Ideology and Foreign Investment
As in so many other areas of public policy, attitudes towards overseas investment in New Zealand – and anywhere, for that matter – boil down in the end to ideology.
For proponents of the “free market”, there is really no issue. The market, in their view, must never be second-guessed; it must always be allowed to do its thing. It will always produce the optimal outcomes; any attempt to inhibit it or even just to guide it will inevitably mean sub-optimal outcomes.
And such purists go further. The market recognises no limitations or boundaries; it will go where it will, with a supreme indifference to considerations of geography or sovereignty or democracy. It crosses national boundaries without a care or thought; its proper sphere of operation is the whole world, and any wish or attempt to constrain it within man-made or political boundaries must be resisted.
I was led to these truths when I read, a few weeks ago, an opinion piece published in the Herald. It was written by a New Zealand businessman and self-described “entrepreneur” named Andrew Barnes. He took as his theme the futility and impropriety of the attempts by the Overseas Investment Office to regulate the level of foreign investment in our country.
Barnes is not a fool or a troglodyte. He is a leading advocate of a shorter working week and is doing good work to gather support for this possibility. But, on the subject of foreign investment, he revealed himself to be a prisoner of free-market ideology.
When he contemplated the prospect and reality of increased overseas investment, he saw nothing but the proper and beneficial operation of market forces. For those of us who see a little further, and perhaps think a little deeper, he had nothing but contempt – and perhaps something approaching sympathy. We are, he seemed to suggest, starting at shadows, frightened of phantoms.
He was airily dismissive of (in the sense that he did not even recognise) the concerns that many of us have. If the ownership of large tracts of land or of substantial business enterprises passes into foreign hands, he thought, we should have no legitimate cause for concern; we should instead congratulate ourselves on the price we had secured for these assets – and to forestall such deals would be an unacceptable interference with market forces.
The possibility of downsides was simply not recognised. Yet, does a change in the ownership of an asset not carry with it the power of decision as to what should be done with that asset and with any income it produces, and does foreign ownership not mean that those decisions will be taken by those who have no primary concern for or interest in the welfare of the inhabitants of this country?
Does foreign ownership of an asset not mean that it could be put to purposes that are quite inimical to the future wellbeing of this country? Does a significant proportion of foreign ownership not mean that the national interest is substantially at the mercy of those who do not necessarily share it or recognise it?
What would be the impact on the objectives of social or environmental policy, if the income produced by foreign-owned resources and needed to implement those policies were siphoned off overseas, or if the resources themselves were put to counter-productive purpose by their foreign owners?
What would be the point of electing our own government if institutions, such as banks, that fulfil a central role in our system of government are answerable to the government of another country?
The ideologues are nothing if not single-minded. Questions such as these, if Andrew Barnes is anything to go by, simply do not occur to them.