Time to put Rogernomics to sleep

Roger Douglas

It is one of the mysteries of New Zealand politics how both the main parties remain so wedded to the neo-liberal economic policies of the 1980’s. After the Global Financial Crisis the only debate should be what do we as a nation replace them with. Instead like Australia, Britain, Canada and the United States we have a two party but single elite system bereft of innovative ideas and desperate to maintain the status quo. Both Labour and National tinker at the margins with welfare and taxation but neither will admit that the experiment with deregulated global financial capitalism has failed and needs radical transformation if any form of capitalism is to survive.

The Occupy Wall Street protests and the Arab Spring protests of the Middle East have a common theme. Both are against the cronyism, corruption and accumulation of money and assets by a small financial, political and military elite. Citizens of any country, particularly the middle class, can overlook a certain degree of avarice at the top as long as they feel they are getting an adequate share. But when any gains are flowing to a small group and the majority are at best static or slowly going backwards, cracks will start to appear. As former World Bank economist Joseph Stiglitz recently noted:

 “On one level, today’s protesters are asking for little: a chance to use their skills, the right to decent work at decent pay, a fairer economy and society. Their hope is evolutionary, not revolutionary. But, on another level, they are asking for a great deal: a democracy where people, not dollars, matter, and a market economy that delivers on what it is supposed to do.

The two are related: as we have seen, unfettered markets lead to economic and political crises. Markets work the way they should only when they operate within a framework of appropriate government regulations; and that framework can be erected only in a democracy that reflects the general interest – not the interests of the 1%. The best government that money can buy is no longer good enough.”

Critics of Rogernomics like Bruce Jesson, Brian Easton and Jane Kelsey all foretold the likely outcome of the deregulation of both the fourth Labour government and the following National government on a small vulnerable country like New Zealand. But critics were and remain labeled everything from Luddite to Communist.

A small group of idealogues took a blitzkrieg approach to reform and in a couple of years successfully embedded a new orthodoxy that remains today. They voluntarily submitted New Zealand to the same policies the IMF used to force on debtor nations with their Structural Adjustment Programmes.

This current National government, led by a former investment bank insider, wants to partially privatise many of the remaining State Owned Enterprises, like the late 1980’s selling them into a less than optimal market. Leaving aside the pros and cons of actually selling the shares and future revenue streams, who actually expects to get best price in the middle of an escalating financial crisis? At the very least assets of such quality should be retained until markets are stronger.

Even more importantly National with the tacit support of Labour are secretly negotiating away sovereign rights with the Trans Pacific Partnership, a re-run by transnational finance of the abandoned MAI of the late 1990’s. The TPP will expose New Zealand to predatory corporate power and speculative money like never before with little ability to retreat. This is its intention – to be irreversible.

Neither the public or even parliament will be allowed to see the terms of this binding agreement before it is signed. Under current convention cabinet has the prerogative of signing external treaties without consultation. This needs to change. There is no such thing as commercial sensitivity when it comes to a nation’s sovereignty.

Labour may oppose the privatisation plans but they are as committed as National to the TPP and globalisation agenda and their sticky fingers are all over the explosion in feel good private consumption and borrowing of the last ten years that have left New Zealand’s finances in such as precarious position. Yes Michael Cullen, our public debt might have been low under your stewardship but as Ireland recently showed, when private debt ends up on the governments balance sheet, the distinction is immaterial.

There is no real left or right in mainstream New Zealand politics, only a banal centre, for what deregulation and leaving the economy to be determined by market forces does is absolve politicians of responsibility – “There is nothing we can do”. The Prime Minister becomes a manager rather than a leader, a public relations face to whisper sweet nothings to market participants. In this respect there was no difference between Helen Clark and John Key. Helen the activist became Helen the obsequious the further up the political ladder she went.

This is what Jane Kelsey said of Rogernomics and globalisation:

 “The claim that ‘there is no alternative’ to the right wing revolution has, by sheer repetition, become accepted truth. But in fact this was not the only option available to the New Zealand government. It was simply the only option that had been conceived and promoted at the time – the option that enjoyed the patronage of the political, bureaucratic and business elites….

The mythology of globalisation is enormously powerful. It allows governments to abdicate responsibility for the consequences of their own policies, laws and practices; it justifies a refusal to consider alternative policies that might cause less harm to people, communities, and their environment.”

Is it any different this time round? The model of the last 30 years is broken. Fiddling with band aids won’t fix it. At what point do you admit the experiment just hasn’t worked for New Zealand and won’t be solved by fervent repetition of ideological clap trap? We need to be open to fresh ideas and not allow the debate to be framed by the same elites. The time may be nearing for a third party to tap into growing discontent, perhaps targeting the under 40’s and blowing the New Zealand political landscape wide open. The Green’s have scratched the surface but they are desperate to throw off the hippy dippy tag and will not promote anything that is too far from the current economic orthodoxy.

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2 comments

  1. […] In 2012 I wrote this piece; Time to put Rogernomics to sleep. […]

  2. […] for Andrew Little and the current New Zealand Labour Party to follow Jeremy Corbyn’s lead, to revisit their own history, and offer a financial alternative that will not take New Zealand to the brink of a debt […]

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