Envirologue by Dave Hansford


What has Neoliberalism Done for You Lately?

I am stuck in a failed, dysfunctional relationship. I’ve heard promises for years that things will change for the better, but they never do. Sure, every now and again, my partner extends some small overture – a brief ray of warmth and propinquity. But these always reveal as the same contrivance; a ruse to win another week of tacit subscription.

Recently, it became clear that my partner has been lying to me, and doing things behind my back, almost like there’s a hidden agenda. I now accept that this relationship has not been good for me; it’s left me impoverished, undermined, compromised, distrustful. I’ve surrendered treasured assets and deeply cherished beliefs. I feel dirty.

We’ve been together now since 1978, when I joined the workforce. Back then, we got along well. We had a lot in common: for one thing, we shared a vision of a better place – a model democracy where everyone enjoyed equal rights, opportunity, security. That year, a guy called Bruce Beetham talked about modernistic government and progressive society, and ended up winning the Rangitikei by-election. So I committed to the relationship. I paid my taxes. I worked hard. I participated.

My partner – our beneficent state – enjoyed a reputation for egalitarianism and social mobility. Pretty much anybody who could work, did, and most owned their own home. If they couldn’t afford one, the state rented them one at negligible rates. I didn’t see a beggar until I did my OE. But it turned out my partner was bad with money: by 1984, New Zealand was nearly bankrupt. There was a drinking problem too, which led to a snap election that June.

The honeymoon was over. My partner became mercenary, dictatorial, at times savage. Empathy withered. The fourth Labour Government of David Lange and Roger Douglas lashed out, hurling decades of regulation to the floor and smashing the welfare state. I didn’t recognise this new tyrant, nor their ideology. Only later did I learn it was called neoliberalism, and that my partner had secretly been listening to the likes of Ronald Reagan and Margaret Thatcher.

Neoliberalism, in a nutshell, is about stripping away the mantle of government, and handing the functions of the state to ‘free enterprise’ so that they can be performed at a profit. It’s about selling off Government assets, often at fire-sale prices, to private interests. Slashing public spending. Deconstructing the public sector. Privatising public institutions like schools, hospitals, prisons and state housing.

It’s about removing any impediment to international trade and investment, allowing multinational corporations unfettered access to markets through instruments such as free trade agreements. Reducing wages by undermining unions and collectives, imposing punitive contracts and annulling workers’ rights and conditions. Hacking down regulatory instruments such as price controls. Granting tax relief to the rich while lavishing handouts on corporations.

This, said the neoliberals, would create the right stimuli and environment to increase economic growth and build wealth. Yes, it would inevitably make the richer still richer, but all that money, they assured us, would eventually “trickle down” to the working classes and the poor.

The opposite has happened. For a decade after Rogernomics (including its successor, Ruthanasia) the New Zealand economy languished, stagnant, even as the global economy boomed. If you were born after those fateful few weeks in 1984, you became a citizen of a diametric state, a member of what has been called the “baby bust” generation. You would have arrived in the midst of economic crisis and the deepest recession seen since the Great Depression. You would have seen dole queues, closures, layoffs, mortgagee sales, evicted farmers. In the rapid shift from a production to a finance economy, roughly 76,000 manufacturing jobs vanished between 1987 and 1992. In 1987, former Government Departments became profit-driven state-owned enterprises: the Electricity Corporation shed 3,000 staff; the Coal Corporation 4,000; the Forestry Corporation 5,000; New Zealand Post 8,000.

Families were shattered by debt and desolation. Poverty, which had once been an aberration, was now an intergenerational blight. Home ownership rates, reliable indicators of economic health, began to tumble. You would have been handed a hefty bill for your tertiary education, and if you graduated anytime after 2008, you’d have been lucky to find a job. If you did, you would have discovered upon receipt of your first pay packet that you were being paid less, relatively, than your parents were at your age.

In fact, Household Economic Surveys compared before the Douglas reforms and for years after, show they left just 20 per cent of New Zealanders better off – those who were already wealthy. In other words, neoliberal policies enacted one of the single greatest transfers – let’s just call it theft – of wealth from the public estate to the coffers of the privileged since the colonial confiscations of Maori land.

Wherever the neoliberals have wrenched apart the cradling arms of the state, and left citizens instead to the tender mercies of the market, they have suffered. With protections gone, vulnerable New Zealanders are placed squarely in the path of ruthless speculators: a book released last month, The Child Poverty Debate, contends that the 2008-2012 Global Financial Crisis left 22 per cent of New Zealand children living in poverty. Entrusting the safety of mining operations to a deregulated market cost 29 miners their lives at Pike River.

Liberalisation of the financial markets opened the vault to massive profits for banks. People whose wages had frozen turned to debt to get by. By 2012, New Zealand’s household debt-to-GDP ratio was the fourth highest in the developed world, while Government overseas debt has nearly tripled since 2008. In New Zealand, banking is a protected oligopoly, one the most profitable in the world thanks to the political leverage they can exert on a tremulous economy. Last year, the big four Australian-owned banks recorded a record $4.1 billion profit. Yes, they pay tax and stimulate the economy, but the bulk of that $4.1 billion – desperately-needed domestic capital – was sent overseas to their parent companies.

Such profiteering is the very essence of Neoliberalism – policies that practically guarantee wealth for the elite condemn the rest of us. New Zealand once boasted one of the most egalitarian societies in the world (although nobody pretends that Maori and Pasifika people enjoyed anything like that status). But the neoliberal experiment has prised open the fastest-growing gap in the developed world between the rich and the rest of society.

The top one per cent of New Zealanders now owns three times as much wealth as the entire lower 50 per cent. In barely three decades, the average income, adjusted for inflation, of the top one per cent has more than doubled to $337,000. The average disposable income for someone in the bottom 10 per cent, after housing costs, is lower now than it was in the 1980s.

Neoliberalism has left most New Zealanders little to aspire to. Our social fabric is in shreds; our debt-driven economy now depends desperately on the fortunes of a single volatile commodity. Opportunity and social mobility, once abundant commodities, have all but vanished, replaced by grinding servitude and zero-hour contracts. Some of our proudest achievements, built up over decades of endeavour, with billions of dollars paid in taxes, have been torn down or handed over to corporate raiders as kickback for campaign funding.

I entered this relationship in good faith, emboldened and inspired. I signed a social contract. The free market promised me choices and freedoms, but delivers only faits accompli. I expressly asked my partner not to sell off the state electricity generators, pointing out that they were my property as well. So did a million other people, yet they were sold regardless – much too cheaply. I suspect too, that it is complicit in some secret hegemony being brokered with US oligarchs under the euphemism of free trade, but whenever I ask about it, it refuses to discuss it.

I pay more for electricity than ever before. I cannot take the transport of my choice because the national railways were sold off and stripped. The state was forced to buy the national airline back before it fell into total ruin. I lost tens of thousands of dollars to shysters wearing builders’ belts after my house leaked. When I sought reparation, they were nowhere to be found, no longer bound by any form of regulation.

Where the New Zealand Broadcasting Corporation used to offer me hours of quality current affairs programming every day – Panorama, Column Comment, Gallery (later Compass, Inquiry, The Brian Edwards Show, Perigo, Nationwide... – I now have to suffer fatuous advertorial and celebrity trivia. The departure of the last survivor of a once-proud journalistic tradition – Campbell Live – marks the final few slashes of the frenzied attack on quality content that has been the deregulation of New Zealand television.

My local DHB recently informed me, not that I would face a long wait for a consultation, but that it would not receive me at all.

I gave the best years of my life to this relationship, and it has left me much the poorer: embittered, disillusioned. I’ve been used. I should leave, of course, but it’s scary. I need to imagine, then create, a better life. The enormity of that, and the uncertainty of the outcome, would freeze me to the spot if it weren’t for the galvanising realisation that this must not continue. Neoliberal policy has delivered us to a poorer, greedier, uglier and unjust place.

Worse, we find ourselves staring at something close to global environmental collapse – a catastrophe neoliberalism not only exacerbated, but one it is hopelessly inadequate – never mind unwilling – to address. We must not fall into the trap of believing that this simply how things are; that this is as good as it gets. Every day we stay, the Government assumes renewed license to behave this way.

Roger Douglas once wrote his free market ideology into a book, which he called There’s got to be a Better Way. There is, and we must conceive it, then embark on it urgently. We must reject his free market orthodoxy, the looting of the speculators, the excoriating, dehumanising policies of the conservatives, the hegemony of the politico-corporate complex.

Neoliberalism is not an economic blueprint. It is simply a broken belief system, clutched tightly to the chest of the power elite and prosecuted by their sock puppets in spite of inordinate evidence of failure. It is a toxic relationship that we must leave, for our own sakes.

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