A New Revolution?

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REVOLUTIONS ONLY SUCCEED when the societies in which they occur possess the means to sustain them. If David Lange and Roger Douglas had attempted to build neoliberalism in one country they would have failed. The success of Rogernomics was due entirely to the readiness of the rest of the capitalist world to support it. The latter had long since outgrown the political and economic constraints of the post-war period and its patience with the politicians and civil servants who attempted to preserve its regulatory framework was at an end. Capitalism was demanding a new style of political and bureaucratic leadership, and all around the world it got it.

Forty years later, Capitalism is in urgent need of new leadership. The neoliberal model, tested in Chile between 1974 and 1978, and then rolled out in the UK and the USA between 1979 and 1985, has failed to generate the broadly shared wealth Capitalism requires if it is to remain politically sustainable. The concentration of global resources in fewer and fewer hands is laying the groundwork for a massive social explosion. Not wishing to endure such a catastrophe, intelligent capitalists are once again in the market for a new breed of politician and bureaucrat: decision-makers more tuned-in to the new music of a post-neoliberal age. Unfortunately, the capitalists are not finding them.

Instead, the key institutions of the world’s most powerful states are stuffed full with individuals who either made their reputations in the early, ‘heroic’, phases of the Neoliberal Revolution, or, were inducted into its core principles at their feet. These people are completely deaf to the new music of post-neoliberalism. Indeed, the very idea that there might be some other – better – way to run a modern capitalist economy strikes them as being both ludicrous and dangerous. In such a hostile environment, the expression of new and unorthodox ideas is severely career-limiting.

As Bernard Hickey points out in his latest, brilliant, posting on Newsroom,  New Zealand presents a classic case of the irresistible forces of a looming economic crisis being confronted by the immovable objects of the Neoliberal Revolution.

As he puts it in what are undoubtedly the most compelling sentences of his posting:

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“It’s dawning on us that Ardern and Robertson, who were schooled in the ninth floor offices of the Beehive by the grizzled veterans of the early 1990s (Helen Clark and Michael Cullen), are actually fiscal conservatives. They are not the progressive and transformational pair they led the electorate to believe they were in 2017 and that the rest of the world believes now.

“They are showing that by not helping their Reserve Bank Governor when he needs it most. And they are not alone. In Britain, Germany, France, Australia and America, politicians are either choosing not to invest (Germany, Canada, Australia and America) or cannot because they already have too much debt (Japan, France and Britain). New Zealand has no such debt fears. But it does have fearful politicians.”

Hickey argues that what the global economy most needs now is a massive international effort to recalibrate and rejuvenate capitalism. Without such an effort, there is a very real danger that capitalism will end up eating itself: that the rapid growth of inequality, and the pathological political behaviour it engenders, will trigger a succession of national crises as intractable as they are long-lasting. Crises serious enough to throw the future of globalisation, and all its works, into serious doubt.

At least as far as the Labour Party is concerned, Hickey is absolutely right. There does not appear to be anyone left within its ranks willing to suggest even a slight deviation from the narrow neoliberal path. Any party activist or backbench MP foolhardy enough to suggest policies requiring the sort of recalibration and rejuvenation alluded to in Hickey’s posting will set off reflexive eye-rolling on the part of Labour’s senior parliamentarians. Economically, socially, politically – Labour’s leaders are simply incapable of thinking outside the box. And even if, by some miracle, they did; the eye-rolling of their civil service advisers would swiftly persuade them to crawl back inside it.

The opportunity is there for the Greens to seize hold of the new revolutionary agenda which far-sighted capitalists are now willing to back. There are those who, having seen James Shaw in action in front of business audiences, wonder aloud whether he may be the politician to break New Zealand out of its neoliberal straightjacket. If they could be convinced that the rest of the Green caucus were able to see what Shaw sees, then support might be offered on an unprecedented scale.

The stakes in this game could not be higher. As Hickey makes clear, New Zealand is better placed than most to embark on a truly massive programme of national renovation. A visionary programme, he insists, spanning several decades, could easily attract international invesment in excess of $150 billion.

Redirecting the innovative energy of capitalism, away from its present malignant preoccupations and reorienting it towards the light, is this planet’s last, best hope. Were New Zealand to place itself at the head of such a project, and demonstrate its viability, then all those clichés about this country “punching above its weight” would receive their ultimate vindication. We would, once again, have become the “social laboratory of the world”.

 

36 COMMENTS

  1. Capitalism: it’s good for the planet. Yeah, nah.

    Unless all this new investment is carbon neutral and/or accompanied by population and atmospheric greenhouse gas reduction, only one future is certain.

    • We still have to plan for the event that Putin goes his own way, and the White House does there own thing, and Beijing does there own thing. We could lead on climate change but if China, America and Russia don’t follow then all this virtue about climate would have been for nothing.

      • Sam its a mind shift.
        If Kiwis reduced their emissions to the currently agreed level then we will be ready to move beyond that no matter what the big boys do.
        Transforming our economy and lifestyles to meet a shrinking emission target is a much bigger deal that just keeping to agreed emissions.

        Of course others will notice and protest will push further compliance internationally.

        We cannot and will not continue the way we are anyway. Planning and change outweighs any short term benefits of continuing towards collapse.

        • Well I don’t think capitalist democracies can truly deal with climate change. For example when Auckland sinks below the waves how does capitalism move 2 million people with market forces? It doesn’t, the usual way is a war. So stronger regulations are needed for this. We either pay people to do work or we do as the National Party would do and lower taxes and lower the minimum wage and all that. Either way it will be the death of capitalism.

          My fear is we don’t introduce any changes that has any effect on how competitive our workforce is and then it explodes in bloody revolution. You could cut the corporate tax rate in exchange for raising benefit levels. I would bring back something like the Ministry of Works because people who get payed by the system don’t usually want that changed but ultimate a 60% wage growth in the next 19 years should be priced into long term planning or we will be in big trouble.

          As for technology and how comfortable everyone and how pretty it will all look and how well we all get along with each other and so on. Well I mean nothing in nature was designed to be pretty.

          • Sam by the time break down of food supply occurs capitalism as we suffer under now will be very much changed.
            In times of crisis socialism in some form emerges out of necessity.
            NZ in the 1930s was an example.
            But community strength relies on cooperation and common purpose. Govt’s job will be to support that and give resources to enable a better implementation for cooperatives and like developments for common good not for corporate profit. Revolt is likely if that does not happen.
            Taxation could be very different.

          • Well again I don’t believe capitalism will survive but at the same the Left has no viable alternative to capital in the 21st century. I do believe the woke continues to label Trump as a Fascist homophobic xeno or what ever, to cover over the failures of the left.

            The true tragedy for me to day is the Jacinda can not provide an answer for those supporting protesters at Ihumātao and even with in Ihumātao there are people who work against the protestors and they’ve been in this thing for 5 years and some as long as 150 years. So rage and discontent can explode if mismanaged, sure.

            On the other hand even if the left succeeds in Ihumātao in redirecting this rage, the left can not offer a new political vehicle that can mobilise a million kiwis to the polls.

            The left has 3 main things left over from the 20th century. State housing, Welfare and The Open Market. We have nothing yet for the 20th Century. We have the Cullen Fund with only the smallest amounts being invested into New Zealand.

            Unfortunately we just can’t keep up with the change. Even the Welfare State has to be radically altered for the 21st century which is happening really really slowly, by $25 increases every 20 years.

            Now a days it’s all about maintaining the values and rights of conservative farmers from 40 years ago and they maybe correct. Could you imagine a left wing government revolutionising the farming lifestyle with electric tractors and synthetics dairy products and new forms of taxes, science, finance and capitalism. I don’t think anyone truly thinks things through Y’know? So I do not think that a return to a simple old style social democracy can work.

            And I don’t think that adopting this fear based intrusion of explaining the peak collapse of this or that and eventual collapse of what ever industry. I also think this doesn’t work because the problems are global.

            What’s happening is the old industries are being fished out and over used, and the new production is coming online very slowly and no one can coupe with the slow pace of change. So private capital simply isn’t working. We will need a UBI soon.

            And as for the cooperative commons, well that’s over. The Markets keep increasing its debt limits closer and closer to collapse. Of course there are public attempts to take over private commons on the Internet but of course everyone is using Facebook so that won’t work unless the government becomes more popular than Facebook.

            But none the less it’s clear that the economy is approaching its limits. We’ve got the Star Trek computer, we can build quantum computers but we’ve got none of its groves atom reorganising replicators and medical breakthroughs or lightweight materials so capitalism has probably hit a wall and it’s probably got something to do with the $300 odd billion in National Debt and 4 quadrillion, probably 5, in global debt.

            So I think the left thing to do will be to reinvent the welfare state, reinvent State Housing, and reinvent Free Trade and get rid of the bullshit ISDS clause from all trade deals so we don’t give economic nobodies money to keep there business open. Trade has to be remade so it leverages every New Zealand town, city and suburb with roads, rail, public transport, all planned and connected to airports, land ports, sea ports, and space ports. So all these things require constant investment and the improvements, some where in the neighbourhood of $300 billion over the next 10-20 years before bond yields roll over to the point we can’t pay it all back.

            • Currently we are a vessel for multinational investment and profit.
              Any govt that tries to change that will be a target for aggressive push back and take over.
              Neoliberal capitalism will change as socialism becomes a survival necessity..
              Money will still be used and parasites trading in money will be around but banks have to be partly or fully nationalised when things get really tough.
              A NZ Govt owned central bank can issue money and credit within the country without creating bondage to overseas lenders.We have done this before and it works
              The constraints of today’s system of private banks will have to go.
              A very different ball game.

  2. The James Shaws of this world are the problem. As a bank employee advising Coca Cola what sort of sustainability transformation did this lead to? AHHHHH………Nothing! Nor in any other business he “advised”. He is the banks man doing the bankers job just like John Key. Once he is chucked out of the Greens he will go back to his banking masters and be richly rewarded just like John Key. The only question is the damage he does to the Greens in the mean time. What we need is a Rod Donald and while I am tempted on occasions to dig up his grave and try cloning him I dont think the Greens would see that as a solution 🙂

    While some in the Greens get what Hickey is on about (and I mostly agree with his analysis and solutions) to get someone with the nous to sell that to the Greens membership and front it to the public right now would be difficult. What Hickey is trying to do is be proactive to avoid serious future problems. I suspect it will take economic crisis before a will to actually risk doing something different. Either way James Shaw will not do anything the banks don’t approve of in the meantime even though they are their own worst enemies (and of humanity).

    • The real key to the James Shaw issue is that it turns out he was the initiator of the budget responsibility rules that are constraining the government from doing anything very useful for the country.
      Then again maybe he is right, parliament doesn’t have the power to change the neoliberal settings, and he’s doing everything he can. In which case, it will only change when people take to the streets.

      This means we should stop discussing which of the current crop of politicians will do what we want and start building a new movement. We should also vote the Greens out so that there is room in parliament for the political arm of that movement.

  3. I’m hopelessly dumb when it comes to the finer points of economics, so would appreciate someone answering this for me.
    How could James Shaw be our best hope when he signed up to the Budget responsibility rules.
    What has he said subsequently that would lead one to believe he now challenges those rules?
    Apart from that , and without getting bogged down in the more esoteric elements I thought this post and Hickey’s article was terrific
    A bit of hope out there yet.
    How do we get a media that sees its function as informing the populace rather than getting profits for its shareholders?

    • Any politician who cites “growth” positively is overdue for replacement. Fucking idiots. Parrots. Puppets.

  4. Bernie Sanders three years ago put a stake in the ground for real change. If he gets the Democratic nomination this time, (or Elizabeth Warren), then they could be the lightning rod around which a new electorate base could swing behind, and allow them to transform the USA in a fashion not seen since FDR. For them it is a once in a lifetime opportunity. Indeed, his manifesto is in many respects even to the left of where NZ currently sits. Oh how far we have strayed.
    Interesting to note how Chris has mentioned the Green Party as a potential location for such a revolution. For it very rare for a watershed election or revolution to occur from within the governing parties themselves. In a party that size it would be possible for a few new Bernie, Warren or Norman Kirk style candidates to transform it’s economic wing and then its off to the races.

  5. The lack of investment is truly frustrating. We have train lines to upgrade, solar power could be funded or subsidised, water tanks could be financed in Auckland so we don’t have to listen to Watercare saying we are heading for a water shortage when we are sodden from head to toe. Healthcare and education are screaming for more recognition. Where is the funding for green technology? How about a real incentive for your first EV?There is so much that could be done, instead we sit here waiting for the next election with the real risk that the country will turn hard right again, which will be our death sentence, make no mistake. Surely if we climate change is our generation’s nuclear free, we should be doing something about it?

    • We don’t need investment from the international bankers.

      Infrastructure can and should be invested in by NZ, yes our NZRB can fund and create many projects and in doing so will stimulate the economy without sending more capital off shore as interest.

      We have to stop the drain on NZ to fill pockets of transnational bankers.

  6. In my view the answer to capitalism is not more capitalism. To my mind that’s like saying the answer to cancer is increased tobacco production. Capitalism is a failure and its not a new failure either. In fact in one form or other its been around for a long, long time and all its caused is misery, death, inequality and progressive environmental degradation.

    What has worked and still works is Socialism. Indeed as resources grow scarce its the only system that stands a chance of succeeding in keeping the majority of people fed in my opinion and any possible banners of revolution tucked away in closets.

    My view is the current political establishment simply don’t have the will or the creative insight to make the changes necessary to usher in real change. This government could have been a golden opportunity to do things differently but what we have instead is essentially more of the same. What that means over the longer term remains to be seen.

  7. “Government must use rail for climate change mitigation.”

    CEAC press release 9th August 2019.

    The latest political polls suggest that Labour are losing support for a second term Government.

    We at CEAC have been for 19 years fighting to restore the regional rail services on the East Coast from Gisborne to the ‘main trunk line’ at the Palmerston North rail hub, so we can use rail to export-import/distribute our 35% of all NZ’s export products that we in Gisborne/HB collectively produce every year.

    Rail is a far more fuel efficient mode of transport to move every tonne each km than truck freight is, while rail emits far less GHG (greenhouse gases) to help fight climate change, and produces no tyre dust air pollution which causes cancer and nervous system damage as tyres are made from petroleum and is a form of plastic synthetic nylon, while trains have ‘steel wheels on a steel track’ = no wheel air pollution being emitted.

    Today on the news we see that the Local Government (LGNZ National Council) is calling on the Central Government to put into place a “National climate policy” and give financial support for the regions to use to combat the effects and causes of climate change.

    We searched for a Government financial policy for regional local Governments to request assistance from and only found this older (mfe) ‘Ministry for the Environment’ document.

    https://www.mfe.govt.nz/climate-change/climate-change-guidance/guidance-local-government-preparing-climate-change

    This Local Government (LGNZ National Council) call to Government to produce a clear National Climate Change policy fits exactly what our CEAC Environment Centre has been requesting of successive governments for all those last 19 years and we commend local Government for making the call today.

    We recall;

    PM Jacinda Ardern stood on the Auckland Town Hall Podium in that memorable first pre-election speech in September 2017 saying “Climate Change is our generations nuclear moment” and said “lets do this” but so far we have not seen any real “National climate policy” even in the Governments ‘year of delivery’ before the 2020 election which is fast approaching, so we are reinforcing the local Government (LGNZ National Council) call to Central Government to get a ‘National Climate change policy’ in place now.

    Firstly Government now needs to heed the recommendations in the ‘Parliamentary Commissioner for the Environment’ (PCE) 2005 report to Government https://www.pce.parliament.nz/media/pdfs/Hawkes-Bay-Expressway-Noise-and-air
    -quality-issues-June-2005.pdf

    The (PCE) report (link above) calls for a more integrated approach that promotes alternatives such as buses, cycles, and trains and a greater co-ordination between land use and transport planning.

    So as history shows; that when the last Labour Government in 2005 under PM Helen Clark received the PCE report above from the PCE in 2005 with those recommendations to make more use of rail then on ‘HB export transport activities to Napier Port’ recommending to use rail to reduce the increase of the national truck fleet inventory, Labour did respond then, as PM Helen Clark and Michael Cullen as Finance Minister moved to buy back our former NZ Rail infrastructure in 2007/8 which was a great start for restoring our regional rail infrastructure again after years of languishing in a dysfunctional privatisation model that did nothing but “defer all maintenance” on the rail infrastructure and sell parts of it off slowly until the whole network was at risk of collapsing. – During the National Government nine years rail was left to die a slow death with most of the regional rail funding redistricted to the Auckland/Wellington passenger rail services only.

    So finally Winston Peters our Deputy PM, and Leader of NZ First is now with his Minister of Regional Development the Firebrand MP Shane Jones actually the only part of Government who are actually promoting rail by using the Regional Growth Fund (RGF) to lower our carbon footprint from overuse of truck freight still today expanding unchecked today.

    Government should instead restore all adequate funding for our restoration of all regional rail to all our regions that produce all of NZ’s exports such as Gisborne/HB does, to increase our economic wealth, while lowering the GHG emissions from transport that is still not being reduced since Labour took over in 2017.

    “Lets do this”

  8. Far-sighted capitalists are willing to back one thing: profit, in exchange for zero labour on their part, with all costs externalized. Property is the swansong note of capitalism.

    There is no such thing as a socially or ecologically responsible capitalist – for anyone who is practicing these things, is not practicing capitalism by definition: you can’t both extract/exploit from someone/something and be wholesome in relation to it at the same time.

    James Shaw will save nothing but his neck when the sinking ship that he captained doesn’t make 5% in the next election – and he jumps into a cushy business role.

  9. EVz is the first of many steps. However, this government has many other steps in creating a truley successful Leftwing Project of our own.

  10. Until the day when grumpy, malcontent farmers are freed of the tyranny of the foreign banksters, nothing but miserable, financial doldrums will prevail here.
    Why?
    Because our farmer’s money’s being grifted off, for fucks sake.
    Once our primary industry produce leaves the farm gate? It becomes gold. Lots, and lots of gold for a select, urban few. Nothing’s changed. Nothing is about to change.
    New World supermarket. Balclutha. Ordinary sausages ? $10.99 for six. Not long ago? A kilo of shit garlic? $49.99. Cauliflower ? Was up to $8.00 each.
    Neo liberalism is reflected here in AO/NZ as a mechanism used by one or two, to pinch that which was bought, built and paid for by farmer generated money. Money the farmer will never see and who must be content with living out lives buried in debt. Our primary industry is being ripped off and you and me and you over there are going to get fucked without the kissing when capitalist counties start falling hard and while that happens? Our city people have been shepherded into urban debt tombs to strive then die in debt will suffer the most.
    There’s one chance to improve our lot.
    If farmers took control of their own affairs and shoulder to shouldered it with their down income-stream service industries to force the rats from the Beehive shaped woodpile? That’d do it. But from what I can tell? That’s not about to happen any time soon.
    Therefore, my observation is that we are, in fact, fucked.
    RNZ is a mouth piece for the neoliberals as is The Listener. There’s no free to air tv that’s not under fascist like neoliberal control.
    Think of AO/NZ as a ship sailing along… which is about to be boarded by pirates.
    How about this for an idea?
    We declare that AO/NZ is divided into two states. The State of the North Island and the State of The South Island. Then we vote John Minto in as mayor of Christchurch and he helps set up a state senate?
    What’s that sound?? It sounds like snails being stepped on? Is that riche Aston Martin driving Aucklander’s anal sphincters snapping shut in fright?
    ( It’s been tried. It was sabotaged by government Spooks. Serious. It was a thing back in the early 80’s. Colin Simpson RIP? Three time award winning photojournalist, twice in a row? Anyone? )

    • Nationalise the banks.

      Let the frigates come.
      Guerilla warfare and non cooperation with the transnational corporates and target those corrupt weaklings. who collude with them.
      Set up cooperates to source and distribute food at cost and weed out processed crap while its done.

  11. Infrastructure spending! Low cost borrowing! Jobs through fiscal profligacy and probably throw in some Keynsianism? What a rehash. We need more than this. This is exactly the sort of outdated thinking that you’re complaining about Chris. We need so much more before another round of grid construction for the so called economy. We need independence from all this, to stop getting gouged on everything while getting exploited six ways from Sunday, get out of Afghanistan, and the rest of the laundry list I can’t be bothered elaborating on

  12. Fiscal cowardice will be the end of this government. We will be left with rabid national who also won’t do anything except more tax cuts and slash and burn and a disappointment about what might have been.

  13. Francesca, I think that you are less economics- illiterate than you claim but just in case you need a different perspective, and easily understood, try the following link:- “Neoliberalism Has Met Its Match in China”
    Ellen Brown https://www.truthdig.com/articles/neoliberalism-has-met-its-match-in-china/
    She writes in a number of blogs about monthly and always makes sense.

    I am disappointed in Bernard Hickey’s article. Only a few years ago he held the view that , since NZ is a sovereign nation it can and should print its own money supply, just like the private banks do, and does not need to borrow from outside. If he still believed that, his article would look much different
    Sadly his article is pretty standard economics. Also lots of reference to the primacy of “production” and nil about global warming, so totally irrelevant.

  14. This post was what I was looking for, after the ‘great NZ'(?) chairman of the Reserve Bank discommoded Robertson. That he was discomforted was more about his perception, as you highlight.

    Revolutions require people but this age has made persons. We have everything but the engine. Notice out of the ‘freedom and democracy’ our parents fought for in WW 2 the freedom bit enthuses and increases the number of your commenters. We need as great a love and enthusiasm for the rule of the people. Scandinavia acts positively for that. Listening to my transistor these 35 years has made me a demophile, except for a brief libertarian influence prior to Muldoon’s tumble. But I was always on my own.

  15. James Shaw you say?

    But at this point it’s a matter of one step across a piddle of a creek. You have to have a mental blank.

    For all the doubts about him, I prefer David Cunliffe in his camelhair coat wandering disconsolately/contemplatively along the footpathless state housing side of Stout St in Gisborne.

  16. Bernard Hickey writes:

    “It’s dawning on us that Ardern and Robertson, who were schooled in the ninth floor offices of the Beehive by the grizzled veterans of the early 1990s (Helen Clark and Michael Cullen), are actually fiscal conservatives. ..”
    The obscure writing of Hickey fails to tell us what mad things he proposes for his money magic.

    And as for his caning of Michael Cullen, why is Bernard Hickey scornful of the very excellent provision offered every working person in New Zealand. Money now now in the $billions.

  17. Nothing obscure about Keynesian economics, Bernardo (plenty obscure about the 2nd para in my last post). That freemarket economics have delivered mightily for the rich (and, yes, the third world poor) and not much for any one or thing else (the last includes the unwillingness to face existential problems) is evident now even to the purblind. The chairman of the Reserve Bank is chafing a labour economics minister about it!

  18. I’m thankful NZ is still a seedbed for good NZers as well as bad ones, and thankful the latter still orbit Savage i.e. have consciences.

    But it can’t go on without returning to putting the neediest first. Enfuriates me they’ve had to wait 35 years. And that shouldn’t be at the bottom of the cliff. I.e. a strong govt for the people. What this govt doesn’t, or can’t, understand, as you say Chris.

  19. From my, frankly uninterested, memory Fletcher Challenge destroyed itself with diversification, Martyn. Let’s concentrate on turning this’ budget responsibility rules’ Labour Govt. Dig the crowbar in. They’ve had Orr and O’Reilly come at them from the … Left?! If we don’t get a strong people’s govt we’ll get a strong govt of the powerful ( ‘for the powerful, of…’). NOW is the moment. Which we’ll regret ever after otherwise.

  20. Pneumatically pound this point, Chris. Since it’s the only one that matters.

    We have the choice now between a strong govt for the people or a strong (-er) govt for the powerful. This atomised, diversified, nebulous opinionation of Lefties doesne help. As so this sushi railway round-about will go on forever. Nope. Just as wrong as climate change denier Rightists.

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