“There is no alternative” or TINA was the famous cry associated with the former Prime Minister Of the UK Margaret Thatcher and the introduction of free-market fundamentalism into government policy.
Capitalism had been through a period of growth in state intervention following the Great Depression and World war Two. But a crisis developed in the mid-1980s that seemed to be associated with government spending facilitated by money printing that led to “stagflation” – high inflation and stagnant growth at the same time.
Nearly the entire economics profession and official opinion-makers were won to the view that free-markets and free-trade were the obvious solutions. “Trickle-down economics” became the new mantra with tax cuts on businesses and the wealthy in society “as a means to stimulate business investment in the short term and benefit society at large in the long term.”. Turning publicly-owned services into private profit-seeking businesses became an essential part of the process. If the business couldn’t be privatised for some reason it was subject to the same market-driven profit-seeking principles anyway.
Throughout the capitalist world tax cuts for the rich simply meant cutting welfare and degrading public services like health and education. Public housing became unavailable and private housing turned into a speculative commodity out of reach of ordinary working people now dependent on private landlords.
Unemployment, limiting union rights and cutting real wages were deemed to be needed to prevent inflation ever coming back.
Of course, there would be inequality and obscene displays of wealth accumulation but that was the price needed to restore economic growth and create jobs. “Greed is Good” became their mantra.
The political and economic leaders who imposed these policies transitioned into and out of politics and business leadership roles but with a single ideology to promote markets and profits. The former leader of both the National and Act parties, Don Brash went from private business to the Reserve Bank, to parliament, to private business again. John Key went from private business to Prime Minister and back to business as chairman of the ANZ Bank and director of many companies. Former Labour Party leaders and MP’s are usually not that different.
New Zealand is a tiny country on the edge of the world with the population of a medium-sized city anywhere else, yet our “leaders” insist on being paid the same as business leaders and politicians in the biggest and richest countries.
In my view, the setup is simply corrupt.
New religious dogmas were imposed in the language of economic theory to justify this direction. One of these was the alleged need to permanently run government budget surpluses. Combined with tax cuts for the rich the end result was that surpluses could only be achieved by starving the state of needed expenditure on welfare, education, social infrastructure, and workers wages.
One result of this approach was that in New Zealand for 18 years after the 1990 budget cut welfare benefits by up to 25% both Labour and National governments would only increase them by the consumer price index. This meant benefits halved in value in relation to average wages while housing costs sky-rocketed. National Superannuation, however, kept its relationship to the average wage and was, therefore, protected.
Both Labour and National bought into the lie of the deserving and undeserving poor.
Widespread misery and homelessness was a consequence for people on benefits. A conscious decision was made by both governments to ignore the obvious misery being inflicted. Conscious decisions were made to prioritise repayment of debt over protecting the least fortunate in society. In some ways the debt was actually privatised as many working people were forced into debt slavery to survive as a consequence.
Today, the low government debt has allowed the government to more easily go into debt to help the banks and big companies keep functioning during the crisis. But this is not a justification for denying people the right to basic entitlements in the past. Today we have the “undeserving” rich being bailed out while the poor remain denied decent benefits or access to social housing
Today the wealthy owners of land, finance, and businesses are rewarding themselves still further at the government’s expense through inflated prices for shares and property and dividend payments and share buybacks.
For the one percent in society, the system increasingly focussed their attention on accumulating property and financial assets to speculate with rather than on actually producing things of value in terms of meeting needs. Of course, these forms of wealth accumulation were made effectively tax free.
But the promised trickle down in wealth to create jobs and incomes of course never happened. It was always a lie.
Today, the most basic institutions of the state have been hollowed out to such a degree that delivering the basics we need is not guaranteed.
This was true for health services across the globe and it means that nearly everywhere failed to prepare for the pandemics that we had been warned would be coming with increasing frequency as a consequence of capitalism external conquest and degradation of nature.
In New Zealand, we actually have dodged a bullet time and time again.
But we have a chance to look for a new way forward.
The new way forward must be based on an economic plan that puts people and jobs before profit and the planet and its health before growth.
We can, for a period get away with simply printing more money to fund new and different priorities than those of the past. But there will be a limit to that before inflation returns.
That means we must also begin taxing those in society who have spent generations not paying their fair share. We could begin with a special tax on wealth held by households with assets over $50 million as a special Covid-19 emergency fund. We could simply work out what they would have paid if they had been workers – say at least 20%. That seems fair to me.
Any government that puts the people and the planet first would then prioritise lifting the incomes of the unemployed and sharing the work that is available without loss of pay so everyone could have a job if they want one.
We should begin a process of guaranteeing a job for everyone who wants one. That could begin next year with everyone who leaves school being guaranteed a job at a living wage, further education or apprenticeship.
Housing education and health care would exist as of right and the job of the government is ensuring those rights as soon as possible.
Transport, energy and finance would be public services owned by the government and governed by a democratic plan involving the workers in these and having empowered communities deciding their own needs and priorities..
The government would then prioritise policies that create a genuine clean, green New Zealand rather than the rather degraded version that exists now.
That would be a truly transformational Green New Deal and it could start the day after the election.