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Today is a FREE taste of an Insight Politics article by writer Nathan Smith.

NZ Goverment’s Absolute and Arbitrary Powers Are Real

“New Zealand is turning into a totalitarian communist state!!” says yet another Facebook post.

I know libraries have become homeless shelters and public Wi-Fi spots, but it amazes me how few people understand modern government. The history of communism is a tragicomedy about people trying to overthrow a class that doesn’t exist. They look for it everywhere, but it turns out the whole thing was a trick. The state owned the means of production all along!

About totalitarianism, Bertrand de Jouvenel, in his masterpiece On Power, had something to say. He asked why European-style governments like New Zealand’s have been expanding for about the last millennium. Why don’t people push back against this?

His answer is that people are constantly trying to do so, but their actions only end up exacerbating the trend. In other words, the Byzantism (labyrinthine rules and complexity) of the modern civil service state is actually best thought of as a kind of autoimmune reaction. It succeeds by getting people to side with it against the lesser evil. And from a Jouvenelian angle, communism and capitalism are just variants of state centralisation.

The urge to make government more inefficient tends to make it larger. It is the logic of the cancer cell. From the perspective of the civil service state, its solution for inefficiency is always to get larger. The result is a kind of red-giant state, the world of Brezhnev, all-encompassing and completely ineffective. And anyone who knows about medicine understands that you can’t cure cancer by sanding it down every day.

This is why I don’t like the word “totalitarian” to describe modern governments because it’s an imprecise term of abuse. For instance, Xi Jinping has the same powers as Mao Zedong. Yet, while today’s China is not an ideal government, it is far closer to New Zealand’s unaccountable civil service government than it is to Mao’s China.

In fact, there are important ways in which Xi’s China is freer and better governed than either New Zealand or the EU. You can’t say the same for the murderous regime of Mao. The word “totalitarian” trivialises this difference. So-called “totalitarian” states use what you might call “consensus spectacle”, whereas “liberal” states use “conflict spectacle”. But it’s all spectacle.

Jouvenel knew that totalitarianism is the default of modern government, rather than an aberration. That means it cannot be the result of evil. Instead, totalitarianism is the result of an unstable condition in a state where legitimacy is undefined and the war of all-against-all is 24-7. In a state like this, evil flourishes. Mould will also grow in the fridge if you turn off the power. But it is stupid to blame either the mould or the refrigerator. You have to turn the power back on and start scrubbing. 

Modern “democratic” states have created something very new in history: a stable allodial system (ownership of real property) on a national scale. The absolute and arbitrary powers held by New Zealand’s government are real. They are not some fictitious claim of absolutism based on holy books or bogus law. Wellington alone points its finger and says “bang.”

The government has given some powers “to the people”. For example, Wellington does not have the power to execute Kiwis without due process of law, imprison its political opponents, etc. If it tried to assume these powers, it would be challenged (if not physically overthrown). Indeed, parts of the Covid-19 lockdown were successfully challenged in court as being “illegal”.

But the New Zealand government exercises powers which were not granted to it all the time. The problem is that when you complain about this, you are implicitly appealing to the political system, and the political system is ratcheted to increase its powers rather than decrease them.

People are correct to be suspicious about what’s going on, but wrong to call it “communist totalitarianism.” They have made the specific mistake of believing the government line that “the people” have any actual power beyond the few trinkets of formal power outlined above.

What we have here is a case where Jones and his progeny have been farming Smith’s farm for the last 200 years. This is unstable precisely because the formal powers of New Zealand’s government and its actual powers are completely disconnected. The legions march under the banner of SPQR, while horses are appointed to the Senate. Everyone with a sense of history and good government is tempted to scream at this horrific situation.

The question is: how do you solve it? Good question.

First, understand that the problems with New Zealand’s government are not because it has more powers than it should. The root problem is that the government is, by corporate standards, profoundly malstructured and mismanaged, which leads to abuses of those powers.

Second, it’s important to know why the modern civil service state won. Why did the elegant system of hierarchical jurisdiction known as franchise monarchy disappear? It disappeared for the same reason it emerged: the real power of the civil service was limited at the time of its birth, so nothing stopped the local franchises from existing. All the state could do was formalise the franchises.

The franchise tradition disappeared when the civil service state became strong, and local powers could not resist it. This, too, was a matter of political reality. Local governments had to be able to, for example, hang thieves, and if the King told them not to, they would find a way to get around it. The evolution from fiefdoms to local government was an excellent step but, in the end, this system could not resist Byzantine centralisation in capital cities.

If local governments had been treated as true delegations (entrusting another with power) they would have been a fantastic legal experiment. I am a huge decentralist. I would love to see Auckland run as its own country.

This probably sounds very strange to anyone “educated” after WWII, but in fact there are plenty of delegated franchises around the world called “special economic zones.” Asia is full of them. Even Hong Kong is still an SEZ, even after recent law changes. The reason this system works is because Hong Kong, to China, is a profit centre. Every time Beijing mucks with the golden goose there is a financial tremor. So China pretty much leaves it alone.

A special economic zone is not the removal of sovereignty. The PRC did not establish an SEZ in Shenzhen because the Baron of Shenzhen wanted to hang his own thieves. It did so because it wanted foreign currency. An SEZ is a legal system which is both profitable and stable.

No part of this system involves a command relationship. China does not really tell Hong Kong what to do. Hong Kong does not tell its residents what to do. Either could, quite legally. Neither does because it is not in its own interest. Sovereignty is not tyranny. Formal power and actual power are closely matched. The difference is that many of New Zealand’s state abuses make zero sense in terms of maximising the profit to the state’s beneficiaries (you).

Again, this is not unpredictable. New Zealand’s government is wasteful and irresponsible because its formal and actual powers are unclear. It acts like a dysfunctional Soviet corporation. It is incentivised to treat its capital – its citizens – like crap because the government works for itself, not for its beneficiaries. No one is certain who owns what, which results in a little thing called “politics,” which is simply factional fighting over control of the state coffers.

It didn’t have to be this way. It doesn’t have to be this way. The tragedy of history is how close the monarchical system came to creating a legal structure that was stable and functional. Read Stefan Zweig’s The World of Yesterday – an elegy for the lost world of the Habsburgs. Compared to Austria today, the Habsburg state (an absolute monarchy) was a libertarian utopia. It was governed by serious people who knew a thing or two about profiting from their subjects’ prosperity.

Total sovereignty is not evil. The goal should be to create a system where a leader is responsible. The people who must enforce this are those who benefit from his work, i.e., the shareholders – Kiwis. Monarchies had no shareholders, which turned out to be a bit of a problem. The modern civil service state is simply not incentivised to perform responsible government.

It doesn’t have to be this way.

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