I used to josh Michael Cullen that he should write a memoir about his 27 years in parliament which ended in 2009, including 12 years as a minister. He always said he was too busy and it was not his thing. Sadly things have changed. Learning he has terminal lung cancer, he gave up all the substantial public activities which followed his retirement from politics. Finding he had nothing to do, he wrote the memoir I asked for. I am glad he did but not about the circumstances which precipitated it.
To clear away an issue: because of his medical limitations, Michael was not always able to check his memory against the documentary record. There are accounts in the memoir which do not accord with my memory nor the records I hold. Michael accepts this could happen and apologises – his discipline was, after all, history. The reader, then, must be cautious about particularities but, allowing for that, the memoir is an account of Cullen’s times far more nuanced than a number of those by his contemporaries and quite detailed about how the inside of caucus and government worked. If one has ambitions in politics, journalism, policy or just watching it all, one’s understanding will be greatly enhanced by following his journey (even if the guide is a little unreliable at some ports of call).
However, this column is not to review the memoir, but to use it to discuss social democracy. (A later column will look at Cullen’s record as a Minister of Finance.)
Cullen describes the Lange-Douglas Labour Government torn between three major political groups: traditionalist social democrats, modernising social democrats and neoliberals.
Regrettably he conflates ‘neoliberalism’ with ‘neoclassical economics’ and refers to the former by the latter term. He wants to avoid the former term which has become an label of the unthinking left for any policies with which they disagree (just as ‘socialism’ is a word of abuse for the unthinking right). However, in economics each has a more precise meaning which is lost if the distinction is not made.
Neoclassical economics, as the name says, followed classical economics which was developed by, among others, Adam Smith (who influenced Cullen), David Ricardo, Thomas Malthus, John Stuart Mill and Karl Marx. Its innovation was to introduce the demand side for goods and services. As such, it has been the foundation of economics for more than one hundred years. Keynes took it for granted (Cullen says he is a Keynesian); Paul Samuelson integrated the Keynesian analysis into what is known as the ‘neoclassical synthesis’, which is the workhorse of many of today’s economists.
Neoclassical economics does not have a particular political bias. Of its two great founder-consolidators, Alfred Marshall walked around London with Charles Booth compiling his poverty survey (Cullen researched the data bank), while Leo Walras recommended that Lausanne Commune (he taught at the university) purchase the vineyards around it (which they did and prospered from the decision). I first came across neoclassical economics before I even knew one could study ‘economics’, reading Fabian tracts, which influenced Cullen too.
So yes, neoliberal economists also use neoclassical economics, but they add the political twist of a strong antipathy to state involvement in the economy. It may be the confusion between the two ideas that led the Clark-Cullen Government to appointing neoliberals to various positions, while not making the distinction is part of the explanation of why there are neoliberal fossils in today’s policies.
Modernisation is a central notion in Part V about the Rogernomics period in my Not in Narrow Seas. It arises from the need to adapt the way society and the economy operate as a response to technological, social and attitudinal change and changed external circumstances I argue that in the previous period, under Muldoon, the tendency had been to ignore, avoid and resist such changes – the approach of traditionalists.
Rogernomes were modernisers. (I am not so sure the neoliberal rump is today.) Labour’s social democrat modernisers, like Cullen, found themselves jammed between the Labour traditionalists and the Rogernomes – under attack from both sides. This fragmentation is the basic reason why the left was never able to form a coherent defence against the Rogernomes. (Some were too busy settling old scores to deal with their real enemy.)
A nice example of the difference is that Cullen appears not to have opposed the privatisation of Telecom in 1990 but was concerned about the failure to provide an appropriate regulatory environment. He shows no interest in renationalising it, but later the Clark-Cullen Government set a competitive framework which broke up the monopoly into Chorus and Spark. His pragmatism about state ownership meant that, following major failures of business ownership, he renationalised Air New Zealand and Transrail although he records after having first tried alternative approaches to public ownership which failed. (This pragmatism is also evident in his reluctance to establish Kiwibank although, ironically, he became one of its chairs.)
Cullen points out that, outside economics, the Lange and Palmer governments pursued social democrat modernisation in many areas including education, the environment, health, justice and social welfare (his portfolio). It is well to be reminded of these achievements, although Cullen is perhaps, shall we say, naive in ignoring that some of the changes were contaminated by neoliberalism (and that some were not very successful).
So Cullen (and Helen Clark) came into power after nine years in opposition, determined to set Labour on a modernising social democrat course. (Jim Anderton was one of the traditionalists but the memoir notes that in government he shifted in a modernising direction. Now there’s a journey which sadly, Jim will never write a memoir about.)
Unusually for a New Zealand politician, Michael’s memoir devotes a couple of pages to his ‘basic beliefs’. Most would agree with his first, that humans are essentially equal. More controversial might be
The second basic belief that has underlain my philosophy is in the possibility of what might be called redemptive or corrective action through collective organisation, especially through the role of government in some way or another. That means I do not start from a position of suspicion of government, of the smaller the role of the government the better life is. The vehemence with which I have at times argued the case for a level of taxation necessary to give practical expression to our essential equality is because of my firm belief that, without it, all our lives are less worthy – from that of the rich person who has lost their sense of fellow feeling to that of the poor person who has suffered deprivation.
Cullen says that his ‘two very simple basic beliefs are buttressed by two ultimate values that I see as the aim of political action: security and opportunity.’
Much of the book is about the practical struggles to implement these beliefs, especially in a Labour-led Government with coalition partners with different beliefs; in any case a party itself is a coalition of different factions.
Did he (and Helen) save Labour? Few today expect the party to betray its support in the way it did in 1984 and 1987, and as some expected in 1999 (instead voting Alliance). Is today’s Labour the party of social democrat modernisers? If it is, it should be grateful for Michael Cullen’s intellectual and policy leadership.