In all the industrialised nations of the OECD voters seem determined to chastise politicians. Despite this pattern, commentators are continually surprised that voters are so truculent, even vindictive.
In many cases, the economy and employment has been growing but electors punished leaders. In Germany Chancellor Helmut Kohl almost fell; President Bill Clinton’s Democratic Party lost control of Congress. In France and Austria moderate parties were shocked by the size of neo-fascist polling. In Queensland the Goss Government lost all but a sliver of its large majority in July. In Japan and New Zealand the electors have imposed far‑reaching changes in the electoral rules.
Globalisation has unleashed forces worldwide which create political instability. In New Zealand politicians are dancing to MMP lyrics, but the tune and rhythm is global.
One factor in this change is that governments seem weak to some voters because they can no longer fully control economic affairs. International markets influence currencies and interest rates: domestic markets have little protection against floods of imported goods. The prices of locally produced goods are decided by international, not local, markets and can change amazingly overnight. Increasingly the government seems impotent. In this new era money rules; “investors” and even speculators seem to rule the roost.
A new international elite sets the limits within which governments operate. The elite decides where jobs will be distributed. It also controls the media with its satellites and a digital revolution which no government controls. Kerry Packer and Rupert Murdoch have made major team sports such as rugby, league and soccer their playthings. Aptly did the World Bank observe that “one effect of globalisation is to expand the options available to private individuals and firms, while reducing those of policymakers”. Policymakers increasingly influenced by an unelected international meritocracy and can do little more than pretend to protect their electors from rapid disturbing change, mounting competition and intrusive cultures.
Many countries seem to be developing two‑tier societies. Time (October 24, 1994) noted that “while corporate profits and executive salaries are rising rapidly, real wages are not growing at all”. Median household incomes fell sharply in the United States and another million people slipped into poverty in 1993. “These are astonishing developments for the fourth year of a business recovery.”
Actually in the OECD (especially in the United States) the development is three tiers (rather than two): an influential elite, a middle‑America, and the poor.
Christopher Lasch in The Revolt of the Elites (Norton, 1994) explains how the elite continues to define political issues while it has lost touch with the people. The elite revolts against middle America which is regarded as backward, politically reactionary, sexually repressive and dull. Elites are “at home only in transit, en route to a high level conference ‑ opening a new franchise ‑ to a film festival or an undiscovered resort”. Lasch sees them as detached. “Their ties to an international culture of work and leisure make many of them deeply indifferent to the prospect of American decline” and have set up their own detached systems of health‑care, education, pensions and security.
Kevin Phillips in Arrogant Capital (Little, Brown, 1994) explains how the elite of Washington and Wall Street fails to create more income and jobs for the middle class. Business has suffered from “financialisation”; the money managers of big companies have short‑term profit maximising goals. They become “leaner”, purging employees (especially the middle‑aged), slash wages and shut down plants, bringing agony to families and communities.
Everyone knows that the elite top 1% of the United States increased its incomes prodigiously in the last 15 years. Phillips showed it was the top half of the 1% ‑ those earning $4 million plus ‑ who benefited and all other groups declined. In 1993 the economy grew by 3% but the median income of families fell by 1%. Middle America and Poor America have had declining real wages for 20 years. President Clinton still expected voters to be grateful although economic growth had riot brought a rise in their real incomes.
Middle America also worries about a “cultural collapse” and the Republicans picked up many vocal “angry white men” raging against abortion, political correctness and immigration. Research reveals a correlation between their anger and declining economic security.
Are these patterns pertinent to New Zealand? Clearly New Zealand is markedly different politically from the United States and France is not producing a strong rightwing political force. Politicians have dug bunkers in the centre. Ross Meurant’s party is unconvincing.
Yet any listener to talkback radio will find extreme rightwing attitudes too freely expressed on racial problems, overregulation, the tyrannies of big government and political correctness, women working and allegedly undesirable immigrants. Paradoxically, it may be the Alliance which attracts people with these attitudes, both through its Democrat component and its attraction for protest voters (National Business Review poll, July 21).
Nor are any New Zealand parties concerned essentially with regional interests. But overseas experience again suggests potential opportunities for politicians anxious to buttress their locality against globally‑driven impersonal forces. Nico Colchester in The Spectator (June 3) suggested a rift between the international “them” and the local “us”, between floating elite and the rooted public.
How is globalisation articulated in New Zealand? In my perception the switch in emphasis in the last decade to “freedom of the market” has created groups of people who feel either “empowered” or “marginalised”. Although the terms “winners” and “losers” are imprecise and rather crude, they are useful initial terms to use in my exposition.
“Winners” are people who identify their interests with the market. There are several categories of people here, but at the apex stands a group which the system has favoured. They possess skills which are internationally mobile: top entrepreneurs, managers, financiers, physicians, academics and media people who can compete globally. Those who combine these skills with “rich list” status are the elite.
Another group has substantial assets and through entrepreneurship in farming, business, tourism, etc, is benefiting from the current regime. Some wage and salary earners may identify with this group but on the whole their remuneration is often low because labour rates are depressed by the Employment Contracts Act, global competition, the deskilling of many employment categories and a trend towards casualisation (and feminisation) of work.
The “marginalised” are not amorphous either. One group might include skilled and unskilled blue collar workers, some managers and clerical workers whose security has been undermined by market‑driven forces. Globalisation has brought automation, rapid changes in computers and business methods and other threats to their livelihood. Their market income is low and menaced by the pace of change in the workplace which threatens to outdistance their skills. Another semi‑marginalised group is employed by the government, either national or local, in services, prisons, education and health. Their remuneration has been practically frozen for years and their fear of redundancy often precludes collective action against an insidious managerialism which is remorselessly demanding ever higher productivity.
The beneficiaries form another group ‑ the unemployed, superannuated, invalids or domestic purpose beneficiaries who feel depreciated by a society which pays a grudging livelihood.
The bifurcation in our society is obvious from tax returns. The winners are the top third of the population that earns two‑thirds of the country’s income (and doubtless own at least three‑quarters of its wealth). The losers are perhaps two‑thirds of the population that share one‑third of distributed income and have negligible wealth. The distribution of income has become very inegalitarian and may be increasing. Census data indicated that 60% of Selwyn electors in the by‑election last year earned $20,000 or less a year and more than 50% receive some form of welfare.
National has favoured winners by increasing competition, removing protection, depressing wages and subsidies, reducing welfare and accident compensation and holding the costs of education and health. Its positive policy to Gatt and its removal of gift tax and estate duty are examples of its determination to assist those already favoured by the market. National has identified so well with “winners” that ACT New Zealand cannot find a constituency.
The Alliance has developed a policy platform which represents the marginalised fears of exposure to global market forces. Hence Alliance espouses more state control, national ownership and protection of industry. Believing the state (not the market) should distribute resources, the Alliance favours ‘free” health and education. Naturally these “losers” favour a punitively progressive income tax to pay for this income redistribution.
Labour has not been able to find a role and is perhaps incapable now of adjusting to the great forces which are changing New Zealand society. The 1984‑87 administration seized the “winner” position from a Muldoon administration which had turned anti‑market. Labour was re‑elected in 1987 because it was identified with the market (which boomed 1986‑87) while retaining a grudging loyalty of many who depended on the state for their income.
Sir Roger Douglas, Richard Prebble, David Caygill and Mike Moore impressed the winners, while the “losers” were kept sweet with rising salaries and benefits. David Lange and Helen Clark provided crusading visions of gender equality, tobacco and liquor control and a nuclear‑free society. These “causes” were particularly important in not alienating the winners while reconciling many losers to a disturbing growth of market freedom.
Subsequent changes have left Labour with a market economic policy which does not seem to fit convincingly with their personnel. Even the extremely able Michael Cullen has been unable to project a coherent “winner” philosophy. Having killed off its right and left wings, Labour is at heart a “loser” stuck in winners’ clothes.
This disastrous image may be misplaced ‑ Helen Clark’s effective opposition to National’s health policy showed other concerns ‑ but all the former Labour activists I know will not now lift a finger to help a party which lost its dynamic right and left and now seems to be unduly influenced by radical feminists. United may win their grudging votes.
Labour’s confusion was explicit in its selection of Marion Hobbs for Selwyn. Her rhetoric and collectivist values were repugnant to most of Selwyn’s winners while the party’s market‑favouring policy was a barrier to Hobbs’ appeal to Selwyn’s losers.
New Zealand First has the policy to appeal to losers. Moreover, Winston Peters has remarkable charismatic appeal, enhanced by an ability to play upon the neo‑paranoid fears of some electors that there are conspiracies to be exposed.
New Zealand’s politics may prove more volatile than most commentators have allowed. Their analyses focus only on the short term of MMP and coalitions. But if globalisation is an underlying influence, reflected in what the French call a “precarious life”, then some parties like Labour and United had better adopt viable policy before they are annihilated. National, New Zealand First and the Alliance, in contrast, have created credible niches.
Neville Bennett lectures in Japanese history at Canterbury University.