This week’s Sunday Star-Times was full of stories about unaffordable food, housing and fuel affecting the country’s urban dwellers, nowhere more so than in Auckland. Meanwhile the shortage of housing after the earthquake promises huge rent and house price hikes for Christchurch, assuming the locals don’t flee and push up house prices elsewhere.
Much has been written about the need to invoke some kind of Churchillian / First Labour Government / Ministry of Works spirit, of rolling up our sleeves and overcoming the shortages. But let’s not forget that there was another side to the economy in those days, the spivs, bootleggers and black marketeers who made money out of shortages and stolen goods, even basic necessities like penicillin in The Third Man.
In fact given that speculation in housing seems to have been the national obsession ever since the 1980s, it could be that we’ve been living in a “spiv economy” all those years. An economy of permanent and somewhat artificial shortages that neither the government nor the private sector are actually too keen to overcome, lest it undermine current super-profits.
Being a small, remote island, New Zealand is vulnerable to the development of that kind of economy. After all, if houses are in short supply, they can’t exactly truck them in from somewhere else in significant numbers; whereas that is possible in the USA. Inefficient transport systems prop up the value of existing urban land; and our most characteristic private sector market form is a cosy duopoly, as with supermarkets. And having four foreign-owned banks lending to all sides in bidding contests for local land and houses, like arms dealers supplying all sides in an African war over diamonds, ensures that the winner is—the Bank.
The political economy of the First Labour Government, and indeed every New Zealand government up to 1984, recognised that the profit motive had to be kept in check in New Zealand, for precisely that reason. Remember the Farmer’s Co-op, the Ministry of Works and Development, and State Insurance? That is, when it belonged to the NZ state and not to Australian owners, who’ve kept the old name for the mug-punter Kiwis.
So the question is, can National and its backers actually summon up the spirit that is needed to break the back of the shortage economy? A spirit that necessarily means bringing back some of the institutions, and habits of mind, that were abolished under the Fourth Labour Government? Or could it be that from increasingly unaffordable housing, fuel and food, there is more money to be made than there ever was in the 1980s, the era of all those Dodgycorps?
As the mobster Frank Hugo puts it to ex-serviceman Lucky Gagin in Ride the Pink Horse (1947) “This guy makes me laugh…. Guys like you work all their lives breakin’ their backs trying to earn meat and potatoes. You end up borrowing enough money to buy a hole in the ground to get buried in. Then when you get a chance to make some real scratch, what do you do? Mice like you and Shorty, you ask for peanuts. You know what’s gonna happen when you get outta here? He’s gonna give you a lotta gas about duty, and honor. Fill you with a lotta fancy words like responsibility, patriotism…. And what are you gonna have? Nuthin…. I don’t know why I talk to a lug like you.” View the clip here.
On a more positive note, the growing crisis of shortages overt profiteering and general let-them-eat-cake could be National’s weakness as we count down to the November election and National and its backers are exposed as having the wrong stuff. But only if a still 1980s-tainted Labour can in fact talk the language of responsibility, and persuade us that they mean to act upon it. Otherwise, as Hugo says, all this talk of rolling up our sleeves, bringing back the Ministry of Works and so on, will be a “lotta gas.”