What can we expect from National?

The Spark December 2008 – January 2009
– Philip Ferguson

With National back in power, albeit as a minority government, what can workers expect? Is this going to be a repeat of the first term of the last National government (1990-1993), the one that produced the “mother of all budgets” (cutting the dole, the DPB and other benefits by around 25%) and the notorious Employment Contracts Act?
According to much of the left, it is going to be just as bad – or even worse! They think this is especially so because of ACT, and often insist on referring to the government as the National-ACT coalition. A number of important points are missed by that analysis, however.

Who is actually in government?

First, at the most basic level, this is not a National-ACT coalition. It is a National minority government in which the links with the Maori Party are stronger than those with ACT. Indeed, John Key and his closest associates seem keener to forge links with the Maori Party than with ACT and its founder-ideologue Sir Roger Douglas (the former minister of finance in the fourth Labour government, which launched the biggest attacks on the working class since the Depression).
Secondly, the National Party today is not now the party of rural reactionaries and upper-crust racists and hasn’t been for a long time, despite many leftists continuing to present it in this way. In terms of social composition, the Nats are a party of urban liberals, like Labour. They understand that in order to be, and remain, a viable party of government they have to relate positively to the changing demographics and social attitudes of New Zealand society. They even set up a diversity project headed by Bill English to attract Maori, Pacific Island and Asian New Zealanders and to develop a political base among those sections of New Zealand society. National now has more Maori MPs than Labour, in fact. (For instance, see http://liberation.typepad.com /liberation/2008/08/national-goes-p.html.)
Thirdly, the new National cabinet reflects the newer face of National. Despite claims in some parts of the left that the National front bench was the same old discredited right-wingers, the likes of Lockwood Smith and Maurice Williamson have been replaced by newer, younger faces like former DPB beneficiary Paula Bennett. As Key said before the election, there is no portfolio for Douglas. The left needs to come to terms with the National Party as it is now, not as it was under Muldoon.

Economic policy

But what about economic policy? Surely, the Nats are the party of union bashing and grinding down the workers?
National is not inherently more hostile to workers’ interests than Labour. Just as with Labour, what the new National Party government does in terms of economic policy will be overwhelmingly conditioned by how much of an economic downturn there is. They’re not going to attack the working class because they have some ideological fixation with making workers poor (they don’t have such a fixation and, in fact, they never really have had), and least of all are they going to attempt some pitbull job on the working class just because Roger Douglas might want them to.
The attacks of the 1984-93 period, carried out just as much by Labour as National, reflected that New Zealand capitalism was up shit creek without a paddle. The capitalists had absolutely no alternative. That’s not the situation at present and it remains to be seen how deeply the woes in the finance and banking sector in other countries will hit New Zealand. Because the New Zealand economy depends on exports, and to some extent easy foreign money, it could be hit quite hard. On the other hand, the decline of the New Zealand dollar (which is a product of these woes) is good news for exporters because it makes New Zealand products cheaper in export markets than those of their rivals.
Unless they’re really in a huge crisis, the capitalists prefer not to make big attacks on the working class – especially when they’re blessed with social stability and a tame-pet union leadership like the CTU brass. Why screw that up unless the economic situation is so totally dire that you have to?
One of the things that a large part of the far left has in common with the market-rules ideologues is that neither group really understands that the market is just a thing and can’t organise the preconditions for its own existence and continuance. The operation of the market depends, for one thing, on social stability, yet the operations of the market undermine social stability by trying to commodify everything and individualise society.
Smart capitalists therefore understand that capital, because it’s merely a thing, requires conscious human planning and organisation to maintain social stability and manage society so that the market itself can operate successfully and deliver maximum profitability to the capitalists. In the First World, the capitalists are prepared to pay for stability too. And, generally, they’d rather pay a bit for it than have a big scrap with the working class. This only changes when there is a really serious economic crisis – that is, a real crisis across the whole of the economy, not just problems in the finance sector.

International situation

The situation of the New Zealand economy depends in no small part on international decisions. At present governments of both “Labour” and “National” types across the First World are tending to use the state to pump money into the economy, institute greater regulation of the finance and banking sectors, and continue to remove barriers to global trade. In the absence of mass working-class struggle, the capitalists and the governments that represent them have quite a lot of manoeuvring room to use such a mix of policies.
On the other hand, all the bailouts funded by governments are going to have to be paid for by the working class at some stage – government spending comes out of the surplus-value produced by workers. Similarly, the real economy, the part of the modern economy where real goods and services are produced, is going to be affected by the debt baggage of the artificial economy, ensuring a general slowdown which will be paid for by workers – for instance, in the form of layoffs. While a low New Zealand dollar facilitates exports, those exports still have to find markets, and so the slowing of other economies is going to have an effect on New Zealand’s export sector.
Within New Zealand, there have also been fresh announcements of redundancies. However, redundancies have been a fairly common feature of the New Zealand economy under Labour for the past nine years. Since the banking and finance sector internationally has been hit, there hasn’t yet been any notable increase in redundancies in New Zealand. This may change, but the most important issue here is that the unions, and workers in general, need a strategy to fight layoffs. For years, we’ve needed a perspective that moved from passively accepting redundancy to actively organising resistance.

Where to for the left?

Meanwhile, chunks of the left engaging in hyperbole about the biggest meltdown since 1929 and scare-mongering about a “National-ACT” junta kind of regime simply gets in the way of the clarity we need right now.
We need an ongoing, clinical assessment of the depth of the problems in the artificial economy and their impact on the real economy if we’re to organise effective opposition to the government around economic issues. Otherwise, the danger is that the left will cry wolf, engage in hyper-activism and end up discredited, burnt out, demoralised and confused – just like much of it did after the 1984-1993 period.