More Harm Than Good

How Labour’s and National’s failure to move beyond neoliberalism has brought NZ to the brink of economic and cultural chaos

TO START LOSING, so soon after you won, requires a special kind of political incompetence. At the heart of this Coalition Government’s failure to retain, and build upon, the public support that won it the 2023 General Election are two fundamental errors: one tactical, the other strategic. Tactically, it is a huge mistake to tolerate concentrations of opposition dedicated to thwarting your government’s policy. Strategically, it is fatal to pursue goals that cannot be realised without doing more harm than good. A government committed to radical change must, therefore, be satisfied that its key objectives are both desirable and obtainable, and then be ready to remove all serious obstacles to their fulfilment. So far, the National-Act-NZ First coalition government has failed to do any of these things. That’s why it’s losing.

National and Act (the jury’s still out on NZ First) are both incapable of grasping the central fact of the last forty-five years: that the neoliberal dream of a world governed exclusively by market forces is not only unrealisable, but would be utterly intolerable. Human-beings are complex and contradictory creatures, not cooly rational utility maximisers. In attempting to transform humanity into beings that could survive and thrive in their free-market utopia, neoliberals would first have to inflict immense and unceasing suffering upon the unconvinced majority. Such misery could not be sustained for very long in a democratic context. Thus, only two scenarios confront the serious neoliberal regime: either it will be voted out of office; or it will transform itself into a ferocious tyranny.

That National and Act don’t get this is truly astonishing. Recent New Zealand history offers plenty of lessons concerning what happens to governments who attempt to push the neoliberal project too forcefully. They are defeated electorally. National’s refusal to be guided by the fate of the Fourth Labour Government produced the salutary lesson of MMP – New Zealand’s Brexit – which instantly rendered the neoliberal project even more illusory. National’s and Act’s problem was that they couldn’t come up with anything better.

The abiding tragedy of New Zealand politics is that Labour and the Greens have proved equally incapable of abandoning the neoliberal project. No doubt there are many in both parties who would like to, but the obvious building blocks of an alternative economic and social project – re-nationalisation, re-regulation, workplace democracy – tend to be dismissed out of hand as either an impossible return to the “failed policies of the past”, or, even worse, “communism”. The restraining hands of those who have accepted, however sadly, the claim that “there is no alternative” to neoliberalism, are forever reaching out to prevent the re-creation of the Left. While, on the Right, the promise is always that just “one more big push” will usher in the neoliberal nirvana.

This colossal failure of courage and imagination has brought New Zealand to the brink of economic and cultural chaos. It wasn’t an easy country to break – a truly outstandingly bi-partisan effort was required to wreak such ruin.

Helen Clark and Michael Cullen had the smarts, and their Alliance coalition partner even had the policies, but both of them lacked the faith that anything lay beyond the neoliberal consensus but an arid conceptual desert and electoral death.

John Key knew the neoliberal model was broken – he was sworn in as prime minister as the Global Financial Crisis was breaking it. But, reconstituting a responsible conservatism simply wasn’t in him, and so he smiled and waved for nine years, while everything that mattered in New Zealand rotted away beneath his feet.

Jacinda Ardern and Grant Robertson had the hearts, but not the heads, for transformation. Then Covid-19 granted them their wish – but not in a kind way.

There was so much that could – and should – have been done. Labour could have done it fast – and with flair. National could have done it at a slower pace – but with more consideration. As things turned out, however, neither were ready to give up on the market. Why would they? Neoliberalism’s success as an ideology is mostly attributable to its core message: leave the economy alone and everything will turn out for the best, interfering with market forces only makes everything worse. It is seldom necessary to tell a politician to do nothing twice.

But, if people are prevented from being useful, then they’ll very quickly learn to be stupid. With the road to a more just economy blocked, leftists opted to re-define human-beings and change their cultures. If you can’t stop the oil companies from cooking the planet, then drive people crazy by demanding that they sort their rubbish into three different bins. If you can’t give working people simple human dignity, then give them some new pronouns. If the neoliberals won’t allow left-wing governments to build homeless Māori houses, then keep them warm with offers of “decolonisation” and “indigenisation”. Let them live under a 184-year-old piece of rat-eaten parchment, instead.

Such was the stupidity that National was elected to stop. But, really, they didn’t have a clue how to go about it. When Roger Douglas and Richard Prebble swallowed the Treasury’s neoliberal Kool-Aid, they were careful to make sure that every economic and administrative institution that mattered in New Zealand swallowed the same brew. Those that tried to fight back, like the Ministry of Works, were simply abolished. The rest were sold. The state sector was required to behave like the private sector. The Nazis called this getting with the programme process “Gleichschaltung” – co-ordination.

What the Coalition Government doesn’t realise is that, although the Left was prevented from co-ordinating the economy by Rogernomics and Ruthanasia, that didn’t mean that they weren’t left free to co-ordinate just about everything else: the judiciary, the universities, the news media, the arts. If they are serious about rolling-back the Left’s stupidity, then the Coalition Government will have to engage in a little Gleichschaltung of their own. All those concentrations of opposition dedicated to thwarting government policy will have to be dispersed.

Not easy in a democracy, and impossible when the neoliberal dream this government is pursuing has long been exposed as a waking nightmare. If National, Act and NZ First are to fulfil the mandate handed to them by the electorate – to take back their country from the wealthy and the woke – then they will need more than a philosophy that reassures its followers that “greed is good” and that giving humanity’s worst impulses free rein – laissez-faire – is the answer to every problem.

Abandoning the promised tax cuts would be a good beginning.

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Chris Trotter is New Zealand’s most provocative leftwing political commentator, with 30 years of experience writing professionally about New Zealand politics. He identifies as a “libertarian socialist” and now writes regularly for the Democracy Project, producing his column “From the Left”.

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (democracyproject.substack.com).