Customer Reviews

Taking New Zealand Seriously: the Economics of Decency

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Hazeldine clearly explains the loss of good will and community experienced in New Zealand society since the reforms of 1984 through the 1990's. He cares about NZ, and is not beholden to left/right labels
Reference: <a href="http://physed.otago.ac.nz/sosol/v6i2/v6i2_2.html">http://physed.otago.ac.nz/sosol/v6i2/v6i2_2.html</a>

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The Experiment

From 1984 until 1999 New Zealand was subject to a radical experiment in free market economics. An economic miracle didn't occur. Prior to 1986, 15 to 25 year old New Zealanders were making a median income of $14,700 a year. By year 2000 the same group were making $8,100 and youth suicides were higher than in comparable countries. As well, living standards had plummeted and 70 percent of households were worse off than counterparts ten years earlier (Boshier, 2001).

Cabinet briefing papers spoke of "a sense of unease about the country's social fabric ... the fraying state of the nation's families, children and the socially excluded" (Clark Finds New Energy, Sunday Star-Times, January 23, 2000, p. C2). `Efficiency' and the `free market' meant the already disadvantaged - young Maori and Pacific Islands women - were even more seriously jeopardised (Peters, Marshall & Massey, 1994).

After 1984, foreigners came to observe The New Zealand Experiment. Most were already convinced of the supremacy of Friedmanite economics. For Friedman the only thing that matters was shareholder profit. That the company might also think about its workers, community, society or planet was dismissed as quaint rubbish. Comfortable at the Hilton or Hyatt, visitors were in no position to witness the precipitous decline in literacy and numeracy rates, escalating expulsions from school, a deepening problem of Maori underachievement, confusion of demoralised and underpaid teachers, dismissal (through restructuring) of large numbers of skilled workers, 78 per cent cuts (in a single year) to adult education and emergence of an underclass. Apologists were also in no position to observe the collapse of conviviality, the belligerence of political discourse, and the consternation amongst people with lives turned upside down.

Given conditions at work and a growing divide between farmers and wage earners, trade unions took root in New Zealand and resulted in formation of the Labour Party in 1916. The depression of 1931 created hardship in households, riots, relief work and new theories about social policy and government. In 1935 the Labour Party swept to power on a landslide. It was this government that created a welfare state. By 1984 conditions for radical change were in place. How new right members of the inner cabinet and lobbyists persuaded Labour to jettison social democratic traditions and commit to total capitalism is described by Douglas and Callan (1987). Kelsey (1995) identified the anti-democratic nature of the reforms. The following were significant:

*** Policy changes were made with lightening speed. No time was given for reflection or discussion. As Douglas (1993) said "Implement reform by quantum leaps. Moving step by step lets vested interests mobilise. Big packages neutralizes them. Speed is essential. It is impossible to move too fast" (p.3). Critics called this a blitzkrieg and antidemocratic approach.

*** There was a constant stress on globalisation and TINA (`there-is-no-alternative'). Voices which articulated alternatives were discredited or dismissed as `unrealistic.'

*** The past (particularly pre-1984) was dismissed as irrelevant - an embarrassing welfare state muddle (Boshier, in press).

*** Consultation was used for implementing - not changing - the thrust of reforms.

*** A democratically elected government in an advanced state rather than a developing country trying to curry favour with international financiers undertook large-scale and radical structural adjustments.

*** Pure economic theory was applied in a manner that had little regard for social (even electoral) consequences. Opponents were `benighted.' They `didn't get it.' It was not a matter of `politics,' just `reality.'

*** Labour, a party traditionally opposed to such policies, initiated the restructuring.

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Market rationality

After 1984, the rationality of the marketplace would prevail. It didn't work. Instead, society "lost cohesion and continuity .... industries closed, communities withered, people moved out of employment, change has been so constant that many people are disoriented. People wander through life relating to no social group wider than the family, and often not even that" (Jesson, 1999, p. 211). Expatriate New Zealanders (like the author) noticed how, despite extraordinary accomplishments in many fields, the post 1984 neo-liberal rendering of globalisation eroded confidence.


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It's just globalisation

A stark example of the sea change in cuultural attitudes, and the dichotomy between nouveau riche and grassroots kiwis, was during the bitter "Blackheart" and "Loyal" campaigns during the Auckland America's Cup regattas.

A centrepiece of the neo-liberal (radical right) post-1984 `reform' of New Zealand society was the need to forget the collectivism of the past and embrace individually oriented entrepreneurship in the global economy. Because of the post-1984 experiment with neo-liberalism, many New Zealand citizens were sanguine about defections from Team New Zealand. Young people had grown up with lectures about wealth creation. Having lived in a `cult of finance' (Jesson, 1999) they were used to the idea that `money talks'. Defections were an inevitable consequence of globalisation.

The rightwing Business Roundtable was untroubled by the notion of people selling New Zealand intellectual property abroad; i.e. that humans act out of self-interest and material wealth is the prime motivator. Hence, they abhorred fretting about migration losses. People must "do the best for themselves and their families" (Kerr, 2001, p. 4). "Does it matter if Brad Butterworth takes his skills and money offshore?" asked the Business Roundtable.

Defections are part of headhunting and a salient attribute of professional sports. But, in a small country with a fragile economy, where every taxi driver, farmer and student has an opinion, losing six of the world's best sailors was a serious problem. Hence, the 2003 America's Cup was not a `friendly contest between nations' (as anticipated in the Deed of Gift). It was a regatta like no other.

Alinghi vs. Team New Zealand: A study in contrasts
(GLOBALISATION vs LOCALISATION)

Main sponsor: Swiss billionaire's personal fortune,
vs. `Family-of-five' N.Z. companies

Estimated Cost: $150 million,
vs. $85 million

Boat name: Postmodern signifier; Brand with no meaning
vs. Country

Logos/branding: Postmodern swirls
vs. N.Z. Silver Fern

Staffing: Worldwide headhunting
vs. Mostly N.Z. nationals

Relationship to nation-state: None
vs. Considerable

Operational foci: Individual `excellence'
vs. Team building

Motivation: Money/Global Marketing
vs. Country/Pride

Leadership Orientation: Great men
vs. Team

Syndicate Organisation: Corporation
vs. Whanau [Extended family]

Links to Indigenality: None
vs. Considerable

Historical Consciousness: None
vs. Considerable

Focus of rewards: Private interests
vs. Public good

Meaning of `home': Poorly defined
vs. Well-defined