by Philip Ferguson
Much of the left has banged on for the past six years about neo-liberalism being the dominant economic policy in New Zealand. Before, and for several years after, the 2008 election many on the left also claimed that John Key had a secret agenda to pursue a ruthless neo-liberal policy programme.
Here at Redline, and in our previous political involvement in the Workers Party, we argued that this was, to put it bluntly, nonsense. The Key government was a middle-of-the-road government that gave a few things and took away a few things. We also argued that a Marxist analysis, rather than the almost hysterical anti-National Party politics which typifies much of the left, would show that NZ capitalism needs extreme neo-liberalism like it needs a hole in the head.
Neo-liberalism had done what it was needed for in the 1984-1993 period – raise the rate of exploitation, weaken the working class organisationally and politically, cut state spending that didn’t facilitate surplus-value extraction – but had clearly failed to deliver dynamism to the NZ economy, so the ruling class had moved beyond it to a new policy mix. The government and ruling class have been in a post-neoliberal policy framework for quite some time, while most of the left is stuck in 1984-93 mode.
Interestingly, Mike Treen, the national director of Unite union, and perhaps the most consistently left union leader in the country, has now come out and stated unequivocally that National has not been pursuing a neo-liberal policy framework. In fact, Mike has gone even further than us, saying that Key and co. have essentially been operating in the framework of Keynesianism. While we don’t agree that Key’s reign has been marked by a return to Keynesianism, although there are elements of that in the currently dominant policy mix, we welcome this new voice of sanity.
Here’s how Mike put it yesterday on Unite union’s official blog:
“The National Party ran a fairly orthodox Keynesian policy in response to the Great Financial Crisis and the Christchurch earthquake by running large budget deficits that doubled the government debt to GDP ratio from 17% to 35% GDP. The big tax cuts for the very wealthy also contributed its share to the debt growth. The changes to labour laws have been relatively minor and the minimum wage has been kept at around 50% of the average wage. This is not a radical neo-liberal government like we saw in the 1990s.”
The reason this issue is important is that we need to have an analysis of the current state of NZ Capitalism Inc in order to work out which way the capitalist class and its minions in government will move in terms of economic policy. The existing dominant left practice of crying wolf all the time gets in the way of the political clarity necessary for effective resistance and simply discredits the left, who end up looking like a bunch of cranks.
Whether Mike’s dose of sanity will have any impact on those sections of the left which have kept up the silly charge of neo-liberalism against Key’s government remains to be seen.
The Key-English government in the context of capital accumulation in New Zealand today: https://rdln.wordpress.com/2011/06/20/the-key-english-government-in-the-context-of-capital-accumulation-in-new-zealand-today/
Key’s ‘vision’: managing the malaise of NZ capitalism: https://rdln.wordpress.com/2013/01/31/keys-vision-managing-the-malaise-of-new-zealand-capitalism/
Low pay, longer hours and less social mobility: welcome to NZ capitalism in the 21st century: https://rdln.wordpress.com/2012/02/08/low-pay-longer-hours-and-less-social-mobility/
Coming apart down under: the decay of New Zealand capitalist society, 1970s to 1993: https://rdln.wordpress.com/2011/06/23/coming-apart-down-under-the-decay-of-new-zealand-capitalist-society-from-the-1970s-to-1993/