Labour and its history lesson

Labour's opening campaign documentary focused very much on history, and I was happy to see this much-reproduced photograph from the 1913 Waterfront strike appear in that. The picture was taken from a vantage point by Victoria Park, and looks up Franklin Rd on the left and College Hill on the right. If you took a photo from the same position now, the motorway viaduct would block a lot of the view. And you can see how much the plane trees have grown in the last century!

I guess that the 'blood' mentioned on the banner refers to the death of a miner in the strike at Waihi the year before.

Michael Joseph Savage could have been in that crowd, as we know he was involved in the strikes of those days, and that he lived just over the ridge in O'Neill St.

Savage was an Australian who had arrived in New Zealand a few years earlier, in 1908. He and other industrial socialists must have found the lessons of those years hard. But they soon changed their approach, formed a political party, and by 1935 they were in power.

The policies that they brought in had their future generations (that's us!) in mind. They must have realized that, in a civilized society, people should not have to go on strike and to fight the forces of the State in order to get a better deal for the labouring class. Democratic socialists believed that voters would vote for a party that had their interests at heart - and would put that into action. Well, it worked for Savage and co.

Occupy the Beehive

…that’s the practical aim of politics.

But, ideologically speaking, who will get there first? The protestors, or those being protested against?

One way of understanding National’s current political vulnerability is to propose that the soundbite-free Occupy-just-about-everywhere movement may have (deep down) won more middle-class hearts and minds than any politician of any hue right now. Don’t we all more or less get the point now that unfettered markets, or deregulated capital, have screwed most of us?

The kind of capitalism that John Key represents (and by which he made his personal fortune) is simply not working for the vast majority of us.

The Occupy Wall St protest-claim that virtually 99% of Americans have been left out of the action (or even made jobless and homeless) is not entirely off-mark if applied to New Zealand. And we have known about this for some time now.

If I may quote from my own book:

“An economic study of inequality in gross household incomes over the period 1984 to ’96 concluded that ‘the bottom 80 percent of New Zealand income earners suffered a reduction in their share of the total incomes paid out, while the top 5 percent enjoyed a 25 percent gain after twelve years of painful restructuring’ (Podder and Chatterjee, 1998, p. 25). This trend was driven by cuts in welfare benefits and by the significant employment advantage held by high-skilled earners in high-income occupations. In fact, the rate of increase in New Zealand’s income inequality (as measured by the Gini coefficient for household equivalent disposable income) during the mid-1980s to 1990s was far more rapid than that for Australia, Canada, France, Sweden or the US (Statistics NZ data, cited in O’Dea and Howden-Chapman, 2000). The periods during which increases in inequality were greatest were characterised by tax-cuts for high- and middle-income earners” (Duncan 2007, p. 227).

Things did not improve much under Clark’s Labour-led government – although Working for Families appeared to help reduce inequality a little. And then the 2008 Crash, the rise in unemployment, tax-cuts and (proposed) asset-sales for the well-off, have not assisted to reduce inequalities since then.

National’s weak-point, then, is in the failure to represent and to defend materially the very classes (the middle classes) upon whom it has historically relied for propelling it into the Beehive. Once the RWC effect wears off, ‘hard-working’ middle New Zealand has little to celebrate, in terms of economic prosperity.

And middle New Zealand has little to gain from National’s key forthcoming policy platforms: competitive provision of workers’ compensation is good for insurance-company executives and shareholders, and that’s about all; asset-sales benefit only the richer ‘Mums and Dads’; bashing the beneficiaries gives middle income-earners a feeling of Schadenfreude, tinged with insecurity… and nothing more.

What middle-class New Zealanders can look forward to is leaner public services, meaner employment policies, oil on our beaches, cow-shit in our rivers.

In 2008, many middle-class voters said: ‘Key made a fortune for himself; so he will do the same for the country.’ For those who can’t personally see much economic gain, if any, from the last three years, and in the light of an emerging politics of class-inequality, that positive view could easily flip into: ‘Key’s one of the 1%; so he doesn’t represent us.’

The irony is, though, that an embarrassing three-way handshake may have done more electoral damage than any hard economic realities.

And what I have yet to describe is an even deeper problem that National has exposed from behind its ‘relaxed, liberal’ façade: a tendency to authoritarianism. More about that later…

Meanwhile, watch this.

How did Key get away with it?

The way to dominate politics in the MMP system is to stake out the opposition’s territory.

Labour’s ‘third way’ managed this in the 2000s by rejecting National’s worn-out neo-liberal idea that social policy must be subordinated to economic policy, and replacing it with a more subtle neo-liberal idea that social and economic policy depend reciprocally upon one another. Labour claimed both sides of the pitch, and then they put that into action by raising taxes by stealth (or 'fiscal creep') and hence delivering consecutive budget surpluses and reducing public debt.

Labour ‘squared the circle’ of the politics of the day, and they succeeded (for a good three terms in office) in taking that crucial middle-ground support. New left movements (New Labour, the Alliance, the Greens) came along, but Clark’s Labour Party captured and tamed them each time, while quietly allowing a fundamental monetarist consensus to continue unchallenged.

Such a political manoeuvre is bound to have its weak side, though. For Helen Clark’s strategy, a critical vulnerability arose from leaving their traditional working-class base unrepresented, partly due to obscuring class with ethnicity.

Since then, under Key, National has pulled off a similar political three-card trick, but under (obviously) different conditions. They’ve been sufficiently successful at it that left-wing commentator Chris Trotter went so far as to say that National now is mainstream New Zealand.

So, how did Key and co. do it?

Their first trump-card was to claim that they knew all about a so-called ‘underclass’. To this day, most New Zealanders can probably recall Key’s PR visit to McGechan Close (state house territory) and his invitation to a Maori girl to accompany him to Waitangi (shades of Norm Kirk). Thus he reached deeply and symbolically into traditional Labour territory – the very territory that Labour had left unguarded and untended for more than two decades.

The next trick was to use tax-cuts to appeal to ‘hard-working New Zealanders.’ The latter term cuts across working-class New Zealanders and middle-class New Zealanders in one go, thus implicitly representing the unrepresented. (Who, regardless of class, doesn’t want to be represented as ‘hard-working’?)

By substituting the ideological term ‘hard-working’ for the traditional working-class/middle-class (or blue-collar/white-collar) distinction, they managed to obliterate the class politics that used to limit their appeal as a traditional conservative party, and hence to stake out a wider territory for themselves. After the 2008 election, the unexpected marriage of convenience with the Maori Party then helped them to obliterate ethnic-identity political boundaries as well.

But what happened to the under-class? Here comes the third trump-card: National’s rhetoric separated ‘hard-working’ New Zealanders from ‘not-working’ New Zealanders (on working-age welfare benefits). Thus the ‘hard-working’ identity could be shored up (among those who still had jobs after the 2008 Crash) by distinguishing itself from that ‘under-class’ of the unemployed. That's the same 'under-class' which John Key had used earlier for political gain – and then abandoned for ‘welfare’ policies that attack the supposed ‘dependency’ issues of that same beneficiary ‘under-class.’

In the meantime, this ideological card-game has concealed the ace that pulls off a large-scale upward mobilization of wealth, by means of tax-cuts and asset-sales. The latter policy will convert assets that presently we all own into assets owned by the few of us with spare capital and an appetite for investment (i.e., the wealthy). Shares will be conveniently priced to ensure that the (rich) Mum-n-Dads’ investments are a safe bet.

Welfare and employment policies meanwhile have chipped away at the incomes of the lowest-paid.

If you were one of the 50% of us who didn't see the sleight of hand, Key has managed to walk on water as a 'telegenic' persona.

He was initially adopted by National’s insiders as ‘the candidate from central casting,’ and he has (most of the time) met their expectations.

But, as Athens burns, as dictators die, as the RWC ends, as the election’s knock-out match looms, and as some of our sacred beaches get polluted by the oil of neo-liberal deregulation, National’s card-playing luck may be running out.

So, what's National's weak point? More on this later...

The return of class politics?

Athens is on strike. After all, why not? Why should Greek public-sector workers pay the price for other people’s greed and dishonesty? Even the Greek judges are working to rule. Middle-Eastern dictators are falling, or have fallen, and one has just been killed. Tens of thousands of students are protesting in Chile. The Occupy Wall St movement has spread to cities all over the globe. The latter are mainly peaceful protests (Rome was an exception), but their main point (‘capitalism has let us down,’ to put it mildly) gains quiet consent from a wide range of the world’s middle classes.

Back home in Godzone, the recently-unthinkable has suddenly become an election issue. Economic inequality is said (by almost everyone now) to be a bad thing; and the Labour Party (after years of abandoning class in favour of identity politics) has said we need to stop applying the ‘let the market decide’ principle to wages, and instead to raise the minimum wage, and to apply industry-wide terms and conditions of employment, overseen by a Workplace Commission. It sounds a bit like the system that we had from 1893 to 1987.

Business-class critics and their newsroom scribes say Labour's policy would take us back only as far as the 1970s, though (‘gruesome echoes of the unlovely 1970s’ as the scaremongering Press put it) – as if the situation of the average New Zealander were worse then, with national awards, than it is now!

Meanwhile, Mr Key and his party have suffered a series of blows to their credibility (e.g.: What were the SAS doing in Afghanistan? Did the PM knowingly mislead the House about what S&P think? Do asset-sales not mean a huge gift to the rich?), and so they find themselves fighting fires (and mopping up oil). This is probably not enough (yet) to spoil their chances of regaining office, but that absolute majority in the House that they were hoping for looks less probable by the day.

The playing-field of politics is changing shape. Can political parties come up with sensible responses? Do they even understand what’s going on?

More on this next week…

The Rena as a public-policy case study

Although some have tried, it would be illogical to 'blame' the grounding of the Rena on the deregulation of New Zealand's coastal shipping back in the 1990s. After all, we will never know if such a disaster might have happened anyway under the old system. And let's not forget the pre-deregulation Wahine tragedy!

But, the fact is that the good ship Rena (and her foreign crew) would not have been plying our waters were it not for deregulation.

The Rena hit the Astrolabe reef at 2.18 am, 5 October. The owner and manager of the ship is the Greek firm Costamare. Costamare is also the parent company of Daina Shipping which was responsible for contracting the salvage firm, Svitzer Salvage whose global head office is in Copenhagen. The salvage contract is a standard Lloyd's contract, and hence is governed by English law.

Costamare has third-party cover with the Swedish Club, a non-profit mutual insurer, obviously based in Sweden. This cover includes pollution liabilities, and the insurer has promised to pay out 'in full' but they mentioned no exact sum at this time.

The vessel is chartered by the Mediterranean Shipping Company, based in Geneva, Switzerland. MSC is a significant customer of Costamare, leasing numerous vessels. MSC say: "MSC Group confirms that it is neither the owner of the involved vessel nor responsible for its management or the crew on board." As of today, in spite of denying legal liability, they have offered $1 million to help with the clean-up.

Although owned by a Greek firm, the ship is registered in Monrovia, Liberia. This is a common practice that is widely regarded as a way of evading the high labour, health and safety and environmental standards of developed countries. In return for the fee paid to the Liberian government, the ship-owner gets to evade European law. See the report by Al Jazeera.

Liberia is hardly noted for an absence of corruption, and one wonders what happens to those fees. And it also seems unlikely that any law-suit to hold them accountable will get anyone very far.

This globalized, non-transparent, cost-cutting approach is furthered by the ship's operator hiring a Filipino crew.

But Costamare's website boasts about high standards regarding employment, safety and environmental protection. They have issued an unreserved apology so far, but it remains to be seen what liabilities they will incur, or what assistance they will front up with, other than the standard insurance excess.

Having outlined those facts, let's bring the matter back to Wellington. Maritime NZ was created in 2005, and was previously known as the Maritime Safety Authority. The latter was created by a deregulation-led reorganization in 1993. It was split off from the Ministry of Transport as a Crown entity, giving it a greater degree of operational independence from the Minister.

The deregulation of coastal shipping of the 1990s was justified by the then Minister of Transport, Jenny Shipley, in the House in 1997, on the grounds of reduced cargo-fees and expanded services. (See Hansard). Such cost-cutting was achieved at the expense of New Zealand operators and crews, according to Harry Duynhoven, then MP for New Plymouth.

The good ship Rena, her oil, and her cargo are now our problem. This event arises from a context created by public-policy decisions made some time ago, and the prosecution of the Captain and navigator will not answer all the questions. The complexities that lie ahead in determining who pays for the clean-up will be huge, thanks to the globalization of the industry. I doubt that the companies concerned will compensate us for all of the costs and consequences, and the NZ taxpayer will probably end up footing much of the bill - not to mention the huge voluntary contributions of people out there on the beaches.

The Rena

The name of the Filipino captain of the Rena is all over the internet, but I won't provide any links in case that's in breach of the court order.

But one on-line report from the Philippines suggests that crew have been sent home already – 8 on Monday and 11 more by now – compared with the Herald's report, which says: 11 put on flights yesterday and 6 are still here.

Who do we believe? Have the crew been spirited out to avoid any press attention?

Another interesting, unrelated, issue that affects the Philippines embassy and the election arose last week. The Philippines consulate (in Lake Rd, Takapuna, Auckland) is in a large house with land around it, and a billboard promoting local National-party candidate Maggie Barry appeared on the grounds in front of the house, only a few meters away from the Philippines flag.

It's now been removed, but only because it was pointed out to the consulate that any association between a foreign government and a party in the general election was completely inappropriate. It was no big scandal, but the billboard just had to be removed. The story was reported by the North Shore Times, with a photo of the offending billboard.

I can't supply a link to the story as, oddly enough, the editors of the North Shore Times (a part of the Fairfax network), have chosen not to place the item on line.