The Common Affairs Of The Whole: Why National is so bad for Capitalism

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[T]he bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.

Karl Marx & Friedrich Engels – The Communist Manifesto (1848)

IF JOHN KEY’S GOVERNMENT is a committee, tasked with “managing the common affairs” of the whole employing class”, how’s it doing? Would it earn a pass mark from Charlie Marx and Fred Engels? Or, would they condemn Key for his failure to comprehend the whole meaning of the word “common”?

There’s an enormous difference between managing the affairs of the employing class as a whole, and arranging sweet deals for your mates. Indeed, it’s possible to argue that the difference between a “modern” state, and a state which merely aspires to that condition, is how successfully its political leaders have extricated themselves from the webs of personal, familial, and tribal obligations that characterise pre-modern societies.

The late Bruce Jesson shrewdly observed of New Zealand’s two major political parties that, although the National Party knew how to govern for capitalists, only the Labour Party had mastered the art of governing for capitalism.

Just think of the Sky City Casino deal. Or, the irrigator-driven dismissal of the Canterbury Regional Council. Consider the exclusion of the agricultural sector from the Emissions Trading Scheme. Or, the Government’s plans to make the Resource Management Act more developer-friendly. Think about Bill English’s plans to privatise social housing.

All of these policies are designed to serve the interests of either individual businesses, or favoured sectors of the economy. But none of them meet the Manifesto’s test for “managing the common affairs” of the employing class as a whole.

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Bill English’s disastrous intrusion into the social housing scene is a telling instance of this government’s failure to comprehend the general good.

The provision of social housing in New Zealand will forever be associated with the First Labour Government’s massive state house construction programmes of the 1930s and 40s. State houses are, however, a little older than Mickey Savage and Jack Lee. It was the Reform Party leader, Gordon Coates who first authorised the building of “state” houses for the employees of the publicly-owned railway network. As a way of giving these workers’ a powerful “stake” in their employment it was a highly successful project.

Labour’s programme expanded the scope of worker housing tremendously. Moreover, by laying a floor of high-quality and affordable accommodation beneath the feet of the working-class, Labour’s “socialists” also conferred a huge benefit on the whole of the employing class.

Thanks to Labour’s state housing scheme, the health of workers and their families improved dramatically – lifting their productivity and reducing the economic burden of disease and chronic illness. Fixing the share of workers’ income expended on accommodation at around 25 percent similarly assisted the employers. By curbing property speculation and rack-renting, Labour’s state housing scheme kept prices stable across the entire housing market. Affordable housing meant that the incidence of workers attempting to offset rapidly rising accommodation costs by ratchetting-up the price of their labour, was reduced. Money not spent on accommodation could be spent on other things. In all these respects, state housing acted as a significant wage subsidy.

Which was just as well, because workers now needed to spend as much money as possible. Mass consumption was fast becoming the indispensable corollary to mass production. And, for mass consumption to continue, wages not only needed to rise – they had to keep on rising.

As the American inventor of modern mass-production techniques, Henry Ford, put it: “if you don’t pay your own employees enough that they can afford to buy your products, sooner or later, you’re going to go broke.”

Ford’s vision was clear – but narrow. He could see the advantage of paying his workers enough to purchase the Model-Ts they were putting together on his production lines, but he never made the next conceptual step: the one that would have allowed him to conceive of a society in which the working-class was paid enough, collectively, to consume its own production.

This was capitalism’s equivalent of a perpetual motion machine (assuming, of course, that capitalism had somehow discovered a way to exempt itself from the laws of planetary thermodynamics). The only downside (from the capitalists’ point of view) was that the full-employment and steadily rising living standards generated by the machine were bound to precipitate a concomitant decline in the political, social and economic power of the employing class.

The fatal paradox of capitalism’s perpetual motion machine (which actually operated throughout the West from 1950-1980) was that the more efficient it became at the equitable distribution of mass-produced goods and services, the more precarious the position of the capitalist system’s owners became.

With the efficient generation of surpluses ceasing to be an occasion for the obscene enrichment of a privileged few; and becoming, instead, the chief mechanism for ensuring better lives for everybody; those we now call “The One Percent” very quickly apprehended that economic inefficiency – even crises – were infinitely preferable to social equality. Even at the price of driving a large proportion of the employing class to the wall, the One Percent’s urgent mission became the election of “executive committees” dedicated to protecting the interests of only the most powerful capitalists – i.e. themselves. The rest of the bourgeoisie could go and join the proletariat in Hell.

The funny thing about Bill English is that 15 years ago he gave every appearance of understanding the crucial distinction between governing for capitalism as a whole, and governing for a handful of National Party cronies and Federated Farmers. His famous speech to the Balclutha Branch of the National Party in 2000 marked him out as a good, Disraelian, “One Nation” conservative. Even today, under Pope Francis, English, as a good Catholic, is obligated to take “the preferential option for the poor”. Why, then, has he allowed himself to become tangled up in a social housing policy that has been widely condemned as a “property developers charter”?

Could it be that Mr English, in his heart-of-hearts, knows that, in New Zealand, any Finance Minister who is serious about making capitalism work effectively and efficiently is much more likely to belong to the Labour Party than the National Party? That “One Nation” conservatism and moderate Social Democracy are, in practical political terms, indistinguishable. Could all the floundering around and making it up as he goes along be evidence of Mr English coming to terms with the fact that he has more in common with Winston Peters than John Key? Or, even more heretically, that in working out what “managing the common affairs of the whole bourgeoisie” truly entails, Mr English has come to realise just how far National’s “executive committee” has fallen short of Marx and Engel’s prescription?

29 COMMENTS

  1. Beautifully written, this exposes ourcurrent rulers for what they are and how far short of decency and brains they are. Why are so many ignoring their best raw material, that is, the huge pool of labour. As an employer, your best asset is your staff. Pay them decent wages and they can buy your product. You ignore them at your peril. A carrot is more incentive to the donkey than a stick.

    • Hi Dorothy

      I found Chris Trotter’s writing obscure and not to the point I had to make an effort to decipher what he couldn’t say in plain English. However that’s just my opinion and I accept it.

    • Unfortunately, Dorothy, you are describing a world that no longer exists. Under multinationalism, free trade dictates that production goes to the nations that bid its labour down to the bone. Their workers cant afford to buy their products but we can.
      All of the numerous Free Trade agreements that are currently being signed are utterly destructive. All workers are losers. The winners are the multinationals. I also had problems following Chris’s arguments probably because, without considering international trade, his arguments dont stack up.

  2. Oddly enough, as I watched Bill English attempt to defend the Key Govt’s position in the “Non-debating” chamber during Question Times this week I felt briefly a tinge of sympathy for him.

    It seems to me that he started out pretty well as a Minister of the Crown when The Key Gov’t kicked off their currently unfolding reign of terror. He initially struck me as a basically honest, fair-minded politician who possessed a fair degree of integrity, both political and personal.

    But if this weeks’ performance in the House is anything to go by, then sadly, the integrity and honesty have well and truly gone out the window, replaced by an unfailing sense of the necessity to tow the party line at whatever personal cost.

    Just an observation.

  3. Strong parallels can be drawn between Bill English’s Balclutha Speech in 2000 and John Key’s victory night speech of the last election.
    All the soothing words by Key about ensuring that they don’t become arrogant,(when they already were), in their 3rd term blahdee, blahdee, blah……. on and on it went.
    Soothing words without any intent to follow them up with the promised appropriate action.
    I don’t believe for a second that Bill English has found himself surrounded by the wrong people.
    If his perpetual supercilious smurk doesn’t tell you anything , then a speech he gave to a ‘Farming Group’ last year, where he opened by mocking the unemployed and beneficiaries , (to get ‘his people’ ‘on side’), should tell anyone with even an ounce of perceptiveness that this is a person , like Key , who will say any old thing for personal gain.
    Interesting isn’t it that English was the one caught out rorting the Government MP Scheme with multiple houses in Wellington (to house his large family) apparently. Ah yes ,”do as I say , not as I do “.
    Unfortunately for N.Z, English is not the sharpest knife in the draw.
    An acquaintance of mine , with ‘National’ DNA in his blood , who is the CEO of a large company that has to deal with the ‘Government of the day’ from time to time, told me quite candidly that Key, English, Joyce and Brownlee were all “actually a bit thick “.
    He went on to say , ” I can’t believe I’m saying this, but the previous Labour Government were far more visionary and ‘clued up’ when it came to business and showed far greater holistic intelligence.”
    I rest my case!

    • No sh*t Sherlock! If only your CEO mate had the intelligence quotient of the average leftie who knows we might even be the Norway of the South Pacific economically.

    • I usually agree with Mr Trotter in most cases…. but I would agree with the poster above ,- GRANT – who reminds us that Bill English was caught out with ,…. the rort regarding the Government MP Scheme…

      Hence the nickname and being dubbed :

      The Double Dipper from Dipton.

      And in case people have short memories ….and going back even further ….

      This statement very early on in the Key – led govt from Finanace Minister Bill English :

      ” We should be glad we have a LOW WAGE ECONOMY because it ENCOURAGES OVERSEA’S INVESTMENT ” .

      This WANKER AGREES with having 300 , 000 minimum wage workers , 250, 000 kids in poverty , unaffordable housing , state homes being sold off to the lowest bidder to make way for speculators , banks owned by ‘overseas investors ‘ who bleed the nation dry of all finance and announce record profits each bloody year – AT OUR BLOODY EXPENSE !!!!! …..

      All for the sake of his precious OVERSEAS INVESTORS ( mates of his , no doubt…)

      And don’t think for one minute this jerk – off will oppose any stipulations in the TTPA that would prevent this country from having its ass sued off by foreign USA corporations , either !!!

      And guess who will end up paying for that?….Key ??? ,…Bennett???…..English ????!!!!

      Don’t make me laugh ! ….Hell !!!!….this bastards probably got shares in those bloody corporations , anyhow’s…..He’s probably looking forwards to this country getting sued –

      More dividends goes into his pocket and he doesn’t have to look over his shoulder all the time worrying if the unthinking public will catch his triple dipping …..as this time it will all be LEGAL !!!!

      WAKE UP !!! …this guys a classic neo liberal through and through !!!

      He aint here to do you any favor’s , dammit !!!

      • 1000% Wild Katipo,

        This gangster mob are laying the groundwork for a low wage two tiered economy alright where the top 2% will live off the backs of the 98% of us poor and vanishing middle class, so the gap widens to where we will live a subsistence life rife with crime and the rich will plunder at their pleasure.

        We are far from where we were when this country had ful employment and no crime or children going hungry but this toxic bunch of pillages and carpetbaggers has all but destroyed our country.

        Bring back Egalitarianism again please Winston, at least you are old enough to remember the good years when we had no crime, or corruption and everyone was happy and contented thus no one was full of greed as we see rampant today, even with some of these comments show on this blog.
        Pay it forward people please as our past generations did.

    • I think your CEO friend may be right!
      There is no denying that the welcomed rise of developing economises requires more efficiency but hey why throw out the baby with the bath water?

  4. I think the exposure of English (and others) in the double dipping rent scam he perpetrated upon the NZ taxpayer, a clear indicator of his (and others doing the same) honesty.

    If you hang with a bunch of scumbags, it gonna rub off on ya.

  5. Could all the floundering around and making it up as he goes along be evidence of Mr English coming to terms with the fact that he has more in common with Winston Peters than John Key?

    You are drawing inferences that may not exist.

    That English is making a mess of the housing asset sale doesn’t indicate any diminished enthusiasm on his part for that, hitherto deliberately hidden, part of the neoliberal agenda.

    And what English may have said publicly 15 years ago doesn’t mean squat. We know the Nats say whatever they think the audience wants to hear. (What English lets slip at cocktail parties is more illustrative.)

    Assess him by what he does and what he attempts to do, not by anything that comes out of his mouth, nor by any rose-coloured perceptions of his religious allegiances, there is more than ample historical evidence that the faithful can use their dogmas to justify almost any course of action.

  6. Key’s Government has no concept of the “common good”: his money trader’s heart has never heard of this.Political history wise Key is ignorant and uneducated a mere finance cog.

    Is it in the interests of the employing ( employers) class to observe the common good? Yes, this creates a stable Nation with happy people who are satisfied not unhappy exploited victims of a rentier economy with depressed exploitative wage rates.

    The underpinning of worker boss relations has been destroyed by globalisation and jobs offshoring leaving such countries as NZ and the US depending on the service sector and primary production.

    Government is only concerned with looking after the primary sector and speculator rentier class, the latter well represented by their own members.Workers in the main are replaceable disposable cogs in the economy since unions have been forced to retreat.

    The “Common good” is no longer the government’s concern: Support for disabled children discouraged, privatisation, reject the feed the kids bill, sell off social housing, build more motorways and waste money etc.

    “The Working Class” no longer exists it has been atomised by the private contract system and curtailment of the unions plus a ready supply of the unemployed to fill vacancies.

    The “social wage” has been replaced by the market god which supposedly boosts productivity and wealth which has all gone to the top layer of NZ society: 10% own over 50% of the wealth the bottom 10% own nothing except tp be exploited by low wages and paying rent to greedy landlords out for capital gain which is not taxed: We have a speculators economy not a worker one.

    Now you don’t earn the money you go into lifetime debt becoming a serf in the new neoliberal economy.

    We now have a soft fascist state : the marriage of corporate, boss, and government power, the actual wishes of the people such as the power company sell off referendum are ignored and the interests of privatised often foreign wealth entertained.

    ” Mr English has come to realise just how far National’s “executive committee” has fallen short of Marx and Engel’s prescription? ” English does what he’s told he gave a billion to South Canterbury speculators but they couldn’t gift a billion to CHCH to save them from selling off their revenue earning assets.English is just a glorified bean counter “YES” man answering to Key and his business supporters.

    • Now you don’t earn the money you go into lifetime debt becoming a serf in the new neoliberal economy.

      We now have a soft fascist state : the marriage of corporate, boss, and government power

      +100%

      We ought to call it what it is:

      it’s not neo liberalism, it’s neo feudalism.

  7. Chris – Why slam Winston ? Why continue the misrepresentation and ill will towards a man who puts his country ahead of the corporate buddy system ?

    I know I sound like a broken record but I feel that we can not just simply blame the govt. and John Key. The worldwide globalists dictate to and mostly run most govts. John Key and Bill English are just silver tongued puppets not really understanding why their horrendous housing plans and other trainwreck agendas and TPPA etc. are so bad for our country. Can anyone else see that the likes of Joyce and Key are so corporate bound and just spewing out mostly nonsense to defend their corporate buddies and their interests ?
    I remain surprised that more switched on journalists are not writing about and exposing the Agenda 21 and the elite globalists who are manipulating world events. They fund Al Queda and Isis to perpetuate wars that they gain riches from. They create the crisis all over and then they change the subject with their lies and deceptions.

    The people are waking up and seeing through the charade and Bill English can only spew his defensive untruths only so long in defense of the high level corrupt and indefensible. I do not feel sorry for any of them and hope they all get their just desserts very soon. Most societies operate way below their potential and these mega-corporations (petro-oil; chemical etc.) and (arms / nuclear dealers) who are running the show are mostly at fault. They have way too much power controlling govts. and the media and they are to blame for most of the worlds wars ; economic depressions and abuse of people and their environments (AND SO MUCH MORE !) Please take a moment and consider checking out Ralph Nader and the Tavistock Institute and Agenda 21. Most govts are just pawns in a bigger game run by the elite globalist families like the Rothschilds, Rockefellers and on and on . . . . . . .

    http://www.thesleuthjournal.com/10-truth-seeker-terms-nonexistent-typical-blind-sheep/

    http://thetruthseekersguide.blogspot.com/2014/05/science-fiction-and-hidden-global-agenda.html

    • Yep- quite a bit of truth to that , Blake.

      Though I’ll qualify that statement by saying that most people do not read or have the motivation to research such matters. Unfortunately .

      What they do take heed of is their immediate suroundings – such as this by – election win by Winston Peters.

      Now ,…strategically …this is where we , as the public , can operate in what we feel as effective agents for change – in our local environment. We may not be able to influence at all these geo political giants ….

      But what CAN be influenced is our local response to it.

      And that response can be to slow down , inhibit , stonewall , frustrate , and lessen /negate the impact of these malevolent bodies….

      Changing govts that can apply this pressure can go a long way to softening that influence. By not playing the game and making it more difficult for them to have a free ride with their agenda….

      Even this win for Peters in Northland..is going to slow down and even inhibit the way this govt governs…imagine a united , concerted effort by the Left to totally reject or reverse many of the things this arrogant autocratic govt is pushing , has pushed and is trying to push through…

      That is frustrating the plans of these groups on the local front in our local environment..and that much we can do.

  8. Its misleading to quote a sentence from Marx writing in 1848 to critique Key’s regime for falling short of managing capitalism efficiently for the whole ruling class.

    Since Marx’s time however, capitalism has undergone some major changes. The ruling class had concentrated wealth and power into a small fraction of the capitalist class. The less efficient and small capitalists get swallowed up. The rest are used as subcontractors.

    So the state managing the interests of the international capitalist class today acts according to its position in the global pecking order.

    NZ is a tiny semi-colony that never had a war of independence. It is somewhere in the middle of the pecking order because of its favoured history as a British farm.

    During the the times of the first Labour Government, NZ was able to secure a measure of self-government and economic protection to allow domestic capitalism to establish itself. Labour governed in the interests of NZ domestic manufacturers, but the other side of the deal was to allow the City to keep control of banking and rake out its profits.

    Jesson certainly recognised who had the better of the bargain since he saw NZ as still a colony of Britain.

    Today, 50 years later, with the end of the postwar boom and the onset of neoliberal globalisation, NZ’s ruling class no longer tries to serve two masters.

    Sutch signalled this with his 1970 book Takeover NZ. NZ was about to become no more than a book entry in the accounts of the multinationals.

    The NZ economy is deregulated, opened up, and recolonised by international finance capital. NZ domestic capital was gutted, and key productive sectors privatised and under foreign control.

    The role of the Key regime is that of comprador, the agent of US, UK and Chinese capital, facilitating the complete takeover of the economy.

    NZ has returned to its colonial role of provider of raw materials, with its No 8 wire innovation bought out by international monopolies.

    Like all compradors, the NZ ruling class gets paid off with part of the proceeds, usually for its conspicuous consumption, not for domestic production.

    So the prescription of the 1848 Communist Manifesto about the state being the “organising committee of the ruling class” needs some historical elaboration.

    The NACT regime today does represent the international ruling class, both the giant monopolies and banks, and their national agents, collaborating in the job of organising the world economy in which various nations fill their assigned roles in the international division of labour of accumulating profits for the 1%.

    The alternative is not to insist that capitalists read Marx and tidy up their act, rather that the 99% need to remove the 1% and run the world economy sustainably and equitably.

    The new ruling class of the 99% will certainly hold the state to its task of “managing its common affairs”.

    • Vive la France !!!

      We need to storm the Bastille !!!!

      seriously though……..somethings got to be done….

      Even if it is putting Key in chains and putting him on a one way boat to New Swaziland in Antarctica…

    • I like the comprador analogy, it has a little poetic justice to it though for how long…. the sins of the fathers?.
      One often wonders if what we are seeing is a variant / morphing / evolving of Wallerstein’s “World Systems Theory”.

    • “rather that the 99% need to remove the 1% and run the world economy sustainably and equitably.”

      If they could already do this then the next layer down from 1% would have stepped up and struggled for the poison chalice.

      But they haven’t and they can’t. They’re IN the game and playing by the rules. And the rule is – you can win any game where you control the rules. The rising suckers don’t control the rule-making.

      The 99% won’t rise up. They/we won’t be troubling the scum overhead.

      If you want change then look for the 1-5% who not only see the rules for what they are but also have the will and the SKILL to create a new and attractive game.

      On the gloomy side – read Trout and Ries on marketing. All those hopefuls at the beginning of a New Era soon disappear into the maw of those who play more efficiently. (Doubt and disbelieve? When did you last buy a new Bugatti or Studebaker? And Holden is no longer 100% Australian. The many are swallowed by the few over time. It’s how things are. Entropy…)

  9. Indeed. National stands for corporatism, not capitalism.
    They pander to vast, wealthy, self-interested, monopolistic groups and organisations – not the thousands of small businesses that operate up and down this country, providing small scale but extremely necessary and valuable services that the big ones have no interest in. National claims it stands for capitalism – but tell this to the businesses that are being swallowed up by more and more regulatory red tape every year costing more and more time and money. The owners will laugh at you.

  10. All I’ve noticed about Bill English is that he says some pretty nasty stuff about people on a regular basis.

  11. What I’ve noticed in the past 6 years is the large amount of local shops/ businesses around me closing down and not being replaced. So many shops sitting empty. The life is being sucked out of New Zealand thanks to the Neo-lib ‘ideals’.

  12. As per usual Chris delivers a thoughtful and sound analysis. It is always a pleasure and informative to read his articles especially enjoyable is a commentator who while being strong in their convictions is willing to amend positions based on evidence.
    I would be so bold as to offer a couple of suggestions to round out the piece.
    Firstly he is being far to generous with respect to the motivations and/or abilities of Bill English or his spiritual leader. Both English and the latest reactionary to run the Catholic church use a form of “weasel words” which do not conform to their real views; e.g. Francis later statements have shown him to conform with the anti LGBT and patriarchal / female oppressive norm of all the Abrahamic theologies.
    English in unguarded moments leaves a window into his views; eg. where he commented that hungry children were the responsibility of the parents not schools or state and his attempt to abandon state housing when the evidence of its efficacy is so strong – I fail o see much concern for the poor in either of these. I also fail to see any evidence that he is motivated other than by a slavish devotion to the neoliberal principle that the state has no role in community or social welfare arenas. Additionally as an economics graduate I seriously question his economic competence even in the light of classical economic prescriptions; e.g. actions during the GFC actually worsened the impact on the general public and sent inefficient tax / “government largesse ” messages to investors as do most of this governments actions on the housing front.
    As Chris’s observations imply the webs of personal, familial, and tribal obligations that characterise pre-modern societies are unfortunately still with us. An interesting view by one of the elites who see’s the seeds of destruction for his class and perhaps for liberal democracy is Steven Sachers Hard Talk with Nick Hanauer.
    Personally I think the provision of affordable, quality hosing by the state goes beyond that of freeing up funds for demand. Realty / accommodation is a unique resource in that it is finite, a necessity and a store of value, this requires the state to intervene o prevent shortages and / or wealth concentration. Additionally it serves a “stability” / safety role that enables those from less advantaged / stable background to better their lot – a fact that John “you don’t want to be that type” Key seems to have forgotten which demonstrates a severe case of hubris and ethical bankruptcy.

  13. There’s no sign as of yet that the capitalist class as a class is unhappy with Key-English. They’ve managed to keep the show on the road reasonably well, in terms of the interests of capital in general.
    https://rdln.wordpress.com/2014/12/12/the-key-english-government-in-the-context-of-capital-accumulation-in-new-zealand-today/

    Of course, they have a few things making life a lot easier for them, the most important being working class passivity. Despite – or possibly because of – what has happened to them since 1984, the working class has largely given up fighting. Thus, all Key-English have to do is manage the general malaise of the system: https://rdln.wordpress.com/2013/01/31/keys-vision-managing-the-malaise-of-new-zealand-capitalism/

    It remains to be seen how long workers will put up with this shite:
    https://rdln.wordpress.com/2012/02/08/low-pay-longer-hours-and-less-social-mobility/

    So far, however, workers have shown a huge tolerance towards those walking all over them.

    Phil

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