Austerity protests rage across Europe, and here in New Zealand a leading proponent of the free-market economy rethinks his stance

Yesterday I was astonished to read of Bernard Hickey’s stunning conversion from high priest of neoliberal economics to advocate of far greater control by New Zealanders of our own economy.

I’m sure his erstwhile friends and colleagues are looking on in amazement and some trepidation at his sudden transformation.

However, for those of us who have spent our lives trying to say ‘there is an alternative’ I think we probably share a collective sense of ‘welcome to the real world Bernard, and let’s have the debate you’re asking for.’

Groups like CAFCA (Campaign against Foreign Control of Aotearoa), the former ARENA, and some academics and unionists have spent decades trying to persuade politicians and the public that having one of the most globalised and open economies in the world is not going to do it for us.

And I for one will never forget the conference Ruth Richardson hosted at the Pan Pacific hotel in Auckland back in 1993.

Our group, the Auckland Unemployed Workers Rights Centre, saw the conference as a three day sales job aimed at hocking off as many of New Zealand’s assets as possible to the highest overseas bidders.

We staged three days of noisy protest outside, trying to get the message across that at least some of us desperately wanted to keep jobs, land and assets at home.

As was quite common at the time, we ended up derided, beaten up and arrested for our efforts, in an infamous police raid on our home base, the Peoples Centre.

So it is with a quite personal sense of vindication that I see someone like Bernard Hickey finally coming to understand what even the ragged unemployed were saying way back then – changing his tune in the same way that those among the privileged and powerful came to their senses on other issues, like the Springbok Tour and nuclear warships, as the years went by.

Mr Hickey’s timing couldn’t have been better as news begins to filter through this morning of massive austerity protests across the UK and Europe.

Demonstrations and strikes have been taking place in Brussels, Spain, Greece, Portugal, Slovenia, Poland, Italy, Latvia, Serbia, and Lithuania.

In Ireland a man drove a concrete mixer truck into the gates of parliament in protest at the estimated €30 billion taxpayers there are going to be asked to cough up for the bailout the Anglo Irish Bank.

With Irish unemployment at 13.7%, and the jobless rate for men under 25 at almost 45%, this chap’s anger seems more than justified.

Across the EU, people are protesting wage cuts, redundancies, cuts in social services, the raising of the retirement age and the slashing of benefits and pensions.

Fundamentally they are fed up with the EU and their own governments colluding to prop up the bankers and financiers who created the global financial crisis (GFC), while ordinary people pay the price.

Here in New Zealand we have been comparatively sheltered from the GFC storm, but its waves are lapping our shores.

The bailout of South Canterbury Finance, tax cuts for the rich paid for by borrowing, the rise in GST, employment law reforms, the insidious chipping away at welfare, talk of raising the age of super, and cuts in public sector services and jobs are all signs that in fact our Government is acting out a shadow play paralleling the European descent.

The ‘revolts, political unrests and global tensions’ that Bernard Hickey talked about in his article yesterday are happening today.

Mr Hickey also talked about some answers too – things like income redistribution, protection of our land and assets from foreign control, and greater regulation of the banking and finance sector.

I sincerely hope he will take a lead in the public debate he suggests on new ways forward for our economy,

I also hope that many more of us here can learn from what is happening in Europe, not just about the dangers of what the EU and governments are inflicting on their people, but also about the importance of strong, organised resistance to the whole ‘privatise the profits, socialize the losses’ agenda.

Comments (15)

by Mark Wilson on September 30, 2010
Mark Wilson

Dear Sue,

The result of your policies would just result in even more inefficient economies with even greater resulting social chaos.

Everyone of the countries you name is corrupt beyond measure with governments whose wasteful spending has done far more damage to their economies than the US investment banks could manage. There can be no defence of the greed and stupidity of the banks but there can equally be no defence of the stupidity of the "spend more than we can ever possibly afford' behaviour of those governments.

All of those big socialist governments spent far more than their countries could afford and their greedy voters lapped it up and now don't want to pay their debts. Well tough! Welcome to the really real world where if you waste money and overspend you have to pay it back. For them to blame big capital is the height of dishonesty.

It is inarguable that the countries such as the Scandinavian, Australasian and some Asian countries that controlled their spending are riding out the global downturn well while your socialist  countries are getting hammered. If as you suggest that it is all big capital's fault then they would be getting hammered as well.

The American banks bought forward the day of reckoning, but the overspending was the real problem. 

Welcome to the real world indeed.   

by stuart munro on September 30, 2010
stuart munro

Mark, you are evidently visiting from another reality.

The decline of the US economy is directly attributable to ultra-rightist attempts to wind back the clock to pre- New Deal days by sabotaging government.

Since a competent and active government is essential to the health and prospects of a modern state, the US is falling apart faster than its European peers.

You wouldn't know the real world if it bit you.

by Tim Watkin on September 30, 2010
Tim Watkin

Mark, I'm going to need some evidence to buy what you're selling. Even if you can provide proof of corruption, can you tell me how the countries Sue discusses are more corrupt than, say, America? Or why an uncorrupt country such as Britain is also taking some rather serious austerity measures?

Ireland was a Celtic Tiger of globalisation, hardly socialist. John Key wanted to model New Zealand's economy on Ireland's... until it collapsed.

And then in contrast to these terrible socialist countries you offer conservative, hard capitalist states in, er, Scaninavia and Asia? Um, Denmark? Korea? Sweden? Malaysia? China? Some of the most centralised countries in the world?

I'm sorry, you seem to be all over the place. I agree that overspending was a problem, but surely you accept that it was private spending – on property in particular – rather than government spending at the heart of the crisis.

You can argue that state spending in Greece, for example, was exposed as a result, but I don't think you can make a case the other way round.

by Ryan Blair on October 01, 2010
Ryan Blair

Mark's comment along with the others are harping it over on the one thing the world seems to accept. That its overspending..  It's not. It's over loaning in an underhand and nearly fraudulent manner by the USA and it "Fed" using legislation from 1913 passed by a nearly empty congress during the Christmas break.  These banks create events and profit from wars.  They run with the freemason ethic of bribery sex and assasination to get the ball moving.  The absolute abuse of the Official Secrets Act and the suppression of technology and energy technology is whats really making it collapse.

Retaining control of governments by selling their bonds that have generated fractional banking loans and voila! Foreclosure city..  War anyone?  These North American and European banking families are making the mint and passing the buck and now they are at odds with each other..  Get real indeed..

A re hash rather than diaster and depopulation using viruses and depleted uranium in engineered wars is not the way forward for the "economy".  Its abuse of power.

When will we all just get it?

by Mark Wilson on October 01, 2010
Mark Wilson

I will leave the conspiracy theories of Stuart and Ryan to the readers to judge. Ryan's "Freemason ethic" accusation is a newie but a goodie. 

Tim my argument is that the world has been on a credit binge and that those countries whose governments bought power by buying off the voters are far more to blame than Sue's big capital. That doesn't in anyway excuse big capital.

You are correct in that there is not a common thread in regard to their government's professed political hue but the countries that have done relatively well in the global crises have either huge natural resources (Australia, oil rich countries etc) or have had disciplined fiscally conservative governments.   

The "spend it to death" governments are corrupt almost by definition as Transparency International lists confirm. They also tend to be left leaning although you are correct that there are right wing governments to share the blame. I would however, debate how right wing they were in practice. 

Bernard Hickey's road to Damascus converson is plain silly. I expect Sue Bradford to see things through socialist glasses and to ignore that it was politicians who share her view of  the world that did the most damage but he should know better.

Governmental fiscal discipline is the way to provide the best for society's losers, not big government spending more wealth than the wealth creators can provide.

All the riots won't make a damn bit of difference (except make things worse). If you overspend by bribing voters sooner or later the voters will have to pay the debts.     

Those who take more from society than they produce are going to do it very hard indeed, and it is the big government supporters who should be blamed.   


by stuart munro on October 01, 2010
stuart munro


The pernicious global influence of Rupert Murdoch, and of the brothers David and Charles Koch, who fund the Tea Party, is not a conspiracy theory, but an established fact.

"Those who take more from society than they produce are going to do it very hard indeed"

Clearly you are not refering to politicians, bankers and multinationals, who will parasite society to death before they suffer any hardship whatsoever.

Government fiscal discipline is a false economy in a recession, but that doesn't licence governments to spend irresponsibly - they must always spend very wisely indeed if their actions are to be beneficial.

The political appeal of your position is very plain, a non-interventionist government need not do any work or take any consequential action. But from the citizens point of view, such a government is worthless, since it has ceased to pursue their interests.

Quite why economists believe that they are entitled to usurp entire states with their vacuous and conspicuously unsuccessful policies is hard to fathom. But they certainly do not belong to that prestigious class, the wealth creators.

With New Zealand as a case in point, how well have 'the wealth creators' served us as a nation over the past thirty years? We have collapsed. Our leaders have devoted their energies to failed rightwing policies, and to trade agreements that do not serve us. They have conspired in the destruction and alienation of New Zealand's productive base base.

There are indeed hard times coming, and if a real leadership does not arise before the majority reassert its discontents, it will go badly for banksters and freemarketeers, and indeed many others.

by Mark Wilson on October 01, 2010
Mark Wilson

Stuart I will be happy to bet you that, putting aside the morality issue, that the banksters and free marketers will emerge richer and better off because they understand how economies work and the left don't.

by stuart munro on October 01, 2010
stuart munro

Though it is true that the New Zealand left largely don't understand economics, the banksters and their ilk will prosper due to dishonesty and government complicity.

But you promote the same failed freemarket piffle as them - which makes you either a cynical insider, or a dupe.

by Richard James McIntosh on October 01, 2010
Richard James McIntosh

Dear Sue, I spotted Bernard Hickey's piece in the online Herald on Wednesday, too. What a great read.

I was immediately reminded of a book I read last year, an autobiography by the Hungarian economist Kornai János, in which he first devotes a chapter to describing how he became a communist ("I went the whole way"), and goes on to describe his susequent loss of faith.

When asked at the American Consulate in Sweden in 1975 why he had answered 'yes' to the question of Communist Party membership, the official said, "They must have forced you to join... 'Far from it', I replied, 'I joined of my own free will. I joined because those were my convictions at the time'".

Here's some of what he said of his experience in the mid-1950s:

"According to its own assertions, Marxism alone presents a scientific method for researching society and comprehending the body of knowledge about it. I broke with Marxism because I became convinced that it lacked foundations in precisely this respect."

"The problem was not just that the theories performed badly in all these comparisons, that the Marxist dogmas failed to match reality. The main trouble was that Marx himself and his later disciples did not feel the primary intellectual duty to apply the elementary criterion of scholarship: testing their ideas against reality."

And finally, "I remember talking about the early 1950s to my son András once when he was a teenager, and his asking me, 'Father, you are a clever man. How could you have been so dumb?'"

So, I don't agree with you that Hickey's piece represents a stunning conversion. To my mind, he has experienced - like Kornai - a sincere loss of faith, and has now expressed what he has clearly been suspecting for quite a while: that the economic theory he had been devoted to 'faied to match reality'

I'm sure you're right about the reaction of his fellow-travellers, though! It's great to read someone with Hickey's intellectual power present the evidence so clearly.



by Ryan Blair on October 01, 2010
Ryan Blair

Better leave transparant economies to the new republican debate..  There's talent in NZ yet left or right regardless, and perhaps they are actually going to convene.  Peters will save our super after Hide dies a politcal death deserving of his name and we can all live in peace and prosperity..

Hope I didn't jinx it..

by Ram on October 11, 2010

All these variants of capitalism, from it's soft interventionism to the fully deregulated red in tooth and claw Friedmanite school of uinfettered growth simply act to delay the inevitable day when the sum total of global suplus must exhaust itself in the eventual race to the bottom of the annual profit barrel.

In the mantime, all this talk of capital lite or pure free markets merely obscures the innate contradictions in a system designed to secure ever increasing expansion within a paradigm of finite resourcing. I suppose we could invent some alchemising Singularity or better still, mine the distant reaches of the cosmos.

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