They do not know what guilt, responsibility, or consideration are, these born organizers: they exemplify that terrible artists’ egoism that has the look of bronze and knows itself justified to all eternity in its “work,” like a mother in her child. - Friedrich Nietzsche
I’ve been goaded to write this post by a couple of Jim Mora panels last week, which created a stronger than usual temptation to throw the radio out the window.
On Tuesday 5 April a collection of middle-class white liberals (as it seems) end up in apparent agreement that the problem of crime in New Zealand will likely result in a physical isolation of the “underclass,” along with criminal sentences, jailing rates and generally stepped-up policing on a par with the USA.
Even if crime statistics were fluctuating, nonetheless it was an inevitability that we would go down this path for society was becoming harsher and more Darwinistic.
And that’s all there was too it, sorry folks: as a parting shot from one of the participants had it, “if you look at the United States, you see New Zealand in twenty years’ time.”
Of course in Auckland, “underclass” is dog-whistle for Maori. So what the Panel were really talking about was a form of Apartheid and the return of the Armed Constabulary to fight the Maori all the way up and down the Great South Road.
How could such atavistic nonsense pass for informed discussion these days, even in dog-whistle terms?
The answer is that we’ve been conditioned to it by a generation in which hardly anybody on the right has employed the slightest restraint in discussing economic matters. A certain ruthlessness in this area is catching, and metastasises to other areas of politics.
April 5 Panel part 1
April 5 Panel part 2
As if to confirm this point about economics, I was forced to listen on Friday 8 April to a ‘fair and balanced’ panel pitting Michelle Boag and the arch-Rogernome Roderick Deane, against token lefty Brian Edwards.
Edwards disarmingly confessed in his delightful brogue to being an “really financially illiterate.” In fact Edwards had really been wheeled on for a debate on broadcasting in the second half of the hour.
Which cleared the field, in the first half, for Deane to claim that record economic growth from 1987 or thereabouts through to the year 2000 set New Zealand up for prosperity, to scapegoat the domestically-funded public sector as a constraint on foreign lenders’ willingness to lend into NZ (technically true, but what are all the borrowings for?), to suggest that it all turned to custard after Helen Clark got in, and to peddle a few other choice lines, which Edwards and Mora actually bought into.
A transcript of part of the 8 April interview follows (any mistakes in transcription are, of course, mine). Some of the more interesting claims are highlighted in bold. There’s more, but I can’t be bothered transcribing the whole thing:
April 8 Panel part 1
April 5 Panel part 2
MORA: “So you’d prune the public service just as was done in the 1980s, you’d do that again?”
DEANE: “Um, unquestionably, I would do that again, yes, because that, at the end of the day that’s the only option if we’re going to bail ourselves out, other than that we’re going to end up with somebody else forcing solutions upon us, I’m afraid. I mean, our overseas debt as a proportion of our national income is now at the same sort of level as experienced by Portugal, Greece, Spain and Ireland just before they became cot cases, so we’re right, we’re the next cab off the rank in that respect. And, you know, we’ve got our destiny in our own hands. We should slow the growth of the government sector and allow more space for the private sector, reduce the regulatory burden, let people get on with the job, that’s what’s gonna produce the productivity growth. That’s what, we were one of the fastest-growing economies in the Western World from the late 80s through to, erm, the early 2000s, and that was off the back of really good monetary and economic, monetary and fiscal policies, we had a big fiscal surplus, ah, by the end of that period, ah, we’d got our overseas debt down, the government overseas debt was, ah, paid off completely, and that allowed space for the, um, private sector to really grow.”
MORA: “And yet someone like Brian Gould, of course, will say, ah, that that’s all very well, but since then we’ve had a gradual decline, we’ve gone rung by rung down the ladder of prosperity, and real incomes have declined, and people are actually not that much better off for all the reforms we’ve been through.
DEANE: “They’re not, they’re not better off in the last few years, but they were a few years ago, I mean if you go back to the mid-2000s they’re immeasurably better off than they had been twenty years ago, or even ten years before that….
. . . . .
DEANE: “… I mean I was Chairman for many years of Fletchers. To construct a building it would take us invariably longer to get the regulatory approvals than it would to build the building. So that was just completely out of hand. And that, everything just operates more slowly, and less effectively.”
EDWARDS: “But to come back to…”
DEANE: “To overcome that, from the, through the late 1980s, late 1980s through to 2000, the amount of deregulation, it really allowed people to get on with the job much more rapidly.”
EDWARDS: “To come back to Jim’s question, if there are too many of those people [in the public service] and they’re all talking to one another all the time and not producing very much, you’ve got to get rid of them, haven’t you?
DEANE: “Yes, yes, and then, um, you have to do that in a sort of sensible and reasonable way, such that as, as the private sector grows more rapidly they get absorbed into the private sector. “
MORA: “OK so that’s the theory…”
DEANE: “That’s what, what in fact we’ve been through that period in the past and proven that it can be done.”
MORA: “Getting rid of the 10,000 people, to a layperson, doesn’t sound enough to do the job, even if you did that.”
DEANE: “Of course not. No, it’s not about, it’s not about getting rid of the people, it’s about just doing things more effectively and more quickly. And that’s, the Government says that that is its wish, but, ah, most people in the private sector would argue that they’re just not doing that rapidly enough.”
EDWARDS: “There’s an issue here, isn’t there, also of what’s got to be acceptable to people. Rightly or wrongly, the most unpopular period, probably, in our history recently would have been the Rogernomics period, 1987 on. People didn’t like it. And they didn’t think it worked.”
DEANE: “Well, we got, we got huge benefits from it right through the 1990s and into the mid-2000s.
MORA: “Do you think…?”
DEANE: “That, that was the basis on which we had, we had the fastest rate of economic growth through that period that we’d had for very many decades.”
EDWARDS: “And did those huge benefits as was, as they were meant to do in fact, trickle down to other people?”
DEANE: “Well, it did in the sense that, ah, unemployment fell dramatically throughout that period.”
MORA: “Time magazine said that…”
DEANE: “We deny that now, but we don’t look at the facts of the matter.”
Boag savaged Len Brown’s rail schemes as “totally cloud cuckoo land,” an obvious financial impossibility peddled by an unprincipled demagogue to an even easily-led electorate.
Well, ah, again, I’m afraid not. If Aucklanders have voted for the considerable mass of taxes raised in that city—including their petrol taxes—to be spent on rail, rather than on Roads of National Significance, then maybe their will should be respected.
You know, democracy and all that? No taxation without representation? That was a cry which really meant local tax powers, because representation gets watered down with distance, especially on local matters.
(Sorry if this sounds like men-in-tights Enlightenment stuff, Michelle. But it meant something in those days at least.)
Maybe Edwards gave a better account of himself when the topic shifted to broadcasting. But by then I had switched off, lest I throw the radio out the window.
Part of the problem is the format of Mora’s panel, in which three pundits discuss three topics. Mora tries to match one pundit to each topic. But the same format means that It’s rare to get a real expert discussion. Usually the discussion on any topic is dominated by whoever seems to know most about the topic.
But these two Panels also pointed to the worrying connections between right wing economic extremism and right wing extremism—indeed, all extremism—of every other kind.
For there is a connection between the offensive messages of the two Panels, even though one was about economics and the other about crime.
As Karl Polanyi suggested in his Great Transformation, the problem is that the language of laissez-faire liberalism seethes with a hidden, Malthusian violence. Language like:
These three bullet points can, with only the slightest twist, be adapted to the cause of a Bolshevik or a Nazi, or any other kind of violent radical or terrorist.
It can be similarly adapted to the cause of ethnic cleansing, Apartheid and military-style policing against indigenous minorities by a settler state. The extreme insecurity and dispossession bred by laissez-faire, in turn, intensifies the problem.
Often both sides in an escalating conflict will use the same language, each against the other. For the radicalised right the useless mouths are the unemployed, for the radicalised left the bankers.
Ultimately, this spiral is an expression of what the American jurist Learned Hand called ”the ruthless and unbridled will,”which is actually the enemy of freedom; it is really the ‘liberty of the strong’:
“And what is this liberty which must lie in the hearts of men and women? It is not the ruthless, the unbridled will… A society in which men recognize no check upon their freedom soon becomes a society where freedom is the possession of only a savage few…”
The skinheads on the street acquire their mental habits, their idea of what constitutes the acceptable limits of rhetoric, from laissez-faire liberals; who are skinheads in suits.
The roots of all this violence lie in the fact that the issue is, fundamentally, about land, the possession of which is, as Marx said, born with a “congenital bloodstain.” Maori and Pakaha alike know all about this, or should do.
As we all know, laissez-faire liberalism as a political crusade is something quite dark and aggressive. It did not really begin with the sunny, humane optimism of Adam Smith, even though the claim is often made.
It actually began with the writings of the Reverend Malthus and his friend David Ricardo in the late 1790s and the Napoleonic era; authors who were writing in reaction to the French Revolution, as the full title of Malthus’s essay reveals: An Essay On the Principle of Population, As It Affects the Future Improvement of Society with remarks on the Speculations of Mr. Godwin, M. Concordet, and other writers.
Malthus and Ricardo argued that improvement of the conditions of the working class, generally at the expense of the landowner, would cause the workers to breed to the point where once more the landowner faced a seller’s market for the fruits of the land. Malthus focused on population, Ricardo on its economic implications.
As a corollary, the industrial capitalist would also be bankrupted by rising food prices, striking workers and land speculation. For a while the Malthus/Ricardo thesis led economics to become known as the ‘dismal science’.
But then some radicals, and radical liberals like James Mill and his son John Stuart, began to suggest taxing these landowners who made capital gains, “as it were, in their sleep” (JSM, Principles of Political Economy), so as to relieve the burden on workers and industrialists.
Ironically, these critics made use of the analysis of Ricardo, and so they came to be known as the ‘Ricardians’ even though they were by now on the opposite political side. Sure it’s the landowners vs. the workers; we just happen to side with the workers!
And in practice also—since we are talking about a fairly broad radical church rather than a strictly Marxist one—the critics would side with the industrial capitalists, at least when it was industrialist versus landowner.
More technically, the Ricardian critique zeroed in on a fatal flaw in the case for laissez-faire, the issue of ‘economic rent’.
The origins of economic rent lie in the landowner’s rent, though economic rent is more general in its significance. Rent in the economists’ sense is the component of private income that can be taxed away without affecting private productive output.
Land is the first and best case of economic rent; obviously, 100% of a speculator’s capital gains could be taxed away without affecting nature’s bounty and the distribution of continents. But the same could also be said for most forms of mortgage interest, especially if it is raised against land.
With other forms of income it’s a sliding scale of rent versus reward for useful effort, depending on how monopolistic they are. Most of the practical controversies of capitalism, such as controversies around intellectual property and copyright, all revolve around this issue. Does a given proposal lock in reward for the efforts of struggling creative types? Or just more rent for fat-cat corporations and their gravy-train lawyers?
From the 1830s, a second wave of reactionaries began to challenge the rent critique. But this time it was not so much in fully reasoned terms, because the idea of rent actually dated back to Ricardo himself!
Instead it was done by means of a less fully reasoned and more polemical approach, which tried to make property rights, above all those invested in land, absolute and beyond criticism on various hand-waving grounds, of which a hardy perennial was that land reformers were really Communists in disguise.
By the 1840s, so radical were the laissez-faire liberals in their opposition to giving an inch on the land question (lest reformers take a mile) that they notoriously opposed doing anything about the Irish potato famine, on the grounds of interference with the rights of private property and the self-levelling market.
Eventually the government relented and did something, but it was too late for those who had starved in the interim. The laissez-faire liberals should have been drummed out of respectable politics at this point like the Nazis a hundred years later. But they weren’t.
Indeed, the advent of Darwin a couple of generations later would give their cause another shot in the arm as ‘social Darwinism’, the law of the jungle applied to civil society. But even here we find self-subverting tendencies in the rationalisation of laissez-faire.
For as Darwin observed, in nature all kinds of symbiosis and cooperation can be found. Selection can favour groups as much as individuals, and groups can reshape their environments. Every organism big enough to be seen by the naked eye is, itself, a collection of smaller individual cells that at some point in the past somehow came to cooperate, as opposed to the deregulation that leads to cancer.
The social insects show that cooperation doesn’t stop there. For the Nazis, this cooperative message was warped into a predatory hive mentality. Other social Darwinists simply weren’t interested in that kind of Gaian hippyshit at all.
What’s the alternative? The answer is that in theory and in practice, a radical (or Millian) liberal will tolerate a fairly large dose of ‘social market’ policy where rents are concerned. The social market refers to an economy in which the state is the main provider of land, mortgages, electric power, and so on.
The state may charge a fair price for all of these in order to ration the resource, but the object is not to gouge the citizen and ship the money to a private bank account!
Instead, the pure rent component of all of these government charges becomes a form of taxation, enabling taxes on productive effort to be lowered: tax reform centre-left style.
Obfuscation of the rent issue is the whole basis of laissez-faire liberalism, from the time of the Potato Famine to the present day. Later developments such as the denial of climate change and peak oil (lest they lead to planning) are only variations on the obfuscation of rent.
As an aspect of this general obfuscation, the laissez-faire liberal also invariably equates market forces with privatisation, as if the choice lay between privatisation and the relative impracticality of doing without markets altogether. The social market is simply not mentioned.
Most people figure out sooner or later that laissez-faire liberalism is about the rent question and that all its ‘you-must-be-a-Commie’ polemics, and omissions of real alternatives, are directed to that end.
As Situations Vacant puts it very pithily and correctly, “privatisation is not about economic efficiency, it’s about the extraction of monopoly rent.” In short, the liberty of the strong, a savage few, to exploit the weak on the grounds that it’s the law of the jungle.
For anyone with a good knowledge of the history of ideas, the cause of laissez-faire is steeped in general intellectual disreputability, in the black dye of Malthusian reaction, through-and-through. Even F. A. Hayek said he wasn’t alaissez-faire liberal; though it goes without saying that most of his followers are.
We are under a duty to put this understanding into practice. Laissez-faire liberalism today must not be confused with the well-meaning doctrines of Adam Smith two hundred-plus years ago, before Malthus.
It must outed as a violent reactionary doctrine, that leads in an unbroken line from Malthus through the Potato Famine and social Darwinism to the horrors of the twentieth century.
It must be opposed by all people of conscience lest it lead to worse horrors in the 21st, which is potentially shaping up to be a very Malthusian century indeed.
Failure to do so is to practice what Herbert Marcuse called ‘repressive tolerance’; to tolerate the forces that will eventually lead to repression. It’s just another way of saying that for evil to triumph the good need only do nothing. The bayonet is always thrust in further and further, till it strikes steel.
It is exactly wrong to imagine that the true spirit of liberty is passive in the sense implied by the laissez-faire ‘nightwatchman state’. It is active and engaged. Yet at the same time it is a spirit “which is not too sure it is right.”
Active engagement in peddling their own ideas, with dogmatic effect, has never been a problem for LFLs. But it seems to be harder for moderates to sustain opposition to dogma.
Against fanatics, against ‘hired prize fighters’ who treat politics as war, the genuine liberal so often goes “ooh ah um well maybe you’re right.” It’s the same with poor old Brian Edwards and Jim Mora trying to inject a note of balance against Deane and Boag’s look of bronze.
The duty to oppose (more effectively) exists even now, because when the present belongs to laissez-faire, bad enough as it is, tomorrow may belong to revived Nazis and Bolsheviks who adapt the rhetoric of the unbridled will to their own ends.
Or it may belong to a theocracy with its roots in the sustained denial of reality. For all such habits of mind are catching.
If you go back far enough or dig deep enough, the attempt of a savage few to crudely dispossess a weaker group of the fruits of the land by actual or institutional violence is the common leitmotiv of all such atavisms.
Why is it so difficult for modern social democrats to oppose the savage few, whose arguments are often so uneasily unmasked as resting on a firm foundation of making shit up, or peddling stuff that someone else has made up? Do they no longer believe in progress?