“Disaster Capitalism” Is Alive and Well
It was the Canadian writer, Naomi Klein, who invented the term “disaster capitalism” to describe what she identified as a deliberate strategy to use the opportunity created by the shock of natural disasters, social dislocation or economic failure to force through “free-market reforms”.
She first recognised the phenomenon in the case of 1970s Chile under Pinochet, but there have been many instances since; societies suddenly confronted with unexpected crises have been forced, as the price of being bailed out by private capital or – just as commonly – by international agencies like the International Monetary Fund, to accept the prescriptions insisted upon by their supposed saviours.
The outcome in almost all such cases has been the adoption of “structural reforms” – a euphemism for asset sales, privatisation, deregulation and “free-market” economic policies which have done little to help the economies concerned but have provided rich pickings for powerful financial interests.
It may come as a surprise to some to realise that we have not been immune to such developments in New Zealand. The Christchurch earthquakes have provided just such an opportunity for the pursuit of objectives of a political rather than economic nature.
It was announced last week that the Christchurch City Council was about $900 million in the red, as a consequence of the reconstruction burdens it has had to assume as a consequence of the earthquake damage. The only solution, it is asserted, is that the Council must sell a large proportion of its existing assets, and it seems that – despite its long-standing opposition to such a course – the Council has reluctantly accepted its inevitability.
There are several reasons for regarding this as an instance of the “disaster capitalism” described by Naomi Klein. Such sales have been resisted by the Council in the past, as they usually are by most public authorities – and, in the case of our national assets, by most New Zealand voters – because they are seen to be bad business; they may seem to resolve a short-term problem but they ensure, through the loss of revenue-producing assets, a longer-term loss of major income streams and a consequent hole in the accounts which can only be made up by future generations of ratepayers or taxpayers.
The sale of assets is, however, very much welcomed by those private financial and commercial interests who see the chance of exploiting a short-term difficulty for their own private gain. The transfer of these assets into the private domain ensures that revenues that once went into the public purse will now be diverted into profits for a small group of shareholders.
Not surprisingly, the assertion has been eagerly welcomed by the city’s Chamber of Commerce; indeed, we are already told that the proposed sale of about a quarter of the Council’s assets will not be enough and will have to be followed by yet further sales.
Yet we might wonder why it is that the City Council is to be left alone to bear the burden of finding $900 million. Surely the cost of the damage caused by the earthquake disaster is on such a scale that the people of Christchurch cannot be left alone to meet it by themselves; and make no mistake, that is what they are being asked to do – every dollar of the revenue lost through asset sales will have to be covered by Christchurch ratepayers for years to come.
Rather than look for national solutions, such as the kind of credit creation for national purposes that we would naturally turn to in wartime, we are being asked to endorse a barely concealed step towards further privatisation. And bear in mind that Canterbury has already seen a similarly significant political development in the replacement of the Canterbury regional authority by a government-appointed board with a remit to ensure that water resources are made available, whatever the public interest, to allow for a major expansion of dairying.
Supposedly immutable economic factors, in other words, are being used to push through supposed and politically inspired “reforms”, based on “free-market principles” that are not supported by most New Zealanders. And, if we examine closely the government’s drive to cut public spending, we can see that the pattern is constantly repeated; it is often not just an economic outcome that is sought but a political one as well.
By putting public sector entities under financial pressure, for example, the government not only saves money but is able to force structural changes too – the tertiary education sector is a case in point. And the public purse can also be used to ensure that non-government bodies that might jib at complying with the government’s wishes can be kept in line – the Problem Gambling Foundation and Fish and Game are recent instances.
Paradoxically, this course is pursued at the very time that the government has had to step in to pick up the pieces of private sector failures like those of Novopay and the TV set recycling company RCN. The proper balance between public and private provision is not, it seems, as straightforward as the government seems to assume.
Bryan Gould
3 August 2014
Closed Processes Don’t Make For Open Government
New Zealand has long enjoyed an enviable reputation as an international citizen. We are regularly rated as one of the most effective democracies in the world, and we recently topped a survey as the world’s most socially advanced country.
No surprise then that – although, as an Official Information inquiry revealed, somewhat reluctantly and belatedly – our government has decided to join the Open Government Partnership (OGP), an international organisation devoted to bringing governments around the world closer to their people.
The move comes at a time when the government is no doubt looking for international friends, particularly in the context of our quest for a seat on the UN Security Council. We need something, after all, to offset the perception that we are a little too keen to please the Americans, and to divert attention from the cavalier way we have cut our historical links with UNESCO – the UN’s longest established agency – over the last few years.
So, last Thursday, we submitted our application, based on an Action Plan prepared by the government, to join the OPG. Our high standing in international eyes might suggest that we should be a shoo-in; but there is good reason to believe that it may not be so straightforward.
The first problem we may face is that the Action Plan should specify the commitments that our government is prepared to make for the future to improve its openness and responsiveness to the people – yet our application seems unlikely to make any such specific future commitments.
Instead, the government offers as evidence of its support for OGP ideals two programmes that are already in place and that, it may be thought, fall somewhat short of the openness that is required.
The first is the Better Public Services (BPS) programme – a product of ideological preference rather than open consultation; indeed, it was put in place without any consultation at all. The ethos at the heart of this programme is the conviction that privatisation and contracting out deliver better results than public services, which should be replaced wherever possible by private commercial provision. Does a programme that advocates lower transparency and more privatisation really qualify as a step towards more open government?
The second element – the government’s ‘digital by default’ delivery of public services – is also problematic, and hardly in the spirit of open government. The essence of this initiative has been the closure of local offices across the country in favour of web-only delivery and 0800 services which depend greatly on pressing this or that number for options. Most of these services are intended for people needing face-to-face help and advice and who might struggle trying to access or being familiar with the required technology.
Imagine English is not your first language – remembering that advice services to immigrants are a prime example of the services affected by this so-called reform. Imagine you have a disability or have difficulty negotiating the web to find what you want online – or you can’t afford a secure and fast broadband connection, or broadband in your part of the country is still years away.
Would you still be inclined to see this supposed step towards open government as making public services more accessible? The truth is that ‘digital by design’ is really about government convenience and cost-cutting, not open government and better-quality citizen engagement.
And even taken at face value, the government’s ‘reform’ is merely about access, not about two-way consultation that gives citizens a say in the decisions that affect them. It is designed to shape individualised interactions, not to engage and involve community organisations representing the considered views of large numbers of people.
And that is precisely the deficiency that lies at the heart of the Action Plan itself. The government has decided for its own purposes to seek this certification of its ‘open government’ credentials, but – revealingly – it has prepared its application without bothering to consult the great majority of those who might have an interest in making real progress on open government.
The Open Government Partnership itself recommends setting up a permanent structure to provide ongoing consultation and opportunities for public input in developing the Action Plan. That has not happened; such consultation as there has been has been minimal and on the basis of a fait accompli.
So what should the OGP look for, if it is not to be found in the government’s Action Plan? Should it take note of the deal the Prime Minister struck over the Auckland Convention Centre with Sky City – the only candidate allowed a look-in? Or the replacement of an elected authority by government appointees in Canterbury?
Should it be impressed by the secret negotiations for the TPPA – a so-called “trade deal” that will see New Zealand lose key aspects of its sovereignty? Or the constant use of legislation passed “under urgency” and bypassing the Select Committee process?
We must hope that these are the kind of issues on which the OGP will take a tough line. We should hope even more for a government that does more than posture and instead makes a reality of its commitments on open government.
Bryan Gould
27 July 2014
Another 1945?
Steve Richards (The Guardian, 28 July) is right to say (and Ed Miliband obviously agrees with him) that next year’s election will not, and should not, be decided by personality politics. So what is it that will determine the voters’ preferences?
It would be nice to think, as Richards argues, that the election will be about ideas. But policy ideas, until and unless they are successfully proved in practice, make little impact on voters increasingly cynical about promises.
What might matter, however, is something even less tangible. The evidence suggests that every now and again, for no apparent reason, the zeitgeist, the spirit of the times, can change. It may be that we are at just such a juncture – and not before time.
We have now given an extended trial to the values espoused by the proponents of the “free” market and the aggressive pursuit of individual self-interest. It is becoming increasingly clear that those values are not those of our great humane and liberal tradition; they are instead those of “dog eat dog”, “devil take the hindmost”, “look after number one”, “winner takes all” and any other of those phrases that have been traditionally used to describe with contempt and distaste the sentiments of selfishness and greed.
It is, as Thomas Piketty demonstrates, always the case that powerful people, given the chance (and nothing is better guaranteed to offer that chance than the unrestrained market), to grab what they can, and then to entrench and protect their advantage, so that they can extend it still further.
We may now have reached the point, however, when the question is increasingly being asked – why do the rest of us allow that to happen? Wasn’t that supposed to be the role of democracy, to ensure that the political power of elected governments would ensure that the virtues of inclusivity, social cohesion, and equal rights, would offset the otherwise overwhelming power of those who would dominate the marketplace?
It may be that, just as in 1945 (another crucial turning-point), the forthcoming election will be about values, rather than personalities, or even policies. And the good news is that the values that we have been in danger of losing have not disappeared; they are still present in the hearts and minds of most citizens. Most people in Britain will affirm, if asked, their continued support for fairness, compassion, tolerance, concern for others. Those values have become submerged under the tidal wave of free-market propaganda, but the 2015 election may see them again rise to the surface.
Most voters do not think about politics or economics in any systematic way. It is only a small minority, whatever their position on the spectrum of political views, that has developed a fully coherent set of beliefs and principles. The majority are perfectly capable of holding in their minds quite contradictory notions and allegiances. What matters, what determines the way they will vote, is which of those contradictory values is closest to the surface, or in other words has the greatest salience, at any particular time.
Over more than three decades, those who have hijacked our democracy have discovered the means by which they can raise the salience in the popular mind of values that suit their interests. They have become expert at “tweaking” particular issues – outrage at social security “scroungers”, perhaps, or concern about the supposed threat to jobs or housing posed by immigrants, or fear of an allegedly threatened tax increase. They have learned to practise what the Australians have called “dog whistle” politics – the appeal to sentiments which they dare not encourage openly and which voters would be ashamed to admit to but which will nevertheless decide voting intentions.
The control exercised by the powerful through their ownership of most media outlets gives them a great advantage in such efforts. But they are also able to exploit a natural human predilection which means that the values of self-interest and self-preservation, at least in the heat of any particular moment, will often take precedence over more socially aware and responsible attitudes. The default position for most people – especially in hard times – will quite naturally give a high priority to looking after the interests of their own nearest and dearest.
But experience is a great teacher. When decline and social disjunction are seared over decades into the national consciousness, when hope and confidence are at a low ebb, and when the outlook is more of the same, it is not surprising that the guiding principles of the last three decades might be called into question. It is then that hearts rather than minds help to frame the compelling argument that we would all be better and stronger if we could all rely on the same degree of help and support as we are ready to offer to our own closest family and friends.
In 1945, the British people rejected a great war hero in favour of one of the least charismatic leaders in our history. Clement Attlee won a landslide victory and went on to head the most successful and effective reforming government of modern times. Ed Miliband may know – and intuitively feel – more than we think.
Bryan Gould
28 July 2015
Using Ministerial Inquiries to Close Down Debate
As a young MP in the British House of Commons in the late 1970s, I rapidly became aware that half the political stories in Fleet Street originated with the Press Association’s indefatigable political correspondent, Chris Moncrieff. I was regularly button-holed by Chris as I crossed the Members’ Lobby and asked to comment on the latest mess made by the government. “So you’re calling for an inquiry?” he would demand, pen poised above notebook. I would say “yes, I suppose so” and there was the next day’s headline – “Opposition Demands Inquiry”.
Calling for an inquiry into a matter that embarrasses the government is always a favourite Opposition tactic – in New Zealand as in the UK. But, in New Zealand at least, the tables have recently been turned. Here, it is a government keen to run for cover that increasingly resorts to setting up an inquiry as a means of escape.
It is more and more often the case that, under pressure, John Key will kick for touch by setting up a government (formerly called a Ministerial) inquiry. Leaks of a report about the GCSB, the government’s security agency? A government inquiry will calm things down. The long drawn-out and hugely expensive mess made by Novopay of paying teachers’ salaries? An inquiry will take it out of the headlines.
A government inquiry is a strange beast. It operates in practice only with the approval of the Prime Minister but under the aegis of the Minister whose difficulties are the subject of investigation. The person conducting the inquiry will be selected by the Minister and will be someone who can be trusted to stick to the brief and not to embarrass the government unduly.
Some Ministers, it seems have a greater predilection for setting up such inquiries, perhaps reflecting a greater tendency to get into trouble; Murray McCully, for example, has been responsible for two inquiries into his department over the last year or so – the first into the leaks concerning his proposed restructuring of the Ministry of Foreign Affairs and Trade and the second into the bungling of the diplomatic immunity claim by a Malaysian diplomat accused of a criminal offence.
Government or Ministerial inquiries are often described as the “poor cousins” of the inquiry family. They provide the illusion that something serious is being done to address an important issue, but all too often they are merely a means of burying an issue far from public scrutiny in the hope that, by the time a report is made, that issue will have dropped out of the headlines and the public will have lost interest.
The reports themselves have often been unsatisfactory, to the point of being positively harmful. The inquiry into the MFAT leaks provided no answers, other than to imply without any justification that two senior and well-respected officials had been responsible. And in the case of the leaked GCSB report, the inquiry failed to address, let alone answer, the question that most people wanted answered – did Peter Dunne leak the report to his journalist friend?
Yet in both cases, the setting up of the inquiry served its – or at least the government’s – purpose; it took the heat off the Minister involved and directed it somewhere else, usually onto a hapless official or two. We can almost write the report now of the inquiry into the handling of the Malaysian diplomat; it will solemnly find that the fault lay with officials and that Ministers were blameless.
These manoeuvrings might be dismissed as merely the stuff of party politics, but there is a more serious point involved. It has, until recently, been a primary feature of parliamentary government that Ministers are accountable to Parliament for the policies and actions of the departments for which they are responsible.
Today, however, Ministers duck out from under any such responsibility. Murray McCully, for example, can assert – as he did in respect of the calamitous restructuring proposals for MFAT – that he had no responsibility for the plan that was eventually abandoned. His responsibility, it seems, was limited to setting up an inquiry into who had leaked it. Parliament, and Ministerial responsibility, did not get a look in.
The trend towards using inquiries to cover tracks and save embarrassment has reached ludicrous proportions, however, with the Malaysian diplomat case. John Key, recognising the bungling that had taken place, promised that he would apologise to the unfortunate victim of the alleged assault by the diplomat, if only he knew who she was. It now seems that he had no intention of actually doing so, and had never expected that she would have the courage to reveal her identity.
We now understand that an apology is not required, because the matter was not important enough, and that it is in any case inappropriate because the matter is the subject of an inquiry. The benefits of such an inquiry apparently have no limits; they extend even to saving the Prime Minister from having to apologise, not just to the victim, but for not keeping his word.
Bryan Gould
23 July 2014
This article was published in the NZ Herald on 24 July 2014
Growing Inequality Can Be Seen As Clever Politics
Voter turnout has been falling steadily across the western world in recent decades, and not least in New Zealand. We have a proud record of high turnouts in general elections, but even here, we dipped below 80% in 2008 and fell further to a post-war low of 74.21% in 2011.
The problem is even more acute with young voters; opinion polls show a growing number of those under 25 with no interest in voting. And turnout at local elections is much lower again.
These figures are of real concern to the older generation who still retain a folk memory of what things were like before we achieved democracy and of the sacrifices our forbears made to do so. They are also a puzzle to politicians and activists who have difficulty in understanding that, to many people, politics is a sideshow that impinges on their lives only briefly – and even then, not very much – at election time.
Short of following the Australian example by making voting compulsory, it is, though, hard to know what could be done to improve matters. We know very little about what makes people not only vote but vote the way they do – thankfully it may be thought, since if we knew more, even more would be spent on trying to sell them personalities and policies as though they were products on the supermarket shelf.
What we do know is, not surprisingly, that people’s views and motivations vary greatly. Some are entirely settled in their preferences, others change their minds according to their perceptions at the time, while yet others make a random choice on the day or do not vote at all.
It is no doubt broadly the case that the electorate comprises two groups of voters with consistent voting intentions at either end of the political spectrum, and in the middle, perhaps an even larger group of undecideds, swing voters and those who do not vote at all.
I don’t think I am revealing any secrets of the polling booth when I recall that my own dear parents, and most of their respective families, voted National all their lives. For them, it required no actual decision; it was just what we – and “people like us” did. It was rather like being a lifelong supporter of, say, Manchester United.
For many voters, in other words, voting – particularly in a broadly right-wing direction – is often seen as a badge of identity, of respectability and difference. It means being part of the successful people in society, those who are a cut above the common herd.
Even if the facts of the voter’s situation may not actually bear that out, to vote in that direction is to express an aspiration that it should be so. And as so often, it is not just a matter of making common cause with the better off but with establishing an identity clearly differentiated from that of the less successful.
There is also, of course, the belief that the “top” people know what they are doing and that the country can safely be entrusted to them. People who have had success in their own lives, particularly in financial terms, are thought to be best suited to run the country – though whether the kind of self-interest that produces personal fortunes is evidence of the breadth of vision needed to run the country is a question rarely asked.
At the other end of the political spectrum, there is an equally committed group of voters who, either as a matter of self-interest or of social conscience, vote in solidarity with those who are struggling and who want to see the power of a democratic government used to offset the economic power of those who would otherwise dominate the marketplace.
It is the composition of this group that is of most interest in terms of explaining falling voter turnout. It is a reasonable interpretation of the opinion polling figures that significant numbers of those who might once have voted in the hope of a government that would give them a better deal have now migrated to the group that despairs of or has no interest in politics and who do not, therefore, show up in the polls.
These are the people – found disproportionately amongst the poorly educated, the badly housed, the ethnic minorities, the unemployed, those in poor health – who have concluded that “the system” has nothing to offer them. Many of them are on benefits or low incomes, and are in debt, with no foreseeable means of improving their situations. As my former colleague in the House of Commons, Tony Benn, once said, “people without hope do not vote”.
The electoral message is clear but unwelcome. A government that puts the interests of the well-off first can relax. As a significant proportion of the population becomes increasingly voiceless and invisible – in other words, devoid of hope – their absence from the polling booths on election day means they can safely be ignored.
Growing inequality can be seen, in other words, as clever politics. It allows a government that is so inclined to deliver to its supporters, but discourages the losers to such an extent that they are in effect disenfranchised.
Bryan Gould
21 July 2014