Liam Hehir: Three reasons neoliberalism isn’t going anywhere in NZ

Liam Hehir: Three reasons neoliberalism isn’t going anywhere in NZ

Never let a crisis go to waste, the cliché goes. Which is why, given predictions of a serous economic slump, some of prime minister Jacinda Ardern’s stalwart supporters are urging her to remake the economy for the better. But those hoping that the PM will embark upon a Hugo Chavez-style rejection of the neoliberal paradigm are likely to be disappointed.

Here are three reasons why.

One: There has not been a crisis of capitalism

This slump has not come about because of the failures of the economy. It has been brought about because we have halted the economy for nearly two months. Indeed, what we are suffering now is very much a trial of the scarcity and stress that would ensue if we turned our backs on a way of doing things that, on the whole, has delivered much for us over the decades.

This is not to say that the Before Times were always happy times for all people. On the contrary, there have always been people ill-served by our system of free enterprise and a moral society should always take the edge off such suffering through a properly resourced safety net. And to argue that we are not doing that well enough is not the same thing as rejecting the ideas that have brought about general prosperity.

Radical economic change is more available when the people being blamed for the crash are finance bros. In this case, the parties responsible are microbes. Those are less happy as demagogue hunting grounds.

Two: The electoral system

In the days of first-past-the-post, governments were, in the parlance of political scientists, “elective dictatorships.” Parliament was dominated by the prime minister and cabinet, who not only controlled the legislative program but were also usually assured that its bills would clear the House of Representatives. And so it was that the fourth Labour and National governments were able to institute a program of controversial economic reforms in the face of a series of crises in the eighties and nineties.

New Zealanders decided we didn’t like that so much, so we introduced proportional representation which makes an elective dictatorship hard to achieve. Since then, we have mostly had minority governments, where the parties in cabinet do not command an absolute majority in the House. Politics is supposed to operate with greater emphasis on negotiation and consensus in this new era.

Here’s the problem. A lot of the people who endorse MMP because they like the idea of consensus government also get frustrated when others won’t join the consensus for a bold new vision. Any radical departure from the status quo is going to generate resistance, and the more radical the departure the more motivated the resisters. In the olden days a government might be able to ride things out but that’s no longer the case.

You can’t have it both ways. For better or worse, power is bridled now. More conservative government is an outcome of that.

Three: The prime minister’s temperament

Some left-wing agitators despair that Jacinda Ardern does not use her “political capital” to persuade the nation of the need for radical reform. But the thing about political capital is that if you accrue it through congeniality, you become reluctant to spend it. If your brand is built on being broadly popular, what do you gain by tarnishing that through attempting reforms that probably won’t pass anyway.

A popular leader is a bit like a soccer team with a narrow lead in a must win game. Knowing that the team that makes the fewest errors is likely to win, and understanding that an expansive style will lead to errors, the temptation is focus on eliminating risks. In soccer, that means parking the bus and focussing on defence. In politics, it means pleasing but vague platitudes.

To date, Jacinda Ardern has made few moves to radically change the country. Despite convening innumerable working groups to suggest drastic new directions in various areas, few of the bolder recommendations have been implemented. When faced with determined opposition, Ardern has been content to repair back to safer ground.

There’s nothing new in that. While widely considered to be a neoliberal maniac by the unhinged, Sir John Key frustrated the ideologies on his side by not moving against the popular elements of the prior Clark government (such as Working for Families and Kiwibank). And, unsurprisingly, Key was very popular throughout his tenure.

Reforms, not paradigm shifts

The challenges faced by Ardern and her cabinet are formidable and may require serious government intervention at some level. They will be newsworthy and will have consequences for the wellbeing of this country. But it is much more likely than not that they will occur within the economic framework that has prevailed since the end of the Sir Robert Muldoon era.

To my friends on the left all I can counsel is that they try not to be too disappointed.


This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.  

Photo by Thomas Hawk on / CC BY-NC