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.