In the Revolution's Twilight

Part IV: The Choice

One Step Forward, Three Steps Back

And there is something else I have to report. The breathless accounts of the greatest libertarian revolution ever that you have read about in Liberty & Reason have left out fully half the story. Yes it's true that there have been corporatisation & privatisation, tariff reductions, pockets of deregulation and a withdrawal of government from some areas. These progressive developments have been more than offset by regressive ones. Overall, Big Brother is bigger & more ominous than ever. Let me give you just some of the main items here. This is not an exhaustive list, & I present it in no particular order — I shall number the horrors just for clarity's sake.

One. Private property has been virtually nationalised under a draconian, labrynthian piece of environmental legislation called the Resource Management Act. Prepared by the Labour Government of which Roger Douglas was a member, and passed by the National Government, of which Ruth Richardson was a member, this Act embodies every Objectivist horror file item you ever read & a lot more besides. It is explicitly based on the premise that nature has an intrinsic value qua nature. Intrinsic values, says this 600-page monstrosity, are "those aspects of ecosystems and their constituent parts which have value in their own right ... " It empowers local governments to draw up District Plans to promote the "sustainable management of natural & physical resources," with particular regard to "the intrinsic values of ecosystems," the protection of indigenous plants & animals, the preservation of the "outstanding natural features & landscapes" and other matters of "national importance." So zealous have local governments been to protect natural features & landscapes that they have forbidden residents to paint their houses & sheds & so on in anything but natural colours. They have forbidden residents to park buses or boats on their properties. They have forbidden coastal residents to protect their beachside properties from erosion by shoring them up with rocks. They have told residents that vast tracts of "their" property must be left exactly as they are. The Act provides for jail terms of up to two years and fines of up to $200,000. Thus far, such obscene sentences have not been imposed, but one property owner has been fined $80,000 for clearing native bush on his property. Nowhere, incidentally, does the Act even mention private property rights.

Two. Freedom of speech & association have been severely curtailed by a piece of legislation with the hideously Orwellian misnomer of the Human Rights Act. Passed by the National Government and supported by Labour, this Act makes it an imprisonable offence to utter in any public forum sentiments that could be construed as "inciting racial disharmony." I don't need to explain to this audience that the answer to bad ideas such as racism is better ideas, not a ban — but a ban is what the Human Rights Act imposes.

It also prohibits discrimination on the grounds of race, gender, age, political or religious belief, physical or intellectual disability, sexual orientation & marital status. After this Act was passed, a golf club was threatened with prosecution when it proceeded with plans for its annual golf tournament for married couples, which it had been holding for thirty-odd years (this was discrimination on the grounds of marital status). A Christian book-binding firm refused to accept a job from a local atheist group — and was told it had to do the work or it would be in breach of the prohibition of discrimination on religious grounds. Newspapers are forbidden to run job advertisements which specify desired age or gender. Employers are not permitted to ask potential employees about their psychiatric history. Hairdressers have been harassed by the Human Rights Commission for charging different prices for men's & women's haircuts. A bus company has been ordered to spend $80,000 on making its buses wheelchair-accessible. (A grand total of three disabled people subsequently used the buses.) And on & on & on.

Three. Under legislation introduced by the Labour Government in 1986, the so-called indigenous people of New Zealand, the Maori, can pursue land grievances dating back to 1840, when the Treaty of Waitangi was signed between Queen Victoria & Maori tribes. This has resulted in a plethora of extravagant & dubious claims, and an orgy of white liberal guilt. Expensive white liberal guilt. Vast amounts of taxpayers' money have been handed over to Maori tribes, as the current generation of taxpayers have been held accountable for the real or imagined sins of governments last century. Some government-owned land hitherto accessible to all has now been set aside for the exclusive use of Maori on about 200 days of the year. When challenged that this might constitute apartheid, the Minister in charge of all this said: "The sooner we realise that there are laws for one & laws for another, the better." This unspeakable specimen justifies his policies on the grounds that "Maori are imbued with a spiritual element which is not easy for us to understand."

Four. Rampant, government-sponsored political correctness. This reverence for Maori so-called spirituality, and other facets of political correctness, now pervade the government-run health & education systems. In education, it is deemed to be "ethnocentric" to concentrate on the history of western civilisation, western science, western law, western literature, etc.. All cultures are equal — with the more primitive, superstitious cultures more equal than the others. Teachers do not teach, they "facilitate" the drawing out of a child's inner feelings. Children are encouraged to sit around in groups reaching consensus on everything under the sun. A draft for the new science curriculum, for example, suggested pupils use this method to determine the location of various organs in the body of a cow. In English Literary Criticism courses, students are taught to decode the hidden sexism, racism, classism & whatever else in the text under study. The author's intent is irrelevant; there is no author. The Minister of Education said to me quite brazenly in an interview once that there is no such thing as truth. That's certainly true in the government health system where nursing trainees have to undergo "cultural safety" training in which all manner of outrageous lies are taught. One trainee was expelled because she questioned a cultural safety lecturer — a Maori elder — who claimed that when Europeans arrived in New Zealand, they threw Maori printing presses into the sea. And so on ad nauseam.

Five. (Back to the economic issues.) It's a myth that New Zealand now has a low-tax regime. As I pointed out, the overall tax take as a percentage of GDP went up 6 points under Roger Douglas, Bill Bradford's most libertarian politician in the history of the universe, and hasn't come back down. At 38-40% of GDP, it's gone up. Here's Texas economics professor Gerald Scully, who was commissioned by Inland Revenue itself to do a report on the subject, on the 16th May this year: "Taxes as a share of gdp in central government are as high as they've ever been." When I asked the Business Roundtable for their best estimate as to what date in New Zealand constituted the equivalent of your Tax Freedom Day, when you stop working for the government, they told me that, taking local government spending into account, it was May 29. twenty days later than yours. Half the year we spend working for the government in its various guises — after Mr Bradford's slaying of the statist dragon!

Six. In addition to maintaining persistently high levels of taxation, the government has just enacted into law the most vicious tax penalty regime in the country's history, with vastly increased fines for late filing of tax returns, or carelessness in filling them in, and jail terms for what IRD deems to be deliberate tax evasion. Recently one exporter filed his return one day late because he was working round the clock getting his goods on a ship to fill an order. Sight unseen, IRD slapped a thousand dollar penalty on him. We are going to see a lot more of this.

Seven. The Reserve Bank Act, designed to prevent politicians from printing money at whim, has become an albatross around the economy's neck. It charges the Reserve Bank with confining inflation to 3% or less. It fails to distinguish between politically-induced inflation & price rises that reflect supply & demand. Since the government is now not spending money it doesn't have, the Reserve Bank's actions are currently directed against price rises that reflect supply & demand. Its weapon is high wholesale interest rates, leading to artificially high retail interest rates and to an artificially highly-valued currency that is hell for our exporters. This is state interventionism to make Muldoon blush.

Eight. The Employment Court and the Employment Tribunal, set up under the Employment Contracts Act to adjudicate workplace disputes, have become potent forces for old-fashioned class warfare. They have made it virtually impossible for employers to fire anyone, and thus — to hire anyone. The required procedure is so convoluted as to be impossible to observe. Employers must avoid causing "distress & hurt feelings" to anyone they fire, otherwise they're liable for substantial sums of money. That means of course that employers hire as few people as possible because they know once they've taken someone on, they're stuck with him. Deborah Coddington tells the story in a recent Free Radical of an elderly woman who advertised for a student to do about $200 worth of work assisting with the bibliography of a book she was writing. She decided the student who first applied did not have the necessary qualifications, & readvertised the job. The student took her to the Employment Tribunal. Cutting a long story short, she, the author, ended up having to pay that student $2,500 for hurt feelings, and $12,000 in other fees associated with the case.

Nine. The government is waging an obsessive, intrusive war against drugs — i.e. against victimless crimes. The police boast that they solve 90% of drug cases, while 85% of burglaries go unsolved. Undisclosed police manpower & taxpayer money are spent on seeking out marijuana crops while police make no bones about the fact that they cannot protect us against muggers & murderers. What they have said is that they will prosecute anyone who keeps a gun handy for self-defence (New Zealand law requires that if you own a gun, it must be kept locked up)! And violations of the liquor laws are an equally high priority. The owner of a wine shop was recently burgled after hosting a wine-tasting event. He got a good look at the burglars and noted the registration number of their getaway car. The police told him that they didn't hold out much hope of catching the burglars, but they would be prosecuting him for holding a wine-tasting without a special licence!

I could go on, but by now it should be plain to you that New Zealand is not a place where the Leviathan State has been successfully challenged or the statist dragon slain. Mr Bradford's claim to that effect is an unfathomable, unconscionable inanity, an insult to those in New Zealand who are carrying the libertarian torch. The reality is, in the words of Sir Robert Jones, a millionaire businessman writing in The Free Radical, "New Zealand is now more regulated than at any time in its history."

Theory and Practice

So now finally we come to the most interesting question: why is it so? Why do we have Burgeoning Big Brother on the one hand, & an electorate stubbornly opposed to our state-shrinking reforms on the other?

The answer should already be clear. New Zealand's economic reforms never had a sound philosophical base, and they were never given a sound philosophical defence. That is what has made it possible for large numbers of people to be unimpressed by their success, for significant reactionary developments to occur simultaneously, and for the forces of reaction to be poised for a decisive triumph. What may mute such a triumph are the practical obstacles to going backwards, the difficulties of re-establishing a fortress when technology & globalisation have rendered such a thing im practical, but this will not stop the reactionaries from trying — and they most certainly will have no moral or philosophical barriers to overcome.

In his 1996 Hayek Memorial Lecture to the Institute of Economic Affairs in London, the Governor of the Reserve Bank of New Zealand, Don Brash, bemoaned this persistence of reactionary attitudes. New Zealanders, he lamented, "remain wedded to the welfare state and a Fabian notion of fairness. They still instinctively regard the state as the primary, if not the only supplier of welfare services of all kinds." He concluded: "Perhaps after all Perigo was partly right when he said that New Zealand was a country reformed by Hayekians, run by pragmatists and populated by socialists."

"Partly right" is right. When I made that statement in 1995, I was influenced above all by the fact that the most active & talented establishment proselytiser on behalf of the reforms, the tireless Roger Kerr (Executive Director of the New Zealand Business Roundtable, formerly with the Treasury) quoted Hayek frequently, and that the reforms themselves displayed the strengths & shortcomings you would expect from anything that proceeded on a Hayekian rationale. Subsequent to that statement, however, I was stunned to learn from Roger's own lips that he'd never read Hayek. I suppose I should have been alerted a couple of years earlier when I had presented him with a lengthy, apoplectically indignant review of The Fatal Conceit, which I had written, and he had enigmatically commented that I should talk to a Hayek scholar about it. "But Roger," I should have said, "I thought you were a Hayek scholar." I should add at this point that Roger is a scholar in the broader sense, and a gentleman, and someone for whom I have the utmost respect. (I should add also that he has since read The Fatal Conceit.) But if the most powerful & influential figure outside the Government, Roger Kerr, had never read Hayek, and the most powerful & influential figure inside the Government, Roger Douglas, probably thought that Hayek was a suburb of Auckland (as in Howick), where the hell were the reformers coming from?

Well, in a sense I've told you that already: a mish-mash of public choice theory, agency theory, transaction cost economics, managerialism and other bits & pieces. New Zealand Objectivist scholar — yes, we do have one! — Robert White, an Honours student at Waikato University, has just completed a paper entitled Ends & Means, in which he examines each of these in turn, and points out their flawed common denominator: a stress on economic efficiency either as an end in itself or as a means to a more sustainable regime of state expenditure without the function of the state being properly defined. Freedom, to the extent that it gets a look in at all, is defended, to quote Robert, "on the basis of economic efficiency, as a mere means to an allegedly higher end. Economics is thus seen as a handmaiden to the government's social objectives."

In the case of public choice theory, freedom is additionally defended because it puts a curb on the "self-interest" of politicians. "Self-interest" is thus equated with power-lust & other subjectivist traits — scarcely a concept that Objectivists, who distinguish rational selfishness from irrational self-indulgence, would concur with.

Agency theory is, in White's words, "designed to address the absence of incentives for managers in the public service to minimise costs," while transaction cost economics lays particular stress on improving organisational structures within the state sector.

Linked to all of these is the notion of "public goods," i.e. goods or services which, by their nature, can be provided only by, or under the auspices of. the state. (In a lively discussion with me some months ago, Roger Kerr's son claimed that sewerage & electricity & maybe even education were in this category!) It doesn't say that the state must provide these things directly, necessarily; it asks: what is the most efficient way the state can ensure that these things get provided? It might allow for some contracting out or franchising on these grounds, but as White points out, this is scarcely a free market; rather, "the private company receives a government-sanctioned monopoly to be the sole supplier of a particular service." Current proposals in parts of New Zealand to franchise the supply of water fall into this category.

(One further observation here: the preoccupation with efficiency & failure properly to define the role of the state have resulted in some bizarre recommendations from the reformers. For example, Treasury recently argued that while a police force much better resourced & successful than the one we have now is certainly possible, it is not desirable because it would cost too much! Never mind that we're talking here about something the government truly ought to be doing — the policy is, where there's spending, cut it.)

Managerialism aspires to transplant the best managerial practices of the private sector onto the public sector. As far as I can make out, in New Zealand it is not just the best but also the worst aspects of the private sector that have been transplanted — such insufferable New Age nonsense as mission statements, collective visions, corporate image, flow charts & spread sheets signifying nothing, or Orwellian doublespeak signifying the exact opposite of the relevant reality. Thus, from the Inland Revenue Department, the Department of Legalised Theft, we get this: "Inland Revenue's vision is to become one of the world's leading tax administrators. Our focus is on delivering an effective & efficient service to all our customers." Whereas the reality, as identified by Rex Benson in the current Free Radical, is: "The primary function of Inland Revenue is to extract from each & every citizen the absolute maximum amount of tax that can be taken within legal limits, as IRD chooses to interpret them, and to carry out this task with such enthusiasm & rigour as would inspire envy & admiration even among the early Zealots. The secondary aim of IRD is to make life as difficult as possible for small businesses, working shareholders, partnerships & the self-employed by imposing strict regimens of form-filling & log-keeping, lest a single coin slip through its grasp and not be available for redistribution to the looters ... we are not the customers of IRD, we are its victims; IRD is not a service, it is an imposition."

The foregoing gives you some idea, I think of where the reformers were coming from. Be they Treasury officials, the politicians who ended up forming the ACT party, or Roger Kerr & his colleagues of the Business Roundtable, they have conceived & couched their arguments almost entirely in terms of economic outcomes, with the task of economics being defined as prescribing the most efficient allocation of scarce resources. They have assailed the country with OECD reports, comparative studies, cost-benefit analyses, models & modules, breakdowns & projections and an avalanche of statistics that have proved, contrary to Objectivist theory, that the concept "infinite" does have a referent in reality after all.

We are punch-drunk from it all — and morally, utterly uninspired.

Even Bill Bradford, an ACT apologist, was moved to make the following observation in his Liberty article: "ACT party literature is a bit pedestrian. Its party programme runs some 82 pages, of which some 40 contain tables or graphs. Twenty pages are devoted to spread sheets detailing how various ACT proposals would affect the after-tax income or retirement benefits or some such for citizens in various situations with income increments of $2,500. There's nothing like 20 pages completely covered with columns of numbers to win the hearts & minds of voters."

I myself have poured scorn at every opportunity on the Treasury-ACT-Roundtable efficiency-obsession. My most tasteless, and therefore favourite, taunt is that, had these people been around at the time of the Nazis' gassing of Jews, their primary concern would have been the impact of the gas bill on the government's budget deficit, not the use to which the gas was put. But my taunts have been to no avail. ACT, as it happens, is about to reverse its policy on compulsory superannuation — not because the policy is immoral , but because it's clear from polls associated with the forthcoming referendum on the subject that it's unpopular. When I asked Roger Kerr, who has been fighting vigorously behind the scenes to have the compulsion policy dropped on efficiency grounds, "Will the compulsory health insurance policy be dropped now as well?", the answer was, "No, health is different. A compelling case can be made for compulsion in health." (Shades of the story of Objectivist legend of the chap who finally accepted, after months of argument, that the steel industry shouldn't be nationalised, and then asked, "But what about the coal industry?"!!!!!)

(Don't, by the way, make the mistake of thinking that the unpopularity of the compulsory super proposal is a sign of hope — the people who oppose it do so because they want to retain the existing form of compulsory super, i.e. the taxpayer-funded version.)

The Moral and the Practical

On the odd occasion when the reformers do venture into the realm of moral philosophy, one ends up wishing that they hadn't. It is on such occasions that they trot out such ghastly bromides as "the common good" or "the greatest good of the greatest number," and remind us that their preferred morality, as with Adam Smith & Hayek, is: altruism.

"All systems of morality of course commend altruistic action," said Hayek, as he proceeded to defend private property & the free market on the grounds that they inadvertently serve "the needs of distant, unknown individuals" and thus measure up to the requirements of altruism. This is precisely the defence of the reforms offered up by Roger Kerr in a recent speech entitled, "What's all this about individualism?" which I reprinted in The Free Radical just so that I could make the point to my New Zealand readers that I'm making to you today.

In it, Roger initially appears confused as to whether he should endorse individualism or not. At one point he approvingly quotes Catholic theologian Michael Novak saying: "Capitalism is not about individualism. It is about a creative form of community." But then he proceeds to defend individualism on the grounds that it is a mistake to equate it with selfishness and collectivism with unselfishness. He quotes, approvingly again, Hayek's friend Karl Popper saying: "Collectivism is not opposed to egoism, nor is it identical with altruism or unselfishness ... an anti-collectivist, i.e. an individualist, can at the same time be an altruist; he can be ready to make sacrifices in order to help other individuals." Roger then explains what Margaret Thatcher really meant when she said "There's no such thing as society," and reassures us that she wasn't defending selfishness. (Perish the thought!) He supplies the context in which she made the statement, and then approvingly paraphrases her: "People have obligations to look after their neighbours as well as their families." As I commented in my editorial: "Observe the package-dealing here: people have obligations to their neighbours, whom they did not bring into the world, just as they have obligations to their children, whom they did. In other words, there is no difference between voluntarily-assumed responsibilities and unchosen duties. If this be so, what objection can there be to the state's enforcing the performance of such duties?" Consistent with his premise, incidentally, Roger goes on to say: "Most of us would agree there is a case for financing a social safety net out of taxation." And he has repeatedly repudiated the proposition that taxation is theft. (I shall draw a veil of charitable silence over the epistemological corruption of "Most of us would agree that ...")

This, remember, was Roger's response to attacks on New Zealand's economic reforms such as those by the leader of the ultra-left-wing Alliance political party, Jim Anderton, who had condemned the reforms for promoting "selfish, competitive individualism." Small wonder that a leading socialist intellectual, economist Susan St John of Auckland University, could say: "If we dig a little beyond the rhetoric and positioning on both sides, it is likely that we will find a surprising commonality in goals." What Roger's apologia reduces to in effect is: "Mr Anderton, I am as enthusiastic a devotee of unselfishness as you. My policies, as exemplified in the economic reforms, are a better expression of unselfishness than yours."

I don't need to explain to this audience that this is not a defence, but a capitulation. When that is the best that the defenders of our reforms can do, what hope is there?

Well, we know what hope there is. It's a response that says, "Mr Anderton, I'm here to tell you that selfishness, properly defined, is good. Living for one's own sake, by the use of one's own mind, by the guidance of one's own judgement; taking pride in the results; granting no one else — especially non-productive, power-lusting second-handers like you Mr Anderton — a prior claim on one's achievements; treating others as sovereign equals, neither sacrificing oneself to them nor them to oneself; neither accepting nor imposing unchosen obligations ... this, Mr Anderton, is good. To the extent that the reforms have promoted selfishness, they are good. Because such is the nature of man that it is the right of each man to be selfish as I've defined it — to live for his own sake. And because that is the right of each man, there's a lot more reforming to be done yet."

That's what hope there is.

And we know where that hope comes from. It's us — and that magnificent philosophy to which we have given our allegiance. Not uncritical allegiance, not unthinking acceptance of every word on every subject its founder ever uttered or wrote, but allegiance in the higher sense of commitment to reality first & foremost. The reality that each individual has his own conceptual faculty which he must activate volitionally. The reality that no one else can do that for him. The reality that he is thus sovereign, and that his proper social estate is thus: freedom. The reality that we have on our side. The reality that remains real, even when people who ostensibly adhere to it politically — the Reagans, the Thatchers, the Newt Gingriches, the Republicans, the National & ACT parties, the Bill Bradfords — betray it epistemologically, ethically & journalistically.

That is our hope — and to keep it alive in the face of seemingly impossible odds, we must remind ourselves of two things: 1) it is the reality; and 2) — in the words of Ayn Rand, "It's earlier than you think."

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