The real legacy of Neoliberalism

Make no mistake neoliberalism is back - we are back on track - despite both Jim Bolger and Dame Jacinda Ardern warning us how Neoliberalism had failed so badly ( 2017 ).

If you asked Noam Chomsky or Naomi Klein about the legacy of neoliberalism around the world they'd point you at all the evidence that contradicts the claims of Neoliberalism - and they'd cite South America, Iraq, Europe, the Soviet Union and the USA as examples where Neoliberalism failed badly.

You'd hear about the destruction of trade unions, workers feeling really insecure in their jobs, having no bargaining power, you'd hear about austerity programmes and the rise of neo fascist groups ( eg. banning muslims ), about 70% of western populations being disenfranchised, rising inequality, long term benefit dependency, the oppression of the indigenous, elitism and rising poverty and crime.

There's huge studies online by academics - but this is just a facebook post - so skipping over much - a brief background is - do nothing capitalism ( Laissez-faire capitalism ) failed and everyone realised it after the Great Depression.

Loads of economists from different schools argued in a big conference in 1938 about how the New Deal ( a series of public works programmes etc ) was the state intervening and what about the free market - and after the Second World War - Keynesian economics ( social democrat - state interventions ) dominated the scene - as the free market economists raged hard but were irrelevant...and things went well for a while - but the Chicago school of economists worked hard to be relevant again.

Milton Friedman and Hayek etc started up the Mont Pelerin Society in 1947 - where they all argued for a while and cutting a long story short Hayek had written a book called Road to Serfdom and that was condensed by the Readers Digest and lapped up by conservatives and liberals all over the Western World.

This was about acknowledging that yeah you need to control the money supply - so no more of that wu wei, laissez-faire capitalism - instead competition would act to make an economic equilibrium and invisible hands would guide prices to their correct level.

Call it the new liberalism - ( neo ) and boom - nek minute you've got this whole elitism story about a trickle down - about unity and choice and individual freedom.

Cutting a long story short ( leaving out Post war Consensus, Washington Consensus, and the IMF, World Bank and OECD etc ) all of this was just academic but eventually it had it's day - because there's nothing like a big shock or crisis to let the new right neo liberalism in.

You know the dissent and dissatisfaction where you vote out a Government - whether it was cos of the Oil Shock, the Stock Market crash, a public debt crisis - or simply a global pandemic and subsequent cost of living crisis ...in surfs neoliberalism with it's blitzkrieg reforms.

They all look and sound the same - they use similar language about the failure of social democracy, the waste of spending, the need to devolve and localise, to make governments smaller, the need for austerity and the way we'll all have a better future.

In 1981 the Atlas Network of think tanks sprung up around the world and they set about working on the intellectual norms in societies by getting their economists embedded in Universities and shaping thinking and policy.

Themes included delaying climate action cos it was too expensive, saying the science was not settled, tobacco may not be the cause, indigenous are separatists and what about unity and equality and wow we need to privatise and decentralise bureaucracy ( sounds familiar ) ...cos private capitalists and the free market will provide better, localised services.

You know about Thatcher and Reagan - but here we had Rogernomics and to be honest - while these were similar each were unique. We had our own flavour - and here's some sauce.

New Zealanders were sick of Muldoon, his heavy handed authoritarian tactics and after a drunk night and a snap election Labour was swept to power in 1984. Ironically Labour the parent of the welfare State in the 1930s ( Savage ) - ended up being captured from the inside ( endogenous ) by a little sect of free market liberals like Roger, Prebble and a few others - and so wow they were the ideal vehicle for radical neoliberal reforms ( Trade Unions did not wish to attack Labour ) while the public were pretty slow to catch on. These reforms were much more radical than most other places - and I won't detail them all here - just a few.

Just about all of our state economic infrastructure was sold off into private hands and some people grew insanely rich and - the way this was done - was to justify it as solving a public debt crisis ( bit like Willis today ) and the privatisation was all done by stealth.

There was a two step process - first corporatise state assets as State Owned Enterprises and then Privatise by selling these suckers off to foreign and domestic firms. You can imagine the glee as Atlas Network folk got themselves onto the Boards and snapped up SOEs making an absolute killing cos these assets were huge and many involved natural resources and were sold for a song.

The same methods you see today were used back in the 1980s...for example Atlas Network Think Tanks like The Centre for Independent Studies had Alan Gibbs, Ron Trotter, Rod Deane and Simon Walker onboard and the likes of the RBNZ, State Services Commission and Dept of Trade and Industry was full of free market plants. They wanted to make the consumer sovereign and competition the driving force...yes and these folk cross fertilised with the Adam Smith Institute in the UK, and the Centre of Independent Studies in the US and Australia.

One example was the sale of Petrocorp - which was a state company formed in 1978 and it had land in Taranaki and shares in Maui Gas exploration. Cutting a long story short Roger and company removed Petrocorp from the State Owned Enterprises Act so they could avoid Treaty Claims and then sold it off.

The whole "principles of Waitangi" clauses arose out of this selling off of resources like 70 forests and coal and land and oil and much of it was done under urgency in backrooms without Select Committee - and wow this sounds familiar - as politicians barked about "foreign xenophobia" and "Maori are holding up the works" and on and on.

The principles of the Treaty stood in the way and highlighted the contradiction between neoliberalism and the Treaty.

Politicians did not care much and private greed was rife over justice and Tino Rangitiratanga.

Once corporatised and privatised you could not get your land back and forget about anymore claims. Today Luxon believes in all these sorts of devolutions and localisms of state assets and services. ( Here comes Bill English and his review of Kainga Ora the same one who wrote the foreword for the Taxpayers' Union 10 year anniversary book )

We sold off NZ Steel, Air NZ shares, Government Printing, Health Computing, Development Finance, State Forests, Telecom, Maui Gas, PostBank, Landcorp etc - and even the National Film Unit etc...and all in the name of public debt to balance the books for about 9 Billion - when really it was Neoliberal ideology at play.

By the end of all this David Lange and mates had sold out Maori and there was tension between Roger and David and - in the end Lange resigned after Douglas was booted and reinstated.

National stormed in and the next Minute Bolger who was using the "decent society" trope about family values that conservatives love - was overseeing the Mother of All Budgets which destroyed the welfare state and gutted benefits - severely harming solo mums and women in general - and yes so began that generational benefit dependency as all the social welfare and protections were removed ...and neoliberals filled the sky.

After endless damage still present today - Helen Clark got in and tried to close the gaps using what is sometimes named "Third Way" neoliberalism - where you soften it all up but basically leave the structures in place and this was better than the Nats or Act but still left us pretty suckered.

John Key surfed in on a crisis - as per usual and set about semi privatising energy assets - and "mum and dad investors" ( the free market was there to solve things and he ratcheted up GST without a mandate - in fact a broken promise not to. ) Naturally our power bills went sky high and nothing improved and not much was done about climate change.

Neoliberals ( calling themselves pragmatists ) saw to it that we underfunded health so that when the global pandemic arrived - we had no PPE, hardly any ICU, and a dog's breakfast of localism and devolution ( Luxon and Atlas ) in the form of DHBs that could not interoperate on a national basis.

Yes the Neoliberals would have cost us lives if it had not been for Jacinda and Grant ( more social democrats than neoliberals ) who saved lives and livelihoods - but who were resented for the global inflation, supply delays, Ukraine War and almost anything else.

Now we have the Neoliberals implementing their Blitzkrieg again ( 100 days ) - as media crumbles ( Jacinda did tell them it was in decline and they scoffed ) and Luxon springs surprise new taxes.

The Neoliberal Assault - is now in the form of stripping Treaty clauses out of the way - fast track consenting ( push off you greenies and Maori ) and weakening the Public Service...and rewriting the principles in legislation so Neoliberal ideology can preside again. That fundamental injustice preserved.

We all pay more for these dumb choices to vote back Neoliberalism however we've been structurally weak - we don't have huge monied think tanks with claws all over government and across private enterprise.

The Trade Unions are on the back foot, Maori are on their own doing great things but they are outnumbered and we've got a media who worries about a 24 hour news cycle - not these matters of history and cycles of neoliberalism.

The real legacy is all around you and every time Luxon or Willis blames the previous government ( in a pandemic ) to justify more neoliberal policy that only makes things worse.

The real legacy of Neoliberalism

Morena

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