Crony capitalism and voting against self-interest

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The true nature of this government has been on show in recent weeks. We have seen consistent evidence of a government ruling for the economic elite with little or no regard for the broader population.

The actions of this government speak to an arrogance and commensurate sense of entitlement. This is shared with our own economic elite and replicated across the western world through the tentacles of neo-liberalism – a failed economic experiment that holds on desperately through the continued corruption of political life and the imposed consent of the masses while entrenching inequality.

In Aotearoa, accompanying this unjustified privileging is an apparent lack of contrition. Judith Collins remains steadfast in refusing to accept the existence of a conflict of interest while Maurice Williamson seems to genuinely believe that he has done nothing wrong. Meanwhile, Simon Bridges is perhaps just guilty of ignorance when he signs off on the degradation of our protected land, but neo-liberalism justifies this as a rational pursuit of profit regardless of the long term cost to our country.

Maurice Williamson’s resignation was not a solitary event for this government. It follows in the footsteps of, off the top of my head, Richard Worth, Pansy Wong, John Banks, Peter Dunne, Nick Smith, and Aaron Gilmore. Along with a gaggle of resignations in advance of the upcoming election, some external observers might even dare to suggest that this is a government in crisis, with consistent concerns around the behaviour of MPs. But no, it is merely renewal, they tell me.

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What the evidence shows is a government dealing out favours to their corporate backers and ideological bed pals. Whether it be better access to Ministers, bailing out corporates, changing our employment laws, meals at Antoines, or a massive transfer of public wealth into private hands, this government has a clear and undeniable track record of meeting the short term needs of the economic elite at the expense of the long term health of New Zealand.

With the very public mistakes of Collins and Williamson, the stench of cronyism was finally beginning to stick. Members of the public were beginning to see the true motives of their governing representatives, and the smell was undeniable.

What we have also seen is a relentless obsession with power, consistent with the neo-liberal doctrine. That doctrine is flexible, for it allows for a shift in ideology, so long as it is for the shortest time possible and results in a maintenance of power. This is particularly so in an election year. Power above principle, it would seem.

As it happens, this is an election year.

This week’s Budget announcement saw what some commentators have called a “Labour-lite” Budget, with messaging clearly aimed at grabbing the attention of “middle” New Zealanders through a modicum of social spending. However, this shift to the left seems to have escaped, by in large, critical analysis by a suppliant media content to recycle the government’s spin.

The pre-Budget nod to tax cuts was another technique to highlight better things are coming for that same middle ground. Speaking plainly, these moves were electioneering, not long term fiscal management of our economy.

We are left, then, with some unanswered questions. When we look at the content of the Budget, how does the Budget address the fundamental challenges we face?

Where do we sit on our government debt? What is happening with our housing crisis? Where is the investment in addressing child poverty? What strategies do we have for job creation? What about the quality of those jobs? How is the increasing amount of people exposed to precarious work beneficial for our country? What jobs are there for people in the regions? What options are there for school leavers? What are we doing to address our over-valued dollar? Do we have any strategy beyond primary industries? Are we going to have any discussion about our growing retirement liability? Did anyone actually read the Intergovernmental Panel on Climate Change’s report?

The reality is that we are faced with a government with no ideas. A government that clearly favours the economic elite, yet has no plan to empower the community as a whole.

So, why is it then that this government continues to garner support? Why is it that a significant number of New Zealanders are voting against their own self-interest?

Because we live in a hegemonic society. The proponents of neo-liberalism have succeeded in having an all encompassing ideology supplanting our collective social goals. As the Australian thinker Anne Manne wrote in 2010:

“…the values of the market began to colonise the life-world. Its assumptions seeped inexorably into every cultural pore, penetrating all kinds of relationships, however intimate. As a consequence, our very sense of self began to change and to become more consistent with neo-liberalism’s self-sufficient and self-interested ideal: Economic Man.”

To achieve this, neo-liberalism has deliberately developed what the academic David Harvey calls a “construction of consent”.

In New Zealand, an example is the construction of consent around a re-engineering of our values when it comes to social welfare. For decades we had a social welfare system – although not perfect – that provided a safety net driven by compassion for our fellow members of society. The language of the neo-liberals, however, removed any references to “compassion” or “fairness”, while instead using the mantra of “dependence”, leading to social exclusion and blame of those in need of assistance.

Deliberately ignorant of privilege, the blame directed at the poorest is used to mask policies aimed at providing for the wealthy. More cynically, this strategy of blame creates a wedge between the working poor and those receiving assistance. Beneficiaries are blamed for the lack of money for the working poor when in truth it has been siphoned off to the wealthy. This is evident in the concentration of wealth in the top 10% as we tilt towards an oligarchy. Collateral damage in this deliberate exclusion? The children: now with 285,000 in poverty. In New Zealand.

Other examples are in education and health, with the development of systems adding to pre-existing privileging.

Fuelled by anger and mis-informed by spin, the same academic David Harvey sums it up best:

“Not for the first, nor, it is to be feared, for the last time in history has a social group been persuaded to vote against its material, economic, and class interests…”

The challenge for the opposition this election is to break beyond the fog of neo-liberalism, and to tap into the real self-interest of New Zealanders: a better society with more opportunities right across the socio-economic spectrum. They can do this through positive, smart, solution oriented messaging – not through divisive and negative tactics.

The good news is that there is a global populist movement coming together to re-orient ourselves to our collective well-being. This movement particularly targets the lack of accountability following the 2008 Global Financial Crisis. We also see calls for the freedom of the internet and an ensured realm of privacy to maintain the ability to challenge tyrannical government, particularly prescient for New Zealand given our collusion in the narrowing of the global private sphere.

Finally, we are even seeing in the United States members of the establishment questioning the secrecy and benefits around free trade agreements with Senator Elizabeth Warren rightly querying the Trans Pacific Partnership.

Ultimately, we need to move beyond this outdated orthodoxy proven to be fundamentally flawed by the 2008 Global Financial Crisis. We need to remember why we have a government – not to make money, but to allow a society to flourish. That will not happen with a government serving only a few. We need a government serving the interests of New Zealanders right across society grounded in equity and access to opportunity for all.

In sum, we need a change in government.

11 COMMENTS

  1. When I read about the angry demonstrations against John Key outside Sky City I was somewhat reassurred that not everyone was swallowing the empty b….s that the National government was spinning us about their wonderful budget. There are a lot of angry people out there. They are angry because not only has National largely ignored the problem of poverty in this country, they still do not even acknowledge its existence.
    They can trumpet about under 13 year olds getting free medical care (from next July I should add, not now when it is needed now) but they do nothing to alleviate the kind of poverty and poor conditions that exacerbates many of the diseases and conditions that send kids to the doctor in the first place. Ditto the cost of housing, a few adjustments to tarrifs on imported building materials that builders say will do little because the majority of materials are made here in NZ anyway.
    On the radio this morning I heard someone from the Salvation Army saying that the Auckland housing problem is just about in crisis mode and he predicted that shortly we will begin to see people living on the streets. There is nothing in the budget that will fix this.
    It is the duty of the NZ government to protect its young and vulnerable citizens. The National government has failed to do this and shows no regrets. F….. them!

  2. Maybe the populist mood stirring across the globe is what has inspired Nationals recent lurch to the left. It is too easy to disregard the 2014 Budget as a pre-election sweetener and even if it is a sweetener it’s one that tells us the NZ electorate wants re-distributive social policies.
    So while we on the left might despair at Nationals popularity we can perhaps take some comfort from the fact that this comes on the back of very left of center policies. Free health care for under 13’s – it’s astonishing – this is Mana Party policy. Not even Labour talks about free health care. Neither has National shied away from spending money in Welfare as well as the easier to accept Health and Education.
    Could all of this be an indication that neo-liberalism is starting to be questioned in NZ even by those on the political right? Lets hope so.

  3. The Institution of Corporate Greed (aka the global market) has learned absolutely nothing from the 2008 financial crisis. After a lot of institutions going to the wall or having to be bailed out by central governments there was a lot of hand wringing and vows that the system had learned its lesson and would never again let greed and speculation be the dominant market forces. But what has changed since then? Very little. After a few years of sobriety the market has once again become money-drunk. The Dow Index reaching new highs nearly every week. The same kind of crazy financial risks being taken by mortgage lenders. The world’s money lusting financial system (really the American system) is back on track and is headed for another major meltdown with the same consequences to the people who did nothing to cause it but will suffer most of the ill-effects. It is not a case of if, it is a case of when. Can we expect our present government to take stock of this and make appropriate policies? Probably not, they take little notice of things that they don’t like.

  4. You really have nailed it here.
    A very accurate and most helpful analysis, Michael Timmins, you have answered a question that was forming in my mind. ‘Where to from here’.

    I hope that all left-wing party strategists read this and take note.

  5. The whole ‘self sufficient’ individualistic ideal needs to be questioned. To realise how fantastical it is to aim at individualistic self sufficiency, perhaps it is useful to question why humans have grouped together. Why do we create towns, tribes, cities etc. Hint: It has been our strength that we have. Fact. Currently, there is not one of us who survives solely under our own steam. Fact. Why do we collect together?

    We deny the advantages derived from this cooperation and interdependence by following an ideology that focusses on individual strength. We threaten the advantages of collecting together by this course of belief. What is individual strength compared to cooperative strength? It is excellent to have the freedom to express uniqueness, yet this needs to be done by understanding how we have managed to get to a point where we have so much freedom of expression to follow our predilections (well some of us do) and paradoxically it is due to our past generations’ collective cooperation toward that aim.

    Are we now going to piss it all away on a very faulty ideology promoted by the most ignorant individuals in our society? They are ignorant because they are the most advantaged by this system and yet they are promoting an attitude that is going to collapse their own fortunes along with everyone elses’.

    Allowing oneself to be lead by fools isn’t ever going to lead to a good place.

    I agree – this government must go. They are promoting a most foolish ideology.

  6. Well the OECD (!) has the right ideas:

    • Abolishing or scaling back tax deductions, credits and exemptions (more relevant to America than New Zealand)

    • Taxing as ordinary income all remuneration, including fringe benefits, carried interest arrangements and stock options;

    • More taxes on immovable property, i.e. wealth

    • Reviewing other forms of wealth taxes such as inheritance taxes

    • Increasing transparency and international cooperation on tax rules to minimise “treaty shopping”

    • Developing policies to improve transparency and tax compliance
    http://www.inequality.org.nz/oecd-takes-aim-disproportionate-1/

    Plus – put (back) up top tax rates! How about a FTT (Financial Transaction Tax (EU doing this soon) as mentioned in another post here. Capital Gains Tax? (even Aussie has one – we’re so keen to keep up with them so why not?).

    Over the last 30 years, our top 1% has got one dollar in every six (15%) of all the income generated in that time. We’ve done much worse than Denmark where the top 1% got just 2.5% of income growth since 1981. Surely with even some of the measures above we could easily afford to help the families of our 285,000 kids living in poverty – instead of providing free medical for the diseases they get from living in poverty. Providing an ambulance at the bottom of the cliff is counter-productive and, well, just plain stupid.

    Another no-brainer – raise the minimum wage to the recommended $18 odd per hour. Anecdotal evidence from other countries is favourable with employers reporting higher productivity and worker satisfaction, less absenteeism and staff turnover. The by-product of this move (apart from workers spending more benefiting local businesses) is less corporate welfare in in the form of WFF credits. NOW we can talk about tax cuts for those who need them most!

    Flame away.

  7. I wish I had faith in a change of government. After the political debate on all sides this week, I remain dismayed at the lack of vision and the lack of any urgency for fundamental change on all sides. Looking to Europe, those countries who do successfully look after its citizens – all of them – are those who are governed by coalition governments. The continuous vagaries of a two party system that swings from one policy to another every three years, will always fail to address the need for a long term plan. A long term plan which systematically supports inclusive education, housing and health policies.

  8. For as long as we have an adversarial and stupidly competitive system of government where it is obvious that we are not served by ‘our best’ we will continue to have government for the elites. Government is not a sport, as such. There is no need for point scoring.

    Just because the ‘people’ got the vote does not mean we have a democracy. It is still government by a few, for the greater good of the few.

    Even if we ‘had communism’ there would still be the rise of the scum to the top of the septic tank. The fixers and dealers and those with sharp elbows serving personal short-term interest. It’s the system itself that allows and encourages this.

    I wonder which of the parties on offer is going to Go Mad – and put the work of MPs on the same footing as most other jobs in NZ (no perks for life, for example)? To end the very ancient and unregenerate Westminster system that has served the elite for hundreds of years, and replace it with something far more effective. None? Then we’re up for another round of status quo, perhaps with different colours.

  9. Superb article Martyn – it really sums up the situation.

    In answer to Annie, we need a change of government – and then we really need to put the pressure on.

    I’ve said it before and I’ll keep saying it, Cunliffe will only be as good as the support he gets from us (the public and Labour party members). If we leave him to do it by himself the same thing will happen to him that happened to the Clark government – a fake crisis in the financial press and then a call from the business roundtable offering to come to an “arrangement”.

  10. “This week’s Budget announcement saw what some commentators have called a “Labour-lite” Budget, with messaging clearly aimed at grabbing the attention of “middle” New Zealanders through a modicum of social spending. However, this shift to the left seems to have escaped, by in large, critical analysis by a suppliant media content to recycle the government’s spin.”

    Critical analysis is a concept that the high speed and personality focused mainstream media is no longer capable of, except in the odd case, where one or another journalist actually dares to spend some extra time on digging into a topic matter.

    Modern day communication and media news spreading is more along the lines of twitter. Short and sweet, or short and hitting, and nothing much else. It has to fit into the 140 or so allowed characters, and anything complex just does not even get looked at anymore. Look for instance at Patrick Gower and how he does his “PowerPoint” style or other presentations on screen at times, it goes bang, slap, surprise, or shock and awe, and a few words dress up the short messages.

    That is what the wider public are fed, and only a minority read on blogs like this one, to hear the other side of the story.

    The budget that English presented and Key feasted on like a maniac in his speech in Parliament, is nothing but a well packaged BRIBE, and nothing else. A bribe to the middle class mums and dads, those having kids, or wanting kids, and needing a bit of easing to afford raising them.

    It offers no answers to major challenges, it rests on earned “laurels” on more milk powder, baby formula and log exports to China, fooling us that this can keep on growing, to afford the future and more. The only aim is to keep the government in power, to then go around to do another round of “reforms”, that will benefit the top 10 to 20 percent of the population, and expect yet more of the rest.

    While English is more cautious, Key already indicated another bribe, yes tax cuts, and he wants to “finance” them by raising GST for the common folk, who will pay the cuts that will again benefit the better off.

    People should listen and start thinking, start to ask more questions, and see what the budget really delivers and what not.

    It is my observation, that all appeals that Michael Timmins and others may direct at the voters, to think and question, will not be heard by enough. I see daily, how people rely on the quick and easy decisions, on focusing on their immediate, personal aspirations and challenges, and that decades of social dismantling and division have changed social behaviour, which is now very individualised, self centred and consumerist, that is for most.

    Here in Auckland I simply see too little in the old fashioned collective thinking and behaviour, and it scares me. I remember weeks ago, there was a story in a paper, about a dead body floating off the wharf in the Waitemata Harbour, instead of calling police or ambulance, some people just stood around, and took photos with their smart phones.

    Michael writes: “The good news is that there is a global populist movement coming together to re-orient ourselves to our collective well-being. This movement particularly targets the lack of accountability following the 2008 Global Financial Crisis.”

    I am sorry, but that is not what I see anymore. That “populist movement” is very diverse, like in Europe also includes a rise of anti immigrant and right wing sentiment, and is in other places also more divisive.

    The neo-liberal forces have achieved division is now firmly established, and that facilitates their agenda. It is time to make more people aware of the risks and dangers, and this good post by Michael can only be one of many contributions to achieve this.

    • Yes in Auckland the individualist mode is very intense. It helps to go out to the regions where the benefits of neoliberal policies are challenged because they do not benefit the regions. There some community still exists if only by default. An excellent posting Mr Timmins and a timely reminder what we are up against. Fortunately some of the superficiality that seems to determine who votes for what may just be turning on the ruling elite. In this respect I can see why the opposition do hound Judith and co. as this is the level many seem to fuction at. The ‘Who owned who’ celebrity version of politics, stupid as it is, may be turning away from a focus on Labour and Greens and coming back to bite the govt. in their own corrupt backsides. I even heard Fran O Sullivan praise David Cunliffe today! Self interest may be what saves us as long as people see the govt as the self serving rich club of old boys and wealthy immigrants that they are, not a smiley bloke to have a beer with who speaks New Zild.

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