The Dim-Post

January 27, 2013

Slow hands

Filed under: economics,Politics — danylmc @ 8:45 pm

David Shearer’s SOTU speech is here. There’s nothing new in terms of policy, but in value terms it promotes contemporary center-left values, a huge contrast from Shearer’s repeated bizarre attempts in 2012 to win over disaffected ACT voters.

His main critique of the National government is that it’s ‘hands off’. DPF rebutted this argument last week, pointing out the many ways in which National is a ‘hands-on’ government, and in an enormous coincidence the Prime Minister made exactly the same points a few hours later.

I agree with whoever wrote DPF’s post and John Key’s speech – it’s not credible to attack the government’s lack of involvement in the economy when they’re spending $400 million dollars on irrigation in Canterbury, $1.5 billion on broadband, how ever many dozens of billions the Roads of National Significance is costing, and so-on, and so-on. This is not a neo-liberal government.

And looking at ACT’s polling, it seems obvious that the political will for a neo-liberal economic model is dead; the debate is now about what kind of welfare state we want to move towards: a traditional model in the democratic socialist tradition, or a corporate welfare model in which benefits and services are directed away from individuals and into the business sector. I guess you could look at contemporary China or 1960s South Korea as exemplars.

I’m not opposed to this second approach – wouldn’t it be great if we were a country with loads of great, high-paying export focused jobs! But most of National’s corporate welfare measures look like white elephants: roads to nowhere that won’t return the cost of the investment, stadium and convention center boondoggles, etc. It seems to be driven by which sectors of the economy are more effective lobbyists rather than any coherent vision.

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47 Comments »

  1. Interesting that Key seems to have turned away from austerity, no more mentions of zero budgets, investment in apprenticeships. Clearly thats because their polling is telling them that people are tired of austerity. Heck even the IMF is telling the UK to be less austere.

    Comment by max — January 27, 2013 @ 8:53 pm

  2. “hands off”

    Cos that line worked so well for Labour before the last election. Muppets.

    Comment by Sacha — January 27, 2013 @ 9:14 pm

  3. I presume Shearer is going for the “out of touch” persona that has worked so well for him to date?

    Comment by Oz has Moz — January 27, 2013 @ 9:29 pm

  4. For what it is worth, no one suggested, implied, assisted or even knew about my post before I made it. I saw a preview of Shearer’s speech on Stuff, and thought the positioning they were trying for was facile. The irrigation announcement seemed a good counter-example so that then promoted me to go to the Treasury website and read Votes Econ Dev, Science and Primary Industries and then did my post.

    I have no idea if the PM lines are a coincidence, or if his staff like what I blog. Having said that I would note that rebuffing the idea the Govt is hands off is not likely to be a unique idea to me, especially as it is rather manifestly true.

    People always seem to think I have parliamentary staff writing things for me. If only. Keith Ng once suggested that one piece I did wa sso quick and comprehensive I must have had help. I showed him the history of my browser which showed all my Google searches and research. Another time someone OIA’d some Ministers asking for all e-mails from staff to or from me. There was one in six months.

    I spent eight years in Parliament. It is little surprise that the lines I come up with or research I do, often occurs to others still working there. It would be surprising if it didn’t. Likewise it is quite possible the bastards just rip my stuff off and never send me a royalty cheque :-)

    Comment by dpf — January 27, 2013 @ 9:45 pm

  5. Oh come on dpf, you secretly run the country.

    Comment by timmy — January 27, 2013 @ 9:51 pm

  6. “I agree with whoever wrote DPF’s post and John Key’s speech” drolloll

    Comment by mutyala — January 27, 2013 @ 10:21 pm

  7. I think ‘hands off/hands on’ works because, while objectively the Nats have their fingers in all sorts of pies – usually privatising public wealth, there’s a feeling among the public that they’re not ‘doing anything’ for the bulk of the population – jobs, affordable housing, etc. Hands on is short-hand for market interventions to help those people – that is, most of us.

    Whether Labour actually has the policies to do the ‘hands on’ job they’re talking about or whether the Greens will outgun them every time is another matter.

    Comment by dean logan — January 27, 2013 @ 10:22 pm

  8. @DPF: You know, I have a lot of problems with Danyl’s blogging, but I really admire his ability to get you to dash around huffing and puffing and trying to protect your precious blogosphere reputation.

    Here’s a hint – if you really care so much about what people think of you, pay less attention to Danyl, and more to Whale Oil. That’s where the issue is.

    Comment by Hugh — January 27, 2013 @ 10:51 pm

  9. Sorry Danyl, but this post has to be your Worst. Post. Ever. Shearer espousing ‘centre-left values’?@#$! Only in the Mallard-ian sense, providing adequate cover for his free-market capitalism. Have you forgotten Chris Trotter’s expose on Shearer’s mercenary army theory? (a theory debunked by the inability of Shearer’s hired goons to turn out the vote in Sth Akld for Labour – hehe).

    As for National – of course they are totally liberal capitalists. That does not preclude a side order of corporate welfare, which has always existed (under both Labour – think Michael Fay – and National – think Skycity or Telecom’s shareholders grinning in perpetuity).

    In that light, Labour & Nats waffling about ‘hands on/off’ is evidence of their refusal to tackle the issues that affect NZers, because both parties want to retain liberal capitalism. So they try to tinker with housing policies, while keeping a liberal foreign investment regime, allowing house prices, & so rents, to be driven up. They maintain liberal open immigration to keep a pool of unemployed Kiwis to depress wages; and they talk ‘high tech’ jobs, while ignoring the fact that any such high tech job gets outsourced to cheaper skilled workers in China or India and the cheap goods imported back into NZ under their trade liberalisation. And that inability to *retain* high tech jobs in NZ is why Nats corporate welfare has to go to infrastructure, like RoNS and convention centres and stadiums. They don’t want to pick winners, and they can’t, as their winners keep off-shoring their operations (F&P, Rakon, Tait, etc).

    In that sense, Act’s collapsed voter support is due to their silly MP antics, which was caused by their desperation to appeal to liberal capitalist voters already well catered for by National and Labour. It’s a competitive market amongst the free market parties in NZ…

    Sorry to sound snarky – just that I cannot understand why people keep giving Shearer & Key the benefit of the doubt, when the doubt has evaporated.

    Comment by bob — January 28, 2013 @ 1:10 am

  10. People often confuse crony capitalism with neo-liberalism. This is mainly because the same people benefit from either policy. Further confusion is created by claiming to be laissez-faire capitalists “supporting the market” while stuffing taxpayer cash into your mates’ pockets…eg: Roads of Nation-wide Crony Significance.

    Comment by Steve (@nza1) — January 28, 2013 @ 1:14 am

  11. #9: good point. Socialism for the rich & austerity for everyone else is actually quite hands-on, but not in a liberal way – in fact quite the opposite. So do the war on drugs and the penal-industrial complex.

    Comment by deepred — January 28, 2013 @ 3:12 am

  12. Key’s 2014 campaign slogan: ‘We’re not neoliberal, we build roads and shit’
    Danyl’s 2014 campaign slogan: ‘China: Not opposed as long as they let me blog’
    Shearer’s 2014 campaign slogan: ‘In a pub in Napier a guy came up to me and said to me “I’m working harder than ever, I pay my taxes, we’re trying to bring up our kids the best we can, but we simply can’t seem to get ahead…”’ (Grant Robertson sneaks up behind him and hits him over the head with the Ranfurly Shield)

    Comment by bradluen — January 28, 2013 @ 8:38 am

  13. I have it on good authority that the original name for the RONS project was Roadworks Offering Rich Taxpayer Subsidies.

    Comment by Gregor W — January 28, 2013 @ 9:20 am

  14. National has implemented a fairly typical Keynesian economics policy. It’s borrowed to spend spend money on infrastructure to stimulate the economy during a recession.

    Perhaps Cullen might have divided up that money amongst the various possible infrastructure projects slightly differently but his govt’s record of commitment to roading suggests it wouldn’t have been all that different.

    If Shearer wants to get himself stuck with trying to convince everyone that that’s not true and National have been ultra-neolibs out to destroy the economy then good luck to him.

    Comment by NeilM — January 28, 2013 @ 9:30 am

  15. Ah, I don’t agree with you or DPF. There is a question of how much intervention, the type of intervention etc. The national examples are primarily infrastructure (roads, fibre, irrigation). These types of project are almost invariably state funded worldwide due to the high capital requirements, the network nature, the need for easements and land purchases etc. Arguably irrigation could practically be carried out by the private sector, but then again irrigation is about exports.

    The Christchurch stuff has not been committed to at all. And they are not building the Auckland convention centre if that ever happens.

    Taking over a third or more of the residential construction industry (and presumably bending rules that hamper the private sector in their favour) is a different kettle of fish.

    Comment by Swan — January 28, 2013 @ 10:21 am

  16. I do sometimes forget that you voted for National in 2008, Danyl. Ta for the reminder.

    >People often confuse crony capitalism with neo-liberalism.

    In the same way that people confuse communism with what they had in the Soviet Union. Yeah, right.

    Just because Labour has wimped out and decided to tag along with National’s economic plan doesn’t stop it being a neoliberal one.

    Comment by Ben Wilson — January 28, 2013 @ 12:06 pm

  17. “the debate is now about what kind of welfare state we want to move towards: a traditional model in the democratic socialist tradition, or a corporate welfare model in which benefits and services are directed away from individuals and into the business sector.”

    A binary. How wonderfully simple and easy to understand. It is truly remarkable how political issues can always be turned into nice simple binaries.

    Comment by Quoth the Raven — January 28, 2013 @ 12:54 pm

  18. @DPF was that full browser history of all browsers?

    Comment by rsingers — January 28, 2013 @ 1:21 pm

  19. @ Steve – what Ben Wilson said in #16. Interesting that even NeilM agrees Labour is the same as National economically. I’ve already noted you can have a side order of crony capitalism with either free market or interventionist Keynesian values, but cronyism is not a palatable political programme for any politician to espouse (hey folks, vote for me so I can give buckets of your cash to my mates! – not a vote winner).

    @ deepred – actually, the free market capitalism we have had since 1984 *is* properly known as liberal capitalism. It is underpinned by the ideologically liberal belief that individuals can do anything/contract to anything they want, and the state should not interfere, just ensure a judicial & police system that preserves individual property rights. That is why ‘Conservatives’ like Maggy Thatcher could declare ‘there is no such thing as society’ while implementing Rogernomics on Britain.

    That is also why NZ MPs increasingly vote for both economically liberal (ie free market) proposals (like selling power SOEs), and socially liberal proposals (like legalising prostitution, banning smacking, redefining marriage to include gay couples, etc). There is tension in ACT between the majority liberals and the SST/John Banks faction of social conservatives, but they all agree on economically liberal policies. Ditto for the Bill English social conservatives in National vs John Key’s socially liberal faction.

    In the same way, MPs who are social liberals will happily endorse non-liberal policies like the War on Drugs & big prison industry, as it meets their liberal economic agenda (and gives chances for cronyism). Sad, but true. Liberalism brings some good things (end of apartheid, etc), but is not an untrammelled good in and of itself.

    Comment by bob — January 28, 2013 @ 2:15 pm

  20. Liberalism brings some good things (end of apartheid, etc), but is not an untrammelled good in and of itself.

    I thought the ANC commies back then but quickly turned liberal (in the economic sense) when they got their mitts on the goodies.

    Comment by Gregor W — January 28, 2013 @ 2:42 pm

  21. One could argue that Key isn’t a neoliberal because he’s maintaining an army rather than contracting it out to mercenaries, and it would be only slightly more silly. As others have said, spending on infrastructure is something that even neoliberals usually grudgingly concede should be done by the state. While it’s true that Key’s government could be more neoliberal, and it’s not the most neoliberal government in NZ history, both the rhetoric and the practice have been firmly grounded in neoliberalism, definitely more than Keynesianism.

    There isn’t that much political space between Key and Shearer, but that’s got more to do with Labour’s acceptance of the key tenets of neoliberalism than Key’s interventionist credentials. The whole “hands on” rhetoric actually indirectly points to this. Shearer is unable to be specific about the way his government would arrange the economy because that would contradict neoliberal ideology, so he instead has to use vague slogans.

    Comment by Hugh — January 28, 2013 @ 3:00 pm

  22. “I thought the ANC commies back then but quickly turned liberal (in the economic sense) when they got their mitts on the goodies.”

    It is true that their were a number of privatisations of state owned enterprizes they were burdened with from the apartheid government and perhaps they didn’t embrace economic populism to the extent that one might have thought given their roots and they certainly didn’t go as far in the dirigeste direction as Mugabe did in Zimbabwe. However, the ANC economic policies in the post-apartheid era could hardly be considered economically liberal. Despite the fact that some are delusional enough to blame post-apartheid South Africa’s problems on an embrace of neo-liberalism by the ANC. A party belonging to the Socialist International in alliance with the Congress of South African Trade Unions and the South African Communist Party.

    It is a shame that the ANC instead of embracing liberalism in overthrowing the dirigeste system of arpatheid of racist redistributional policies, e.g., discriminatory labour regulations, high import tarrifs to support export industries whose competitiveness was hampered by their high labour costs (due to the racial labour regulations), land expropriation, the aforementioned state owned enterprises, &c, decided to replace it with their own illiberal economic policies including, restricitive labour regulations, racial quotas, land redistribution, and welfarism. Whatever one may think of the good intentions of the policies of Black Economic Empowerment, they could in no way be construed as liberal. The Black Economic Empowerment programs has been assailed from all political directions as only serving an ANC connected elite even Desmond Tutu said “We have created a small handful of mega-rich beneficiaries of a black economic empowerment policy while spectacularly failing to narrow the gap in living standards between rich and poor South Africans”.

    The relative lack of progress in South Africa in spite of such promise after the profoundly liberal and humanising end to aparthied can probably be explained by incompetence, corruption, and the illiberal economic policies of the ANC. Corruption is widespread within the ANC. So it is more a case of them quickly being corrupted by power than turning liberal. The same old story of the corrupting effects of politics which is seemingly never learned as one can see by the calls for a more hands on government here.

    Comment by Quoth the Raven — January 28, 2013 @ 11:00 pm

  23. Er, you know who else was a member party of the SI, backed by the Trade Unions? The 4th Labour Government. Hardly conclusive proof of lack of neo-liberalism there.

    Comment by Keir — January 28, 2013 @ 11:24 pm

  24. Keir – It wasn’t meant to be. Their policies on the other hand should be conclusive enough evidence for all but the most obdurate socialists who insist on seeing neoliberals lurking behind every corner.

    Comment by Quoth the Raven — January 29, 2013 @ 1:19 am

  25. A party belonging to the Socialist International…”

    Means nothing. Singapore’s Peoples Action Party was a longtime member of the Socialist International under Lee Kuan Yew.

    Comment by Joe W — January 29, 2013 @ 7:27 am

  26. NZ is a one party state. Deal with it ladies.

    Comment by Simon — January 29, 2013 @ 8:39 am

  27. However, the ANC economic policies in the post-apartheid era could hardly be considered economically liberal.

    That’s a weird statement to make given that Mbeki’s neo-lib posture was pretty blatant (i.e. abandonment of significant land reform and nationalisation provisions of the Freedom Charter).

    I’ll grant you though that the endemic corruption within the ANC is not a result of economic liberalism per se, but it is fair to say that the justification of economic liberalisation post apartheid (and all the crony capitalism that comes with such radical change) has encouraged some pretty egregious troughing.

    Comment by Gregor W — January 29, 2013 @ 10:00 am

  28. if Labour are so convinced that bringing down the exchange rate is actually very easy then why haven’t we seen from them a guarantee – not just vague hand-waving – that they will do this and some detail about what they will bring it down to.

    Comment by NeilM — January 29, 2013 @ 11:33 am

  29. Gregor – Because his economic policies mercifully didn’t go as far as Mugabe’s in Zimbabwe (with whom Mbeki repeatedly sided) you can’t call him neoliberal. Mbeki is a man who spoke out against capitalism and globalization. For instance, he criticised capitalism in the most banal terms in a speech in which he quotes Polanyi “the central point made by Polanyi is that the capitalist market destroys relations of “kinship, neighbourhood, profession, and creed”, replacing these with the pursuit of personal wealth by citizens who, as he says, have become “atomistic and individualistic.” In 2000 as President he spoke in Havana to the non-aligned movement saying of them that “The atomisation of the family and the individual, driven by the development and entrenchment of the capitalist system, has not reached the structural permanence it has attained in the developed countries of the North”. One could hardly call that neoliberal posturing. Yes, as Deputy and President he did undo apartheid era protectionist measures and privaitised many of the mess of apartheid era state owned enterprises and he didn’t turn his back on the global economy, but it could only be a stretch of the most paranoid imagination to think of him as neoliberal.

    Comment by Quoth the Raven — January 29, 2013 @ 12:13 pm

  30. “…a traditional model in the democratic socialist tradition, or a corporate welfare model in which benefits and services are directed away from individuals and into the business sector. I guess you could look at contemporary China or 1960s South Korea as exemplars.
    I’m not opposed to this second approach…”
    Danyl, surely the stupidity of your position is obvious in your choice of exemplar nations. Why not just join the ACToids in singing the praise of Singapore? Political decisions on economic matters do not exist in a vacuum; corporate welfare can only exist in conjunction with authoritarian corporatist government. The idea that the economy can be run in the interests of a corporate oligarchy whilst retaining truly democratic institutions is naive poppycock. In reality, what you propose is contradictory to democracy – a phantasmal nonsense to anyone who prizes democracy as the greatest expression of mankind’s political will.

    Currency speculation should be just that – engaging in risky transactions in an attempt to second guess – and therefore profit – from fluctuations in the currency. In New Zealand, it is hardly speculation. – Our brand of neo-liberalism is particularly unimaginative and ultra-zealous so any currency trader knows exactly how the RBNZ will behave, and our dollar has accrued accordingly. It is as if you know one side in a rugby match will immediately kick all and every piece of possession into touch, regardless of the actual tactical opportunities presented. If our grey suited RBNZ technocrats were to be even slightly less moribund and exhibited even the faintest bit of intellectual curiosity and courage then the dollar might be a wee bit lower than it is now.

    But anyway, I think everyone understands that bringing the dollar down is fairly simple – we could print money, or peg the currency, our let the RBNZ engage is surprise raids that really, really hurt the bottom line of private currency speculation firms. The slightest hint of instability in our dollar would see the currency fall rapidly in a world where we are still a financial afterthought.

    But the problem isn’t bringing the dollar down – it what our ham fisted neo-liberal zealots in the RBNZ would do in reaction that frightens the bejesus out of politicians. A falling dollar would see the jackboot of the Reserve bank Act’s inflation targets stamped down on the throat of the domestic economy. Interest rates would rocket, and that combined with higher costs for imported raw materials would tip the retail and services sector (now the main employment drivers in our low wage economy) into a catastrophic job collapse. Even if, as it does now, the middle class cheerleaders of economic orthodoxy in the mainstream media happily made sure such lower class unemployment remained largely invisible the middle class wouldn’t escape. they’d scream as mortgage rates went up and they had to go cold turkey on their addictions to cheap electronic consumer good and cheap holidays in Thailand, Fiji, Bali, and the Gold Coast.

    When neo-liberal middle class economic talking heads talk about the need for “painful economic medicine” to restructure the economy towards export orientated industries in areas like manufacturing it isn’t their sins of consumption they have in mind, and all major political parties know it. “Economic medicine” means making the poor poorer and welfare state weaker. It doesn’t mean actually living within our means with the Pacific peso, expensive imported consumer goods, and needing an import licence for a car.

    Comment by Sanctuary — January 29, 2013 @ 1:24 pm

  31. but it could only be a stretch of the most paranoid imagination to think of him as neoliberal.

    Well I guess that counts William Gumede (Oppenheimer fellow at St Antony’s College) and Professor Anthony Butler (Director of the Politics and Administration at the University of London Programme and Chair in Political Studies at University of the Witwatersrand) among this esteemed group of paranoids.

    I would have thought you would be the first to understand that what a politician might promulgate for popular consumption is not what he enacts. Mbeki (as with most other politicians) was well aware who he was actually beholden.

    Comment by Gregor W — January 29, 2013 @ 1:35 pm

  32. *Professor Anthony Butler (Director of the Politics and Administration Programme at the University of London, and Chair in Political Studies at University of the Witwatersrand)

    Comment by Gregor W — January 29, 2013 @ 1:44 pm

  33. Gregor – I think Quoth the Raven is actually Trevor Mallard incognito… ;)

    Count me among the paranoid delusionals who consider the ANC a traiterous pack of sell-outs impoverishing their own people for their liberal capitalist masters, again, with a healthy side order of cronyism.

    Comment by bob — January 29, 2013 @ 2:03 pm

  34. Gregor – Because someone who holds a position at a university cannot be a crackpot? Have you ever spent time at a university?

    I hardly think a speech in which Mbeki quotes Polanyi and Hamlet is something which would be promulgated for mass consumption. Nor do I think that for example a speech to the International Union of Socialist Youth in Sweden would have garnered much comment from the masses in South Africa. If you look at his speeches during the apartheid years, over his years as President and since you will find a consistent view on capitalism. One which I believe is sincere. He is an intellectual and I don’t believe the breath of his knowledge can be simply passed off as an insincere attempt at popularity.

    I know there are those who see any deviation from hardline anti-capitalism and socialism to be “neo-liberal”. (see bob’s comment) But people like Mbeki do have to make concession to economic reality (though some choose not e.g., Mugabe). For instance when he said “Let me now mention that big, and some think, ugly word–globalization. This is one of the contemporary phenomena we will have to ensure we understand. We will have to understand this because whether we like it or not, we are part of the world economy. It would neither be possible nor desirable that we cut ourselves off from that world economy so that the process of globalization becomes a matter irrelevant to our country and people”. A recognition of reality that would be anathema to many who comment here. Such a concession does not make him a neoliberal. Any cursory look at the polcies under BEE and BBEE such as demanding a percentage of white owned companies be taken over by blacks, largely to the benefit of an ANC connected elite, could hardly be considered as giving in to their “liberal capitalist masters”.

    Another example of a leader giving in to economic reality is François Hollande who has just made a u-turn on economic policy. No doubt there will be those who said he was a secret neoliberal all along.

    Comment by Quoth the Raven — January 29, 2013 @ 3:29 pm

  35. God, I wish people would stop misusing the term “corporatism”.

    Comment by Hugh — January 29, 2013 @ 4:05 pm

  36. I feel for you, Hugh. I suppose the upside is that the earlier political philosophy that went by that name is so dead that people think that the current, obvious meaning is the only one there could be. Whereas many more years will have to pass before, say, “national socialism” or “people’s republic” will be able to be repurposed effectively.

    Comment by Stephen J — January 29, 2013 @ 6:29 pm

  37. @Stephen: You think? I see corporatist ideas as pretty alive and well in contemporary thinking, particularly around multiculturalism.

    Comment by Hugh — January 29, 2013 @ 7:38 pm

  38. There’s certainly scope for Universities to employ crackpots, just look at Eric Crampton.

    Comment by Rob — January 30, 2013 @ 11:12 pm

  39. #38: He’s quite mild when you factor in David Round, who’s on the very same campus.

    Comment by deepred — January 31, 2013 @ 3:14 am

  40. And on that same campus there’s Greg Newbold, whose glib media quotability is based on his decades-old experience as a prison inmate. Surely it’s time he went back for a sabbatical?

    Comment by Joe W — January 31, 2013 @ 9:47 am

  41. Because someone who holds a position at a university cannot be a crackpot? Have you ever spent time at a university?

    Let me see if I get this straight, QtR.

    You, an anonymous blog commenter, posit that all who disagree with your hypothesis are “paranoid”.
    I offer up a couple of published academics – one of whom specialises in the field of South African politico-economic analysis – who have a contrary position.
    You dismiss their analysis as the work of “crackpots”.

    Further, in defence of Mbeki’s record you cast him as an “intellectual” – a guy who as President of the Republic, publicly went against his own Health Department’s initiatives to combat AIDS by holding a position that HIV did not cause AIDS and further, quashed initiatives to supply cheap retroviral drugs – estimated by a report in the NYT to have lead to more than 300,000 preventable deaths.

    To me, rather than rhetoric, the measure is pretty straightforward in assessing the degree of Mbeki’s neo-lib bent:
    Note – not suggesting the results has been beneficial or otherwise, just attempting to establish where he sits on the continuum philosophically.

    Free Trade? – Yes. (i) TDCA signed with the EU in1999 with the final schedules enacted last year (ii) African Free Trade Zone enacted 2008

    Open markets? – Yes. Analysis the food markets across Africa, Coulter and Poulton (2001) suggest that reforms been “unambiguously proliberalization”.

    Economic liberalisation? – Yes. The South African Financial Sector Charter established in 2004 in order to support BBBEE initiatives.

    Privatization? – Sort of. Privatisation actually slowed under Mbeki, but it has been suggested that was as a result of him being somewhat of a control freak as opposed to specific ideological reasons.

    Deregulation? Yes. Tons of it under his watch, spanning agriculture to electricity and telco.

    Comment by Gregor W — January 31, 2013 @ 10:00 am

  42. Gregor – The man you mention above William Gumede describes Mbeki in his book ‘ Thabo Mbeki and the Battle for the Soul of the ANC’ as a “stiff, aloof, intellectual” and “an intellectual at heart”. He also said he is “widely seen as an intellectual”.

    Simply because one is an intellectual (or holds a position at a university) does not mean that they cannot hold mistaken views. Mbeki’s once held views on HIV and the views he still holds on capitalism (views clearly not of a neoliberal) were and are grossly mistaken.

    When the ANC came to power in 1994 they inherited from the apartheid regime an indebted state, after years of deficit financed economic stimulus and foreign sanctions. The highly interventionist apartheid government through a highly regulated labour market, protectionist policies, and a network of parastatals, state-owned corporations, controlled much of the economy. So it should come as no surprise that after liberation in many areas the economy of South Africa became much freer as the apartheid economic system was dismantled. But does that make Mbeki or Mandela neoliberals? No. Enacting some economically liberal policies no more makes them neoliberals than does it make Raul Castro or Deng Xiaoping neoliberals.

    That you think BBBEE initiatives, including the raft of new regulations in the “Financial Sector Charter”, like the BEE measures before them, which regulate the economy along racial lines, mandating hiring, ownership, procurement, and training based on race, where the public utility Eskom advertises “‘No white male appointments for the rest of the financial year” and where coal has to be procured through “Black Women-owned Suppliers,” first then “Small Black Suppliers,” then “Large Black Suppliers,” then “Black Empowering Suppliers.” (low stockpiles of coal eventually caused blackouts), are part of economic liberalization demonstrates your confusion.

    Comment by Quoth the Raven — January 31, 2013 @ 3:54 pm

  43. QtR – I should have been clearer – I meant Tony Butler rather than Gumede.

    Your also baiting somewhat of a red herring; you asserted that my sources who categorise Mbeki as neolib are “paranoid” and “crackpots”. Whether one of them also categorises Mbeki as “intellectual” is not pertinent (unless of course that view is crackpot as well?).

    Simply because one is an intellectual (or holds a position at a university) does not mean that they cannot hold mistaken views.

    The counterpoint being that simply because you are a blog commenter, your views – as opposed to people who specialise in this field – are accurate?
    Forgive me, but I’ll go with the academics on this one.

    Lastly, if as you say the pre-apartheid economy (government corporations, closed markets et. al.) was dismantled – and control effectively removed from whites – and replaced with broadly more open markets and privatization, then I take that as a pretty clear indicator of a process of ‘economic liberalization’.

    Simply, if an economic programme moves an existing structure rightward – with clear political intent – toward freer trade, more open markets, privatisation and de-regulation then it is by default on the neo-lib continuum.

    To infer otherwise – from what I can tell, you seem to think that anything less than total liberalisation is an ‘economic liberalisation fail’ – I think is flawed.

    Comment by Gregor W — January 31, 2013 @ 5:29 pm

  44. “Simply, if an economic programme moves an existing structure rightward – with clear political intent – toward freer trade, more open markets, privatisation and de-regulation then it is by default on the neo-lib continuum”.

    So by your reckoning, Raul Castro is a neo-liberal, Deng Xiaoping was a neo-liberal and Vladimir Lenin when he enacted the NEP was a neoliberal, Or are they just on the “neo-lib continuum”?

    Let me end by quoting from a man you think of as a neo-liberal, Thabo Mbeki, on the subject of neo-liberalism:

    In recent times, the values of efficiency and corporate social responsibility (CSR) have been thrust upon us. Never mind that the value of thrift, frugality, efficiency and profit were the stuff of Max Weber’s work on the Protestant Ethic and the Spirit of Capitalism. We must recognize these values in the context of neo-liberalism which mobilises efficiency in service of maximising profits and CSR as a palliative that temporarily minimises the pain without telling you that the pain is caused in the first instance by neo-liberalism. CSR does not heal the sickness.

    We must therefore rescue leadership from neo-liberal afflictions in Africa. We also need to reconceptualise leadership training in Africa and differentiate it from a technocratic notion of management. Leadership must be understood as an all-encompassing act that includes but is not restricted to management.
    Management denotes the act of controlling things or people. It is often used in a technocratic sense that refers to particular skills that specific people learn and can use to manage institutions, businesses, etc. Trainings with such a technocratic vision of leadership of course end up minimising leadership to management. In a neo-liberal context in which the market looms large and the profit motive is religiously celebrated, a management heavy notion of leadership can be celebrated. But the consequence of this context is that the ideals of corporate management predominate and skills in management training are geared towards achieving efficiency; but it is efficiency in service of the elite seeking to maximise profit.

    Comment by Quoth the Raven — January 31, 2013 @ 6:37 pm

  45. I guess you could look at contemporary China or 1960s South Korea as exemplars.

    I’m not opposed to this second approach – wouldn’t it be great if we were a country with loads of great, high-paying export focused jobs! But most of National’s corporate welfare measures look like white elephants: roads to nowhere that won’t return the cost of the investment, stadium and convention center boondoggles, etc.

    A lot of corporate welfare, or industrial policy if you are in Labour, in China were white elephants too. Take for example the famous ghost city of Chengong in China.

    1960s South Korea was and contemporary China is a developing nation. To look at the development success of what was in the terminology of the day a third world nation in South Korea and the still developing nation of China as exemplars for a developed nation like the one we live in is naive. The other problem is if we can really put their economic development success down to industrial policy. What we are to believe is that those governments succeded where so many others failed in state development planning. That if a nation tried the same it could somehow avoid the failures and ending up in a morass of rent seeking. However, examining the empirical link between industrial planning and economic growth shows it is tenuous. For instance, private enterprises are more productive than SOEs in China. The highest living standards and fastest growth in China are in those regions dominated by private business, rather than SOEs. The slowest growth and lowest living standards are in those regions dominated by the state. See: The environment of productive entrepreneurship: evidence from Asia and the pacific rim.

    Some regions of China have opened up to private enterprise more than others. Starting in the mid-1980s, more economic freedom and foreign trade were allowed in special economic zones created in selected coastal cities. Most of the more economically free regions in China still tend to be coastal, as shown by the “Marketization Index” for the various regions of China created by Fan, Wang, and Zhang (2001). They rank regions according to how big the government is, what the firm ownership structure is like, how many trade barriers and price controls there are, the development of factor markets, and how secure the legal framework is. Dorn (2005: 16) finds that regions with higher scores on the marketization index are those that have grown the fastest. For example, from 1990-95 Guangdong, Zhejiang, and Fujian grew at an annual rate of more than 20 percent. In these regions, state-owned enterprises account for only a small fraction of output. In contrast, in Heilongjiang, the Nignxia Autonomous Region and Qinghai, where state-owned enterprises are more prevalent, growth was only 7-8 percent per year and this figure is likely overstated because the managers in state owned enterprises are likely to overstate production. Using the overall marketization index, Dorn finds that the GDP per capita in the six coastal provinces that score in the highest quintile on the marketization index is almost three times higher than the provinces in the lowest quintile and is even 70 percent higher than the provinces in the second highest scoring quintile (2005:16).

    The evidence from China is overwhelmingly consistent with the notion that improvements in the entrepreneurial environment lead to economic growth. Despite the fact that it is still nominally communist, China has been the biggest pro economic freedom reformer in the region. Most of the growth has occurred in the private sector and those regions that have made greater pro-market reforms.

    Comment by Quoth the Raven — January 31, 2013 @ 6:46 pm

  46. so Shearer claims National acted in bad faith over the election of the speaker. And then puts forward Mallard.

    Did someone steal Shearer’s sense of decency recently. I was half expected to agree that the Nats were being high-handed but by putting forward such an unpleasant person it’s clear Labour were just playing petty games. or maybe Shearer really is a big fan of Mallard.

    It’s not a great look either way.

    Comment by NeilM — January 31, 2013 @ 9:14 pm

  47. So by your reckoning, Raul Castro is a neo-liberal, Deng Xiaoping was a neo-liberal and Vladimir Lenin when he enacted the NEP was a neoliberal, Or are they just on the “neo-lib continuum”?

    So taking a leaf from Blomgren’s continuum thesis and putting a fully statist/communist economic model to the hard left (as opposed to classical liberalism) and anarcho-capitalism at the hard right (as opposed to economic liberalism), then yes, I think the rightward driven by Castro, Deng and Lenin could be constituted as a move towards neo-liberalsim – though of course neo-liberalism in hypothesis is not even close to the most extreme rightward position given that it accepts some form of government is desirable.

    It comes down to whether you think these Commie grandees were philosophically committed to free trade, open markets, privatisation and deregulation as part of an overarching programme.

    In Lenin’s case, probably not as while the NEP was primarily about freeing up markets relating to agricultural goods (and bolstering industry to support that objective) it didn’t really touch on privatisation of formerly public assets or concerted deregulation. Also, it’s hard to apply the neo-liberal concept to a programme or individual before the concept existed.

    Castro, again probably not, as the rightward drift is piecemeal and seems un-coordinated.

    Deng on balance I would say yes – from ’92 onwards anyway.

    As to your giant cut and paste from a Mbeki speech, as I noted before the proof of ideology is in actions, not words.

    Comment by Gregor W — February 1, 2013 @ 1:58 pm


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