Almost thirty-six years have passed since the whiskey-fuelled snap election ended Robert Muldoon’s Fortress New Zealand and ushered in the Roger Douglas free-market revolution. New Zealand was changed forever in a few short years. The ideological troglodytes of the political left still regurgitate their thoughtless slogans against ‘neo-liberalism’ even today. However, none of them has ever dragged us back to 1983…
Coronavirus has seen New Zealand in lockdown for just over a week. I’m not debating whether a nationwide lockdown and border closure was the best decision. I simply don’t know. It is the sort of approach that requires swift decision-making to maximise its effectiveness and if that is the government response, I’ll freely concede they haven’t done a catastrophic job of it. If there is one thing this Labour-led government are good at, it is shutting things down. Look what they did to Charter Schools!
Save for a few virtue-signalling local body prats declaring a climate emergency, New Zealand has not been put into a state of emergency for 69 years. I don’t doubt Jacinda Ardern’s genuinely benevolent motivation in taking this step. I don’t doubt the good intentions of the hundreds of thousands of New Zealanders demanding this very drastic action. It doesn’t make me any less vigilant, nor less concerned for individual liberty. The relatively benign political environment in New Zealand is enough to stop most New Zealanders from worrying about their liberty – which is precisely the reason I’m alert to the threat this Government has become.
I’m not a conspiracy theorist by any stretch; however, I have studied the totalitarian regimes of the twentieth century well enough to know that they all start with crackdowns on speech, confiscation of firearms or declaring emergency powers to fight a crisis. This Government is preparing for the first, did a complete cock-up of the second and has just commenced the third while adjourning parliament. They’re probably not going to declare a Soviet Republic, but just be vigilant.
One of the problems with the one-minded ‘the government must do something’ approach, the very same approach we were being told a month ago was essential to stop climate change, is that it is impossible to measure the results. When the virus is gone (I’m pretty optimistic about that), will the resulting economic and personal misery be a result of the Government not doing enough, fast enough, or is the big-government approach simply wrong? Just as, if we ruin our economy going Carbon Zero and climate catastrophe occurs in 2100 as predicted, is it because the Government didn’t do enough or that Government couldn’t stop the change which impoverished us beyond our ability to adapt?
Now that we’ve commenced the four-week lockdown, I’m not going to call for civil disobedience and rioting to bring about an anarcho-capitalist revolution and destroy the state. Of course, we should follow the directions of the Government for the duration of the lockdown, avoid non-essential travel and stay at home. Being an essential worker, I’ll never truly know the cabin-fever you risk descending into, but I’m well aware of the picky, micro-managing bullshit that comes with operating a business in an emergency environment. However, we can all follow the general spirit of the lockdown rules without being complete dicks about it. Go and have a look at a couple of facebook community groups if you’re unsure what I mean. There are thousands of people out there who aren’t just following the rules or spying on their neighbours and calling the police, but they enjoy doing so and proudly tell everyone about it. Totalitarian states aren’t the result of good people doing nothing, they’re the result of these jerks and there are plenty of them.
Without advocating for or against the lockdown as a solution, it is still possible to observe the consequences of the action as conclusive evidence of the shortfalls of socialism and central planning. First, look at the debate over what constitutes an essential service and an essential worker; which boils down to an academic dispute over needs and wants. It is highly subjective, arbitrary and would never take place in a capitalist country with free-markets. If one were to take a cursory look at GST regimes in other countries that have exclusions for non-luxury items, or free food, they find a mess which enriches litigious lawyers and accountants more than low-income families. If we were debating firearms laws, advocates for greater controls often claim ‘nobody needs to have a semi-automatic weapon’ without considering what a dystopian future we would face if ‘need’ was the primary determination of what is and isn’t permitted.
Centrally planned economies are always a failure in every country that attempts them, for a few reasons already apparent. In a free market, individuals and families, workers, sole traders, small businesses and large corporations act independently, primarily motivated by satisfying their interests through mutually beneficial trade (labour for cash, cash for goods etc). It isn’t utopia. Aside from charity, there are examples of malicious participants, bad ideas or stupid decisions that can be found throughout the economy, which fail and are purged with great efficiency in a free-market. These aren’t “market failures”; they’re the proper risk and reward consequence that makes free markets superior to central planning. Massive taxpayer bailouts don’t correct market failures; they protect participants from the consequence of producing products nobody wants or unsustainable investment decisions.
Ordinarily, referring to the supermarket retail sector as a duopoly is a misnomer. Foodstuffs and Woolworths NZ are the dominant participants with approximately 85% market share. The remaining 15% include independents, small chains, superettes, service stations etc. The decision to restrict trade to only those businesses which provide essential goods and services has resulted in only supermarkets, superettes and petrol stations being able to operate. Independent butchers, seafood, produce shops, takeaway and fast food restaurants haven’t managed to be included in this highly arbitrary definition and are forced to close until the lockdown is lifted.
Already supermarkets are being accused of profiteering and price gouging despite both players removing weekly promotional activities from most of their products and only changing the prices of meat and produce based on seasonal fluctuations as they always have. This isn’t the first time cauliflower prices have reached $10 a head. It has happened previously, usually around the same time of year: outside of cauliflower season. In response to the removal of competition from the retail sector fuelling accusations of supermarkets engaging in anti-competitive behaviour, the government has set up an email address for consumers to report accusations of price gouging. No doubt it will become as clogged by unmanageable volumes of pettiness as the email address for complaining about your neighbours for breaching lockdown rules has.
The free market isn’t just goods and services, it is also a market for ideas. When a market becomes highly regulated, the number of thinkers and ideas is significantly reduced, down to those who are permitted to decide the rules for participation, production etc. ad nauseam. They cannot possibly fathom every single scenario for an entire nation, and this becomes obvious as the government is required to make tweaks and changes daily. A free market makes every participant a planner with just a few elements to consider relevant to themselves, hence it functions much better than central planning done by a few for infinite elements.
As we enter the second week of nationwide lockdown, the public narrative has moved to whether four weeks will be long enough and how the country can extract itself from the regime of unlimited government power. Being born in 1983, I can’t fully appreciate the excesses of Sir Robert Muldoon’s powers but have studied the period sufficiently to identify the parallels of the present-day lockdown and his Fortress New Zealand regime.
Prior to danger of the coronavirus becoming evident, Labour had entered campaign mode and began making multi-billion dollar proposals that resurrected the infrastructure projects of the previous National Government that had been cancelled by Labour just two years prior. A $12 billion debt-funded spend-up on various road and public transport projects was already on the cards prior to the realisation the coming pandemic was going to be economically catastrophic for New Zealand, due to our reliance on China, tourism and international education.
As we faced the closure of our borders to foreign nationals, Labour unveiled another spending package costing an eye-watering additional $12.1 billion, which is set to grow even further. The original $5.1 billion wage subsidy proposal has already been eclipsed by further spending promises lifting it to over $8 billion. Inevitably that will have to rise to cushion the shock of increasing the minimum wage by $1.20 on April 1st. More announcements haven’t been ruled out in addition to the coming annual budget. Finance Minister Grant Robertson has $52 billion to play with thus far and it is largely funded by borrowing from the Reserve Bank. In a few short weeks, the almost forgotten Social Credit movement has witnessed its ideas being implemented by this government.
At the start of this article, I mentioned Robert Muldoon and the Rogernomics revolution. Coronavirus threatens to achieve what the most radical leftists never utter when they criticise the policies of the Fourth Labour Government: a return to the Think Big era of 1981 in which the Reserve Bank printed money to fund enormous Government infrastructure projects in a misguided attempt to stimulate the economy and create jobs. The failure of these projects led to the interventionist extremes of Muldoon’s final term in power, in which he authorised, regulated, subsidised, licensed, froze, monopolised and permitted every aspect of life. The only difference is the order in which they may occur.
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