Tamihere on ‘a less equal society’

I think it is difficult to pin down just what equality or inequality mean. It can be quite misleading and misused.

A country in which everyone lives in poverty have a form of equality.

Generally, countries in which people can and do get richer have on average improved standards of living for most people at least.

John Tamihere (NZH): The fruits of 30 years – a less equal society

What were – and are – the major drivers behind the major wealth redistribution that has occurred over 30 years across OECD countries?

The policies that delivered this massive redistribution of wealth requires a look.
In the United States it was known as Reaganomics, and in Britain as Thatcherism, after US President Ronald Regan and UK Prime Minister Margaret Thatcher.

The two powerhouse economic leaders set a course that led to an economic framework based on globalisation and underwritten by supply side economics.

In this country, the incoming 1984 Labour Government took these policies and put them on steroids. It was known here as Rogernomics, after Finance Minister Roger Douglas.

The policy foundations are known as supply side economics or trickledown economics. They are underpinned by the pillars of deregulation, privatisation of public assets, monetary control leading to low interest rates, labour deregulation – in large part the destruction of labour and unions and also lower taxes particularly for the wealthy.

The Rogernomics blitzkrieg promised a more efficient and effective delivery of state services. It offered the breakup of state monopolies so that entrepreneurial New Zealanders could dream to start their own business and become self-made millionaires.

Few people argue against major and urgent reform being necessary in the 1980sn in New Zealand. Muldoon had just about destroyed the economy as the country struggled to trade after the United Kingdom ditched us and swung towards Europe.

We didn’t exactly have equality then. Some, like farmers, got unequal amounts of government assistance.

Major reforms like we had can’t avoid negative effects, unintended consequences and collateral damage. Subsequent tweaks have to be made to limit the damage.

The argument was, once we built a more efficient and effective economy, wealth retained by the Government could be redistributed to build wealth for all New Zealanders.

The magic in this policy framework was that all New Zealanders lifestyles would lift and be so good that by the late 1990s we would be the ‘leisure society’ working four days or less a week.

I don’t remember those promises. I was too busy (very busy) working and raising a family.

Funny coincidence just this week: Four-day work week ‘liberating, empowering, exciting’

Tamihere:

So apart from tourism doing outstandingly well – which is all about the race to the bottom
in importing cheap labour to make coffee and serve tables – dairy, beef lamb, fish and forestry are still a significant backbone of the New Zealand economy, even after trickledown.

People that have done extraordinarily well out of the trickledown of course love the status quo and likely have a say over their 40-hour employment contract, and earn enough to feed, clothe, educate and house their families.

While we have low employment, we have thousands of New Zealanders on low incomes who are underemployed because to be efficient and effective you must ensure as the trickledown starts its downward spiral, less and less gets through to the bottom.

That sounds like nonsense – the keeping people poorer to stay richer fallacy.

We do have one type of inequality that’s growing – the inequality of Working for Families that redistributes money from workers without dependent children to everyone with children, including many quite well off people.

So this article has nothing to do with decrying those who work hard and earn a lot. It has everything to do with asking the questions. What sort of society or country do you want to live in? Are you comfortable seeing fellow Kiwis on Struggle Street sleeping in cars and under hedges? And are you comfortable making significant profits, having the whip hand over wages, hours, conditions and therefore the livelihood of your fellow citizen.

What about: Are you comfortable taking significant financial risks and working your arse off to provide jobs?

We’ve seen a major collapse in integrity and credibility in business leadership in this country, whether it was the collapse of the finance houses or whether it was the captains of industry who sat on the district health boards and pretended that everything was okay. That wages for nurses were good and that buildings that housed patients were fit and healthy for purpose.

While there have always been examples, have we really had “a major collapse in integrity and credibility in business leadership”?

We all know differently. We know that in every sector of our community, the great underwrite for this country was that everyone was able to have a fair go. I’m not sure that is the situation.

A fair go can only exist in an open, transparent society. The only institution that can reassert a fair go is the New Zealand Government.

There’s some interesting comments on this at Reddit:

Excellent article, which does a good job of highlighting the fact that inequality is not a partisan issue. The financial deregulation of the 1980s (“Rogernomics”) was a Labour government initiative, and National has spent the best part of the last decade promoting it.

Now, after 30-odd years, we’re all running around looking for someone to blame for the results, but what we really need to do is take a look in the mirror and ask ourselves some serious questions about how we let things get to this point, and what we can do to fix it. Witch-hunts are incredibly unproductive.

And:

That last sentence is important I feel. The previous government took things to the penultimate point and tried to use industry and capitalism to fix all society’s problems (health, housing, corrections, education) which was an abysmal failure.

Capitalism is awesome and a fantastic system in many ways, but it cannot fix all problems and cannot entiry self regulate. So the problems now are far to big for any industry sector to tackle and require significant government intervention. To those who argue against this…well why did you (yes you) let things get so bad under the system of the last 30 years. There was ample opportunity to ensure fair distribution of societal gains to prevent the current disaster in mass inequality, but humanity is selfish by design and needs to be checked.

There have been failures for sure, but have things overall been ‘an abysmal failure’?