Having shared cups of coffee and conversation on the Terrace with John Key in his first term when Bill English and the rat pack were determined to keep this Johnny come lately from going anywhere, and thus for company he was reduced to that of the only Progressive Party backbencher, I would never have picked him as a keen student of history.
But his decision on funding the Auckland City Rail Link shows that it had dawned on him, perhaps through his advisers, that it has been public funding not private capital that has developed New Zealand. When big money has been needed to fund New Zealand infrastructure and thus the country’s development it is the state that has had to cough up the people’s money to do it.
Our roads, rail, air, maritime transport and electricity generation and supply, were paid for from public debt. The planning was done by state engineers, statisticians, economists, architects and surveyors.
There were no rugged capitalists in sight to get the work done or to pay for it. Like the Little Red Hen they waited for the cake to be baked or rather for privatisation when the risk had gone. The scale of the development tasks and the cost left only one agency capable of mobilising the resources and the funds – the state.
And that has been the history of the development of capitalism across the globe even in the land of the free.
Neither the funding nor the planning for the development of New Zealand could have been done by John Key’s mates at Sky Casino. Nor, as John realises, could it be done for Auckland Transport and the other big infrastructure projects that Auckland urgently requires.
And although I don’t want to go too far in suggesting that John has taken to reading I thought he may have been inspired by a passage in Capital Volume One where Karl Marx wrote on the role of the public debt as follows:
“… The only part of the so-called national wealth that actually enters into the collective possession of modern people is their national debt…And with the rise of national debt –making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgotten.”
That analysis would have been reassuring to the National Party Leader. Public money could be used but it would not undermine the rightful order of things and place the resulting wealth in the hands of the masses.
But even if the PM was inspired by Marx on the role of the public debt to finance development when he spoke to the Auckland Chamber of Commerce ( Key that is not Marx) and made his famous U-turn announcement, he only uttered the four letter socialist word “plan” when absolutely necessary as befits a free marketer.
He was able to satisfy his business audience that his state intervention was all about them and their welfare:
“The Business Growth Agenda is about providing Auckland businesses with the things they need to be successful. It’s about providing better market access, better access to capital and resources , better public infrastructure , and access to innovation and skilled people.”
He was then quick to assure his audience that the cost of delivering the City Rail Link and the other transport infrastructure projects would be met by the public through government and Council.
In other words, you won’t have to pay it will be part of the national debt. At this point it would not have been surprising if he had borrowed from Nixon’s statement at the time of his 1971 budget speech that “we are all Keynesians now.”
So the Herald’s free market cheerleader Fran O’Sullivan was not wrong at all when she crossly denounced those who saw Key’s announcement as driven by the need to get the Auckland vote.
More important for this journalist than the whining and babbling of the Auckland people about Auckland’s woeful public rail system was “leading Auckland-based lobbies …meeting(s) with Finance Minister Bill English…to emphasise the need to get on with the projects that will enable and service business growth in the city.”
So there we have it from the horse’s mouth! There is no need to fear under National the introduction of rational, economic, social and environmental planning to meet the needs of all, with the state playing a progressive and positive on-going role.
Nor should there be any concern across the country or in the financial centres of the world where “austerity” is the buzz word that in general these non-market led processes will replace the muddling and anarchic policy processes that have almost strangled Auckland. This will be a one-off. Funding via the public debt will be there when private capital cannot do the job.
But it will be worth it for at the end of the day the public will pay the bill and the fruits will be harvested by the business lobbies.
And when the debt is paid the profitable parts can be sold off. What a relief! I think John has done enough reading for now.
There are plenty of signals that the global financial and globalised economic system is on track to go kaput……. well not immediately, but some time over the next two years.
Oil is up again and the Kiwi dollar is down = another fuel price rise soon, and higher costs for practically EVERYTHING.
Furious money-printing by the US Fed and the BoJ (matched by NZ) simply exacerbates the long term predicament. It does, however, provide a façade of normality in the short term to uninformed proles, who have never heard of bonds, yields, derivatives etc. and don’t care.
I see that NZ is the second fattest nation on Earth. So much for overeating whilst lounging around and watching sport instead of walking/cycling. The coming epidemic of diabetes and heart disease are just another pile of extra straws ready to break the camel’s back.
On the matter of funding, once you understand that all money is created out of thin air, the mystery of how this Ponzi system keep going is solved. It’s finding the interest when you have a contracting economy that is the problem, as numerous nations around the globe are discovering.
I’m sure the politicians will do their best to dig the hole we are in a lot deeper over the coming months.
Yeah if he continues to read he’ll find out that there are a few billion people out there who realise they paid for it all and want to take it back and put it to good use, honkey batches in Hawaii included.
Ok . To be fair , I’m in a hurry and I only read the first few paragraphs of your Post Matt Robson but you say ‘ Public funding ‘ paid for our country’s infrastructure ‘ not Private Capital .
So , where do you think our ‘ Public Funds ‘ came from historically ?
Tourism ?
Small , overly protected urban Industry ? The kinds of Industry that are getting a hammering from a ( rightfully ) high value NZ dollar and fierce off-shore competition which is seeing off Kiwis to AU at a rate of about 1000 a week as urban industry sheds it’s workers like autumn leaves ?
Or Agriculture perhaps ?
If it was agriculture , how did Agriculture-generated foreign currency become ‘ available ‘ to be spent on ‘ Public Funding ‘ ?
And how much of that foreign currency generated economy was diverted into non agricultural ‘ Private Capital ‘ ?
Where did Auckland come from again ? ( No disrespect to you Aucklanders . I actually like Auckland . It’s not your fault . )
Has anyone of you brilliant minds with pens , pads , computers and everything thought about looking deep into the history of NZ’s Primary Producer Boards ? You know ? The Wool Board , the Meat Board and the Apple and Pear marketing Board ? And who were the Board Members and what outside-interests did they have ?
Have you thought about Wattie ? Fletchers ? The BNZ ? Fay / RIchwhite ? Brierly ? Etc etc ?
Have you noticed how most of those guys now live off-shore and we Kiwis are broke as bro ?
Ahhh , the great New Zealand institutionalized Lie . When will you ever see the light of public scrutiny ?
You Jurno’s ! Man-Up ! Not Man-Ban . You’re barking up the wrong Neo-Liberal traitor .
The printing of money. Labour did it in the 1930s but, unfortunately, they let the banksters take over afterwards and now we’re in deep shit. All we have to do is take back that function and we could have a rational economy again.
Think about it, we already own all the resources in NZ and so all we have to do is direct the people into using those resources and the tool we use to do that is money. All we have to do is print the money and we get the direction desired. Of course, to choose the direction we need democracy.
That is why Key et all are so keen to sell off these resources and assets – it is the only way to make NZ completely beholden to the corporate controlled ‘actual’ global government
Yep, the more we sell to foreign owners the more serfdom increases in NZ.
And the agriculturalists entered Parliament and passed laws to direct money toward building the ports, roads, agencies and services, education and all the other goods that profited them.
Didn’t they?
Wasn’t there a virtuous closed circle going on for many years until the Great Unwashed thought thoughts about getting a few slim slices of the cake and got politics?
Hasn’t changed much.
Frack me dead.
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