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Granny hugs the corpse of neoliberalism

Written By: - Date published: 9:11 am, October 15th, 2012 - 59 comments
Categories: capitalism, energy, jobs - Tags:

Here’s Granny Herald’s genius plan for economic development: if Meridian can get more money for its power elsewhere, it should let Tiwai Point close. 3,000 jobs would be lost. Invercargill and Bluff would effectively be killed. But, hey, market forces! Problem is, if Meridian only considers its narrow commercial interests, it ignores the cost to the country as a whole.

But that’s always been the problem with neoliberalism. This quasi-religious belief that what is good for the one must ipso facto be good for the whole (or maybe that should be, what’s good for the one is all that matters, fuck the whole). That logic might be OK for the corner dairy. It might be optimal for small companies in perfect competition. But it isn’t OK for major companies in monopolistic situations. And it definitely isn’t OK for the Government. Remember, that’s what Meridian is – our government, an artificial division of our government, but our government all the same.

So, what Granny Herald is basically saying is that part of our collective wealth (the government) should behave with the logic of a corner dairy and attempt to maximise its own profits even if that hurts the rest of us (ie its owners) more. This is the madness of neoliberalism at its maddest – our company shouldn’t consider our interests when making its decisions.

None of this is to say that the country might not in fact be better off if the smelter closes and the cheap hydro displaces fossil fuel electricity production elsewhere. Point is, the decision should be made on what is best for the country – and the world come to that, if Tiwai closes it’ll just be replaced by coal-powered smelting in China – not what makes sense in the narrow lense Meridian’s books, which is nothing but neoliberal accounting artifice.

59 comments on “Granny hugs the corpse of neoliberalism ”

  1. Georgy 1

    You cannot run a nation as if it is a commercial entity.

    Business people such as Key are the worst type of person to have managing our economy.

    We need people who have a strong sense of governance. Not profit. Good governance will allow and encourage profit in the right quarter. But there is a bigger picture than simply making a profit or running depts as cheaply as possible.

    • Reagan Cline 1.1

      Who defines the “bigger picture” and more importantly decides YOUR PLACE in it ?

      • McFlock 1.1.1

        Gotta love democracy for that job. It’s a contrary beast of a system, but it’s better than a plutocracy.

  2. tracey 2

    Hear hear. It is possible to be financially prudent without having a profit motive driving everything.

  3. stopthesubsidies 3

    We are paying vast subsidies in cheap electricity to keep Tiwai going, about quarter of a million for each worker http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10605697

    Why not tell Rio Tinto to sling its hook, put the $s into creating work for Bluff and save the wasted power for us to use? No need for more electricity generation, kicking out a plank in the ‘reasoning’ for the sell off.

    Seems to me that the Herald is right in this case in wanting to stop giving corporate welfare to a multinational.

    • Gosman 3.1

      We are in general agreement here.

    • deano 3.2

      maybe we would be better off if we had the power, rather than the smelter. But that is the question ‘would we be better off?’

      the question the Herald asks is ‘would Meridian be better off?’ That’s stupid. You don’t decide your hand’s actions on whether or not they make your hand better off, you ask whether they make you as a whole better off.

      • Gosman 3.2.1

        Are you trying to argue that the major actions of commercial enterprises in NZ need to checked against some sort of arbitary measurement of overall benefit to NZ as a whole?

        • ropata

          are you trying to argue that multinational corporations have no responsibility to the broader society in which they operate and reap vast profits?

          • Gosman

            Is Meridian a multi-national now? I had no idea.

            In relation to the question, NO I don’t agree that they have no responsibility to the wider society.

            I do think that trying to dictate what their MAJOR responsibility will be will lead to a shed load of negative impacts on the wider economy and society.

            Now, are you going to answer my question?

        • Lightly

          of course they should be. Corporations exist for the benefit of society, not the other way around.

  4. vto 4

    Look, the current batch of fools who believe in the free market have shown that they do not in fact believe in the free market at all.

    There was the perfect opportunity in Christchurch to let an entire city develop via the free market. You know, fully hands off. But what did they do? The biggest centrist intervention ever in NZ’s history.

    What they say and what they do are poles apart.

    • Gosman 4.1

      Are you stating you don’t believe in free markets? Is this the policy of any of the political parties represented in parliament because as far as I was aware they all believe in free markets. It is just the degree of freedom they disagree on.

      • vto 4.1.1

        Classic gosman. Avoid the point made. Why did the free market disciples not push to have a go at the biggest opportunity in the country’s history to prove that the free market works? They all ran like widdle scaredy cats …

        Why not gosman?

        • Gosman

          Ummmmm… which free market ‘disciples’ are you meaning here?

          The National party is certainly not the home of libertarian free market ideologues.

          Even ACT believes in regulation and co-ordination by elected officials. The Auckland supercity was implemented under the auspices of a previous leader of the party for example.

          I think you are attempting to set up a strawman argument here so you can feel good knocking it down.

          • vto

            ummmmmm…. let’s see ….. how about the free market disciple that has left the Christchurch red zone residents up to the free market. The market will solve the problem, said free market (when it suits) disciple Minister Gerry Brownlee.

            So why not the same approach with commercial interests as with residential?

            Or you can dodge this very simple question again ….

            • Gosman

              Because, like all mainstream political parties in NZ, the current National led Government believes in a mix of State intervention/co-ordination and letting market forces determining outcomes.

              You might like to see more involvement from the State but that is a matter of degrees I would suggest. If a person sharing such views were in power I could ask an equally asinine question about why won’t they advocate for the State to sort EVERYTHING out. Unless that is what you do advocate for. If so, more power to you Comrade.

              • vto

                Specific question dodged again.


                • Gosman

                  Ah no.

                  The question asked was “So why not the same approach with commercial interests as with residential?”

                  and my answer was because the current Government believes in a mix of State and private sector approaches to problems.

                  Just because you don’t like an answer doesn’t mean it isn’t an answer.

                  • vto



                  • McFlock

                    the point is the fundamentally different “balance” the government has taken vis: rehousing poor people vs rebuilding the business district for its donors capitalist friends.

                    • Gosman

                      Or perhaps the Government has decided there are greater economic benefits to be had of taking a more interventionist approach in relation to Commercial enterprises in Christchurch than the Residential sector.

                      You say Po-tah-toe…

                    • vto

                      You say potato, I say pathetic apologist.

                      If your hunch is right then it is despicable that money gets put before people, in these circumstances. But not surprising as this government is filled with wankers and arseholes (try not to picture it folks).

                      Further, the fact that intervention is deemed to be required to achieve a better outcome is an admission that the free market would not be able to similarly provide. Thanks for the support for my initial contention.

                    • McFlock

                      either interpretation is what vto said in the first place.
                      Fuck you’re a waste of time. 

                    • Gosman

                      Depends once again on your viewpoint. I have seen any number of decisions made by left leaning Governments supposedly to benefit ‘The people’ , (whatever that term actually means), that have had unintended consequences arguable much worse than the supposed problem they were put in place to resolve.

                    • McFlock

                      “lefties did it too” = irrelevant;
                      “unintended consequences” = irrelevant;
                      “viewpoint” = irrelevant.
                      Relevant: the government which claims to support free markets and has embarked of a programme of privatising schools and prisons realises that the market cannot rebuild a commercial centre. That nactoids are hypocritical cocks.
                      Do you have any relevant comment to make on that point, gos?

                    • Gosman

                      I’ve already answered that point. No main stream political party, (including ACT), advocates for a completely free market approach to all issues. Just as no mainstream political party advocates for a completely statist approach top all issues. To take such an absolutist position exposes your argument to ridicule.

                    • McFlock

                      So you see nothing inconsistent between National’s rhetoric and increased use of outside contractors in everything from analysis to prison operation, versus their behaviour when crap performance outcomes would adversely affect the corporate sector?

                    • Gosman

                      How can it be inconsistent when they generally take a horses for courses approach to most things in Government? It isn’t as if they get in to power and decide to privatise everything in sight. Even their asset sales programme they are attempting to implement is to sell minority stakes only. You could equally argue that this is inconsistent with your view that they are some ideologically pure right leaning party that favours the private sector over the State all the time.

                    • McFlock

                      not plausibly, especially given their “voting shares” sale debacle.
                      But anyway, your basic counter to vto’s point is that the nacts aren’t lying hypocrites, they just have no coherent economic philosophy or indeed economic plan?

                    • Gosman

                      That position is only valid if you think ALL mainstream political parties in NZ don’t have a coherent economic plan as they all support a mix of free market and State intervention to resolve perceived problems in the economy.

                    • McFlock

                      Maybe on planet key.
                      In the real world it just seems funny how NACT see intervention as the best way to help their mates in the corporate sector, yet poor people have to go it alone. 

                    • Gosman

                      In your obviously biased view of the world. As previously stated the Government may well have decided that there were better economic returns from intervening in the commercial area in relation to Canterbury rather than supporting everybody. This is entirely consistent with National, (if not ACT), party philosophy.

                    • McFlock

                      It’s not consistent with their “smaller government” rhetoric and assault on the public service. Apparently the civil service is incapable of running anything in Wellington, but is the only mechanism capable of rebuilding a commercial centre (but not the accompanying residential suburbs).
                      That’s not running different horses on their appropriate courses.  That’s having three horses in the same damned race, and switching numbers at the end to pretend that the one with the longest odds won.

                    • vto

                      Exactly McFlock.

                      I have heard nobody explain the point in this wee mini-thread and gosman has made a hash of it too. That is because there is no defence.

                      And here is another for non-Christchurch folk to ponder when considering the politics of post-earthquake Chch and its reflection on the realities of the wanker and arsehole-filled National Party…..

                      The red zoned residential property owners of Christchurch get paid out by rateable value whereas the central city commercial property owners get paid out by market value.

                      WHAT THE FUCK?

                      Explain that one gosman. There is a pin in your granny’s sewing basket for you to dance on I’m sure.

                    • vto

                      In fact, the lack of explanation around these issues is EXACTLY the same as how nobody has been able to explain how having foreign landlords is good for New Zealand (note – not reference to foreign investment, just foreign ownership).

                      Nobody has explained.









          • starlight

            Gosman, Act holds no credibility,roy morgan poll act are 0%.

          • thatguynz

            Hate to break it to you Gosman but the true “free market” is likewise a strawman…
            It exists in theory and fancy – not in practice.  Just like pure “socialism” and many other “ism’s”…

            • Gosman

              Good oh. Then you agree with my point. All we are really discussing here is degrees of free market versus State intervention.

              The current Government clearly favours a more free market approach in some areas but is comfortable with the State playing a leading role in others. Shock horror.

              • thatguynz

                As shocking as it may be – yes I do agree.
                I don’t of course agree with the current government’s approach 🙂

  5. Gosman 5

    I thought many of you lot were against corporate welfare, especially for a large foreign owned multi-national.

  6. tracey 6

    I just read tjis from kiwiblog in 2006.

    ” To put it baldly, Don’s major failing was that he was a very bad liar. Helen on the other hand is a first class liar. Now I should explain – I don’t mean deliberate totally incorrect falsehoods – MPs (including Helen) avoid those sort of lies as much as possible. It’s more the ability to obfuscate, to confuse, to even deceive the questioner. Don had the annoying habit of actually answering the questions people put to him, rather than answering the ones he wanted them to ask. The rare time he tried not to answer the question (often necessary), it was obvious – he was not skilled at such obfuscation. I don’t mean this quite as cynically as it sounds. MPs every day get asked questions which they don’t want to answer, and part of the skills required is to not give an answer which is unhelpful. For example if hypothetically a journalist asks what the Caucus position on nuclear ships is, the answer should be “no change to the current policy is contemplated”, rather than “Well we think the ban is daft, but its popular so 18 out of 29 MPs voted to keep the ban” The other weakness was, in my opinion, trying to be overly fair, and not not pragmatic enough. I don’t mean pragmatic policy-wise (The 2005 policy was relatively moderate) but pragmatic politically. The example here is the Exclusive Brethren, After it was revealed that some Brethren members had hired a private detective, the obvious political response was to use it as an opportunity to say one will not meet with the Brethren again.

  7. quartz 7

    The taxpayer is subsidising Rio Tinto’s electricity and emissions to a greater annual dollar value than Rio Tinto spends each year on labour. It would be sensible to tell them to f**K off and to use those subsidies to promote green growth in Southland along the lines that the WWF and BERL have suggested.

    Hell, the subsidies are so large you could offer every worker three years govt-funded redundancy (circa $300k) to soften the blow and still come out well ahead financially. With the added environmental bonus that you’d lose a large emitter and have a sh*tload of green electricity come on line. We’d probably all have to pay less on our power bills for a while too.

    • tc 7.1

      +1, this is exactly what should happen.

      Aluminium is a commodity under threat from cheap chinese gov’t backed supply, time to move on and sweep away another Muldoon ‘think big’ project that’s done nothing except feather Rio’s nest more so than NZ’s as a whole.

  8. Richard Down South 8

    Wonder how the herald would feel about a 1000% increase in the cost of paper (it’s possible in a free market)

    • Gosman 8.1

      If the NZ Herald was getting a reduced costs of newsprint and was only commercially viable as a result then they should seriously think about getting out of the Newspaper business.

      • tc 8.1.1

        They’re in the newspaper business ? I thought it was part of the NACT PR machine, gosh no wonder they’re struggling that explains alot Gossie.

        • Gosman

          Yeah, that would explain the series they ran on Poverty in NZ. All part of the cunning NACT plan to screw with your minds.

  9. captain hook 9

    maybe the the bonamia virus in Foveaux straight might go away now.

  10. Populuxe1 10

    A minor point: closing Tiwai wouldn’t kill Invercargill – it’s the hub for Southland farming. Bluff would suffer badly, true. I know South Island geography is fairly abstract to a lot of you, but at least try to be accurate.

  11. captain hook 11

    and where is this Free Market that you believe in?
    show me.

    • vto 11.1

      It’s in the fine print in the documentation around the loan given by little old lady ratepayers in the Selwyn District by their Council to the very large and wealthy dairy sector in Canterbury for an irrigation project to turn unirrigated farms into dairy farms worth 5 times as much.

      You see, the free market wouldn’t stump up to assist with this Central Plains Water scheme so instead they force a loan from little old lady ratepayers.

      It is also in the documentation of the NZX, the stock exchange, surely the final bastion of free market enterprise, whereby their failure to attract enough investment in the last 80-plus years to make a viable and successful trading place for businesses, that they have to take electricity companies from the taxpayer (cf ratepayer) to bolster their shortcomings.

      The free market ethos has failed in the sense and scale that disciples have believed. It will take them a while yet to either realise this or to wake up.

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