The NZ political consensus

Liam Hehir writes:

Despite occasional appearances to the contrary, we enjoy something of a consensus about our political arrangements in New Zealand.

There is really no dispute that we should have a representative democracy, the rule of law and a market economy coupled with a welfare state. There is unlikely to be a single member of Parliament who would disagree with any of that.

I suspect Sue Bradford and Keith Locke would have disagreed with a market economy but as of today that is probably right.

There is debate within those broad parameters, of course. We argue about how generous welfare should be and how it should be operated. National tends to be concerned about ensuring the system is not a drag on the productivity sustaining it. Labour tends to want the system to be as generous as possible.

That debate is heated at times. However, there is really no fundamental disagreement on the question of what kind of society we want to be.

By coincidence this was a point the PM made the other day also. That NZ had avoided the extremism in other countries because we do accept a role in looking after people from cradle to grave – free maternity care, paid parental leave, free pre-tertiary education, almost free healthcare for kids, welfare if not working and a generous superannuation scheme where retired people’s real income keeps rising.

Strictly speaking, however, a lot of what gets called “socialism” in this country should instead be called “welfarism”. The welfare state redistributes some resources from rich to poor to boost the consumption of those who need help – such as those unable to work because of age, disability or bad luck.

This is entirely compatible with the idea of a market economy and so it should be no surprise that many of the countries with advanced welfare states also have high levels of free enterprise.

Nevertheless, it seldom ceases to surprise many on the Left when they see just how flagrantly capitalist countries like Sweden, Norway and Denmark really are. The socialist state, on the other hand, actually assumes control of the productive parts of the economy.

Such as taking over the building of new homes!

Having commandeered the means of production, the government can then ration goods and services as it sees fit. It’s not about helping the vulnerable to survive in a market society, but replacing the market with political control.

For obvious reasons, this form of government is generally not compatible with the existence of private enterprise. Where a welfare state might respond to rising food prices by increasing benefits (and taxation), the socialist response would be to take control of the nation’s farms and supermarkets. There is a world of difference between the two modes of government.

We see this in Venezuela.

With swollen revenues, the government financed state-owned grocery outlets to sell food at a fraction of its market price. It also embarked on an ambitious programme of nationalisations and price controls to prevent “speculators” from profiting at the expense of the people.

Unfortunately, Venezuela’s bold experiment in socialism has turned out no differently than previous attempts did in the Soviet Union, the pre-reform People’s Republic of China or neighbouring Cuba.

In other words, shortages, hunger and general decay are now the order of the day. The government has even decreed that, in order to ward off famine, citizens will be forced to report to the fields to grow food for the state – essentially adding the reintroduction of agricultural slavery to the woes of the poor, benighted country.

The left used to be against slavery – but in the last few decades slavery pretty much always occurs in socialist countries!

One thing we seem to have no shortage of is activists who claim Labour and National have devastated our country with successive “neoliberal” governments in the past 30 years. But the alternative to neoliberalism isn’t Norway, Denmark or Sweden. It’s Cuba, Zimbabwe and Venezuela. I know where I would rather live.

We are not neoliberal or socialist. We’re a market economy with a welfare state as Hehir states. But many on the left thing neoliberalism is anything they disagree with.