Finance Minister Grant Robertson: The enormous rescue package is inherently a rejection of neoliberalism, but his budget on May 14 is the Government's great test. Photo / Mark Mitchell
Finance Minister Grant Robertson: The enormous rescue package is inherently a rejection of neoliberalism, but his budget on May 14 is the Government's great test. Photo / Mark Mitchell
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 MPin 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 pandemic.
"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 jobs."
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 dystopian society."
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".
Prime Minister Jacinda Ardern and Finance Minister Grant Robertson: if they don't have "real-world experience", what's a pandemic crisis? Photo / Mark Mitchell
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 economics.
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.
Finance Minister Grant Robertson: The enormous rescue package is inherently a rejection of neoliberalism, but his budget on May 14 is the Government's great test. Photo / Mark Mitchell
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.
