Wednesday, March 31, 2004

What more can I say?

No Right Turn has an intriguing post on energy policy in the wake of Project Aqua's demise. He's right to say that we've got plenty of electricity generation coming on stream to deal with demand in the short term, and what's more, he's got the figures to prove it. Unfortunately, the medium term will be problematic.

Part of the problem is that for years New Zealand relied on cheap generation, most latterly from the Maui gas field which accounted for most of this country's gas supply. As long as the cheap gas kept flowing, alternative generation didn't stand a chance. No Right Turn points out that this was one of the fundamental problems with Project Aqua; diverting most of a river promised cheap electricity and priced the alternatives out of the market.
Cheap electricity leads to wasteful consumption, a lack of emphasis on conservation and lacklustre development of environmentally sustainable generation alternatives.

I remember seeing some graffitti that read: 'can you afford free love?' It's almost the same thing here. What is the cost of cheap electricity? Despite the deregulation of electricity markets and a gradual rise in prices, New Zealanders still pay less for electricity than most other developed countries. In 2000, for example, New Zealand's average household price of electricity was U.S.$ 0.060 in comaparison with an OECD average of 0.105.

Perhaps as a result, we use more electricity in relation to GDP than most other countries in the OECD. That's a whole bunch of opportunity cost. Look at it this way: we pay less for electricity per kilowatt hour, but we use more of it in relation to our economic output than most other countries in the OECD. Not too innovative, if you ask me.

The bottom line? Well heck, where is the bottom line? Cheap electricity leads to wasteful consumption, a lack of emphasis on conservation and lacklustre development of environmentally sustainable generation alternatives.

Say, maybe the Resource Management Act is doing its job after all!

Tuesday, March 30, 2004

More bad news for Bush:

Japan has signaled that it may stop funding U.S. debt...

A Government is only as good as...

Read these two questions in Parliament following from the recent decision to scrap Project Aqua:

Dr DON BRASH to the Prime Minister:Does she have confidence in the Minister for the Environment; if so, why?

JEANETTE FITZSIMONS to the Minister of Energy: What additional steps will he be taking to promote energy efficiency, energy conservation and renewable energy following the cancellation of Project Aqua?

There's an adage in parliamentary politics that a government is only as good as its opposition. That's because when an opposition party does its job well, it's able to help direct the response and energies of government.
Opposition parties can try to take advantage of populist sentiment, or they can engage in intelligent and constructive criticism of government policy.

To do this, opposition parties can try to take advantage of populist sentiment, or they can engage in intelligent and constructive criticism of government policy. Sometimes they try both, but considering the stakes many parties opt for the former over the latter.

Labour's chief opposition is the newly reactionary and simple-minded National party under Don Brash. The determination of Brash to play the race card or the recent attack on grants (the Social Entrepeneurship scheme) given to people who don't happen to members of the elite are examples of spinning issues in a purely negative and populist way. It's a strategy that works best in an opportunistic media environment and when government fails to articulate why such programmes or policies are fair and reasonable.

Unfortunately, that's exactly what Labour has chosen to do, most likely because it fears that the middle ground of New Zealand's political landscape has shifted to the right. Where the middle goes, Labour will follow.

But if there is no credible political voice defending the policies that have been subjected to populist attack, we have to ask how the electorate is able to make an intelligent decision about them? If there is no-one to articulate the need for a policy, how can we really say that the electorate feels one way or the other about that policy? More to the point, what justification is there for Labour to abandon and review programmes without first doing the basic work of defending these programmes as based on sound policy?

The problem for Labour is this: the more it fails to articulate its programme, the less popular that programme will be. The less that Labour demonstrates why policies like the social entrepeneurship programme are a good idea, the more that National will be able to demonstrate that such policies are a bad idea. The more that Labour responds to National's attacks by announcing reviews, the more we begin to feel that Labour's entire policy approach lacks credibility.

I can't think of a better way to move New Zealand's political centre to the right.

Wednesday, March 24, 2004

It's a good thing, right?

This week came news that the Cairns group of nations will try to break the deadlock at the WTO by working with the G-20, a group of poorer developing nations that rather famously held out against the Europeans and Americans in the last round of negotiations at Cancun, arguing that before they could accept things like free trade in services the E.U. and the U.S. would have to end subsidies to domestic agricultural producers.

The idea that the Cairns group, which supports an end to agricultural subsidies, would team up with the G-20 would appear to be a good thing, if we assume that the final result of such an arrangement would be torpedoing subsidies which make products from the rich countries cheaper than those from poorer nations. This all sounds good, right?

It’s clear that the costs of free trade are shared unequally. Workers in developed nations lose out more than say, finance capital.
Well, maybe not. Leaving aside for the moment the fact that such an arrangement would pave the way for international de-regulation of trade in services, even the Americans are starting to realise that the benefits of free trade have been over-hyped, while the costs have yet to be adequately studied. Only a few days ago an article appeared in the New York Times warning that free trade had the potential for more negatives than positives:

In general, most economists believe that the "consumer surplus" that results from lower prices far outweighs the cost of lost jobs or lower wages. In other words, there are many more winners than losers. But recent research suggests that the magnitude of this advantage has been exaggerated. Also, the plight of the losers has clearly been sorely neglected in the economic literature.

Oh yeah. Let’s not forget that business groups lobbying for free trade deals don’t like to spend a lot of time studying losers. I guess it’s not really part of their job. But as the article by Jeff Madrick illustrates, it turns out that academics have been been amiss when it comes to studying the potential negative impacts of multi-sector free trade arrangements. Interestingly, the literature that has focused on the costs of such deals (on workers, for example) has generally failed to take into account other effects, such as technological change or unemployment.

Ground control to economic orthodoxy: free trade does not work in a vaccuum.

Speaking of the potential impact of free trade arrangements on the U.S. domestic economy, Madrick writes that

the basic tenets of free trade assume that the economy is operating at full employment - in other words, almost everyone who wants a job can find one. Not enough research has been done on the trade effects in an economy with persistent unemployment, which has characterized most of the last 30 years.
What is entirely clear, however, is that the losers from free trade require more of the nation's attention. And their numbers are growing as trade and job migration expand.

Now if the rich countries stand to lose productivity growth and employment as a result of free trade arrangements, there is a case to be made that the loss of certain kinds of jobs to developing nations is a good thing, rather like exporting economic development to those areas of the globe that have been excluded from western capitalism’s dizzying success. And to that extent, I agree. It is a good thing.

But a couple of thoughts keep popping up in my head.

It’s clear that the costs of free trade are shared unequally. Workers in developed nations lose out more than say, finance capital. It's important that there be sufficient programmes and services in place to help workers in an economy faced with restructuring as a result of free trade. Ironically, it's these same programmes that anti-globalisation activist Jane Kelsey seems to deride as "neo-statism".

Secondly, while ending subsidies that penalise cheap goods from poorer countries is a good thing, de-regulation of trade in services may not be. Not for us, or for the developing world. Remember that these services include things like water and power utilities as well as some pretty basic government services. A cross-sector de-regulation of trade in such services can have an impact on the delivery of public goods and services that is not always benign.

And last? O.k., it’s a cheap one, but if the costs of free trade have been poorly studied in the developed world, then I would guess that the costs for the developing world have received pretty scant attention.

Sunday, March 21, 2004

Roger Kerr and contemporary Marxist theory

A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing abounding in metaphysical subtleties (Marx Capital Vol. 1).

Marxist theory has faced many difficult challenges throughout its history, not the least of which has been the disastrous example of the Soviet system with its terrible authoritarianism and repression. In this new century, we in the west seem to be well away from the world of Marx's Capital, with its emphasis on production, workers and things. For a contemporary Marxist theory to survive it needs to be capable of explaining the new economy of international financial markets, globalisation and post industrialism.

I think that Marxism still has a great deal to say about contemporary society, simply because I think that we have been led to believe that the contemporary world is qualitatively different; that the new economy is somehow beyond the explanatory ability of traditional Marxist categories. But to what extent is this really true?

To answer this question we need to peer into what Marx felt that capitalism was all about: the production of commodities. And we need to be able to understand the new economy as simply producing new kinds of commodities in addition to boots and hammers. If we can do that, then we can show that Marx's analysis of capitalist production might still be relevant today.

Fortunately, Marxists aren't the only people who see the "new" economy as a continuation of the old. Roger Kerr, the head of New Zealand's influential Business Roundtable sees things in pretty much the same terms. Speaking on the nature of the knowledge economy the arch neo-liberal Kerr underlined the essential continuities of the new economy:

An enormous amount of nonsense was talked by politicians and pundits about knowledge-intensive industries, the new economy, the information revolution and so forth. Painful lessons have been learnt as the high-tech bubble burst and investors discovered that the so-called new economy was subject to the same economic laws as the old? But there is nothing fundamentally new going on here. Knowledge is what hunters and gatherers needed to survive

If it is true that the new economy is still producing commodities, what is the nature of the contemporary commodity? What does it mean to think of knowledge as a commodity in the context of a global information society? According to Marx, to see a commodity as just a thing obscures the social relations of production:

A commodity is therefore a mysterious thing, simply because in it the social character of men?s labour appears to them as an objective character stamped upon the product of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves but between the products of their labour (Marx, Capital Vol. 1).

What's new is that global digital technologies have brought together finance, production, consumption, and mass communication in a nearly seamless web.
In old-fashioned Marxist theory, relations of production in capitalist society enabled capitalists to appropriate surplus value as profit from workers. These workers received a wage that appeared to them as a fair exchange for the sale of their labour, but, according to Marx, it was the contribution of labour power to the process of production that was responsible for the production of surplus-value.

How relevant is this model for today? To what extent is the new informantion commodity the result of a classical labour process? A commodity is the result of a productive combination between a worker, an owner of capital and what are called the means of production. In classical Marxist theory, the commodity is exchanged for money, allowing the capitalist to accumulate profit and generate more capital. What is relevant for us now is that the commodity is a social product arising out of the relations of production. The social, or shared nature of the commodity is appropriated by the owners of the means of production. And most importantly, the production and consumption of a commodity reproduces class relationships.

The new capitalism is characterised by the dominance of capital flows over trade flows, of a global economy based on information rather than on trade and production of basic commodities. The extent to which Marx's analysis of the commodity can inform a critique of the new economy depends on the extent to which knowledge and information can be thought of as commodities. A useful starting point for such an analysis begins with an examination of the information economy. Can the qualities that determine this economy be usefully understood as the result of the saturation of commodities with information, of knowledge with commodities?

Following Kerr, it's important to see that the new economy is in many ways continuous with the old. For all the talk of the information revolution, we must remember that there has been no revolution. In the developed world, computerisation and digital technology has led to a transformation of the capitalist economy, replacing and augmenting machine-based manufacture as the engine of capital production. What's new is that global digital technologies have brought together finance, production, consumption, and mass communication in a nearly seamless web.

Although the new economy appears to create money without producing real goods, global financial flows rely on speculation in money markets and on access to privileged networks of communication. A worldwide surplus of commodities and attendant low rates of profit have pushed capital toward the expansion of money markets and trade in services in an effort to secure greater returns on investment. Digital technologies bring together inherently social products such as money, information and economic activity, at the same time as technology creates the conditions for the private ownership of the new vectors of capital.

If we are to think of a commodity as reproducing the class relations out of which it is formed, in this case by reproducing capital, it is important to see that the new vectors of digital and communication technology are not independent of the social and political demands of capital accumulation. Although the virtual world of the new global economy may appear infinite, i.e., as capable of transcending modern capitalism, in reality the new, virtual economy is bounded by political and social relationships. Critic Fredric Jameson points to problems associated with understanding the new world of virtuality, knowledge and networks as anything other than a manifestation of capitalist relations:

We must avoid the implication that technology is the ultimately determining instance either of our present-day social life or of our cultural production. I want to suggest that our faulty representations of some immense communicational and computer network are themselves but a distorted figuration of something even deeper, namely, the whole world system of a present-day multinational capitalism (Jameson 1991, p. 37).

Thus knowledge and information become commodities in as much as being social products, they are produced, appropriated and exchanged by capital as factors in its own reproduction and extension. As these products circulate along the new vectors of the global economy they reproduce not only capital, but also the social relations of capitalist production, constantly re-creating the conditions of capital accumulation for owners of the (new) means of production and distribution.

Thanks, Roger. You really helped me sort this out.

Tuesday, March 16, 2004

Auckland Public Transport

There was a rather curious seminar given the other day in the Department of Marketing at the University of Auckland. I can only hope that the politicians responsible for this city's transportation system could attend:

Extreme Service Failures: Betrayal and

12noon Commerce B 115.

This paper reports a programme of research
examining extreme service failures. Based on
critical incident data, we identify and
differentiate extreme service failures from
other failures. Consumers perceive extreme
service failures as service betrayals with
dramatic consequences for consumer
satisfaction, intentions and behaviour. Next,
drawing on depth interviews we differentiate
commercial from interpersonal betrayal.
Commercial betrayal is similar to interpersonal
betrayal in several respects, but also has
unique characteristics. Finally we report
results of two experiments directed at
understanding whether and how service
providers can recover from service betrayal.

I read about this seminar on extreme service betrayal at the same time that I heard that the Auckland City Council (ACC) was asking for feedback on its vision for Auckland's 'Central Business District' (CBD). The vision that they have come up with makes me think of a neurological disorder from the pages of Oliver Sacks. Like some kind of abnormality that makes people see things upside down but experience this inversion as normal.

It's about ranking and list order. Here is the way that the Auckland City Council prioritises its 'vision':

In the next 10 years Auckland's CBD will grow and consolidate its international reputation as one of the world's most vibrant and dynamic business and cultural centres.

To realise the vision the Auckland CBD will be:

- recognised as one of the world's premier business locations
- a high-quality urban environment
- the most popular destination for Aucklanders and visitors in the region
- a world-class centre for education research and development
- a place that feels like the heart and expresses the soul of Auckland.

Now it seems to me that one of the things that makes Auckland such an awful city is the fact that it has focused on business at the expense of nearly everything else. The result is that Auckland's CBD is dull, grey and devoted to the automobile. It's not uncommon for sidewalks to disappear, for intersections to have no visible means for a pedestrian to cross, and for entire blocks to be given over to carparks. It turns out that I am not the only person who feels this way. According to research carried out for the ACC by De Beer Marketing and Communications:

The CBD is currently seen as 'unfriendly, disjointed, unrelated, lacking in personality, hardened, dowdy, no elegance, concrete and glass, grey, lacking in green spaces, and suffering from a lack of planning'. The absence of any reliable and convenient transport system, traffic congestion...are preventing access to the CBD. Building developments within the CBD have created limited or no visible connection with the harbour, and the CBD is perceived as 'over-developed, lacking in identity, and expanding with no direction'.

In light of these findings it's rather interesting that the emphasis on heart and soul comes dead last, preceded by education which is we all know one of Auckland's most important economic sectors. Note to John Banks: ACC's own figures show that the education sector is the leading occupier of floor space in the CBD. And according to a study by Informetrics the international education sector alone contributes $930 million per year, or the equivalent of holding an America's Cup each year. God forbid.

But back to this CBD project. There is a section that discusses the problem of access to and around the CBD with masterful understatement:

We have the roads we need in the CBD but the congestion at peak times suggests that we need to make better use of them. This congestion affects the CBD's attractiveness as a place to work, live, visit and invest.

But it's when the document pauses to consider the impact of public transport in the CBD that the prose becomes truly, well, sublime:

Passenger transport has become more popular in recent times, especially with the introduction of bus-priority measures on arterial roads leading to the CBD, and the introduction of newer buses.

There is a detached and inactive quality to this writing, as if the ACC has really had nothing much to with public transport. As though an integrated public transport system was really only a matter of consumer choice, rather than as a result of, say, proactive planning. Unfortunately, it seems this has been the case.

The document ends with a discussion of the problem of congestion in Auckland's CBD. Note the emphasis on the lack of a 'direct route to and from the eastern suburbs' even though through traffic represents only 15% of congestion and I suspect that the vast majority of through traffic is to the north shore, not the eastern suburbs:

Two main contributors to congestion in the CBD are through traffic (traffic neither originating from nor heading to activities in the CBD) and low car occupancy. Through traffic now accounts for 15 per cent of CBD traffic and can be partly attributed to a lack of alternative options for accessing other parts of the city (eg the absence of a direct route to and from the eastern suburbs). In addition, private cars coming into the CBD carry an average of 1.2 people, which, on an international scale, is relatively low.

Why not visit the site yourself and have a say. There are at least two problems here as I see it. The one is about using the active voice, while the other is about actively solving the problem of too many cars.

Monday, March 15, 2004

Iraq: One Year Later

No Right Turn has an excellent post summing up the conflict...

If It's Global It's Bad

The marxist in me has always been a little suspicious of the term 'anti-globalisation'. Of course there's the old line that it's a label invented by the political right. But as anyone who has actually been at an anti-globalisation rally knows, there are a few people for whom the term seems altogether too generous. There really is a rather large cohort of folks out there opposed to anything that looks like trade and economics.

Call me old fashioned, but I still believe that there is really something wonderful about capitalist productive capacity. If only it wasn't run so badly.

On the other hand there are writers like Jane Kelsey who have neatly turned globalisation on its head by working in solidarity with 'third world' groups such as farmers and peasants just coming to grips with corporate globalisation. But I am never quite certain what the object of such an excercise might be. Is the desire to be in 'solidarity' with the oppressed in the developing world based on a sense of despair for the prospect of social change in our own?

Certainly, Kelsey and her mentor Bruce Jesson both appear to have been deeply traumatised by the advent of Rogernomics, and Jesson in particular seemed deeply nostalgic for a kind of prehistoric New Zealand that sounds like it was a pretty awful place to live. Listening to Kelsey deliver the Fourth Annual Jesson Lecture a few months back I was surprised to hear her criticise Labour's neo-statism for doing away with 'declining industries like the clothing sector and supporting new ones, such as export education.'

Kelsey delivered that last sentence with a kind of ironic sneer that elicited a laugh from the audience. It was a very strange moment. A sad nostalgia for a rather tatty past and a smirking disdain for a pretty important new sector of this country's economy. And one that I happen to work in and enjoy.

At any rate, it got me to thinking about how important globalisation is, or at least, how important it is to think critically about what we are gesturing to when we use the term globalisation. From LeftCenterLeft comes this article by the American economist Paul Krugman called In Praise of Cheap Labour. Krugman's thesis is that the growth of export industries with relatively cheap labour in the third world is something that is both relatively new and critical for growth in these very same economies. Understood as merely a growth in the extensity of world trade, Globalisation really is exporting jobs and growth to those areas of the world that have been excluded from progress for much of the last hundred years:

In the mid-'70s, cheap labor was not enough to allow a developing country to compete in world markets for manufactured goods. The entrenched advantages of advanced nations--their infrastructure and technical know-how, the vastly larger size of their markets and their proximity to suppliers of key components, their political stability and the subtle-but-crucial social adaptations that are necessary to operate an efficient economy--seemed to outweigh even a tenfold or twentyfold disparity in wage rates.

Detractors of globalisation often argue that the process has led to a growth of inequality between the developing world and our own. What they mean to say is that while there may be some growth in poorer countries, it is more than offset by the accumulation of wealth in the richer countries. But the evidence for such arguments often comes from a simple comparison of GDP, which may not show us the extent to which social and economic growth has improved in the developing world. Using other measurements, there is some evidence to show that there has been a decline in the overall level of international inequality. Professor of Political Studies at the University of Otago Philip Nel has studied human inequality across the globe. In a paper delivered in 2003 to the New Zealand Political Studies Association called International Inequality: has it increased or not, and so what? he shows how important it is to use the right kind of indicators. As Marilyn Waring has shown, GDP simply doesn't capture all those intangible and invisible relationships and things that underpin real economic activity. Through a critical use of the human development index used by the United Nations Development Programme, Nel has been able to determine that there has been an overall drop in 'levels of human development inequality' over the last twenty years.

What this means is that "globalisation" may involve at least two different processes, and it's useful to distinguish between the two. On the one hand there is an accumulation of wealth in Western countries, while on the other hand there has been a decrease in inequality around the globe.

If we accept that there has been a worldwide decrease in inequality, we still need to ask as Nel does if these findings mean that globalisation is good for the poor? Are the processes of growth set in motion by corporate globalisation entirely beneficial for the developing world? Not necessarily:

Defenders of the neo-liberal, pro-globalisation ideology can get little sustenance from these findings. If we accept for the sake of argument that there is some causal connection between neo-liberal policies to promote globalisation, and the improvement noted in our results, then the obvious question is how come the results are so meagre?

It's a sophisticated and compassionate argument. Nel notes that levels of international inequality are too high as they are, and warns that such disparity will have serious consequences for the co-operative provision of global public goods. Finally, he concludes by emphasising that:

Global equity can be said to be a public good in its own right. In addition, high levels of international inequality, especially when it overlaps with power and cultural differentials, do make world politics more prone to fractionalism and conflict than would otherwise be the case. Most important of all, international inequality of the magnitude that we have in the world today is simply morally indefensible in light of the view that we have the resources to do something about the poverty-related consequences of inequality.

Thursday, March 11, 2004

It's The Opportunity Cost, Asshole

My thoughts on the proposed Eastern Motorway. It's nice to see that the nearly moribund Campaign for Better Transport has finally decided to do something. Even if it's just issuing a press release.

Fortunately Bruce Hucker seemed to grasp the point about opportunity cost with great clarity. Calling it a road to nowhere, he also put out a press release:

The latest plans for the Eastern Corridor are hugely expensive, won't ease congestion and would stop us spending on real transport solutions, says Bruce Hucker, leader of the City Vision group of Auckland City councillors.

And he dispensed with the bullshit promise of bus lanes thusly:

Proposing a busway alongside the present railway defies the principles of good transport planning", he said. "The busway sets up the bus and rail to compete rather than having buses feeding off the railway as they should.

Fortunately, the Eastern Motorway will not be built.

Unfortunately, there is no way in hell that Bruce Hucker will get anywhere near the behind of the mayor's desk. What is it about City Vision that makes them think that can win a mayoralty race? What makes them think that they have to?

The role of mayor is both a political position and a symbolic one. Because the mayor's fight is so high profile, it's less likely that anyone openly associated with the left can take the seat, particularly in Auckland. But on the plus side, if a mayor is opposed by the majority on council, there is very little that he or she can do. Therefore it is symbolically important to get rid of Banks and politically necessary to maximise the progressive hold on council. Good politics often comes down to a question of realistic expectations. If you are a democrat it means doing what you can to make the situation better, not worse. Sometimes that can mean that ending up in some kind of alliance with someone that you don't like in order to get rid of someone that you both hate.

A preliminary analysis of the 2001 Auckland election shows that the mistake of the left was that they got greedy and refused to join forces against Banks. They split the vote. Badly. In addition to Fletcher, the left decided to run two candidates for mayor, Matt McCarten and for the Greens, Metiana Turiana. Matt was running for the Alliance. Check out the breakdown:

Banks: 47059

Fletcher: 31699

McCarten: 15785

Turiana: 2213

Look at it this way: the non-Banks vote was 49,697 to Banksie's 47,059. Remember that local body elections are not based on proportional representation. It's just winner take all. Once you realise this, you are faced with a few key questions:

Q: Do we have a realistic shot at the mayoralty?
A: No.

Q: Could we win a few council seats by not wasting our resources on the mayor's seat?
A: Maybe.

Q: Well, then who do we think we can work with, considering that we have now rationalised our resources and may be able to win some council seats?
A: Fletcher.

Q: O.K., then who do we really need to get rid of?
A: Banks.

The only thing that has changed is that City Vision is now in the picture. On the surface it appears as a rationalisation of the left vote. But by running against Fletcher, City Vision are effectively splitting the anti-Banks vote again. Even though Fletcher is a former National politician, she has still shown herself to be more progressive on public transport and easier to work with than Banks.

My prediction: Banks wins again because of City Vision. Eastern (Transit Corridor) Motorway fails to get necessary funding. And only the part for cars gets built.

NZ Reserve Bank: Back To Reality

You might have missed it, but NZ Reserve Bank Governor Alan Bollard quietly announced his intention to quietly demolish another part of New Zealand's bizarre experiment in neo-liberal economics.

Along with his announcement that there would be no change in the official cash rate, Bollard has asked Finance Minister Michael Cullen to give the Reserve Bank the capacity to intervene in the currency exchange market to protect the New Zealand dollar from the vagaries of foreign traders. It was enough to set at least one Herald business writer on edge, predicting that "The mere request will be a shock to the currency market".

I think it would be best not to panic. The paper is often a zealous defender of New Zealand's sado-masochistic relationship with Chicago school economics and is easily spooked by anything that seems to run counter to theoretical orthodoxy. The business section of The Herald is so committed to the tarnished dream of perfect markets that the prospect of New Zealand dealing with its economy in the same manner as the rest of the world sends that august group of commentators into gloomy fits of prophecy.

At the same time it would be a mistake to think that Bollard's request is unimportant. Those who believe that government can play a more active role in the regulation of things economic should take some heart from today's announcement. It represents another opening in the ideological conservatism that has gripped this country since the days of Roger Douglas. And it signals that there was much more than just idle speculation behind Cullen's musings a few months ago that government had a few different weapons in its arsenal to deal with excessive currency valuation.

He wasn't just musing. He was floating a trial balloon.

It puts me in mind of an article by Brian Easton that appeared a few months ago in the Listener. In his article Easton tries to show that the policies put in place by the Rogernomes in the 1980's represented a failed revolution. If I read him right, Easton seems to be saying that the Clark government may be what the revolution ought to have looked like. It's a difficult thesis, but it helps Easton to think about Cullen and Clark as revolutionaries, albeit smarter ones:

Will history record 1999 as a year of revolution? The previous ones were associated with periods of long political stability. (The Liberals were in power for 21 years, and Labour first for 14.) The political stability seems to have been associated with strong economic growth. Post-1999 economic growth has been above the OECD average. However, the economy faces the same danger as it did in the 1980s, when the exchange rate was allowed to rise, stifling the external engine of growth. The Rogernomes did not care then ?? and the economy stagnated. This time the government sees the threat.

I am not certain that Easton's speculations make the picture clearer. Much of his argument hinges on the ambiguous use of the word revolution. And I am not sure that he gives Clark and Cullen enough credit for breaking with the disastrous policies of the Lange government. Someone who does is economist Kieth Rankin. In his 2002 article Cullen v. Brash Rankin carefully illustrates the differences between the neo-liberalism represented by Brash and the fiscally tight Michael Cullen. In an interesting passage, Rankin writes that Brash's entry into politics will give Cullen an opportunity to break with the neo-liberal monetary and fiscal policies seen in New Zealand since the mid 1980's:

Former Reserve Bank governor Don Brash's entry into politics has given Finance Minister Michael Cullen a windfall opportunity to criticise the management of monetary policy. Hitherto, at least since 1989, Finance Ministers had been expected to stoically wear the policy actions of the nation's most influential (yet unelected) policymaker.

With Brash taking Labour's rival National toward the neo-liberal right, Cullen has shown that it is now easier for him to carefully pick apart the accretions of the Douglas era. Let's hope that Brash keeps up his good work.

Monday, March 08, 2004

When Small ‘c’ becomes Capital ‘P’

I’m starting to get a little worried about Labour. It seemed pretty clear from the beginning that its response to the Court of Appeal’s decision regarding the Marlborough Sound was a little hysterical. You have to wonder not ‘what were they thinking’ but were they thinking at all?

Or perhaps they thought that they could afford to pick a fight with Maori and force through some short-sighted and fundamentally flawed legislation. That makes sense to me. Only a few short months ago, Labour was high in the polls and National was nowhere in sight. Columnist Colin James wrote that Labour’s strength was its ability to govern as a small ‘c’ party precisely because it lacked any real opposition. Now that it is faced with a popular National leader, that comfortable small ‘c’ conservatism has begun to climb the alphabet into capital ‘P’ for panic.

And Pugilism. Although Clark’s Hikoi of Hope speech appeared to move Labour back to the terrain of the left, the conservative Cullen undermined any warm feelings for Labour from progressives, activists and Maori by attacking the Waitangi Tribunal. We have to remember that warm feelings among these groups are pretty important for a good election campaign. Activists, both party and those just outside, are the engines of any political campaign. These days they are almost more important than anything else. Party activists need to be motivated by something other than just staying in power. I don't think that trashing Maori and the Waitangi Tribunal is going to help much in this department.

As No Right Turn has commented, Cullen’s criticims of the Waitangi report into government’s seabed and foreshore legislation are seriously flawed. But it’s worse than that. It is simply not appropriate for a minister to condemn a finding of the Tribunal in such terms. Just in terms of the optics, who was the idiot who gave Cullen that message box? Talk about challenges, speak about ‘important issues’ or better yet, shut up. Because Cullen has made trashing the Tribunal a legitimate exercise. Now Nelson Mayor Paul Matheson can look relatively sane when he comes out slinging at the Tribunal, calling it a ‘Kangaroo Court.’

It makes me wonder about dissension in Labour. Not the dissension of Maori M.P.'s, but between Labour's left and right. Already, rightists are feeling miffed by the recent cabinet shuffle which appeared to favour the left wing. For Cullen to come out so strongly against the Waitangi Tribunal with such a poor understanding of its findings can only undermine Clark's efforts at reconciliation and force her to the right. Is Cullen merely flexing his muscles or is he trying to undermine Clark's position in the face of the first bad polls in years for her Labour government? If so, I think it's a bad idea.

Tuesday, March 02, 2004

Antipodean Pain: The Psychopathology of Don Brash

Thus the ego…repulsed by reality, struggles to master its economic task of bringing about harmony among the forces working in and upon it; and we can understand how it is that so often we cannot suppress a cry: ‘Life is not easy!’ If the ego is obliged to admit its weakness, it breaks out in anxiety – realistic anxiety regarding the external world, moral anxiety regarding the super-ego and neurotic anxiety regarding the strength of passions in the id.

Sigmund Freud, New Introductory Lectures on Psychoanalysis

This is going to hurt. Over the last few weeks, it’s been getting easier to see how pathological much of Don Brash’s Orewa speech and the reaction to it has been. By pathological, I mean a mental disturbance, a condition that has thrown up delusion and fantasy on to the screen of New Zealand’s political life. If I am right, this disturbance is related to a widespread feeling of psychic pain, and the episode of Brash’s speech is nothing but a symptom of this pain. All people and all societies experience psychic pain, but perhaps New Zealand’s particular circumstances have given rise to a kind of pain that is, for various reasons, closer to the surface than in other, comparable societies. Analysing this current of psychic pain gives us some insight into the politics of Maori, Pakeha and New Zealand’s cultural identity.

The idea that the event of the Orewa speech is symptomatic of psychic disturbance is suggested by the most striking aspect of Brash’s speech and its aftermath: the insistence that Maori enjoy both privilege and special legal rights. Brash articulated this fantasy of special privilege and legal rights for Maori in two key passages of the Orewa speech. The first invoked the imaginary of Maori privilege, while the second fantasized about greater legal rights for tangata whenua:

1. "There can be no basis for special privileges for any race, no basis for government funding based on race, no basis for introducing Maori wards in local authority elections, and no obligation for local governments to consult Maori in preference to other New Zealanders."

2. "One principle above all others guides my thinking: The Treaty of Waitangi should not be used as the basis for giving greater civil, political or democratic rights to any particular ethnic group…"

It is insufficient merely to dismiss the fictions of Maori privilege and special rights as deliberate falsifications. Insufficient because to see Brash’s speech as just a cynical manipulation of public opinion would be to ignore the extent to which the fictions of Maori privilege and special rights were readily believed by many Pakeha New Zealanders in the face of the facts.

We should look quickly at some of these facts, bearing in mind that the present political and cultural circumstances require a more thorough analysis of Maori deprivation and exclusion relative to Pakeha than I can offer here. Provisionally, the spectre of Maori privilege can be dismissed by trolling through a few socio-economic indicators courtesy of Geoff Cumming in The Herald:

Unemployment: in the past six years, Maori unemployment has fallen from 19% to 10%. Meanwhile, Pakeha unemployment went from 8% in 1991 to just 3.3%.

Incomes: Maori remain concentrated in low-income occupations. Median incomes for Maori stand at $37,700 compared to Pakeha at 39,600. Meanwhile, Te Puni Kokiri states that Maori are significantly underepresented in the top 20% income bracket.

Living standards: three years ago, 39% of Maori families lived in low-income households compared with just 22% of the general population.

Education: only 6% of Maori have a tertiary degree compared to 14% among Pakeha…

And the list goes on. Colin James, in his article The indigenisation of Aotearoa-New Zealand: the politics of the Treaty of Waitangi underlines the importance of this dislocation and exclusion to New Zealand’s society as a whole:

"New Zealand has to get it right. Maori are around 15 per cent of the population and increasing. They underperform on all social and economic indicators. The coherence of this society and its economic wellbeing require Maori to feel wholly part of this society and be full participants in an internationally competitive economy."

The figment of special rights appears more complicated by the presence of the Treaty of Waitangi, which floats in Brash’s nightmares as a document which has been twisted out of its original context in order to establish a special legal and juridical order for Maori. In reality, both the Treaty of Waitangi and Maori rights to customary property form the basis of New Zealand’s legal foundation under the common law tradition. That tradition is a body of jurisprudence that is by definition one law for all.

Most of the writing about the Don Brash’s Orewa speech and the response to it have either credited or criticised Brash with having tapped into something underneath the surface of New Zealand’s society. Some have called it frustration, some have called it anger, while others have called it racism. I think Brash’s speech event has revealed all of these things. What is more interesting to me is the source of these feelings. The question is: what accounts for the mass fantasy among Pakeha of Maori privilege and special rights?

A few months ago I came across a paper by the Australian psychoanalyst Craig San Roque called Coming to Terms with the Country. The paper is a careful self analysis, both of himself and his culture in the context of the aboriginal presence in Australia. As Roque puts it, his essay is an attempt “to come to terms with living and working together in a country which is impregnated with Aboriginal mind, experience and consciousness.”

For Roque, psychotherapeutic practise in Australia must come to understand the particular qualities of Australian psychic pain if it is to be effective at all. As he writes:

"We must study the Australian culture, its psychic history and its contemporary distress in order to arrive ( continually ) at diagnostic positions which recognise the specific nature of the ‘national psyche’ as well as the individual disorders of psyche. We have to attain a cultural meta-diagnosis; and re develop (perhaps) our practice methods accordingly. The psychological dynamics of Australian social systems are not simple. Many institutionalised assumptions about the causes and cures of contemporary psychic ills may require rethinking".

The starting point for such an analysis is to discover the origins of what Roque calls Antipodean psychic pain, the formation of which is related to the presence or absence of what he calls ‘potential space.’ Potential spaces are human spaces, areas of intimacy between oneself and an other. Critically, these spaces of intimacy and potential are key sites in the formation of self-identity.

"Potential space is a mysterious, invisible yet utterly palpable space of interaction between one human and another. In this space, play begins and continues until it is transformed into shared culture. People of a shared culture live within a mutually created and maintained ‘potential space.’ Its continuous existence forms us and informs us. The ‘potential space’ between intimate people is full of potency, imagination and psychological transformation".

But what happens when we are cut off from each other? What happens when the promise of an intimate potential space is denied or abandoned? For Roque, the answer is that we experience pain at the loss of something that we all desire: intimacy. Although we live everywhere with the potential of this intimacy, it is, in our present circumstances, always receding from us. We may have never experienced this intimacy, although we appear to share the same landscape with others with whom we desire a closer relation. In the face of this loss, we begin to fantasize about about ourselves and the our place in this world as a defense against the pain we feel. Germaine Greer has gone so far as to diagnose european Australia as psychotic in the way that it has tried to deny the pain of its dislocation from Aboriginal reality. Roque, I think, would agree:

"We have to ask ourselves about the nature of the ‘potential space’ which is being formed here, in Australia. There is an optimistic fantasy generated that, between us, we can create Australia as a place to play; with money and land, sun and sand, freedom and opportunity. But there is another dimension to the space we are making. In the dark matter of the Australian universe, there has been shaping itself, for the same number of years, a culture of psychic pain. Certainly, something less than promising has formed between the original inhabitants of this country’s spaces and those who are coming later. It has been stunningly difficult to construct a ‘potential space’ between the indigenous and non indigenous cultures".

It is important to see that this dynamic is not peculiar to Australia. In fact, what Roque calls Antipodean psychic pain is really only a subset of a larger experience of psychic pain that is shared by all societies with a history of settler colonialism. Although there are many differences in the way that Australia and New Zealand have shaped the spaces between europeans and those who came before, when we compare the socio-economic indicators of Maori and Pakeha it is clear that the conditions of our ‘potential space’ are unequal. It is obvious that the same dynamic of pain and dislocation exists here.

Dislocation and Identity

If it is true that Pakeha culture desires a greater intimacy with Tangata Whenua, we must ask why we have not been able to come together more closely. Looking at Don Brash’s ‘episode’ we could ask why there is, in fact, a resistance to being together. Why there is so much emotional resistance to policy processes that are designed to bring Maori and Pakeha together as equals? Why are these policy instruments actually represented by many as contributing to the separation of Maori and Pakeha?

I would like to suggest that much of the pain related to these resistances arises from feelings of guilt. This fundamental guilt is associated with the original transgressions of colonialism and the way in which the process of colonialism displaced Tangata Whenua from the land. The relationship between transgression and guilt, dislocation and pain circulates and grows. As a defense against these feelings of guilt, and as a defense for the obvious privilege that Pakeha now enjoy as a result of colonialism, many in the Pakeha community have come to feel that modern processes of redress and recompense threaten Pakeha identity. And to the extent that Pakeha identity is actually composed of the elements of pain, dislocation and privilege, this is probably true.

Psychotherapeutic practise shows that defenses against feelings of anxiety often involve the repetition of the very conditions which give rise to feelings of pain and anxiety. This repetition is a kind of trauma response that seeks to master anxiety by staging it over and over again. Such a response helps to explain the depth of the emotional resistance on the part of Pakeha community to the very processes that might contribute to the easing of our psychic pain. A striking example of this repetition and resistance can be found in the account of the Treaty of Waitangi given in Don Brash’s Orewa speech:

Today I want to speak about the threat which "the Treaty process" poses to the future of our country.

In Brash’s speech there is a fear of the Treaty as something that could be active, as something that might exercise any kind of effectivity in the present. The intellectual effort that has been expended to paint the Treaty as something that is no longer active, as something which should not be included in New Zealand's jurisprudence (as if that were possible and legal) shows us that the Treaty ‘process’ actually threatens to bring us together, not tear us apart. By denying the reality of the Treaty, could it be that we are actually trying to re-stage the conditions of our pain and anxiety as a defense against the threat that the Treaty as a process represents to our identity? And might it not be the case that New Zealand can only become culturally mature when we have ceased to re-stage our trauma and can accept the possibility of a future of justice and equality with Maori?