Opinion: Enemies of neo-liberalism looking for a socialist saviour will be disappointed – Ardern’s government essentially promises a continuation with existing policy, argues former National cabinet minister Wayne Mapp.
Among New Zealand’s left, some complain that Jacinda Ardern is not radical enough. She has a golden opportunity, veteran commentator Chris Trotter has argued, to cement herself as a radical prime minister, to become part of Labour’s pantheon of heroes cast in the mould of Norman Kirk or Michael Savage.
But is she either socialist or radical, as some would so dearly love her to be? Or is she forging a new iteration of the Third Way, more like Emmanuel Macron or Justin Trudeau. The true inheritor of Third Way Blairism, though recast for the 21st century.
Her first interview as prime minister elect, on The Nation in October last year, set in train the notion she would be a radical prime minister. Capitalism, she said, was a “blatant failure” when it comes to housing. In the same interview, she referred to the fact that “wages are not keeping up with inflation”, and that New Zealand had “the worst homelessness in the developed world”. Putting aside the fact that both these points are more than a little contestable, she was using the interview to establish the case for much more government intervention, at least in certain parts of the economy.
Her philosophy might be neatly summed up with her view of the balance between the market and the state: “When you have a market economy, it comes down to whether or not you acknowledge the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you’ve been successful when you have growth of roughly 3%, but you’ve got the worst homelessness in the developed world?”
Her reference to capitalism being a blatant failure galvanised both left and right. For the left it was proof that after 30 years they finally had a radical prime minister and for the right, it was proof that Winston Peters had chosen a naïve socialist. If Chris Trotter was excited, then the commenters on Kiwiblog were appalled. It confirmed their suspicions that Jacinda Ardern, as the former leader of the International Union of Socialist Youth, had been installed as the Manchurian candidate.
So, who is correct?
Trotter’s belief in her being a socialist was rather shaken when she signed up to the Comprehensive and Progressive Trans Pacific Partnership, (CPTPP) within the first two weeks, but he lives in hope, as his first articles of 2018 have shown.
By and large New Zealand prime ministers do not write books and articles, setting out their values and beliefs. Instead we have to discern from speeches, interviews, and most importantly, what they actually do in terms of policy.
Jacinda Ardern has a very appealing use of language and personal empathy. It is not just what she says, but also her general air of optimism, and in her “relentlessly positivity”. Whether one agreed with her or not, her empathy over the plight of the Manus Island refugees clearly shone through.
This points to Ardern leading an active government, intervening when government can make a difference to the social and economic conditions of people. Such an approach could quickly become overwhelming, with a band aid approach to a whole range of social ills. An active government, but one without a real plan.
The check on such an approach is the basic economic settings of the government. The Labour Party went into the election with specific electoral promises underscored by its Fiscal Responsibility Rules. There were to be no tax increases, the size of government was to be held broadly at the current level, surpluses would be sustained, and debt reduced. These policy settings had been developed months before the election. Presumably Jacinda Ardern, as deputy leader at the time, had endorsed them.
Labour would have more scope for social spending than National by cancelling the previous government’s tax cut package. The Families Package was rolled out just prior to Christmas, and it will clearly have a greater impact on low income families than National’s plan would have.
However, this is not a socialist revolution. In fact it is essentially a continuation with existing policy.
None of Labour’s electoral commitments would result in a roll back of the essential tenets of what has become pejoratively known as “neo-liberalism.” These being an open economy with low tariffs, the private sector owning virtually all parts of the competitive economy, relatively modest tax rates so that the size of government is around one third of the total economy. Of course this still allows large discretion for political parties. However one party promising $4 billion more in social spending does not disrupt the basic social and economic bargain.
To make the kind of difference to change the neo-liberal paradigm would require a different approach. The government would not have signed up to the CPTPP. A fund would have been established for the renationalization of at least the electricity companies. The top tax rate would be at least 40% to reverse inequality. Some form of compulsory unionism would be restored, though perhaps the promised industry wide agreements are intended to be exactly that. An economy so deeply regulated that official permission would be required for even the simplest of business transactions.
Would this even be enough? The most profound aspect of neo-liberalism is globalised trade and finance, with few barriers to the international exchange of money and goods. These two things are so deeply interwoven into the New Zealand economy, they would be impossible to reverse outside a state of total global war, as was the case in the second world war.
Over the last 30 years, the Labour movement, particularly in Britain, has developed a political response to the wave of deregulation, privitisation and globalisation that the 1980s had bought about. It was Tony Blair’s Third Way. These days anything associated with the former UK prime minister is discredited and indeed reviled in the minds of the left because of his Iraqi war adventure. But in practical terms Third Wayism remains the predominant path of leftist governments. It is largely how Helen Clark governed.
In the latter part of the second decade of the twenty-first century, 22 years since Blair first became prime minister, his spiritual successors, Justin Trudeau and Jacinda Ardern, seem to have wholly adopted Third Wayism. The basic tenets of the neo-liberal settlement are accepted, but the state employs it power and resources to assist those who the market does not fully provide for.
But there is also something further with the new generation of leaders. Ardern and Trudeau seem to be the epitome of their generation, comfortable with the benefits of the modern global culture, and the aspirations of middle class success. Jacinda’s partner Clarke Gayford is not a professor, he is the host of a television fishing show, far removed from the university common room that was the milieu of Helen Clark’s cohort. Access to fishing is something that many New Zealanders see as a birth right. But it takes material success, the wherewithal to buy a boat, and all the accoutrements that go with it.
In a sense this is the message that Jacinda Ardern, in her personal style, conveys. She wants all New Zealanders to have access to the things typically associated with middle class aspiration and success. It is not a message that sits easily alongside the image of being the class warrior, as many on the left would her want to be. It is not something that would be readily associated with British Labour leader Jeremy Corbyn, a man from a previous generation and whose personal interests reflect a deeply entrenched view of the English working class.
As was the case with Tony Blair 20 years ago, the new version of Third Wayism is neo-liberalism with the sharp edges knocked off. All of the benefits, but not the worst of the costs.