Wayne Mapp on New Zealand neo-liberalism

Wayne Mapp has responded to Mandy Hager’s A calculated feeding of the beasts within.

I appreciate it is an article of faith for the author of this item, as well as most the commenters, that New Zealand is in the grip of a neo-liberal hell hole, and that anyone who contests this is deluded.

So for mhagar her approach to anyone who might disagree with her is to state;
“ok, lets deal straight away with the first obvious distracting argument that might erupt that New Zealand under the current government cannot be labelled as neo-liberal.”

To begin with not, it is not a distracting argument, her whole thesis is built on the assumption that the government is neo-liberal, she cannot wish away those who might contest that.

She cites the British Dictionary definition that neo-liberalism is “a modern politico-economic theory favoring free trade, privatization, minimal government intervention in business, reducing government expenditure on social services, etc.” and broadly speaking I would agree. But it is important to note that the whole package is required.

After all the GATT, since 1947, has favored free trade, as has the EU for all its members. So one element is not enough.

I think it is probably fair to characterize the Roger Douglas reforms and also those of Ruth Richardson as meeting the test of neo-liberalism.

But is it true of Helen Clark and John Key? Because it is really necessary to label Helen Clark as neo-lberal in order to stick the same label on John Key

The last Labour govt rolled back the ECA, it introduced Working for Families, interest free student loans, income related rents for Housing New Zealand houses, Kiwisaver, created KiwiBank, did a buy back of KiwiRail and air New Zealand. She increased the top tax rate from 33% to 39%.

However, she did not bring back compulsory unionism, or restore all benefits to pre 1991 levels. And she did not try and turn back New Zealand to its pre 1984 condition with massive government ownership of much of the economy, exchange controls, high tariffs and import controls. And for many commenters on this site because she did not do that she is neo-liberal. And they want Labour to apologies for her. Mind you if Labour did the majority of New Zealander s would think Labour had gone mad. To some extent David Cunliffe did apologize, but Labour got the expected electoral verdict.

For Helen Clark to unwind pretty much everything since 1984 would have meant opting out of much of the worlds economy. The closest analogies are Argentina and Venezuela, not notably successful economies.

In my view John Key has been an incrementalist. He has reversed very little of the Helen Clark reforms, though he has modified them. So there has been the 90 day bill (pretty much modeled on Germany and Scandinavia), some limited partial privitisation, and more direct intervention for welfare beneficiaries, a reduction of the top tax rate from 39% to 33%. He has restrained the growth of government expenditure so that it hovers around 33% rather than 35 or 36% of GDP. Even so large scale borrowing was required yo sustain government expenditure during the GFC, in the order of $35 billion. In contrast the tax cut was $4 billion, so the bulk of the borrowing was to maintain government expenditure generally.

There is a reason why most commentators, including Brian Easton (hardly a right wing economist) do not see John Key as neo-liberal. He has just not been radical enough to earn the label.

Mhagars critique of the current state is rather different. It is more about the modern style of life. In her view “we are encouraged to live shallowly, selfishly, devoid of compassion for our neighbors and suspicious of everyone.” In addition she sees modern New Zealand as having no place for arts and intellectuals. At least on the last point that is hardly any more true of New Zealand than it has ever been. Surely the 1940’s and 1950’s was far more conformist and resistant to intellectual life than the modern era.

Her view is a bit of a caricature of modern life in New Zealand. Certainly where I live in Bayswater/Devonport there is a strong sense of community. But at least I can understand why someone might have that view.

There is a plethora of consumerist advertising, with the internet and mobile communications encouraging a more personal life. Traditional sporting clubs and community activities are on the wane (not that many on the intellectual Left actually like the style of Clubs such as RSA, Lions, Rotary, Rugby clubs, Schools PTA’s, Workingman’s and Cosmopolitan Clubs).

I would also note that many of the regions do not provide the job rich communities that once existed. Farming, forestry and fishing are more large scale. Public works projects such as roading, etc are much more capital intensive with far fewer manual jobs.

But coming back to Hhagars core point about the nature of modern life. Is that a function of neo-liberalism, or is it a function of technological and social change the world over?

Mapp ends up making a simlar point to me in “The social democracy of my youth has so radically collapsed”.

Neo-liberalism has been a small part of complex social evolution. And even if it could be attributed to isolated polotocal politices neo-liberalism can’t be undone.

Next Post
Leave a comment

1 Comment

  1. Alan Wilkinson

     /  6th February 2015

    Francois Hollande best deserves the Neo-liberal tag at present having first tried the opposite policies and wrecked his economy.

    Reply

Leave a Reply to Alan Wilkinson Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s