Misjudging the Nats
Most of the left, both organised groups and the wider milieu of individual leftists, still really believe there is a fundamental difference between Labour and National. While the Workers Party have never argued that they are exactly the same, we’re probably the only people who really believe - and act in accordance with the belief - that they are fundamentally the same. They are liberal bourgeois parties; largely made up of urban, socially-liberal, middle class individuals. Their goal is to manage the capitalist system. Politically they’ve converged around liberal economics and liberal social policy, although both have some more blatantly right-wing social policies around issues like law and order.
For much of the left, however, the Nats remain seen as some backwoods social reactionaries, a la Piggy Muldoon era. And, economically, they are seen as unchanged since the 1990-93 period. An especially crude representation of this view of the Nats was summed up in Socialist Aotearoa’s response to last November’s election: that a Nat-Act junta was now in power.
We have always challenged this demonisation of the Nats and done so for three reasons: one is that it always lets Labour off the hook; the second is that it’s just not an accurate analysis of what the National Party is in the twenty-first century. The third reason is that it is devoid of any Marxist analysis of modern NZ capitalist society and the politics that the economic system requires.
This brings us to the Nats’ strategy for dealing with the slump and how we deal with the state-employer strategy.
For much of the left, it’s all very simple: this is the biggest slump since the 1930s, the Nats are evil capitalist hacks who will create mass unemployment to drive down wages and slash workers living conditions and rights in order to revive the system. Yet none of this actually corresponds with reality. It’s possible that this will become the worst slump since the 1930s but, at present, it isn’t - and that is especially the case in NZ. People who were around when the postwar boom ended, or in the aftermath of the 1987 crash, will have direct experience of worse economic situations, for instance.
Moreover, in NZ, unlike the USA and some other countries, the banking system has held up - not one significant bank has yet gone under and there is no indication that any of them are about to. A layer of finance houses went to the wall, beginning before the current international downturn and there may not be much more to shake out there. It seems the main impact in NZ will be the impact of the global downturn in terms of the shrinking of export markets (real economy), continuing decline of property prices (artificial economy) and possibly a growing reluctance of people to spend money in department stores, car yards, restaurants etc in a more fearful economic environment. While banks may be reluctant to provide credit to businesses, a key priority of the government is to ensure this doesn’t happen and that businesses continue to be able to access credit. While the Nats were not exactly enthusiastic about the establishment of Kiwibank, they’re probably all quite pleased now that Kiwibank exists and that Jim Anderton was there to do the job for capital when a lot of capitalists didn’t recognise it as being in their own best interests to have a state-owned (and therefore pretty secure) bank.
But surely the downturn means there must be attacks on the working class? This is certainly the case, but there is more than one way to attack the working class. In the 1980s the whole NZ economy faced seizing up - indicative of a more serious crisis than the current one! - and the only way out of that for capital was what might be called the ‘slash and burn’ approach. Chunks of capital had to be let go to the wall, jobs had to be shed on a massive scale, the NZ dollar had to be devalued, potentially profitable chunks of the state assets had to be sold off; other state assets, while remaining in the hands of the state, had to be commodified - ie state services and goods produced to be sold for a profit or at least to break even. This is because the old state sector was a drain on surplus-value - it was underwritten by the surplus-value produced in the private sector.
But slash and burn has its limits. Wages and working class consumption levels were reduced, union organisation was largely destroyed, a chunk of inefficient capital was wiped out and the state sector was dramatically changed. Yet all of this - the ‘Rogernomics revolution’ - failed to usher in a new period of dramatic and sustained growth in the real economy. Instead, the artificial economy expanded to bloated levels and, when it crashed in 1987, became a huge drag on the real/productive economy, which meant NZ’s overall economic performance throughout the 1990s was fairly mundane and sluggish. NZ productivity growth after the Employment Contracts Act fell well behind Australia’s, for instance. Employers here increasingly relied on making workers work longer and harder for relatively less - expanding what Marx called absolute surplus-value. Private capital investment in new plant, machinery, technology and research & development remained lower than almost anywhere else in the OECD; it had to be topped up by the government and, even then, total new investment remained fairly low. This meant that real growth did too.
Over a period of time, just as Keynesianism became discredited by its inability to solve the problems attendant with the end of the postwar boom, so neoliberalism became discredited by its inability to foster dynamic, sustained growth in the real economy. Thus while Roger Kerr continues to pop up from time to time, most of the smart money, especially in the real economy, have moved beyond neo-liberalism - a trend largely un-noticed by most of the NZ left.
What has emerged instead is the dominance of some level of understanding of the importance of the real economy and of the limits of slash and burn. Ironically, it’s someone who made his fortune in the artificial economy who is leading National in a clearly non-neoliberal direction, John Key. (In fact, even Brash has been talking over the past year about the importance of investment in the real economy.)
This understanding on the part of business interests and their political front - the government - is a key reason why there was a Jobs Summit. The capitalists, especially the ones who operate primarily in the real economy, and the Nats, actually do want to preserve and expand employment. The left repeating the mantras which were true about the 1984-1993 period simply won’t cut it and will just make those who repeat the mantras look daft.
National Party (and wider capitalist) strategy to deal with what is clearly a serious economic downturn has to be closely analysed, using the tools of Marxism.
One thing we need to note is that attacks on the working class take different forms at different times. There is an attack already being mooted, but it’s a more sophisticated attack than coming to get the working class with a big hatchet. The approach laid out at the Jobs Summit is this: this is a serious economic downturn, the way out of it is for all of us as Kiwis to pull together, to spread and share and bear the pain together, and we’ll get through it. So, instead of simply laying off ten percent of the workforce and cutting the wage bill that way - with all the longer-term drawbacks that represents for capital (and the potential social upheaval and conflict) what they are mooting is the idea of a chunk of the workforce working nine days instead of ten - and, of course, only being paid for those nine days. The state then will then underwrite workers’ upskilling on the tenth day, or pay a small top up, so workers will get something out of it too. This is both clever politically and, in terms of the interests of capital today (as opposed to their interests in the specific conditions of 1984), clever economically.
It’s clever politically because it brings the population together in an economic crisis, promoting a kind of liberal kiwi nationalism (pulling together, helping your mates, doing the right thing, etc) instead of promoting class differentiation and conflict and therefore makes it far harder for the left to attack. It’s clever economically because it cuts the wage bill while maintaining (and even upskilling) a workforce for the next upturn.
This approach by the capitalists and the Nats also means that they will want to keep the union leaderships on board rather than just totally sideline them, as occurred in 1984-1993 when even the most toady union leaderships got scant reward for their toadiness. The fact that CTU leader Helen Kelly was invited to play such a prominent role in the Jobs Summit, while Roger Kerr was reduced to being a mere workshop participant, indicates whom they see as important and desire to cultivate.
Furthermore, among the 20 key ideas that came out of the Jobs Summit not one involved any further deregulation of the labour market. When a few business figures attempted to raise this issue, they were taken into a private room and told, apparently quite forcefully, that they were out of order in raising this and there was no way the Jobs Summit would discuss for a minute the issue of further deregulation of the jobs market.
That’s not to say that the current approach will never change; it may change if the economic situation deteriorates substantially. But collaboration/inclusiveness/shared suffering is the name of the game at present.
Arguing against the slash and burn policies of the fourth Labour and National governments was straightforward and easy - the arguments didn’t succeed because of the weakness of the far left, widespread illusions about Labour, and the success of the union bureaucracy in stifling resistance/struggles. Arguing against the different form today’s attacks on workers take will be harder. On the positive side, the organisational-political obstacles - a large Labour Party and a large and powerful union bureaucracy which protected Labour and the capitalist system - are far, far weaker. There is also the example of a small, but inspiring union/campaigning alternative in Unite. Also, winning hard arguments represents much more political progress in breaking people from capitalism than winning soft, easy arguments.
We’re clearly in for a complicated and challenging political period. If we succeed in making clear, clinical analyses and acting on them, keeping our nerve, continuously promoting an anti-capitalist perspective and not lowering our horizons, then a new period of growth of our organisation, most particularly among workers, is possible.