What Really Matters
Jeremy Corbyn’s difficulty in carrying his parliamentary colleagues with him in his opposition to bombing in Syria will be seen by his supporters as a decent man struggling to reconcile his deeply held principles with the exigencies of political leadership, in a society that is easily persuaded that action counts for more than reason. Others, no doubt, will see his willingness to alienate centrist opinion on this and other issues as further evidence of his unfitness to lead.
Even those who wish him well, however, will recognise that, after a lifetime of endorsing minority or unpopular causes, bombing in Syria is just one of a number of similar issues, each of which will run the risk of further eroding his precarious support in the parliamentary party, encouraging further outrageous attacks on him from the right-wing media, and discomforting even some of those who voted him into the party leadership.
A realistic assessment, in other words, would lead to the conclusion – welcome or otherwise, according to taste – that whatever views he may hold on Syria or on other issues of the day, there is a growing possibility that he might never have the chance to put them into practice. He could tire of the struggle and decide that the game is not worth the candle; or his many opponents in the parliamentary party could find a way to roll him; and, even if these possibilities do not eventuate, their mere existence will shorten the odds against his leading Labour into government at the next election.
If any one of these outcomes were to materialise, it would be celebrated in many quarters, not least by those who would leap at the opportunity to proclaim that a Corbyn demise meant that everything he stood for had been discredited. But in that event, those who found much to support in his leadership election campaign would need to ensure that what Corbyn has to say on the most important issues, and that stimulated such a positive response, is not thrown out with the bathwater.
It may be necessary, in other words, to distinguish between the man – Jeremy Corbyn, with his own political baggage and at times idiosyncratic positions – and the message, the message that he articulated and that resonated with tens, perhaps hundreds, of thousands of those who had given up on politics.
That message was clear. There is an alternative – a real and viable alternative to the current orthodoxy of austerity, of giving priority to cutting public spending, of widening inequality, of piling burdens on the most vulnerable. It was this brave assertion that propelled him into the leadership and that opened up a long overdue debate. It is a message that could and should have been delivered long ago by his rivals for the leadership and by his current opponents in his own party.
Their dereliction of duty meant that it fell to Jeremy Corbyn to deliver it. That he seems alone in doing so is an indictment of others rather than of him. Whatever may be the deficiencies of what he might say on other issues, what he had to say on the central question of politics – who runs the economy and in whose interests? – was right on the money.
There is a rapidly emerging consensus that – as we discovered 80 years ago but then forgot – austerity is the wrong response to recession. We are learning that lesson all over again. Even in terms of its own stated objectives, austerity has failed; the supposedly central priority of eliminating the government’s deficit remains a long way from being achieved, while the deficit that really matters – the country’s continuing failure to pay its way – remains unattended to and is getting worse.
In the meantime, poverty and inequality increase, housing is increasingly unaffordable, net investment is virtually zero, the prospect of a revival in manufacturing is non-existent, and an unsustainable consumer boom fuelled by asset inflation underpins our rake’s progress to decline.
Corbyn’s assertion that it need not be like this, that government’s responsibility is not to focus on cutting its own spending but to get the economy moving again in a productive direction, that growing poverty and inequality are barriers to economic efficiency, that we must invest in new productive capacity if we are again to pay our way in the world, that full employment is the hallmark of a properly functioning economy, is endorsed by a growing number of economists and others who are now prepared to stand up and be counted.
On this issue, in other words, Corbyn is far from isolated. On the contrary, his message is gathering force. He points the way to government accepting its true responsibilities and to policy and action that are increasingly recognised as essential for our economic future. If his opponents in his own party turn back to their long-standing and virtually inexplicable acceptance of a failed neo-classical orthodoxy, they will – unwittingly perhaps, but because they are obsessed by day-to-day political infighting – have closed their minds to their true responsibilities. What is at stake is more than the political fortunes of one man but the chances for both party and country of finding a way out of their long trough of decline.
Bryan Gould
30 November 2015
Tough Negotiation? I Don’t Think So
Now that we are at last allowed to know a little more about the TPPA negotiated in our name, it is clear that the free trade goal that was said to be the main point of the exercise has not been achieved.
Tariff-free access for our dairy produce into US, Canadian and Japanese markets has been denied to us. Such small gains as have been secured are so insignificant that Tim Groser, the Trade Minister, could not even remember what they were. The best he could come up with was a small reduction over time in the Japanese tariff on cheese.
The truth is that this much-touted goal was never even on the agenda. We were deluding ourselves – or our government was deluding us. The dairy industries of these large countries were too powerful and too protectionist to allow it to happen. New Zealand was just too small, too insignificant, to be taken into account. The negotiators knew, because we had made it clear, that we would take what we were given, even if it was virtually nothing – so much for “tough negotiation”.
Even in those instances, such as kiwifruit and beef, where small gains were made, we – typically enough – put them in the shop window as net pluses, without taking account of the increased penetration of our own market across a wide range of other products.
So, if the TPPA is not from our viewpoint really about free trade, what is it about? As Joseph Stiglitz, the Nobel Prize-winning economist, maintains, it is about managed, not free, trade – and trade that is managed in the interests of large, international, and mainly US corporations.
There is of course a powerful case for an international agreement that would regulate the activities of international corporate investors across national boundaries. Such an agreement would ensure that overseas companies would – inter alia – comply with national law, would protect the interests of their workforces and would avoid damage to the environment.
But the TPPA is not such an agreement. Instead of defining the obligations of large foreign corporations in relation to the domestic economy, it tips the balance the other way. The TPPA is a blueprint for extending the operation of those corporations without their having to bother with the restrictions that might be placed on them by national governments in the interests of their domestic populations.
It represents, in other words, a further, large, and largely irreversible step towards the absorption of a small economy like New Zealand into a much larger economy – an economy that is increasingly directed from overseas, not by politicians or even officials, but by self-interested and unaccountable business leaders.
Perhaps the most obvious indication of that further shift in power is the Investor/State Dispute Resolution provisions included in the TPPA. These provisions allow overseas business interests to sue our government in specially constituted tribunals if they feel that the government has done or is likely to do something that might adversely affect their profits.
A democratically elected government carrying out its mandate, could – in other words – be compelled by a tribunal comprising just three unelected business people from overseas, to abandon its legislative programme and thereby give up a major power of self-government.
Much soothing language is at present being used to try to reassure people that there is nothing to fear on this score. Our own lunch-time TV news even reported – parroting the official line – that this power had never been used. That assertion had been dropped by the time we had got to the evening news.
The reality is that there have been hundreds of occasions where a power of this kind has been used – and that is to say nothing of those many more occasions where governments have been deterred from proceeding with their plans for fear of being hauled before a tribunal.
What the apologists fail to take into account is that we are now dealing with notoriously litigious American corporations who have demonstrated many times over their willingness to use or threaten this undemocratic weapon. There is already the possibility that a mechanism will be set up in the US under which governments will be invited to obtain approval in advance from those corporations so as to avoid the danger that they will be forestalled later on – so that, in effect, overseas business interests will increasingly exercise a power of veto over what our government, and other national governments, want to do.
As we assess the impact on democracy and self-government of conceding these powers under a TPPA, we are entitled to judge the democratic credentials of those who have pushed the TPPA by what we have seen of it so far. How can we have confidence in an arrangement that has been agreed in secret and over our heads, that has at the same time taken such care to consult and serve the interests of such a small group of powerful international business leaders, and that potentially has such a far-reaching impact on our ability to govern ourselves?
Bryan Gould
7 October 2015
What Labour Can Learn from the Corbyn Leadership Campaign
No one, surely, could begrudge Jeremy Corbyn the odd chuckle or two when he contemplates, in his private moments, the consternation he has caused by his unlikely candidature for the Labour party leadership. It is not just the discomfort of his opponents, though that is sufficient cause no doubt for a little schadenfreude, but the fact that so many expectations have been confounded by someone who has been for so long dismissed as a nonentity, a fringe figure and a relic of the past.
It may be that the sweetness of his achievements so far will be as good as it gets and that the “sanity” narrowly defined by his opponents will in due course be restored. It may even be that, in his heart of hearts, he would be secretly relieved if that turns out to be the case. It would be true to his self-image and temperament that he should see himself as the catalyst for change, rather than as bearing the responsibility for putting it into practice.
But, as the possibility of a Corbyn leadership looms ever larger, it is the reaction of his opponents that is truly instructive. That reaction has developed from incredulity, then on to alarm and indignation, and finally to resentment and anger. How could someone as ill-fitted for the task, as unworthy of consideration, as out of touch with political reality, possibly be on the threshold of walking off with the party’s leadership and challenging for the role of Prime Minister?
These reactions are typical of those who feel that an impostor and an interloper has cheated them of an inheritance that is rightfully theirs. Those in the party who have steadfastly trodden the middle way, who have shown their superiority, by recognising “political realities”, over those who do not have to bear parliamentary responsibilities, have long grown accustomed to deciding the party’s fortunes.
For them, Ed Miliband was bad enough, but could, in the end, be restrained. With his defeat, they now want what they have lost returned to them. When the attempt is made to deny them that birthright, they want to vent their anger at the perpetrator by unmasking him and showing just how misled his supporters have been.
So, the “mainstream” stance on Corbyn is to focus on his lack of experience, on the skeletons in his cupboard, on his supposed inability to win a general election. And when those who have the votes and the power to decide seem unmoved by these considerations, there is nothing left but to impugn the bona fides of the voters themselves.
The Corbyn phenomenon is to be explained, it seems, because those tens of thousands of newly enthused actual and potential Labour voters who have joined the party – an unfamiliar sight, after all – are, in reality, “entryists” whose real purpose is to destroy the party and make further Tory victories inevitable.
There must surely be a more rational and constructive approach than this negativity, whatever the outcome of the leadership election. With or without a Corbyn leadership, is it not worthwhile to ask why so many people were ready to support him – not, in other words, what is it that disqualifies him as a leader but rather, what did he do and say that attracted so many to his cause?
We don’t need to look far for the answer. Jeremy Corbyn dared to suggest, along with the IMF, that austerity is an inappropriate and destructive response to recession, that government has the responsibility to use its power and resources to strengthen the economy and share its fruits more equitably, that the OECD is right to say that inequality is not the price we must pay for economic success but a major obstacle to it, that – as the Global Financial Crisis demonstrated – the market is not infallible and self-correcting, that the drive for private profit is not a guarantor of efficiency, that we must cherish our most important resources by raising the health and education levels of ordinary people, that we are all better off if burdens and opportunities are fairly shared and if every shoulder is put to the wheel.
These may be unwelcome or unacceptable ideas in some quarters, but surely not in the Labour party? As far as we can tell, they are ideas that, however frightening they may seem to Labour’s power-brokers, have appealed to a significant part of the electorate who have not hitherto found much about Labour to enthuse them.
They are ideas that deny the mantra that “there is no alternative”, that challenge the voters to think about better ways of doing things, that look forward to new hope that a healthier, more inclusive, society and economy are within our reach.
If we were not so keen to condemn him, if we would look at what his candidature has achieved, could the Labour party as a whole – with or without a Corbyn leadership – not learn and benefit?
Bryan Gould
6 September 2015
Are We Willing to Pay any Price?
No one doubts the benefits of extending our trade opportunities – but many are alarmed at a dangerous naivety in what passes for our trade policy. That policy reflects our unfortunate dependence on a single commodity; our anxiety to maximise our one trading advantage by currying favour with powerful trading partners has led us into some treacherous waters.
We have, for example, rapidly built up a Chinese market for our dairy produce with the result that – without any assurance that that market will remain open to us – we are now virtually economic prisoners, forced to meet almost any Chinese demand in order to retain a market that has become our life blood.
We have chosen, for example, to avert our gaze from the obvious effects of Chinese intervention in the Auckland property market for fear of offending Chinese opinion. More importantly, we have apparently not recognised that the Chinese interest goes beyond merely buying our products in a normal trading relationship, but extends to obtaining control of the productive capacity itself.
Dairy farms themselves, processing plants, manufacturing capacity, expertise of various sorts are now owned by Chinese operators; their production increasingly by-passes New Zealand economic entities and suppliers and is marketed by Chinese companies directly to the Chinese consumer.
There are of course many instances of Chinese capital being deployed across the globe in pursuit of assets and capacity. This is not a cause for criticism – the Chinese are entitled like anyone else to pursue their own interests. It is simply a statement of fact.
We, however, seem unaware of what is happening. It is no accident that this direct supply to the Chinese market has accompanied a fall in the proportion of New Zealand dairy production handled by Fonterra. While the proportion of our dairy production under Chinese control is still quite small, there can be little doubt that it will grow. Low dairy prices will force the sale of a number of farms to foreign owners. As the Chinese increasingly control their own sources of supply, their reduced requirements for dairy produce on international markets will inevitably mean downward pressure on prices.
Nor is it just the ownership of the physical product that has passed into foreign and often Chinese hands. The decision to allow non-farmer ownership of “units” (or, in other words, shares) in Fonterra has meant that we must now face the prospect of a significant part of the income stream from our most important industry to pass into private and often foreign hands.
Our anxiety to improve the markets for our dairy produce has led us into another potentially dangerous relationship. Free access for those products into the US market has long been touted as the “holy grail” of trade policy. So keen are we to achieve this that we are apparently ready – in a so-called free trade agreement – to give up significant benefits, such as Pharmac’s role in achieving the relatively low prices we pay for pharmaceuticals, and to accept severe limitations on other aspects of our ability to organise the way our markets operate.
Even more importantly, we will concede a large part of our powers of self-government by allowing foreign corporations to sue our government in specially constituted tribunals, and to force that government to change its policies and legislation – a power not, of course, enjoyed by domestic companies.
The irony is that these sacrifices are most unlikely to achieve much of what we want. The US (and, more generally, the North American) dairy industry is too powerful and too protectionist to throw open its market to competition from efficient producers overseas; and they have yet to reveal their hand and to bring their political influence to bear on the negotiations we are still pursuing. We have, it seems, spent months making concessions in the hope that the US will at some point deign to offer a deal on dairy produce, with little evidence that such an outcome is at all likely.
In instances like these, we over-estimate our ability to hold our own against the interests of much more powerful economies and over-state the degree of trust we can repose in them as economic partners. The Greeks have shown the price that can be paid for getting into bed with more powerful (and often more ruthless) economies.
Perhaps the most recent instance of what we are prepared to give up for the sake of a free trade deal is the $11 million paid to a Saudi businessman in the hope that he would use his influence to swing such a deal for us with the Gulf States. There can have been no other reason for such a payment. John Key duly turned up, ready to sign the deal, but departed empty-handed. We appear to have traded away our corruption-free record and reputation for the sake of a payback that didn’t materialise. “Naivety” doesn’t really cover it, does it.
Bryan Gould
11 June 2015
Who Are the Ideologues Now? (UK)
It is a truism of today’s political analysis that, over the three or four decades since the so-called “free-market” revolution swept across the western world, the centre of political gravity has moved substantially rightwards. Most of those of middle age or younger will have grown up, after all, in a world where it has been widely accepted that markets are infallible, that government spending is wasteful and a drag on economic development, that running a country is just like running a business, that we all benefit if the rich get richer, and that private profit justifiably overrides all other considerations.
So insidious and comprehensive has been the advance of this orthodoxy that even those who choose to question or oppose it are hard put to understand how complete has been its victory. As we see from the current plight of the Labour Party, political leaders who seek to offer alternatives are disarmed and enfeebled, without realising it, by their experience of growing up within its confines. They are, in any case, urged – on electoral grounds and even by their friends – to accept the new reality; and that reality, of course, keeps on moving inexorably rightwards.
This re-definition of the political landscape has meant that what would once have been regarded as the extreme outer edge of what is politically possible is now the new centre ground. Any divergence from this central position is, by definition therefore, literally eccentric; and any move away from “free-market” orthodoxy is condemned as either a return to the past or an irrational lurch leftwards.
These definitions of centrality and divergence have the further advantage, for their proponents, of confirming a long-held public perception. In the days when the political left was prepared to challenge existing power structures, they were undoubtedly helped by their development of an ideology of sorts that allowed them to ground their objections to orthodox policies in some loosely defined analytical framework. The consequent identification of the left as the doctrinaire element in the political spectrum seems, however, to have inhibited today’s leaders of the left, if the current contest for the Labour Party leadership is any guide, from straying too far from orthodoxy for fear of appearing too ideologically driven.
The right, by contrast, was usually seen as pragmatic and concerned solely with what would work. Politicians of the right still seek to prolong that advantage by clothing their steady move rightwards in the language of experiment and exploration of what is possible, rather than of ideology. They have also learned to proceed stealthily, one small step at a time, with the intention of concealing from the public that each new step is in reality a further development of a highly ideological agenda.
That may, however, be about to change. As the tide of ‘free-market” orthodoxy has reached its high-water mark and appears to be receding (at least in most parts of the western world other than the euro zone), it is more and more likely to leave exposed to public view those new policy initiatives that seem to have little to do with common sense and practicality and to reflect much more clearly what are doctrinaire preoccupations.
Those preoccupations are becoming increasingly apparent. The priority accorded to the drive for private profit, for example, has led to well-publicised failings in delivering what were once public services, epitomised by the misfortunes of Serco – an international firm operating, among other things, as a private manager of prisons and under pressure for its failures in a range of countries.
Privately owned academy schools, an idea that has now been shown even in Sweden, its country of origin, to produce disastrous results in terms of educational standards, will nevertheless no doubt continue to be supported by enthusiasts on the ground that business people are best placed to decide educational priorities for our children.
And what about the wacky idea, now being contemplated by New Zealand’s right-wing government, of financing the delivery of social services to some of the most vulnerable, including the mentally ill, by selling bonds to private investors who will then look to make a profit from their “investment”?
What links all of these and many other similar ideas is that they have little to do with what will work and best serve the interests of society and its citizens. They are instead all statements of ideologically driven preference – in each case, a preference for private provision, not because it works better, but because it is a faithful rendition of “free-market” theory.
It seems, in other words, that the usual view of the left as doctrinaire and the right as pragmatic is in course of changing. It is now the right that espouses the ideological approach and that will go on doing so for as long as it is not held to account and its bluff is not called. It is the left (when it can make up its mind and, like the lion in the Wizard of Oz, reclaim its courage) that has the opportunity to offer new alternatives to free-market orthodoxy – alternatives that are not the product of doctrine, but that are simply sensible and practical and likely to produce better outcomes. Isn’t it time that Labour’s leaders caught up with this new reality?
Bryan Gould
3 August 2015