There is insufficient support for neoliberal economic policies so political parties of the hard right are adopting populist causes.
To succeed the neoliberal revolution of Roger Douglas and Ruth Richardson had to change the culture of New Zealanders from their belief that the government was usually the solution to a problem to a society which emphasised the autonomy of the individual and down-played the role of collective actions which involved compulsion (like taxation).
That they failed is evident in the limited support that the ACT (Association of Consumer and Taxpayers) party has. When it was founded, Douglas predicted its support would exceed 50%. (His forecasts have not had a good record). Yet at the beginning the National Party had to support ACT – it typically won about 3% of the vote – by gifting them a seat (first Wellington Central, later Epsom) because the expectation was that ACT’s list vote would not exceed the 5 percent threshold. (National was keen not to waste the right-wing vote; doing so would have benefited the left.)
By the late 1990s, aware of their limited support, ACT sought the ‘Law and Order’ vote. (Not all neoliberals agreed.) More recently, it began working with the gun lobby. Despite generous funding support – the wealthy are more neoliberal than the population at large – ACT’s electoral support is below 10% which may give it some influence in a right-wing coalition but little power.
So ACT recruited controversial media personality Paul Henry. Whether it will attract more support on polling day is yet to be seen. But the prominence of the recruitment reinforces the earlier broadening of the target supporters, underlining that neoliberalism by itself is not favoured greatly by the masses.
Presumably the strategy is not unlike that of Douglas and Richardson, whose parties campaigned on a vision of reconciliation with nary a hint of the divisive economic policy they would pursue when they got into power. (Don Brash probably had a similar strategy when he led National in the 2005 election, except his campaign was less conciliatory and it failed.) A good chunk of ACT’s votes may come from voters who support its populism but do not favour neoliberal economic policies.
The seeking of populist support for hard-right economic policies is not unique to New Zealand. Quin Slobodian explored the phenomenon in Hayek’s Bastards: The Neoliberal Roots of the Populist Right. (Slobodian is a Canadian intellectual historian whose earlier books, Crackup Capitalism and Globalism, reviewed here.) His thesis is captured in the book’s title. The founders of neoliberalism, economists Ludwig von Mises and Friedrich Hayek, would be appalled by the way their thinking had been corrupted by those following them. The new approach, which combines traditional social values with market libertarianism, is called ‘fusionism’,
Slobodian characterises the beliefs of the fusionist ‘bastards’ as supporting hardwired human nature (genetic destiny), hard borders (mobile capital but captive people), and hard money (the gold standard). Mises and Hayek could live with the last hard but would probably be highly uncomfortable with the first two, which amount to racism. I read the book with interest but was not entirely convinced. Slobodian highlights three thinkers who are neither widely known nor have the intellectual weight of the founders.
In some ways, New Zealand’s ACT confounds the thesis. The promotion of the populist hard right is more a matter of neoliberals trying to get broader public support than of being driven by ideological fusionism. The ‘hard borders’ for people reflects a wider concern about the role of immigration. It is also integral to the popularity of New Zealand First, which is certainly not neoliberal.
‘Racist’ is not a term I use lightly. For instance, I do not think Brash is racist; it’s just that he has a different view of the role of Maori in New Zealand from that of his critics. (His views are similar to the current government’s). But people with racist views treated Brash’s position as a dog whistle for theirs.
Make your own judgement about the following episode in Henry’s life. Once referring to Governor-General, Sir Anand Satyanand, Henry asked, ‘Are you going to choose a New Zealander who looks and sounds like a New Zealander this time... are we going to go for someone who is more like a New Zealander this time?’ As it happens, Anand is of Indian descent but he was born and raised in Auckland (and sounds like an Aucklander). Later Henry apologised for his comments, so one could argue this was a case of an uninformed motor mouth. Whether that is a good basis for an MP, whose statements in Parliament are not subject to the laws of defamation, is a matter for the electorate.
I am not even sure how neoliberal ACT is. Certainly, its Regulatory Responsibility Bill in its initial form was neoliberal but consider its leader David Seymour’s handling of his Pharmac portfolio. Pharmac is a government monopsony (single purchaser) designed to offset the monopoly powers of Big Pharma, a power which comes from the government intervention of granting patents in their drugs. (This is not to object to the principle but to remind the reader that government interventions lurk everywhere.) Rather than shifting Pharmac in a neoliberal direction, Seymour has been strengthening the agency. It is not as if Seymour is trapped there by the coalition; he chose the portfolio.
On the other hand, Brook van der Velden’s management of her labour portfolio has been inching labour law in a neoclassical direction. And ACT expressed a very neoliberal objection to the popular, more comprehensive KiwiSaver proposal, a view unaffected by the findings of behavioural economics. (Perhaps ACT’s economists have been hibernating.)
At issue is not simply the extent to which ACT’s shift towards populism, symbolised by the recruitment of Henry, will increase its voter share. (Discount early polls; at issue is when things settle down for the final poll on 7 November.) It is also from where ACT gets its new voters.
If they come from those who did not vote in 2023 the political right is strengthened. But if the new voters come from National, ACT is strengthened within the right but it wont affect the ultimate election outcome of whether the left or right runs the country. I suppose ACT could get voters from NZF who are also seeking the populist vote. Since NZF is emphatically anti-neoliberalism the transfer would emphasise the irrelevance of neoliberalism to voters’ decisions – a Slobodian conclusion.
Can ACT (and NZF for that matter) recruit left-prone voters (especially those from the working class)? That is what has been happening in the US with Republican MAGA, in Britain with Reform and elsewhere in Europe. In New Zealand, as elsewhere, the right has always been able to attract a significant working-class vote. Neoliberalism by itself, has not.