The Promises of Lange, Moore, Bolger, and the WTO

Written By: - Date published: 9:15 am, August 4th, 2024 - 26 comments
Categories: capitalism, Deep stuff, economy, Globalisation, International, Politics - Tags:

If one were to boil down the harvest of promises, ripe hopes, and vintage-deep beliefs from the late 1980s and 1990s by our political leaders, business leaders and their spokespeople, endless columnists, think-tank writers and quangoes, you’d find the following.

The power of the nation-state is waning, and we’ve done well to accelerate that decline.

Such states as we know them are not particularly useful and often dying anyway.

In the future, power will lie with global markets. Free markets.

Thus economics not politics or armies, will henceforth shape human events.

Freed of national interests and inhibiting regulations, global markets will gradually establish global economic balances.

Through this new balance humanity and New Zealand in particular will outgrow the eternal problem of boom-bust cycles.

Such markets will unleash surges of international trade, and then a broad tide of sustained economic growth.

That tide will raise all ships including those of the poor, right across the world.

That resulting prosperity will allow put-upon individuals to convert dictatorships into democracies.

Those democracies won’t have the power of the old nation-states, which is great because that means a shrivelling-away of irresponsible nationalism, racism, and political violence.

The stupendous size of these multinational markets will require ever-larger corporations. Their size will raise them above the risks of bankruptcy. This will cause a much more stable world all round. They will become like virtual states, quite impervious to the prejudices of individual sovereign governments.

As the power balance between corporations and states recalibrates, new conditions for optimised healthy governance are formed, and so we will see the emergence of debt-free government. Neither markets nor remaining society will stand for any less.

We will follow our collective self-interest through markets  towards a life of prosperity and happiness.

The old cycles of history will have been broken.

And if New Zealand followed all of this more rigorously than anyone else, faster than anyone else, our own market dominance in dairy and meat products will see us truly dominate those specific markets, and New Zealand will be richer for it beyond its wildest dreams.

In 2024 we ought to ask which of the above was true. 

There’s plenty of evidence. 

Because there have been and always will be alternatives to act upon. 

26 comments on “The Promises of Lange, Moore, Bolger, and the WTO ”

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  1. Tiger Mountain 1
    4 August 2024 at 10:47 am

    Where does one start with that pile…perhaps with the fact that markets are code for monopoly capital and international finance capital. They are malevolent rather than benevolent systems for billions of people.

    “Trickle down” has not delivered for the vast majority–as finally admitted by World Bank, IMF and OECD–wealth becomes concentrated in ever fewer hands. There were 3,194 billionaires worldwide in 2022.
    https://www.forbesindia.com/article/explainers/top-10-richest-people-world/85541/1

    Nation States have become more prominent not less as shooting wars and potential wars are increasing.

    The trend towards right opportunism and populism around the world ala Trump’s attitude to free trade and various others sees not a cheery globalism but isolationism. After the 2020/21 major COVID world supply chain disruption with container ships queuing for weeks to unload, “just in time” and offshore production are being revisited by a number of US and other corporates.

    As for “dominate in Dairy and Meat”, well that has its own blow back for NZ waterways and environment. This is a long narrow land of plenty–but we have still not managed to feed all our kids or resolve post colonial fall out–and it is not likely until new gens participate more and a few more boomer funerals occur.*

    *I’m of boomer age but a left aligned one that opposed Rogernomics and state asset sales from the start.

    • Karolyn_IS 1.1
      4 August 2024 at 11:22 am

      Agree. Ad's post seems quite utopian, but neglects a lot of countering details, like the ones TM mentions. Also, within nation states, we already have vast inequalities eg the US is the poster child for such inequalities. If there's no international regulations and weak governance locally, how will profiteers and criminals be policed? And surely there'd be more social discontent, riots, etc?

      • Anne 1.1.1
        4 August 2024 at 6:51 pm

        If there's no international regulations and weak governance locally, how will profiteers and criminals be policed? And surely there'd be more social discontent, riots, etc?

        Precisely. Ad seems to have forgotten to include the human element in his vision of Utopia. Remember Adam of biblical fame? He stole the apple after having been told not to touch it. Nothing has changed and nothing ever will.

    • Ad 1.2
      4 August 2024 at 8:48 pm

      Clearly you missed how the piece is a condensed critique of an entire ideology of 30 years of globalisation.

      The arc was covered well before Stiglitz' "Glbalisation and its Distontents", well before Wolff, or Professor Kelsey or Easton or Jesson, in fact even John Ralston Saul had a go at it 20 years ago.

      If Helen Clark had generated something akin to Biden's Inflation Reduction Act we would have had a nation-regarding framework for Ardern to build on. That act is the full-throated repudiation of globalisation that we've been waiting for here.

  2. SPC 2
    4 August 2024 at 11:11 am

    One perspective about what the end of nation state capacity means – declining local infrastructure (unless funded by global corporations creating shareholder returns) and only offering market efficiencies in health and smashing of the teacher unions in education. He neglected to add Hooton's end company tax … let the private sector grow (though he was prepared to consider a CGT)

    https://www.stuff.co.nz/money/350364940/damien-grant-we-may-be-avoiding-technical-recession-we-are-failing-confront-reality

    An article about a world economy, written as if the decline of the WTO and the separation of China from the western supply chain had not occurred. And while there is still no international agreement about taxation of global corporations or tax haven rules. Let alone the growing isolationism in the USA and the EU cartel.

    Maybe you should have written speeches for TM BJ, LT and R, the island (sans EU) trading with the world, more opportunity for the City than the days of empire.

    It only makes sense, in the context of GW, which the Pentagon sees as generating political instability, causing the collapse of national borders (and or indebtedness).

    There is an answer to national indebtedness – MMT and variants of, but that will be resisted by private capital. That decision will decide the fate of democracy – if corporates rule, democracy will be local council elections.

    • Ad 2.1
      4 August 2024 at 8:51 pm

      Damien Grant is an outrageous right-winger who simply underscores how badly we miss good analysts like Rod Oram. It is particularly sad that James Shaw has chosen to take the Infratil money and run rather than engage in the public sphere and debate.

  3. SPC 3
    4 August 2024 at 11:40 am

    In 2024 we ought to ask which of the above was true.

    About the neo-liberal con

    There’s plenty of evidence.

    Home ownership now under 60% and expected to be under 50% by 2050.

    Because there have been and always will be alternatives to act upon.

    Fooled once, it's on them … fooled …

    • Ad 3.1
      4 August 2024 at 8:56 pm

      Home ownership is an interesting metric, but the big one is the speed of shift from being an egalitarian society with a narrow band between richest and poorest, to a simply massive pool of the poor and a tiny 1% with $7m net wealth or more …

      … and an even tinier .5% with over $20 million or more. That's a group about the size of Kerikeri: 8,000 people controlling the wealth of 5 million people.

  4. SPC 4
    4 August 2024 at 3:25 pm

    Maybe a speech for CL … the landlord class audience would have liked something more to applaud than than two arithmetic tests each year for the kids (so they can do back of the envelope budget forecasting accurately)

  5. Barfly 5
    4 August 2024 at 5:28 pm

    The neo-liberal boom times have been a time of world wide robbery of the assets that nations had built up over decades. angry

  6. gsays 6
    4 August 2024 at 10:06 pm

    Thanks Ad.

    We are getting ever increasing stories which highlight how this terrible experiment has failed the citizens.

    Welfare for working people that extends to a government direct subsidy to power company shareholders and lanlords winter energy payment and accomadation supplement.

    Home ownership dropping.

    The over subscribing of early childhood education (babysitting).

    Corporatising of our health system leading to a running down of facilities, post code lottery of health provision, importation of foreign staffing that does not represent our population all in the name of the balance sheet.

    The migration tap on full without the requisite investment on infrastructure.

    A government too shy to build big infrastructure projects because we now lack the capacity to do it ourselves. Time for a Ministry of Works 2,0.

    The trajectory is not good.

    • aj 6.1
      5 August 2024 at 8:13 am

      Time for a Ministry of Works 2,0.

      Sean Sweeney says much the same without spelling it out. A very interesting interview.

      Auckland City Rail Link: CEO on why NZ struggles to build stuff | Q+A 2024

      If everything had gone to plan, Auckland's City Rail Link would be up and running by now. But instead, the biggest city's largest infrastructure project is way over the original budget, and years behind the original schedule. Q+A speaks to outgoing City Rail Link CEO Sean Sweeney about why New Zealand seems to struggle to complete large infrastructure projects on time and on budget.

      • tWig 6.1.1
        6 August 2024 at 9:21 am

        In fact, Te Ahu a Turanga –the 11 km Manawatū Tararua Highway rebuild run by a comglomerate of Waka Kotahi, construction firms and local iwi, with inbuilt reforestation and a $620mi budget – is well on track and on budget, no PPP involved Something you hear nothing about, funnily enough.

        In a recent excursion trainride through the Gorge, we passed the amazing, huge, curving uphill Viaduct (half-finished), at the Manawatū end. Awesome engineering!

        So this project challenges the story of poor local capacity and implementation for such projects. Even with the dreaded ‘iwi involvement’. It may be a short project, but it's not small, with 6 bridges and a shitload of earthmoving.

  7. thinker 7
    5 August 2024 at 6:59 am

    I'm old enough to remember life before neo liberalism but was a child then.

    So, I have 2 questions:

    1. If a government decided to throw out neoliberalism, what workable alternatives are out there? I'm not sure the welfare state as it existed is right for these times.

    2. Is neoliberalism harder to get out of, the longer it's been in place?

    • gsays 7.1
      5 August 2024 at 12:26 pm

      In answer to 1, I'm no political scientist but something like a social democrat government with a healthy dose of protection for important industries.

      Clothing and textiles, pharmaceutical, etc.

      While we are at it, reform of the tax system where we tax all the transactions that take place outside of the current tax umbrella eg currency speculation and shares changing hands.

      Kiwibank given the ability to do all the government's banking.

      As for 2, we don’t have to be rid of it immediately, Bite size chunks. For example, hospitals bring catering back in-house, along with laundry and security.

      • tWig 7.1.1
        6 August 2024 at 9:27 am

        NZ Post for all official mail. Local contracters preferred for eg supply of Defence Force uniforms.

  8. georgecom 8
    5 August 2024 at 10:58 am

    I was musing about something similar this morning albeit from a different starting point.

    My point of departure was the seeming pretty obvious need for a CGT in NZ, if for only 2 reasons. First it is a source of new income for the state at a time when budgets are in deficit and we have to pay for Willis' tax cuts somehow. Second it does not seem logical to have a source of income untaxed when most other sources are, a dollar earnt is a dollar earnt and should be taxed accordingly.

    Turning then to arguments why capital gains should not be taxed the best I could come up with is along the lines of higher taxes stifle investment and growth, lower taxes encourage investment and economic growth, jobs, wealth creation, prosperity etc. The promises of Douglas – Richardson – Brash and the new right This then leads to the reality of those statements.

    The vision we were sold in the 1980s was a virtuous neoliberal vision of economic growth, increases in productivity, rising incomes and prosperity. Historical cycles of growth and recession somehow alleviated, a golden epoch of market led prosperity just around the corner. A flat tax system the ultimate expression of that ideal and the ultimate expression of low taxes lead to sustained growth and prosperity.

    So that neo-liberal vision in reality. We have had growth and recession, productivity has not romped ahead in leaps and bounds and wealth has flowed up but not cascaded back down in any extent the vision suggested. Investment has not flooded into productive endeavours that make the country as a whole richer, much of it has been sunk into assets like housing. Free markets have not been self sustaining, financial markets blew apart in 2008, quickly contaminating the real economy, delivering the biggest economic shock since the Wall Street crash.

    Seems to me that a CGT is a pretty obvious thing to have, the substantive arguments of merit against it perhaps being around the complexity of implementing such a tax but not the merits of the tax itself.

    • thinker 8.1
      5 August 2024 at 1:19 pm

      I might be too simplistic but another thing that occurred to me is that when times are hard ordinary people can keep the money they earn, but it doesn't go far.

      When times are good, banks are allowed to raise interest rates which seems to me to be another way of saying the banks get to have some of the extra money you earn (delivered in part to the banks shareholders) until the economy contracts again.

      Am I missing something?

  9. E. Burke 9
    5 August 2024 at 11:33 am

    Promises not delivered? Some people are hard to please

    Global Poverty

    Poverty rate worldwide | Statista

    1990 37% of the worldwide population lived in poverty.

    2019 8% are in poverty and still reducing

    Life expectancy (Same source)

    1990 Worldwide life expectancy 63 years

    2021 Worldwide life expectancy: 71 years

    • gsays 9.2
      5 August 2024 at 2:38 pm

      @E Burke: How about some stats from Aotearoa?

      Including house affordability in relation to wages and inequality.

    • SPC 9.3
      5 August 2024 at 3:55 pm

      Over the past 30 years, there has been an almost constant reduction in the poverty rate worldwide. Whereas nearly 38 percent of the world's population lived on less than 2.15 U.S. dollars in terms of 2017 Purchasing Power Parity (PPP) in 1990, this had fallen to 8.4 percent in 2019. This is despite the fact that the world's population was growing over the same period.

      It's only one measure – and without reference to living costs.

      Age.

      Medical developments.

      More farm production and food aid.

      Poverty

      Foreign aid. Development focused local area charity (down to the scale of small business finance for village women). Distribution of technology (clean water/power/information) to governments and regions and schooling.

      Third world environmental degradation or exploitation of labour for lower cost production within the global supply system is a secondary, not primary, characteristic, in poverty reduction.