The neoliberal revolution

Written By: - Date published: 1:31 pm, April 1st, 2017 - 31 comments
Categories: business, capitalism, class war, Deep stuff, economy, Economy - Tags: , ,

Longest April Fool’s joke in history?  Today marks the 30th birthday of “Rogernomics” – neoliberal economics in NZ.  This is a really excellent piece by Philip Matthews on Stuff, well worth reading the whole thing, here are just a few extracts:

Towns full of weeping women: Rogernomics, 30 years later

It was 30 years ago today. Former Cabinet minister Michael Bassett would go on to describe the anticipation, the nervous excitement, in his book Working with David: Inside the Lange Cabinet: “During the last days of March 1987 ministers held on to their hats, hoping that the first day of the SOEs wouldn’t result in too many April Fool’s Day jokes.”

April 1 was a Wednesday. Did it turn out to be funny? Not really. As Bassett writes, within a week of the radical conversion of government departments into State Owned Enterprises (SOEs), 4732 people had taken voluntary redundancy and another 100 went for early retirement. That is close to 5000 redundancies in one week, largely in small town and rural New Zealand.

Then-deputy prime minister Geoffrey Palmer predicted it would be the biggest change in New Zealand public sector history. He was right. It came as a kind of blitzkrieg.

There was more to this than paper-shuffling or a rebranding of the public service in a brave new commercial environment. The image that has come down to us is of a grey, Gliding On-style world of cardigan-wearers on long tea breaks who must suddenly face a harsh but necessary reality. But the truth was more complicated.

“People think of state servants as being in an office,” Patterson says. “But they were coal miners and forest workers as well. You get a place like Tuatapere where the forest workers were laid off – it affects all the shops and pubs, the whole place.”

Patterson was one of the victims of the restructuring when Lands and Survey vanished into history. He finished on March 31 and started with the Social Impact Unit on April 1. The unit’s role was to monitor the effects of restructuring on communities and individuals, and to identify needs. “That was pretty unique, really.”He would knock on doors across Southland. First stop: the mining communities of Ohai and Nightcaps. State Coal Mines had turned into Coal Corp overnight – it was later renamed Solid Energy. “They started by closing two mines and sacking the men who worked there.”

He says that he hit Ohai just as the last union meeting was finishing and the miners were signing on to the unemployment benefit. All the men were together but where were the women? The district nurse told Patterson that they were at home crying.

People were rich overnight but, then again, they weren’t. Inflation was at nearly 20 per cent in 1987 and mortgage interest rates passed 20 per cent by the middle of the year. Unemployment was not high nationally but it smaller towns like Tuatapere it was at around 80 per cent, Patterson says. The 1987 stock market crash came just six months after the first wave of public service redundancies “and many people lost all their redundancy money and superannuation”.

They were volatile times. …

They certainly were. Reminds me of this assessment of thirty years of Thatcherism: Thatcher’s legacy is in ruins, but Britain is still in its thrall.

Further birthday reading for neolibs:
Even the IMF Now Admits Neoliberalism Has Failed
Neoliberalism – the ideology at the root of all our problems
The death of neoliberalism and the crisis in western politics
Authentic Hope in the Twilight of Failed Neoliberal Capitalism

A quote from that last piece:

While the large number of promising social initiatives that can be found across the globe is heartening, there is serious work ahead that requires major changes in the way political strategy is conceived and executed on the left. Creating a civic life strong and diverse enough to counter and supplant the current destructive ethos of globalized neoliberal capitalism requires full political engagement of a kind that is very different from simply voting.

As far as I can see the way forward has got to contain the following elements: universal basic income, sustainable “green” industry / renewable energy, increased education and democratic participation, high taxes on capital and “externalities”. Please add to the list!

31 comments on “The neoliberal revolution”

  1. weka 1

    Glad you put this up r0b, but fuck it’s a hard read. I think we have never come to terms with the 80s or the waves of shock since then let alone recovered. That puts us in a state of chronic stress.

    As far as I can see the way forward has got to contain the following elements: universal basic income, sustainable “green” industry / renewable energy, increased education and democratic participation, high taxes on capital and “externalities”. Please add to the list!

    We could indeed make a list, and those are a good start, but unless we change things more fundamentally we will always be at risk from the neoliberals once they get back into power, or where they retain power on the left. I don’t know how to get from where we are now to something different, but I think it requires a paradigm shift before we look at the elements.

    If I had to pick a focus it would probably be democracy because it cuts across everything else that has been monkey wrenched and is the underlying destabilisation tactic of National. By the time we realise what we’ve lost it will be very hard to change if we don’t have the basic democratic structures and processes in place. Off the top of my head I would look at the local bodies Act, the destruction of privacy (esp in welfare and health, but also the spooks), preventing the sacking of local bodies (do we want National doing that shit when the Big One hits Wellington or the Alpine Fault?), rights to protest, Māori rights (because the stronger they are the better NZ will be protected).

    Mostly we need multiple and cross-sector working together on the important issues. Solidarity politics. That’s another kind of democracy and one that is completely in our hands.

    • r0b 1.1

      Yeah the Matthews piece is grim. I left NZ in early ’85. Found a political clue in Thatcher’s England. Got back here in mid ’89 to a country I hardly recognised.

  2. Carolyn_nth 2

    Return to valuing public and community services
    Upgrading and increasing public housing
    Upgrading and valuing state-funded education system
    Demolish SOEs; more public transport; end to profiteering from essential services like electricity and water for NZ households.
    Affordable housing for all
    Dis-empower financial services and banksters
    Re-invigorating public service media
    Take the money out of politics, especially elections
    Re-structure how the House works so question time truly does hold the government to account and isn’t just a circus.

    • Johan 2.1

      There is a need to tweak our political system, so that it cannot be hijacked by a handful of politicians. Whatever happened to that second sober look when new legislation is being introduced? I do realize that we had a senate once upon a time.
      Also, we need to hold politicians/state employees accountable for their actions.
      I am not a fan of the US political system, but like the idea of having the power to investigate and remove rogue elements in gov’t eg. Nixon.

  3. Ad 3

    “Small scale joyful civic actions” noted in the ‘Authentic hope’ article are necessary supplements reminiscent of Spanish, French and German activism just around WW1.

    I can see they are necessary after the left’s sustained decline.

    But the ‘retro-utopian’ right has some important lessons about immigration and common societal values and their expression in the civic realm that the remaining left won’t find in small scale communitarian activism.

  4. Cricklewood 4

    Thanks Labour…
    I think memories of Rogernomics play a significant role in the way NZ votes for the status quo until the opposition turns into a fascimile of the governing party and people dcide to give them a go.

    No one wants radical change that can turn your life upside down at the stroke of a pen.

    *I have some sympathy for the Ron Swanson position these days

  5. Glenn 5

    I remember the relief I felt when Bolger got voted in in 1990 and thought finally that’s the end of that insanity…then we got the Mother of All Budgets and Ruthanasia and beneficiaries got thumped. Then the Employment Contracts Act thumped the Unions and nothing really changed politically. Rogernomics just carried on.

    “Roger Douglas, minister of finance in the preceding fourth Labour government, said (after his retirement from politics):

    I think the labour market changes in 1990 were first class. I think, unfortunately, Caygill and the Labour party had let the fiscal situation slip from where it was in 1988 and Ruth put that back on the road”

    https://en.wikipedia.org/wiki/Ruthanasia

    • BM 5.1

      Yeah, that was a real kick in the nuts.

      Everyone was like, “yay the madness may end” but it was like some real twisted psychological play were the rescuers we actually worse than the people who were creating all the pain and misery.

      Real out of the frypan into the fire stuff, big reason why so many people despise and distrust politicians, only good thing that came out of that period is that we ended up with MMP.

      • mary_a 5.1.1

        @ BM (5.1) … you state …

        “Everyone was like, “yay the madness may end” but it was like some real twisted psychological play were the rescuers we actually worse than the people who were creating all the pain and misery.”

        A case of Orwell’s Animal Farm revisited for real!

  6. mickysavage 6

    Your choice of photograph was absolutely perfect.

  7. Skeptic 7

    As a bit of a follow up to the article, I was one of the Rogernomics victims. In 1984 there were about 67,000 public/state servants of all descriptions, of whom about one fifth almost fit Roger Hall’s satirical play (and who the Fairfax led papers misled the rest of NZ into thinking all PS were like this). By the time the two ACT governments under Lange/Palmer/Moore & Bolger (after all the two architects did form ACT) there was 34,000 left . I returned to Varsity as a mature student to find out why. I learned!
    Worse, before 1984 about one in three of the workforce was involved in some form or other of voluntary work – from surf life saving to coaching sport to art/craft work to church working bees to social work – about 750,000 people. After 1994, this figure fell to just over 50,000. That’s the real legacy of Rogernomics/Ruthenasia – the total and irrevocable destruction of New Zealand’s voluntary sector.
    Even worse, the whole “economic experiment” was done by stealth and deceit at Cabinet level. Douglas and crew slipped into each Cabinet meeting over a period of about six months, unseen papers that pushed through the reforms – no-one had seen them except a select few. The whole thing was done in secret.
    All this is now common knowledge as a PhD thesis has been done on the comparison of Australia’s open reforms and NZ secret reforms – with direct reference to Cabinet papers. History will judge the perpetrators – traitors – harshly – and justifiably so. Their legacy also includes the rise in the wealth income gap, increased suicide rates, increased divorce rates, increased crime levels, increased third world diseases, devastated internal economy, a wage/slave regime for the lowest 30% of earners where the minimum wage is standard, increased unemployment for youth and school leavers. This list is endless.
    Before Labour can earn the trust of the working class back, it need to publicly and unequivocally disown and distance itself from 1984 – 1990 and above all. apologise for being so stupid as to be hijacked.

    • Thinkerr 7.1

      I was a victim of a different kind.

      Freshly-graduated, I couldn’t compete with the crop of downsized professionals who were reduced to taking what used to be the graduate’s jobs. I spent a few years’ obtaining the practical side of my work, then had to relinquish it 18 months later because I couldn’t afford the annual fee. That led to me having to start a whole new career.

      So, I also voted for change in 1990, to put an end to the madness, only to find that the same agenda was put in place, but with sharper blades.

      I don’t pity myself, because I think the vast majority of (now) two generations have suffered/are suffering because of what happened. I think something had to change – we were not Britains Farm any longer, but as to TINA ((There is no alternative), there are always alternatives and the fact that all this was done in stealth and at speed suggests to me that those involved knew that what they were doing was against the desires of mainstream New Zealand.

      And that’s where my anger lies – the architects of what has ruined many peoples’ lives are still held in high esteem when, in my opinion, the real heroes are those who have kept their families’ fed and watered at their own sacrifice, and also people like Helen Kelly, who took the flak and spoke her mind.

      I don’t think Labour needs to apologise for the past. But what it does need to do is stop presenting a watered-down version of right-wing policy. Give us a credible alternative to vote for that will allow the bottom 90% to live with dignity and to be able to work to live, not live to work.

      • Skeptic 7.1.1

        Absolutely dead right, mate.
        I’m looking forward to when all income is mandatorily disclosed and the lowest income level is set as a percentage of the average top ten percent – say one seventh.
        Only then will all Kiwis feel included and the greedies will be forced to either put up or shut up (or fuck off – emigrate – where we won’t miss them)

    • Stuart Mathieson 7.2

      They won’t do that. But I still remember cadets moving around the BD & M office in Edinburgh House (Dunedin) in slow motion while cardiganed men and ladies with ornametal spectacles kept an eye on them. I wish I’d filmed it.

  8. Tamati Tautuhi 8

    It was basically theft of State Assets by stealth?

  9. Michael 9

    We’re all rolling around with laughter – especially after Grant Robertson and James Shaw decided to keep the joke going.

  10. Sanctuary 10

    Three of the linked pieces in this post take you to articles published in the UK Guardian. In itself, this highlights the pervasive entrenchment of neoliberalism.

    The Guardian has long been big on talking the talk when it comes to opposition to neoliberalism. But when a genuine break with the Thatcherite/Blairist political consensus occured and the UK Labour party elected Jeremy Corbyn as leader against the wishes of the middle class chardonnay “socialists” of the establishment neoliberal parliamentary Labour party the Guardian led the charge in the hysterical attacks on Corbyn.

    The reaction of the comfy liberal Oxbridge elite that warms the seats of the Guardian’s offices to Corbyn (and Brexit) shows that much of what they publish is simply mealy-mouthed hyperbole from middle class liberals who talk of wanting change from neoliberalism, but actively and viciously oppose anyone or anything that might actually bring about that change.

    The Guardian is a classic example of the illusion of a free press and how the (neo) liberal middle class and capitalist establishment maintains a charade of choice when in reality they are in a conspiracy to maintain the status quo – from which both are doing very nicely, thank you very much.

  11. Nick 11

    Rereading the litany of noxious results of neoliberal “rationalization” reminds me also that there are very few problems that New Zealand is facing that cannot be alleviated or cured by a really good Regional Development policy.

    Housing, poverty and the environment can be dealt with far more effectively when the pressure on the city conurbations is lightened, and the plight of rivers and streams is no longer about something in the amorphous mass South of the Bombays, but rather something just down the road. Production can be more efficient in a locale where logistic are actually easy, while workers with a better life-work balance are also far more effective.

    The issue is that so many people today, particularly in Auckland, in their bubble, have the idea that non-Auckland Bucolia is some sort of drooling Hayseedocracy. This, while obviously fatuous, particularly in the age of Internet, is probably a big motivation to reject relocation.

    But New Zealand used to be a highly mobile country when people would think nothing of moving from Christchurch to Auckland to Napier to Golden Bay. In fact the whole Education system was predicated in such mobility.

    Today this flexibility is in the rear-view mirror, particularly from Large to Small centre, but it could perhaps be addressed by a motivated government. To start with, the possibility to get inexpensively from smaller to bigger town could be addressed, (at least in the early stages when dislocated “Jafas” are suffering early withdrawals), but even a sustained government lead would be useful.

    Doubtless not every town can, or maybe should be “saved”, but who gains by jamming ever more people into an increasingly dysfunctional and less and less people-friendly location?

  12. johnm 12

    A government that refuses to control the market will be controlled by the market. The market is not a democratic institution.

    • rocco siffred 12.1

      A market is the only true democracy. All truth is in revealed preferences.

      • Incognito 12.1.1

        A fundamental principle of democracy is equality (e.g. one person, one vote); free-market capitalism is antithetical to equality.

        • In Vino 12.1.1.1

          The market can make a good servant, but it makes an appallingly bad master.
          Do many people really really believe that homo sapiens is so stupid that the invisible hand of the market is its best guide?
          A sad commentary on our education system that too few people have seen through that obvious bullcrap. The market is blind, and all too often manipulated by the privileged.

          • aerobubble 12.1.1.1.1

            Its simple. Look over there. Now i can do what I like, you are looking elsewhere.
            This in essence is free market ideology, Nothing to see here, we dont need to do anything, oh and pass thes laws no question.

            Now why did so many accept it. Simple again. Cheap high density mid.east fuel set the western economies on decades of cheapening fuel costs. Its basic engineering, nothing to do with neo-libs, the market was set to grow whoever was in power. Just the right got out in front and claimed the growth was the result of their ideology. Thank Murdoch.

            Fact is we’ve been beating the crap out of society, citizens, universities, environment, etc to fuel a financial boom, a quite unnecessary and irrelevant wart on us all. And now practical limits hit us, neolibs ideology is the problem holding innovation, govt incentivized, investment, leadership.

            Worse. All that power all that money provides is in the hands of neolibs who think they created thegood times we’ve had and they still do. As Franks put it, let them eat cake, sorry misquote, they,ve never had it so good.

  13. rocco siffred 13

    “Thatcher’s legacy is in ruins, but Britain is still in its thrall.”

    Oddly, Mr Milne seems to have dedicated himself to leaving the UK Labour party in smoking ruins. He has also been very quiet on Venezula in recent years, his preferred alternative to neoliberalism. I wonder why that is?

    • dukeofurl 13.1

      What does Venezuela have to do with anything in particular.

      • aerobubble 13.1.1

        A generation of politicians have been saying they need to do less, or nothing, that the market will do the work, and it still shocks me that people openly admit they vote National, while suggest youth are lazy druggies. Drugged on neolib, lazy thinking, let others do the work, free market zombies.

  14. millsy 14

    30 years of this sort of carry on.

    The NZ government has been reduced to a facade, with much work being outsourced. Most government departments don’t even own their own buildings anymore.

  15. Philj 15

    You should check out this video from Ruth Richardson about how well it has all worked. It is very revealing.

    https://youtube/B36itjmiBs0

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