a whole city to action? Where the government could be made to respond to the people’s concerns. Where real change was possible?
And we could make it.
*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. He writes a weekly column for interest.co.nz. His work may also be found at http://bowalleyroad.blogspot.com.
48 Comments
Most journalists - including Mr Trotter, are blind to reality.
The first move would be to get them to up their game.
https://onlinelibrary.wiley.com/doi/full/10.1111/jiec.13442
That - note Figure3 - is what is impacting western civ currently.
You can read about the Simon Abundance Index here. Simon was the guy who won the famous bet against Erlich about how resources would get more expensive as they were used up. Simon said that was crap and won the bet ten years later.
The key is in the title of this post, The More Resources We Consume, the More We Have, which makes clear the fact that "natural" resources are actually the resources of the human mind. It was a big deal when humans discovered they could turn sand into glass for windows. Now we turn it into fibre optics, as just one example.
As such you may get you wish about de-growth via the peak and then fall of the global human population that is about twenty years away from happening and based on demographics like falling birth rates that have proven correct in the past for individual nations like Japan. We don't like children anymore.
Amazing how the Club Of Rome crowd never learned anything from their failed predictions:
Between 1980 and 2020, the average time price of the 50 commodities fell by 75.2 percent and the world’s population increased by 75.8 percent.
…
for the same number of hours of work that would have bought our worker a pound of wheat in 1980, he or she could have bought 4.18 pounds of wheat in 2020. Resource abundance of the worker rose by 318 percent, growing at a compounded annual rate of 3.64 percent, thereby doubling every 19.4 years.
…
[T]he calorie supply per person rose from 2,497 in 1981 to 2,928 in 2018, or by 17 percent. In Africa, the world’s poorest continent, the calorie supply per person rose from 2,238 to 2,604, or by 16 percent, over the same period. That’s higher than the Portuguese calorie supply in the early 1960's.
What would it be like to live in a country that didn't import record numbers people last year to do the work of those who had been on the Jobseeker benefit over a year.
https://www.nzherald.co.nz/nz/jobseeker-benefit-more-than-half-of-18900….
Yes, totally agree the net inbound immigration rate is unsustainable. It also drives down wages and is a major factor in the housing and infrastructure deficit.
However, our capitalist system with the OCR and minimum wage requires unemployment. i.e. it is government policy that creates the unemployment - people are unemployed through no fault of their own (even without considering immigration).
We need to move to government guaranteed jobs or a UBI, or even free training as some Scandanavian countries provide.
We want a productive society. Dumping people into unemployment is the antithesis of productive.
2% to 3% unemployment is no issue for either the individual or for society so long as it is a rotating pool and not the same people unemployed long term. The far far bigger problem is the disintegration of work ethic amongst the younger generation (more fun to go for a surf and smoke a couple of joints than to get up for a 6am shift). Plus many of our most talented and motivated workers have been leaving for greener pastures, as indicated by the immigration statistics.
We want a productive society
That's a capitalist sentiment if I ever heard one.
We havent, and wont always have only 2-3% unemployment. Its historically been >10%.
We want a productive society - its the way the world runs at the moment, until AI takes all our jobs.
Also, can still be productive while setting policy using socioeconomic cost benefit assessment so that the best policies are put in place.
"New Zealand was once a society in which the exploitation of citizens was deemed unacceptable. The most dramatic illustration of this determination to be a nation in which few were rich and none were poor may be found in the story of Dunedin’s “sweated” tailoresses – women paid starvation wages for sewing garments all day and late into the night."
That has never been the case. New Zealand has exploitation and discrimination exemptions even written into our Bill of Rights. To this day many workers can legally be paid $2 an hour which does not even cover the costs of transport to work. Even MoH support workers are funded to below minimum wage and it is assumed they will not be paid sick leave or holidays or public holiday pay (it is not funded). So lets be clear NZ loves exploitation and abuse of people. NZ laws have it written in stone and even the last 2 governments set to continue and increase the extreme levels of abuse. NZ still has not corrected for the ongoing torture of survivors with the Abuse in Care Royal Commission. So not only did we exploit people we also set up industrialized extreme levels of torture with some facilities bearing mass unmarked graves and people who would disappear in them. Such harm was perpetrated against them often for pleasure and we are still in breach of the UN conventions against torture. There has never been a time in which NZ was truly egalitarian and much like the green fake image the idea of everyone having a fair chance and opportunity for essential things like education, work and access to living needs has never been the case.
What a load of nonsense. Too much to reply to.
NZ was very much egalitarian - one reason they flocked here from the UK. As a child the homes in our street were occupied from the complete range of worker types and their homes were only marginally different.
The greed has come in more recent times. The ww2 vets were probably the last of the generations that did not base values on the $.
This happened on Labour's watch, where they got distracted off into the blind alley of identity politics. They had a once in a generation chance of reforming the supermarkets, building suppliers and working conditions but completely muffed it.
They need to get rid of Hipkins and the top rung like mad-dog Jackson and word salad Tinetti and go through a thorough self-examination, and come out the other end returning to where they started, as a reinvigorated Labour movement.
Boomerism and the belief in the housing ladder has made us too scared of risking change. We don't get change because the majority are too loss averse.
It also does not help that global (mostly Western) forces are also trying push us in this direction.
We will get change when the West (EU and US) collapse but it wont be good change.
It is all about political will. Too often and too many anticipate opposition to the point they never try. Sometimes it take a little time for people to wrap their minds around the need for change, what it needs to look like and how it will be implemented. That doesn't mean it can't be achieved.
But having said that it would be clear that vested interests and powers would seek to protect and preserve their power and privilege. The lengths they would go to can be extreme.
With Luxon as PM the coalition has a slight advantage in that he is new, not carrying baggage and has not been there long enough to make any great enemy amongst the partners. There is though not quite the same measure between those partners. This coalition too was advantaged by the prospect of the alternative being offered by Labour as being frankly, quite scary and the subsequent antics and upheavals in the Green & TPM parties fully justify that apprehension, for want of a better word. Therefore while the left side of NZ politics remains to be shoddy and not credible, the present coalition just needs to maintain plain sailing so to speak. If they remain cohesive they will have the ability to formulate longer term plans and legislation for a second term.
Luxon's problem is Starmer's problem - Trotter's oversight is NZI'S oversight.
This isn't left versus right - the only question in the room is sustainable versus unsustainable.
All of them, current Greens included (although they are closer to what's needed than any of the others. This mob will disintegrate under the inevitable pressure of the next couple of years - they out of their depth by some margin.
The greens are freaks. At their core they would disinvent the wheel.
What is really needed is a vision to wind back the population while winding forward technology. This is a reallocation of resources, not the development of more or continuing growth. It is using the best of technology to create efficient use of resources while winding back the excesses. It is about being able to create balance with the environment.
Can it be done? It will take huge courage and vision. It will need to face down powers like banks and corporations as well as foreign governments. But is it unachievable? I would like to think it could be done.
In 2024 we probably don't have technology capable or cheap enough to displace much of our menial labour jobs.
So you'd need a baseline number of people to do that in your population, and then another cadre of people to perform whatever extremely high yielding vocations you'd need to cover a reducing population. And work out what those high yielding jobs/industries are (this one's the one that's easier said than done).
The other way to have less people is just to accept further lower living standards.
while I understand your logic I disagree with the premise because that would just create a further stratified society of elites and the rest. It would possibly happen anyway, but I believe the goal should be one of equality. The challenge will be to establish a reduced population target and put in place measures to achieve it. I think to a degree some menial labour would always be needed, but I also think that it has always been undervalued. If the labour is so necessary, why are we only prepared to pay so little for it?
A reduced living standard might be needed in the end, but that should be for everyone, not just some.
If the labour is so necessary, why are we only prepared to pay so little for it?
Because the barrier to entry is so low. As it is, our fairly high minimum wages are a bit of a disencentive to doing more valuable work. Why would I want to be store manager for 50 cents more an hour, when I can push a trolley round the carpark.
The barrier to entry for most jobs is pretty low. Most apprenticeships don't need much other than a commitment. But a lot of those 'menial' jobs ultimately are not really 'unskilled'. The skills gained from experience are valuable as is the commitment to continue doing the job, yet the pay is still poor. But again although modified, if the job is so necessary and with experience and a good work record why is the pay still so poor?
I should add that my personal benchmark that sticks in my mind is aged care workers. But cleaners are another example.
+1 Neoliberalism has screwed over US, UK, NZ and Australia. Further supported by unsustainable immigration.
300,000 hhs in energy poverty, 480,000 foodbank customers/mth, very high rent/income ratio, approx 28,000 waiting for social housing (wait list + those in emergency housing. NZ needs:
- Comprehensive capital gains tax + gift tax + inheritance tax with reduced personal & business taxes
- Net inbound immigration rate managed down to a sustainable level
- R&D spending increased to at least above the OECD average
- Address the immediate housing crisis (zoning 30 years land doesnt address the immediate shortfall)
- The government to build 28,000 social houses (not the 1,500 proposed by National)
- The energy poverty issue addressed.
- The foodbank issue addressed - these shouldn't exist in NZ
- Policy set by socioeconomic cost benefit assessment not by the funding power of political donors.
This is really interesting:
Nationalisation does not cost taxpayers anything
https://www.youtube.com/watch?v=eE1XN4IQyzU&t=210s
As long as the nationalised entity is set up to make enough profit to cover the interest on the govt bonds and the bonds are rolled over, then the capital value of the bonds will effectively deflate to near zero over time meaning very low cost to the taxpayer.
Comprehensive capital gains tax + gift tax + inheritance tax with reduced personal & business taxes
You'll be coming back when these are passed I assume - and you'll be bringing your skills and expertise, plus all your money, yes?
You'll have to, because people with all those things will be escaping even faster than they are today.
The energy poverty issue addressed.
If you're supporting the building of nuclear power plants to supply the 300PJ of new electricity we'll need to scrap oil, coal and gas usage then YAY!
But I suspect you mean more wind and solar farms. (:
Most OECD countries have capital gains taxes. NZ is an outlier.
In terms of energy poverty it is a matter of making power affordable to 300,000 households so they can heat their houses rather than fill up the hospitals with sick people and soak up real health care resources.
You actually need a fundamental shift in the silent majority to change things. Democracy is really just a populist overlay sitting on top of the same heirarchical setup that's dominated larger groups of humans for a millennia.
Most of us will just shuffle about our days then put our hands out for some crumbs when things are desperate.
Actual change needs a great deal of time, sacrifice and determination.
Even in the United Kingdom, where the privatisation of water is an accomplished fact...
As it has always been in France.
... it was the growing power of the trade unions in the advanced capitalist states of the 1960s and 70s...
It's been some time since I looked at the stats but IIRC unions were actually growing weaker as Western economies moved away from the industries where unions had first appeared and where they still dominated. No industry, no union power.
On a personal level, in the early 1980's, me and all my mates, including any number of working class youth, could not stand the unions and did everything we could to keep away from them - and keep them away from us. We viewed them as over-bearing and petty ("Don't move that cable, you're a member of the Boilermakers"), who actually weren't very good at getting us pay increases because the industry was slowly going down the tubes.
An 1888 sermon, “The Sin of Cheapness”, penned and delivered by local clergymen, the Rev. Rutherford Waddell, inspired a local journalist to take up the tailoresses’ cause in The Otago Daily Times.
These endless paens to the past by Mr Trotter are having no more effect now than they have over the last forty years and there's a reason for that, recently covered well in this City Journal article, The March of Dimes Syndrome, where people hold on to their movements but shift causes:
The March of Dimes syndrome is an ancient social affliction that is especially virulent today and destined to get even worse. Kings, generals, and high priests have always tried to maintain power by declaring new crusades—new enemies to conquer, new sins to extirpate. But it has gotten steadily easier for leaders to rally the public because of another phenomenon, known as Spencer’s Law, named after the Victorian sociologist Herbert Spencer, who observed a paradox in the reform movements of his day to combat poverty, hunger, child labor, illiteracy, and alcoholism.
These problems were widespread in Britain at the end of the eighteenth century. Then, as the Industrial Revolution lifted incomes during the nineteenth century, the working classes saw a dramatic improvement in their diets and living conditions. By mid-century, most Britons were literate because children were going to school instead of being put to work. Alcohol consumption fell dramatically. But it was only late in the nineteenth century, after so much progress had already occurred, that reformers captured the public’s attention with campaigns to help the needy, mandate universal education, and pass temperance laws. “The more things improve,” Spencer wrote in 1891, “the louder become the exclamations about their badness.”
Finally from Tales Of The Realm of the Possible, comes this story covered on Radio NZ just recently about the Mowbray brothers creating a business from nothing as teenagers to being worth billions, the ZURU company.
I'd never heard of them before, but they took a $20,000 loan from their dairy farming parents, went to China in 2004, bought a plastic extrusion machine and created a toy company, and more from that. Didn't speak Chinese or know much about running a business, slept on the floor in the same room as the machine, and so forth.
Now look at this response to that story over on The Daily Blog with a comment from one “National are squeaky clean”:
I wonder whether this business who donated thousands and thousands of dollars to the National party will trickle down their wealth, as promoted by right wing supporters?
I’m banned over there but would have asked him why the Mowbray’s should donate money to parties full of people like him who hate their guts?
Moreover I would point out that with thousands of Lefties like him in NZ, with that mindset, it’s not surprising we don’t have more Mowbray’s and Zuru’s and that instead of screaming about higher income taxes and wealth taxes on “rich pricks” and nationalising businesses and entire industries to be run by bureaucrats, a better idea would be to see what they hell we can do as a nation to get them setting up factories here instead of in China. Perhaps nothing, but surely they’re reaching the stage in their business where the low-wage economy of China is no longer the crucial factor it may have been.
On the other hand if we continue to lag we may one day find that the Mowbray’s of the world are willing to build factories here and employ New Zealanders – because our wages will have fallen relatively to the extent that we’re the new low-wage source.
Naturally the likes of “squeaky” will be unhappy about that, while never recognising their role in making it that way.
Pumped hydro storage by a state owned entity is a good idea and should be followed up. Renewable energy storage is one of the missing pieces in the renewable energy puzzle.
The reconstruction of refinery capacity for aviation fuel, bitumen, diesel and hydrogen fuel is another piece in the puzzle.
Subsidies for the construction of prototype biofuel plants to use forest waste and a carbon credit type subsidy scheme for the transport of forest waste would also be a good idea.
A judicious mix of state subsidy and private enterprise is always possible to fix the energy problem, but clear thinking and the ability to navigate the roadblocks of vested interests is required.
I fear Mr Totter you ignore why NZ chose the path it did....we were becoming the outliner (rightly or wrongly)
The neoliberal era wasnt ushered in by Douglas et al but rather the economies of the US and UK...and 3 million at the bottom of the world were in no position to buck the trend (unfortunately..though we didnt need to adopt the cause de jour so emphatically, a la OZ)
We will again wait until the major economies reset to something other before we abandon neoliberalism (likely belatedly and poorly) unless it all turns to custard first...a highly likely proposition
This is brilliant.
The mathematical lies neolieralism is based on.
Economists should learn to think.
https://www.youtube.com/watch?v=CSofNexjQxI
This is where we'll be in 2029 or 2032 as we await a shiny new Labour-led government:
Lord (David) Frost is in suitably scornful form this morning in the Daily Telegraph (£). He takes aim at the idea, set out in yesterday’s Labour manifesto, that economic growth can be lifted from its torpor by a mass of councils, committees, agencies and the like, all directed from Whitehall but working, somehow or other, in “partnership” with private sector firms. As he notes, Starmer and the rest of them have learned all the wrong lessons from lockdowns, and in fact they liked the lockdowns precisely because of the ability to order the public around, to mark their movements and somehow command innovations (vaccines) by clapping one’s hands together. The headline of the article is excellent: Lockdown is the inspiration behind Labour’s ‘plan’ for growth.
Sounds a lot like the suggestions of Chris's article and more than a few commentators as they praise pre-1984 NZ (even as they undoubtedly curse the ultimate product of that world, Mr Controller Muldoon).
The article goes into the sad Yin-Yang history of Tory and Labour governments through the 1960's and 1970's. I have the terrible feeling the 2020's and 2030's are going to be like that for NZ.
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