Fear of Democracy


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Opposition to the Labour-Green electricity pricing plan reveals a basic truth. Our neo-liberal establishment is fearful of the democratic process. The language used by National Ministers, business commentators and most of the mainstream media takes me back to election night 1993.
Under first past the post the Alliance and New Zealand First with two seats each almost won the balance of power. They drew 18 per cent and 8.5 per cent, respectively, of the popular vote. Effectively, therefore, over 25 per cent of voters had opposed continuation of the neo-liberal agenda (New Zealand First`s anti-corporate nationalism was quite strident at the time). Mike Moore`s Labour Party proposed a three way coalition against National. But with special votes to be counted in two marginal seats Prime Minister Jim Bolger was showing few signs of leaving office.

The election aftermath was constructed by television as a potential financial catastrophe. On TV One news Monday November 8, news reader Judy Bailey declared that `our political leaders all shared a common fear on election night. That was the likely impact of a hung Parliament on the financial markets`. Footage of of a foreign exchange dealing room replete with screens, keyboards animated phone conversations was accompanied by Ewart Barnsley`s voiceover, `They say this was quite a day on the finance markets. Voters not only delivered a hung Parliament on Saturday,they delivered the one thing the finance markets hate…uncertainty`.

Clearly, the financial markets did not respond well to the election night result. In just a few hours over four and a half billion New Zealand dollars was wiped off the total value of listed shares. On Tuesday 3 News interviewer Bill Ralston asked corporate CEO Douglas Myers this question.` Does it worry you that Jim Anderton and Winston Peters and their supporters now hold in effect the balance of power?`. After Myers replied in the affirmative Ralston posed another question, `Would you prefer to see a fast election then, which maybe restored some kind of government balance?` Myers then stated that business wanted `a position of stability` and that `we are now in a position where we are going to have some instability`.

Mainstream news coverage implied that the hung Parliament had caused market panic and a fall in share prices. In other words the election outcome had disrupted the normal workings of the (financial) economy, democracy had exceeded its brief. In the same way Douglas Myers equated the electoral outcome with business instability.

Obviously, stability required the Alliance and New Zealand First to perform poorly. These neo-liberal assumptions were also built into the language of mainstream news and business reportage. This had been the case since mid 1984. The neo-liberal policy agenda was advancing the freedom, efficiency and equilibirium of the market. Opposition to this agenda was, by definition, a distortion of the market and damaging to the economy. Any person, group or party advocating counter cyclical fiscal policy, government job creation, public ownership of infrastructure or macro-economic planning were pushed down the slippery slope of `interventionism`, `Muldoonism`, `Soviet Union`, `Eastern Europe`,`Gdansk shipyard`.

Anti neo-liberal alternatives were thus anti-democratic and out of date. There is, however, a flaw in this system of meaning; anti-neo-liberal alternatives may have democratic support, including an electoral mandate. When this occurs neo-liberals push the red panic button; tacit assumptions become open prejudices, anger turns to bile.

Let us now fast forward to 2013. Stephen Joyce is fearful of the Labour-Green electricity pricing plan precisely because it may become policy after the next election. The idea that key national infrastructures should be managed on public behalf would then have democratic legitimacy, a terrifying prospect. Joyce, National and the financial establishment must therefore depict their opponents as economic terrorists who have no right to proffer economic alternatives.

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Joyce`s April 23 press release was suitably aggressive. Labour and the Greens were found guilty of `deliberate economic sabotage`. One (anonymous) financial analyst reportedly described the opposition plan as a `hand grenade to the New Zealand economy`. Fran O`Sullivan in her New Zealand Herald column (April 24) referred to `the Labour and Greens mafia`. They were trying to `monster the government` and `sabotage the initial share offering for Mighty River Power`. More insidiously, Brian Gaynor`s April 27 article in the New Zealand Herald business section noted that `investors have to be extremely careful about investing in MRP because of the massive political and regulatory risks associated with the Labour-Green proposals`.

Note here the one- way definition of risk. Certainly, it is true that anti neo-liberal policy alternatives generate risk for investors. Conversely, however, todays electricity pricing regime combined with the MRP partial privatisation program puts democracy at risk. The voting public cannot curtail the market power of generators/retailers such as Meridian, Contact, Genesis and Mighty River Power.

Fortunately, biased scaremongering doesn`t fool everybody. Since 1993 it has become evident that neo-liberal policies have not, in fact, advanced market competition. Privatisation or part privatisation of infrastructures simply transfers state assets into the share portfolios of corporate executives and institutional investors. Just think Telecom, NZ Rail and the electricity sector itself. Furthermore,the financial establishment has revealed the capacity to sabotage itself independently of `regulatory risk`.If the Eurozone crisis triggers another banking collapse the absence of national or supra-national financial regulation will be economically dangerous. In these circumstances management of national infrastructures might best be entrusted to elected governments rather than cash strapped institutional investors.

Skepticism of neo-liberaisml and respect for democratic processes has informed the writings of Gordon Campbell, Bernard Hickey, Brian Rudman, Anthony Hubbard and others. We have here the basis for a national debate over New Zealand`s infrastructural development. And, if the Labour-Green electricity plan is feasible then similar joint programmes could be developed for transport, telecommunications-broadband and broadcasting. Other joint documents for education, labour relations and tax policy would generate real political momentum.

If poorer non–voters become engaged they could swamp the Key government in November 2014. At present though, this is an unlikely scenario. Fear of democracy extends beyond National,the corporate sector and the business-media commentariat. The Labour party right has the same disposition. They are dead against winning a highly politicised election campaign that might increase `regulatory risk`. Their preferred outcome would be a National-lite electoral mandate and a marginal role for their coalition allies. This scenario would entrench neo-liberal rule and put democracy at risk.

Sound familiar?


  1. As a general rule, the middle classes (those with a modicum of wealth they have collected over their working lives) rush to the right whenever they feel economically threatened.

    To give a so called extreme (but actually pretty typical) example, Hitler failed to gain power in the 1920s and looked like a has been till the Depression turned up and then the middle classes in Germany voted for him.

    • Then he gave all their wealth to the Krupps etc and sent their children off to the Russian Front. The middle class seem to have a learning deficiency.

      • Yes, here’s another brilliant example of the middle classes sacrificing their children. In 1972 the American people had a choice between George McGovern who promised to bring all American troops home from Vietnam in 60 days if elected (and he really meant it) and incumbent Richard Nixon. Nixon won around 48 states. I have wondered how many American parents who voted for Nixon lost their sons after that. Although I do have to acknowledge that more working class families had sons in Vietnam, but it does show how people vote on prejudice rather than what’s best for them.

  2. When Grant Robertson hurriedly said there would be no more interference in the “market” by a Labour led government my heart sank, then the North Koreans – and yes, one said South Koreans, Albanians, Mafia, Far left Labour,
    communists assault spooked Robertson into running scared and jumping back on the neoliberal band wagon.
    I liked your list above of where there is room for “interfering” in the market and the grassroots “Far Lefties” (I like it!) would do well to take these on board and write to their respective parties be they Labour, Greens, Mana – and Age Concern to Winston – to push for further social democratic policies where the market has created a Dickensian, vastly unequal society for those whom Key described as “The Underclass”. With just over 12 months to go time to start is now, leave it too late and the horses will be scared off. A bit like education, you don’t throw the whole curriculum at them in one lesson.

  3. Sound very familiar, so the Labour Right has to be removed to unblock the neo-liberal log jam.
    The short-term market risk is, in the light of global warming and threat of near-term human extinction, a sick joke.
    Long-term social risk of climate catastrophe is the basis on which we should be building a left constituency for socialism.
    Grass roots democracy coalescing around nationalising our diminishing resources and planning for survival is the way to go for a Red-Green alliance.
    Unless we junk the dictatorship of the tiny capitalist class minority and replace it with a powerful democracy of the massive working class majority risk of no future is a certainty.

  4. The difficulty for the Labour Party right is this: the neo-liberals can only really keep their program in place by means of tyranny; the “brighter future” fairy tales are all exhausted. And a Labour Party that acquiesces in tyranny is no longer a Labour Party in any meaningful sense of the word. I will be very interested to see whether they will they will go all out to thwart the changes to the Labour laws, which as they stand could well destroy what is left of the unions. It will not be enough to say, “we will change them when we get in” since much destruction can be wrought between now and then. And it will not be enough to leave it all to Darien either, since the amount of caucus unity behind an issue generally shows just how committed the party leadership is to that issue.

  5. It’s good to see that some NZers are finally waking up from their intoxicating hobbit fantasy. The same, tired left vs. right control drama of western politics is fake melodrama. Most other western populations have grasped this obvious truth long ago.

    Here’s a hint, New Zealanders: you lose in either case. Time to reinvent economics and politics from the beginning. Start with decentralised, free currencies (bitcoin, litecoin), and watch the game change.

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