GUEST BLOG: Tadhg Stopford – NZs curious case of corrupt self destruction
When the Soviet Union collapsed, Western economists rushed in. Promising prosperity through free markets and deregulation, they instead engineered the largest theft of public wealth in human history. A handful of oligarchs seized control of vital industries, while millions plunged into poverty. Russia’s economy shrank by over 50% in five years. Life expectancy collapsed. Social trust disintegrated. [¹]
The architects of that disaster? Neoliberal technocrats. Chicago School economists. World Bank advisors, and a US deep state committee to diminishing its adversary.
Across the world, Margaret Thatcher was performing the same surgery on Britain—shuttering coal mines, selling off council housing, and breaking the power of unions. “GDP” grew, but public infrastructure crumbled, inequality soared, and regional poverty deepened. Today, the UK is the most geographically unequal country in the developed world. [²]
In the United States, a similar script unfolded. Reagan deregulated finance, gutted public investment, and cut taxes on the rich. Four decades later, with these policies widened and deepened, life expectancy is falling, infrastructure is collapsing, and financialised monopolies dominate the economy. [³]
All three nations were rich when they began this experiment. They had deep capital markets, large populations, and global empires behind them.
New Zealand had none of these things.
But we copied them anyway.
Its a corporate friendly copycat catastrophe – who benefits?
In 1984, New Zealand’s leaders embraced radical economic reform—without a mandate, public consultation, or historical understanding.
- We floated the dollar and deregulated finance.
- We sold off state assets for a fraction of their value.
- We cut public investment, slashed R&D, and outsourced strategic planning to consultants and banks.
And despite the public’s repeated rejection of these policies at the ballot box, every major party continued the same path—just in different packaging.
What did we lose?
- Telecom, NZ Rail, Contact Energy, Bank of New Zealand—all sold to foreign interests.
- Marsden Point Refinery, dismantled. We now import 100% of refined fuel. [⁴]
- Sovereign tools like the Ministry of Works, Development Finance Corporation, and State Advances Corporation—disbanded.
- Geological mapping, science, R&D—gutted. [⁵]
We now allow Australian-owned banks to extract $6–8 billion in annual profits from our economy. [⁶] We give away gold and minerals for 1–2% royalties, far below international norms. [⁷] And we spend billions renting back the infrastructure we used to own.
Governing without a plan – or is the plan theft?
Unlike Singapore, Norway, or post-war Japan, New Zealand has never written a long-term national plan. Instead, we’ve adopted what might be called cargo cult economics:
If we privatise, efficiency will rise.
If we let the market decide, the best outcome will magically appear.
- Our infrastructure is crumbling.
- Our housing crisis deepens.
- Our exports are still mostly raw commodities.
- Our innovation ecosystem is underfed and undervalued.
We’ve outsourced governance to the New Zealand Initiative, BusinessNZ, lobbyists, and consultants. These private interests shape economic policy while the public foots the bill. It is, to use an old fashioned word, corruption.
NACT enables the sell-off.
Labour delays and deflects.
NZ First trades favours.
The Greens oppose extraction without offering an industrial replacement.
No one touches the core question:
Who owns the future—and who decides how it’s built?
Instead, our leaders abdicate their responsibility to the nation and our people.
Our sovereignty has been ceded to ‘the market’
What does Sovereignty actually look like? Public benefit. National benefit.
Let’s be clear: sovereignty is not a slogan. It’s a strategy.
Sovereign nations:
- Map and steward their resources.
- Own their infrastructure and industries.
- Control their credit and investment.
- Plan across decades—not news cycles.
Singapore built world-class housing, ports, and education using sovereign credit and state-owned enterprise.
Norway turned oil into a $1.7 trillion sovereign wealth fund.
China builds entire industrial ecosystems with five-year plans, public banks, and strategic SOEs.
Other countries and regions (Japan, sth Korea, Scandinavia) do so too. The US and UK used to.
And New Zealand?
Well, we used to be sovereign too. But now?
We let the market pick over our carcass while pretending it’s a virtue.
But, we still have a choice.
Because, we have a Reserve Bank (not every nation does). We have a bond market (that reallly really wants to buy our public credit/debt). We have land, skills, ideas, and natural wealth.
What we lack is the political courage—and public understanding—to use them.
We could:
- Launch a sovereign resource inventory and mineral mapping strategy.
- Rebuild a Ministry of Works to deliver housing, rail, and renewables.
- Establish a Development Bank to fund industrial and regional growth.
- Create a National Energy and Minerals Authority to steward extraction and value-add processing.
- Write a Public Wealth Strategy—just as Treasury once did for commercial assets in 2010 [⁸].
We could invest for the future, instead of selling it off.
But, for some reason, our leaders prefer that we be exploited like a colony; instead of developed as a nation. Who benefits?
Follow the money.
As Lord Rutherford said “we dont have much money, do we have to think”
Well, we do have money now. And we still refuse to think.
In 1936, labour planted our magic money tree, aka the RBNZ, aka our bank that can issue our credit to fund our development. Which it did, successfully, until it was handcuffed by labour in 1989. The 1980s onwards is when the “greedies” (as Muldoon called them) took over.
Since then, the NBR rich list tells us, we have grown our very own oligarchic class. These, in turn, have poured money into their special interest groups. Known to most of us as national, act, nzf, “the New Zealand initiative” (aka business round table), and lobbyists.
Russia shows what happens when oligarchs write the rules.
The UK shows what happens when public assets are stripped bare.
The US shows what happens when capital eats the state.
New Zealand shows what happens when we copy them all—without even the scale to survive it.
It’s time to stop imitating failure.
It’s time to think like a sovereign people.
To write the plan we never wrote.
To build a future no one can sell.
This will require two important and difficult things. Integrity, and wisdom. Or what Adam smith famously called “virtue and prudence”.
Ask chat gpt what Smith says in book 4 & 5 of ‘the wealth of nations’ and how this compares to nzs economic policies over the last forty years. It’s not been prudent or virtuous. It’s not been “for the public benefit”. That’s why most of us know something’s wrong. Because the outcomes of the last forty years have been the opposite of what we were promised.
Yet still we, the passionless people, listen to the politicians lies; and allow them to drive us towards racial conflict, global war, and public poverty.
Pro bono publico.
For the public good, or not at all.
Rule without justice is tyranny, regardless of whether it is “legal”.
Apartheid was legal. Genocide, according to the west, seems fine when it’s on brown people – even if they are the oldest Christian communities in the world. Law and justice are not what they used to be.
Nz has suffered 40 years of lawfare and spin. It seems time to start buying pitchforks. The old ways are best. Let’s reclaim our sovereignty from ‘the market’.
It’s time to wake up.
It’s past time to discuss public credit and sovereign development.
Let’s get real for a change
Tadhg Stopford is a Historian and Teacher. Join him at www.thehempfoundation.org.nz. Support change by purchasing at www.tigerdrops.co.nz
Sources
[1] Sachs, J. (2000). The Economic Consequences of the Transition in Eastern Europe and Russia. Brookings Papers.
[2] UK Inequality Report (IFS, 2020): https://ifs.org.uk/
[3] EPI, 2023: The New Gilded Age — https://www.epi.org/
[4] MBIE / Energy News: https://www.energynews.co.nz/
[5] MBIE Science Budget: https://www.mbie.govt.nz/
[6] RBNZ Bank Profit Reports: https://www.rbnz.govt.nz/
[7] NZPAM Royalties: https://www.nzpam.govt.nz/our-
[8] Treasury (2010). Crown Ownership Monitoring Unit Report. https://www.treasury.govt.nz/
Thanks for a realistic explanation and prescription for the future. I can imagine that the usual moaners will reject any decision unless it’s made by the politicians they worship, even though our politicians have almost continually failed to improve anything. The current coc took delight in rejecting the previous governments positive actions and gave the impression that they would be happy if we all lived in mud huts wearing grass skirts as long as they had their own special place and high-class swill to survive on.
I was having a nice Monday morning, till I read this. Now I realise the ‘nice” was just willful denial.
The most clear, concise, summary of the last 40 plus years I have read. And, ideas on a path forward. Thank you
Just what I think Steve.
As an aside, Putin put a stop to western financier and industrialist 1990s-pillage of USSR and Russia, instead enabling home grown Russian oligarchs to replace the foreign robber barons.
This is the underlying reason the decade-long post-Berlin Wall detente and thawing of US/Russian relations soured in the early 2000s.Russia and Putin both went from being darling to devil. Russia’s assertion of sovereignty is not tolerated by the West and was one of the drivers for agressive expansion of NATO leading to the Ukraine war.
And all you hear from the MSM fed zombies is “Russian Aggression , Russian Aggression , Russian Aggression .
Putin merely represented the corrupt Moscow elite. Gorbachev created an enviable economic success in Primorye, but could not replicate it further west because of entrenched corruption. So he was pushed out. Yeltsin & Putin got to divide the spoils of the breakup of the Soviet Union. But Yeltsin’s daughter got involved in illicit diamonds, and suddenly Putin could make the scandal go away.
Which begs the question – who of our corrupt oligarch stratum stands to gain from the final wreck of our democracy, and what is their end game?
Brilliant , bravo .
I remember when Helen Cark got in and us workers at the coalface were waiting for Bill Birch’s
Union busting legislation to be repelled . Waiting ,waiting , in the mean time my wages took a serious hit and
by the end of her nine year tenure nothing had changed . Its then that I knew for sure labour was not Labour any more and the whole concept of choice was a charade .
Excellent article. Without an understanding of how governments actually create and spend money and how this is the foundation of the private sector it is very difficult to stop people from voting against their own and their children’s best interests.
The government does not borrow money or raise taxes to fund it’s activities – new money is created by the RBNZ in the first instance and spent directly into the private sector – as per the budget agreed by Parliament. Taxes withdraw money from circulation to control inflation after it has been spent by the government – not before. Government bonds are private sector savings (not a loan) nobody is ‘loaning’ their pension fund to the government – bonds are a guaranteed term deposit for savers – not debt.