2020-05-05 09:20:17 UTC
Covid 19 coronavirus: Simon Wilson: Is this the death of
5 May, 2020 By: Simon Wilson NZ Herald
Everywhere we see the signs. Here and overseas, politicians who
usually insist that the market knows best have fallen silent.
Corporates that have benefitted from light-handed regulation now want
protection. Business lobbyists who complain about tax have their hands
out for help.
In March, Steve Baker, a leading libertarian MP in Britain, was
reportedly "nearly in tears" as he spoke in the House of Commons in
support of a massive economic aid package to address the Covid-19
"Libertarian though I may be, this is the right thing to do," he said.
"But, my goodness, we ought not to allow this situation to endure one
moment longer than is absolutely necessary to save lives and preserve
Which is another way of saying his precious world view that
governments should get out of everyone's way was currently not only
useless, but dangerous.
He also said, "We are implementing tonight, in this bill, at least a
A dystopian society? Or a society finding within itself the strength
of common purpose to defeat a pernicious enemy and rebuild itself from
the wreckage? What's dystopian about that? Being stronger together is
why we choose to live in societies in the first place.
What we are doing now has the makings of a great achievement of
civilisation. Those societies that get their pandemic response right
have the chance to become more resilient, less burdened by their
current failings, better able to face the next crisis and the next.
We're one of them.
You want to know what dystopia looks like? New York.
Some of the former cheerleaders of neoliberalism are smart enough to
have already flown the coop. In Britain the Economist, once a champion
of the Reagan/Thatcher economic revolution, is now firmly entrenched
in the mixed-economy camp. The Financial Times last month talked up
the value of redistributive taxes and more central planning.
Here and overseas, though, other champions are digging themselves in.
It's been suggested the Government should not try to choose which
industries to support during the recovery, as if "picking winners",
which is difficult, is the same thing as identifying necessary
industries and helping them to survive and evolve.
Seriously? We know we have an important future in food production. We
also know there's a technological revolution afoot which the
Government must ensure has every chance of thriving here. It's
happening in medicine, communications, education, logistics, farming
... it's not hard to add to this list.
Well, not literally "every chance": allowing corporates not to pay
tax, which is acceptable to neoliberals, can't be allowed to continue.
And can we agree that wherever we invest, we do so with a focus on the
future. More sustainable land use; better allocation of resources to
need; more flexible and rewarding ways to live, work and play.
That requires inspired Government direction. Right now, with billions
of dollars on the table, is the perfect moment to embed this thinking.
Which does point to one of the big fears of the remaining neoliberals:
we could be about to take the climate crisis seriously.
There's another: that we might take poverty more seriously. It's been
proposed the Government should roll back the April 1 increase in the
minimum wage, because it hurts small employers. But that doesn't even
make narrow economic sense, because what those employers need most of
all is spending to return to the economy. If you give poor people more
money, they will spend it.
Also under attack: the Provincial Growth Fund, branded as the "New
Zealand First slush fund". Let's be clear about this: how it's run
bears scrutiny, but that fund is designed to bring economic life back
to the regions. The alternative, pursued under neoliberalism, was to
leave some of them to rot.
One of the most treasured beliefs is that only an anointed few have
the proper skills to run a Government. Thus Prime Minister Jacinda
Ardern and her Finance Minister Grant Robertson are said to lack "real
world experience" something which supposedly made their predecessors
"capable, intelligent and eloquent".
After 35 years of neoliberalism, let's just remember what those
"capable" leaders bequeathed us. A level of poverty that should be a
scandal in a developed society. A broken health system, a deeply
embedded housing crisis, rising carbon emissions and dysfunctional
transport in our major city.
None of these were "unintended consequences": they are the inevitable
result of the neoliberal policies pursued for so long in this country.
Real-world experience? Life in the rarefied, unproductive and utterly
amoral world of financial trading is about as unreal as it gets.
Sadly, neoliberalism isn't about to die just yet. In many parts of the
world, those in power are still happy to insist that if you focus
wealth on the wealthy, everyone else will benefit too. Trickle-down
The immediate problem here is transition. How do we do it? We're good
at reactive and compartmentalised thinking: pre-Budget, most
commentary has focused on immediate proposals: is this tax package
good enough, what will happen to that wage subsidy? These are
important questions but they channel us away from structural change.
They assume that all we want is a return to business as usual.
How will the Government jump? It's still susceptible to neoliberal
thinking but it is also committed to the Wellbeing Budget strategy.
Last year we saw the first, limited iteration. With a new Budget next
week, the great test is now.
Winston Peters had something to say about this last week, arguing for
a return to local manufacturing.
Why is that a bad idea? We're not going to start making Trekka cars
again, but is there a future in 3D-printed autonomous electric
vehicles? Maybe it's not 3D, or not yet, but maybe that technology can
be used, at scale, for other products?
Peters is inviting us to think about how we take charge of our own
destiny. It's the right question to ask.
Will we ask it? We want prosperity, but also biodiversity and the
sustainable management of resources. We don't yet know what a new
political economy that can deliver all that will look like.
But it isn't neoliberalism. If we didn't know that already, we
certainly do now.