On calling out the excesses of capitalism

By   /   November 4, 2017  /   17 Comments

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It’s true that capitalism has failed low income earners who live in poverty at one of the highest rates in the developed world, and indeed, all over the world. It’s failed the children who live in those low-income homes. It’s failed the homeless. But capitalism has also failed our rivers, our oceans, biodiversity, future generations and our atmosphere.

It’s like politicians have suddenly been given permission to call out capitalism for its injustices, excesses, and inequalities. Winston Peters said what others had been scared to say, that capitalism has created many who see it as foe rather than friend, and they’re ‘not all wrong’. He criticised ‘irresponsible’ neo-liberal capitalism which has changed the character and quality of our country, mostly ‘for the worse’. He argued that capitalism must regain its responsible, humane face, I guess to prevent political crisis when the anticipated economic crisis occurs. In choosing Labour as a coalition partner over National, New Zealand First ‘rejected the status quo in favour of real change’. But how much can improving the ‘face’ of capitalism, solve the more fundamental problems of the system itself. And how radical are the new government’s reform policies anyway? Media commentators have had a field day speculating on the degree and impact of the new Government’s reformist agenda in the midst of this rare political opportunity.

Oliver Chan in his article ‘Keynsianism for a new New Zealand’, calls the government’s change programme ‘aspirational socialism’. He said Labour and New Zealand First are the ‘bipartisan gravediggers for neoliberalism’. Media across the ditch and farmers in Morrinsville mistook Labour’s policies for communism. Duncan Garner said the new government with its regional development policies, support for rail, cannabis reform and free education, would be a ‘revolutionary force’.

Others such as Bryan Gould and Bryce Edwards say the election of a progressive, reformist, energetic and active government, reflects a global zeitgeist, and has captured and channelled anti-establishment politics in a more positive way than in, for example, the election of Trump in the United States. Democratic politics and MMP have worked well, in harnessing political opposition to the machinery of the status quo to affect legitimate and peaceful ways of mediating controlled change. Political outcomes are highly contingent, and unfortunately change has been rather slow to get here and a lot of damage has been done in the meantime.

In support of Jacinda Ardern, Wayne Mapp, former National MP, said the new government won’t really be radical. -After all it will continue to work within the current national and international economic frameworks, surpluses will be maintained, budget responsibility will be upheld. Spending will be transparent and accountable. There will be no dismantling of the capitalist system at the hands of this government, despite criticisms of some of its effects. But what will be most important, said Wayne Mapp, is the signal it sends in terms of ‘atmospherics’. That will ‘really mean something.”. “It’s a chance to remake the narrative of the country, …the way we portray ourselves to the world”. Indeed, our election of a young woman as Prime Minister has already done that.

Winston’s criticism of capitalism in the speech where he announced his choice of coalition partner, did a lot to position his party, and the new Government he enabled, more to the symbolic left of centre than had been present for a long time.

On the tv programme The Nation, the next day, Jacinda Ardern, in one of her ‘most left wing speeches’ according to Bryce Edwards, answered Lisa Owen’s inquiry as to whether she agreed with Winston’s prognosis. She said while the party campaigned on addressing capitalism’s failures by ‘tweaking’ the system, her view was that capitalism had been a blatant failure when measured by child poverty. And that “If you have hundreds of thousands of children living in homes without enough to survive, that’s a blatant failure. What else could you describe it as?”

It’s true that capitalism has failed low income earners who live in poverty at one of the highest rates in the developed world, and indeed, all over the world. It’s failed the children who live in those low-income homes. It’s failed the homeless. But capitalism has also failed our rivers, our oceans, biodiversity, future generations and our atmosphere.

But with Winston’s proclamation, and Jacinda’s elucidation, all of a sudden it’s ok to admit the Emperor’s clothes are a poor fit, that they fail to cover the regime’s inadequacies, its indecencies, the harms it causes in private.

We’re on a roll, with more in the new government’s due criticism of capitalism. This week, Trade Minister David Parker said that the proposed ban on non-resident foreign investors buying existing houses in New Zealand, was to address the pressures of the ‘excesses of capitalism’ in the form of the overseas 1% who can currently come in to this country and buy houses, driving up prices for good kiwi buyers.

The policy itself has been criticised as an ill directed, (xenophobic) dog whistle against perceived ‘others’, which may not make much difference to house price inflation, because it’s not matched with a capital gains tax, doesn’t apply to new builds, doesn’t apply to businesses, and the focus of the policy only creates between 5 and 20% of housing demand anyway.

While speculative investment from foreign buyers might be causing a part of the house price inflation, it’s clear that most of the demand is driven by domestic investors and speculators, our own 1% who remain unaffected by this policy. There are clearly thousands of kiwis who had the good luck of access to a low but growing housing market and cheap interest rates to buy a collection of houses, all rented out, with interest and costs claimed against tax. Kiwis who responded to market signals and bought two, three, twenty houses to guard against their old age penury, but without regard to the housing insecurity of others. Criticisms of the global 1% buying existing houses in New Zealand, and current and planned policy settings, do nothing to address the impacts of our own 1%. After all, this sector of the community vote, and have a lot at stake, and we saw in the polls how the prospect of a capital gains tax could make all the difference to the outcome of the election. Despite the enthusiasm for a compassionate and empathetic governance style, self-interest and personal economic security for those who can get it, is a pretty strong force, even if it cuts others including the next generation, out of the market.

Can capitalism really deliver solutions to the problems it creates anyway, without causing worse injustice, if not here, then somewhere else in the world as our local achievements are offset by costs in some poorer country? Joven’s paradox says we can’t use green growth to build our way out of environmental damage, without creating more. We can’t grow ourselves out of finite resources and inequality using the model that created these problems in the first place. And with a duly expected economic slow-down or collapse, aren’t we just trying to secure the safety net and batten the hatches for more of what, for many, is an already bumpy ride? In our welfare system, accommodation allowance, working for families, planned heating subsidies, are we not just supporting the shortcomings of capitalism? Instead of regulated rent control, and companies paying decent wages, the government picks up the pieces. As usual isn’t the democratic system just effectively, co-opting real revolutionary energy and hitching it to the prevailing political order, ameliorating the worst effects of capitalism but doing little to change its wider instability or injustice?

Therein lies the dilemma. We New Zealanders, have responded to the capital incentives of a dynamic housing environment, but reject perceptions of ‘foreign’ involvement in the same. ‘Multiple home ownership should be the purview of kiwis, not ‘foreigners’.’ When it comes to the Trans Pacific Partnership, we all want access to immediate supply of the best – and worst- of the world’s consumer goods and commodities – exotic food, cheap clothing, cars, tvs, the latest international tech gadgets, international education, travel, …but we resent the damage from this global market on our own employment, investments and environment. We want international markets to deliver goods for our own consumption, and to buy our goods, but we resent our loss of jobs, the saturation of our markets and overseas investment in our own country at the same time. Just like capitalism privatises the benefits and socialises the costs, as consumers, we’re globalist when it comes to benefits and protectionist when it comes to costs.

Labour says it plans to ban foreign owners of new homes under the Overseas Investment Act to pre-empt the Trans Pacific Partnership rules, because it will otherwise lose the opportunity to ban foreign home ownership forever. That should be a concern in itself. Some critics think, however, that’s a red herring because of greater concern is the Investor States Disputes Settlement clause which undermines states’ sovereign rights to make policies in the interests of public or environmental health, at risk of being sued by corporations. Jacinda Ardern admits the ISDS provisions may not be changed.

But they’re hopeful days with the new government. With a three-party solution and the broad pick and mix of policies, there’s something there for every-one. In terms of ‘atmospherics’, there must be something in the air because most of us on the left are feeling pretty high. And while this may not be the radical root and branch revolutionary reform that capitalism really needs, a pulling out of a pretty but noxious vine, a good prune will always help to manage better growth and form. That’s in the interests of capital, and the community and keeps the vine bearing fruit and keeps the force alive while we strive for even better.

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  1. Oberserver Tokoroa says:

    Hello Christine Rose

    Your Article today is in my opinion, the most important post election contribution of them all.

    We have the peculiar remains of National perched like chooks on their high and mighty failed structures, mouthing endless lies, and buckets of hostility – like witless brainless scum.

    For the one chant, the chant that is the absolute must, is the very accurate statement of the Labour NZ First Green Party on taking over Government.

    Capitalism has proven itself not the friend of the people of New Zealand, but the Foe.

    This must be chanted constantly.

    The list of National Failures is massive.
    It starts at the top of the country with an absence of adequate bridges.

    It finishes at the bottom of the country with hopeless holes in Health Sevices. National simply didn’t care less about nothing.

    Capital has proven itself the Foe of New Zealand. And has produced the most slovenly careless politicians in our history. Especially John Key and his little handmaid Bill English

  2. Historian Pete says:

    An intelligent competent analysis of the conundrum we find ourselves in.

    • CLEANGREEN says:

      Top marks Christine rose.

      Prudence = Austerity.

      National were deceptive as they have never admitted that they were using austerity against us all as this would seem very negative and ‘draconian’.

  3. Afewknowthetruth says:

    Industrial civlilisation is inherently unsustainable, destructive and self-destructive.

    Capitalism (creating money out of thin air for the benefit of the few at the expense of the many, and using fiat money to extract and burn fossil fuels) is arguably one of the most unsustainable, destructive and self-destructive industrial systems possible.

    The implosion of capitalism is underway. And the implosion of industrial civilization is underway.

    As the available energy (EROEI) extractable from fossil fuels continues its inexorable global decline it will become increasing difficult (and then impossible) to prop up the financial and economic system.

    However, such of the degree of desperation amongst certain circles (let’s call them the shadow government, the real decision-makers, the people who decide gold prices, oil prices, interest rates and which country will get taken down for daring to stand up to the military-financial empire) to maintain historic political-economic-financial arrangements they will orchestrate the looting of low-quality energy sources and subvert all attempts to prevent runaway greenhouse overheating.

    We must expect the Adern government to continue the ‘extend and pretend game’ that has been played since the 1970s -when Limits to Growth came to the fore and highlighted the period 2020 to 2030 as the period when industrial output would fall and pollution would peak.

    And we must expect everything that matters to be made worse until the energy decline (in combination with the cumulative effects of pollution and overconsumption) take down the system.

    To actually address the fundamental issues (creation of money out of thin air and charging of interest on that money, the unsustanablity of fossil fuel use and the accelerating decline in the quality oif the environment) and to implement appropriate policies would take more courage (and knowledge) than any politician in NZ has.

    Corrective action at this late stage in the game would take a massive education programme to completely reverse the sense of entitlement that characterises most people living in industrial nations such as NZ -a sense of entitlement they have been deliberately trained to have through decades of propaganda from advertising agencies and government literature etc .

    One small glimmer of hope is that international oil prices have been rising (up from $45 in July to over $62 currently), and should that trend continue much longer the shit will hit the fan in 2018.

    The rise in atmospheric CO2 (up by the greatest amount in human history in 2016) is an inexorable consequence of industrial civilization, and all so-called strategies to address it within the framework of maintaining industrial civilization are phony.

    Pity the children -all of them- who are going to have to endure miserable existences (or premature death) as a consequence of the decades of stupidity and greed that have characterised the politics of western world since the 1980s.

    • CLEANGREEN says:

      We are in the first ‘burning’ phase of the irreversible ‘heating & thermal runaway’ OF OUR PLANET SO THE FUCKING IDIOTS HAVE FAILED TO SAVE OUR PLANET.


      • Afewknowthetruth says:

        I see that the Arctic ice cover is extraordinarily low, portending runaway melting, which makes the following so much more interesting:

        ‘Hundreds of millions of urban dwellers around the world face their cities being inundated by rising seawaters if latest UN warnings that the world is on course for 3C of global warming come true, according to a Guardian data analysis.’


        Northland and Auckland will obviously become detached from the rest of the North Island when sea level rise of half a metre occurs, of course. And Dunedin, Napier and Christchurch etc. will be well and truly ‘fucked’.

        All the mal-investment in idiotic ‘infrastructure’ that has been going on for the past couple of decades (we’ve known about multi-metre sea level rise in a matter of decades for at least 20 years) will be clearly seen to be mal-investment. But no one will be particularly bothered when the Southern Motorway and the Northwest Motorway disappear under the tide every day because the global economic system will have imploded long before.

  4. Johnnybg says:

    Great article, at last someone who understands the real meaning of RADICAL. To be brutally honest though; We can blame anything that takes our fancy for our lot & the imperfections of today’s world, but we are after all, just a jumped up animal species driven by our primal instincts. We, mal-adapted humankind have done our dash, it’s all downhill form here; unless of course a trans-mutational life force emerges to miraculously transform, the algorithms (nut & bolts) of our innermost nature. Our immediate future will be about finding ways to survive the destruction that increasing resource wars & environmental degradation, will bring to our planet. I believe the only people in our societies who’re equipped to take on such undertakings are our DREAMERS & ARTISTS. It’s high time such people put aside their individual aspirations & came together to form inspirational, localized colonies within which they can shape & model, a myriad of new life affirming worlds & new ways of life, for the smart among us too adopt & put into practice. With many thanks to Nietzsche et al, I’m already some way there. Viva Ayvangard!

  5. Andrea says:

    In 2007 Bridgecorp and a sub-tribe of other financial management businesses began to collapse.

    Prudent people who had saved over the span of a worklife, who wanted something a little safer than less than $360 a week to cover ever-rising outgoings and one-off costs, took the leap of faith and ‘invested’ with financial companies.

    And lost the lot. Or got back 10c in the dollar after a wait of several years. Hundreds of thousands of hard-earned dollars gone.

    Making a mockery of ‘save for your retirement’.

    Oh, Rodney Hide told them. In Parliament. They were ‘greedy’ for wanting an interest return of half a percent more than the banks were offering. Good old ACT – and their diamond-encrusted government super. Greedy…

    The lesson was learned. It’s everyone for themselves. Anything is better than crawling to WINZ for a loan if you’re on super because they’ll foul it up and be demanding repayment from a pittance. Ask the 52 000 who have already come unglued. Ask Mr Peters.

    So some, a few, decided to become landlords with all the hassles that entails – and there are many. Why blame them? If they’re renting them out to people who have to, want to, rent – there’s no call to deride. (Personally – I’d rather scrimp than be a landlord and deal with edgy tenants.)

    And the stock market as a route to a reliable extra income? LOL! The crash of 1987 has entered the lexicon of the cautious and underpaid as an option for fools.

    Plus Kiwisaver. Doing well, despite the perversity of a National government. Who did to the present savers just as they did with Kirk’s effort to put us on a similar prosperity path to Australia’s. Dance, little Cossacks… Staarve the fund – or raid it in times of ‘need’. Or kill it in favour of ‘private enterprise providing the service’. Yeah, right.

    You can’t beat bricks and mortar. At least there’ll be cashflow for a while – and, at worst, even in a downturn, there’s likely to be some money back.

    It’s not just ‘capitalists’ we need to be careful of, either. It’s vote-wanting politicians, who also desire to look ‘progressive’ on the whiff of the smell of an oily rag. ‘Knowledge economies’, cycle ways, tourism, education standards to please competitive parents. And they collude with capitalists. Smart people. Well-educated. Must be okay because they’ve been appointed or make heaps of dosh.

    That is an association bred in the nether regions and perpetuates the rights of the superior elite over the plebs, scroungers, slackers, and those not blessed with Education.


  6. Marc says:

    Gosh, I am flabbergasted at the naivety of some on the left here in New Zealand. Do you really believe the stuff you write, Christine? The powers that be and the commercial interests that run the show here, they will have nothing of what the new government plans. They will sabotage it all over the place.

    To believe you can simply ‘vote’ capitalism out of power, that is bordering on insanity, I reckon.

    The powers that run the show, and will carry on running the show, the capitalists, they will fight any change makers with fire and brimstone, any real change will ONLY come if we have to fight for it with our bodies, hearts and souls, and it will have to be fought in the streets and everywhere, and I fear that blood will be lost.

    All else is so out of touch with reality, just watching Phil Twyford on The Nation today made me cringe, he is as untrustworthy as anybody within the National Party I fear. Talking about ‘affordable’ homes having to be no costlier than 600k and having people go into a ‘ballot’ or lottery to get such new or even ‘bought’ home (from private developers), that is not socialism, it is total betrayal of Labour’s traditional values.

    Would Mickey Savage have tolerated ballots for ‘affordable’ homes? Where are the state homes that need to be built?

    • Go easy, Marc. The new government is constrained in how quickly it can reverse neo-liberalism in this country. We’ve got thirtythree years of a Hyper-Individualised culture to roll back and they’ve been in office since – 23 September!

      National and the msm are waiting for the coalition to stumble and then they will pounce and go for the jugular. Make no mistake, the coalition is under intense scrutiny.

      We can help by being positive; making constructive suggestions; and above all, supporting the parliamentary representatives that 1,305,333 voters elected to represent us. And above all, being patient. Because if we’re impatient for reforms, you can bet that the enemies of progressive politics will also be impatient – impatient to destroy any chance of meaningful, true reforms.

  7. […] The Daily Blog: On calling out the excesses of capitalism […]

  8. jack says:

    The tree may be good but if the root is rotten and a storm blows up, then one little push and down comes the mighty tree. It pays to be closer to the ground in such a scenario, my fellow animals.

  9. Marc says:

    I get it, anything Labour and Greens may do while in government with NZ First will be ‘good’, criticism gets dealt to. As TOP will keep going, I may in give my party vote to them in 2020. They may do better than the Greens then.

  10. Enn Deekay says:

    Well writ articulation of the realities for all. Good job! Thanks.