So much for bosses’ support for the ‘free market’

And if you're a capitalist and any of these characteristics become a problem you can call on the capitalist state to circumvent the free market; if you're a worker it's actually illegal most of the time to set the price for sale (of your labour-power)
Gerard Lameiro’s ‘Nine characteristics of a free market’.  But if you’re a capitalist and any of these characteristics become a problem you can call on the capitalist state to nanny you  and circumvent the free market; if you’re a worker it’s actually illegal most of the time to set the price of your labour-power

by Phil Duncan

The list of ‘private enterprise’ elements that simply can’t cope with the operations of the market continues to grow.

For instance, we’ve had dairy farmers who require state money for irrigation when, surely, they should be relying on the market – sell shares in the business, attract financial investment from and on the market, or whatever.  Anything but nanny state money, surely?

In Christchurch, we have businesspeople in the CBD with their hands out for nanny state support, rather than relying on the operations of their beloved, all-knowing, all-seeing, all-providing market to set, maintain and raise the price-value of their properties and businesses.

We have huge companies, like Hollywood movie outfits and Rio Tinto, who require nanny state intervention.  The movie moguls got the nanny state National government to intervene in the market for labour-power by passing laws restricting what workers (labour-power) could do, while Rio Tinto requires the nanny state to intervene to guarantee cheaper than market prices for resources that it uses, like electricity.

And, of course, all laws which inhibit the right of workers to withdraw their labour or organise collectively for their interests are – surely? – nanny state interference with the free market.

The latest bunch of sorry capitalists whining about the operations of the market are a bunch of Queenstown employers.  They are upset that people aren’t lining up to work for them for the minimum wage of $14.75 an hour.

But doesn’t capitalist economics tell us it’s all about supply and demand.  You have to work to these.  So if $14.85 isn’t getting workers queuing up, then surely that’s the market sending a message that the pay being offered isn’t high enough?  Shouldn’t the government be upholding the free market and telling Queenstown bosses, “You’ll have to offer more, folks!  You can’t buck the market.”

However, rather than meeting the market, Queenstown employers wanting more workers are pushing for nanny state to organise the supply for them.

Far from upholding market principles, associate tourism minister Paula Bennett and immigration minister Michael Woodhouse leapt quickly to their aid.

According to Bennett, “The tourism industry in Queenstown is experiencing strong growth, with spending by international visitors up 36 per cent in December compared to 12 months ago. While this is great news for the industry, it has created some unique challenges for operators struggling to recruit enough staff with the right skills to help with the increased demand. This has been compounded by Queenstown’s tight labour market, and a relatively high cost of living.”

The immigration process has been streamlined to help Queenstown employers bring in overseas labour and, as Woodhouse puts it, places “a temporary hold on the requirement for employers to conduct a Labour Market Test for higher skilled applications, which will relieve immediate pressures in Queenstown while wider work to address issues is underway.” (The speed with which Woodhouse moved to get the Queenstown bosses out of the pickle the free market had put them in is in marked contrast to his preparedness to deal with zero-hours contracts!)

So, basically, all these wealthy folks are wanting to buck the market and demand nanny state intervention to subvert what we are continually told are merely the impersonal, natural and normal (and efficient) operations of the market.  How could this be?

Are these folks simply two-faced, lying hypocrites?  Or does their ‘different rules for different classes’ outlook indicate that the market is itself highly problematic and their market ideology is the necessary covering, the necessary bullshit, to make the rest of us think there is no alternative to the existing economic order.  But if they can interfere with the market, why can’t the rest of us?

Next time you hear someone say anything along the lines of “you can’t buck the market”, remind them that capitalists do all the time and so it’s high time that workers started doing it as well.

And, in terms of the cheap ‘foreign’ labour that the Queenstown employers want the government to do the nanny state thing and help provide, the answer for workers here is not to try to keep them out, but for unions to organise these workers.  Make sure they know their rights and entitlements and involve them in the fight for better wages and conditions for all, regardless of either ‘the market’ or the capitalist state.

Further reading:

Low wages, longer hours and less social mobility: welcome to 21st century NZ capitalism

The political economy of low-wage labour

Who’s free in the free market?

Acknowledgment: this article was inspired by a comment by “VTO” on The Standard blog; VTO gave the dairy farmer and Christchurch CBD examples and mentioned Queenstown, but without going into any detail.  They were taking the piss out of the free market ideology and that inspired this piece.


  1. Very well said. The “free market” relies on big state intervention, usually on the side of business. A large, desperate, compliant labour pool is what is built into our economic system

  2. Indeed, capitalism couldn’t have developed in NZ without the state playing a big role. The state provided the muscle for separating Maori from much of the land; organised, built and paid for most of the infrastructure; organised, as you say, the labour pool and tried to make it as compliant as possible; intervened in industrial disputes on the side of the boss class; and used a thousand and one mechanisms to ensure both the reproduction of labour-power and social stability – the two things most essential to a smooth process of capital accumulation.

    There has never been, nor can there ever be, any such thing as totally free market capitalism. Except in the theory books of academic economists. But not in the real world.


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