Demolishing the doctrinaire delusion, Marilyn Waring

Reclaiming The Future: New Zealand and the Global Economy
Jane Kelsey
Bridget Williams Books, $39.95,
ISBN 1 877 242 012

Reclaiming the Future is Jane Kelsey’s fourth book in a decade of prolific publication: A Question of Honour in 1990, Rolling Back The State in 1993, and the best seller New Zealand Experiment in 1994. Each of these has been a significant addition to the New Zealand list, significant because each has broken new ground and set new standards of rigorous scholarship and analysis. In its scope, Reclaiming The Future takes my prize as the best of them. If you think (like many lazier Kiwi readers) that having read one Kelsey you know what this one will contain, you are very much mistaken.

The book is in ten chapters, with six of them devoted to a specific institution or key ideology of globalisation. These chapters are “Free Investment”, “Transnational Enterprise”, “Free Trade”, the “World Trade Organisation” (WTO),  “Asia Pacific Economic Cooperation” (APEC), and the “Multilateral Agreement on Investment” (MAI). Each of these chapters is structured so that it might stand alone – with an introduction, a history, a commentary on New Zealand’s association and involvement, and the policies pursued. Where necessary there is some demystification of terms, or a chronological commentary on annual conferences or meetings. Each chapter concludes with the author’s reflections. I got used to knowing that this was how each chapter would flow, and could relax to focus on the material itself.

I called the author to talk to her about the book when I had finished it. She told me that this was not, conceptually, the hardest of her books to date. But making the writing accessible, trying to unpack the dense detail, was a challenge:

“The conceptual packaging of The New Zealand Experiment was much more difficult. Reclaiming the Future was much longer in development, so that when it came to the writing I was much more familiar with the content. I was organised with the material, but the ever-present question throughout (and an old quandary from page to page for those of us who tackle the demystifying assignments) was ‘which audience are you writing for?’ Communities have to be able to access the information.”

I suggested that she had had to be very organised. The depth of background resources was such that I had visions of a roomful of paper for each chapter, and a peripatetic process to progress. Kelsey has been researching transnationals for 15 years, and attended her first GATT conference in 1990 and her first APEC conference in 1994, and has had a magpie’s approach to document collection over those years. But she tells me the material is all filed and ordered, and the analysis shows that the documentary collections were not a matter of a few selected or serendipitous piles. In addition, the meticulous quest to fill in the blanks is evident. When I wish to teach my postgraduate students about the value of the Official Information legislation as a primary tool for secondary data, I point them in the direction of Kelsey’s publications, for they are exemplary illustrations of what can be discovered. The same thorough and stubborn scholarship is in evidence throughout Reclaiming The Future. It also highlights the efforts required of those academics in New Zealand who do not receive the big research budgets, and who have to collect and carry the official documents themselves.

2

Reclaiming The Future  was up to date to August 1999 – before the change of government in New Zealand; before the resignation from the World Bank of Chief Economist Joseph Stiglitz after a number of public disputes with the Bank’s President James Wolfensohn; before the mobilisation of masses of concerned communities on the streets of Seattle to coincide with the WTO meeting. The changes in the months since publication reinforce the direction of the analysis, as well as the attention to the politics at many levels in the debate.

The book is dense. The subject matter is dense, the political intrigue is dense (look out for the WTO story on the banana stand-off between the USA and the EU), and there is a frequent need to translate for the reader because much is not as it seems when written in the agreements, communiqués and protocols. Kelsey treads that difficult and fine line in “deconstruction” for accessibility, without at any time patronising the reader, or simplifying to the point where the information is no longer useful as a tool. If one of the key objects of this is to empower communities with enough significant detail to participate and to strategise, it succeeds without reservation. In addition, Kelsey has (at last) begun to offer the reader a break, with stories to illustrate the point, and to let a little more air into the narrative. There are still not enough of these for me, of course. I think it’s the old politician in me, because I like to tell stories, and because I like to see pictures even in the middle of subjects such as foreign direct investment and the Uruguay Round. (One of my favourite stories about this book in production concerns the efforts of the editor to work on direct quotes from Mike Moore to try to make them make sense!)

In the preface the author writes:

This is not a book about the global economy. It is about the choices that have been made on behalf of New Zealanders since 1984, sometimes without our knowledge and often without our consent. It also sets out some of the issues that confront us as we seek alternative ways forward. Its conclusions are optimistic: they celebrate the emergence of New Zealanders from a state of grumbling acquiescence to the point where economic and social policies are (belatedly) subject to a contest of ideas.

Some of these ideas are introduced already in the first chapter when Kelsey quotes US economist Paul Krugman explaining that the conventional wisdom of the Washington model was “based more on the circular process of really important people reinforcing each other’s current dogma than on really solid evidence”. Full cycle some 50 years later, this was the doctrinaire delusion that Keynes wrote of:

To suppose that there exists some smoothly functioning automatic mechanism of adjustment which preserves equilibrium if only we trust to methods of laissez-faire is a doctrinaire delusion which disregards the lessons of historical experience without having behind it the support of sound theory.

There was, Kelsey writes, “no quantitative assessment that showed this process of macroeconomic policy coordination produced any significant gains.” Not only are there no reliable models to test, but the agenda is set by those who ask the questions, those who fund the research, their motives, and by those whom they wish to impress. New Zealanders are certainly used to this work in the guise of “research” published by the Business Roundtable. Kelsey reports on the New Zealand Institute for Economic Research reaching an “intuitive conclusion” (their words) in their 1998 report on the elimination of tariffs on textiles, clothing and footwear.

Introducing the chapter “Leading the World”, Kelsey writes of the enormous effort that has gone into selling the “success” of the New Zealand model offshore:

While a lot of ego is involved, and often lucrative consultancies, there is also missionary zeal. The sales pitch is selective in its evidence, sometimes seems disingenuous, and always carries a favourable spin. It almost never mentions the downside – the huge increase in equality and poverty, a deteriorating social service infrastructure that is near collapse in places, a real economy battered by government policies, and Maori struggling to survive.

Freed from the ideological fervour of the last government, it is a relief to find that the briefing papers for the incoming government have been transparent about the downside. In selling the messages in New Zealand, we were frequently subject to downright lies; for example, the claim that “APEC required the removal of all tariffs by signatory countries by 2010 at the latest.”

3

I began to read Reclaiming The Future in Washington, either side of a visit to the World Bank, who described to me that they had been conducting worldwide research with the poorest of the poor in major focus groups, and they had found that without exception structural adjustment policies hurt poor people! I read it when talks between the United States and China on China’s entry into the WTO hinged on the acceptance of quotas on textiles! It was written at a time when, as New Zealand lamb producers know, Washington was as protectionist as ever.

Conditionalities may apply in structural adjustment policies from the IMF, the World Bank, and the regional banks, and in bilateral assistance programmes, but certainly not in human rights law. Yet there is certainly room for argument in international law that the economic regimes imposed by these institutions have been complicit in accommodating, tolerating, facilitating, justifying or excusing fundamental breaches of human rights. There is now some pretence that such issues are tackled under the “good governance” programmes and projects, but as Kelsey makes clear, these are more about restructuring bureaucracies and training officials and parliamentarians in the Washington model, than in addressing the ongoing abuses to the populations wrought by the slavish adherence to dogma.

Even the institutional conferences and preparations for them infringe basic liberties. At the level of the sublime, Kelsey reports that Jose Ramos Horta, Archbishop Desmond Tutu, and Danielle Mitterand, wife of the late French President, were all blacklisted and banned from entering the Philippines in 1996 to attend the counter-APEC meetings. At the level of the ridiculous, I am reminded that a schoolboy was hidden behind a bus as a calvacade swept by so that his legitimate placard of protest against the People’s Republic of China could not be viewed in Christchurch in 1999.

Ideologies certainly change, and the rhetoric that accompanies them can be tuned to reinforce the practice. “Free investment” has delivered a growing international control of New Zealand’s strategic assets:

In 1999, overseas companies control key areas of the country’s economic, social and cultural life – daily newspapers and radio, petrol, airlines, railways, supermarkets, computer hardware and software, telecommunications, office supplies and equipment, the book trade, pharmaceuticals, flour production, brewing. All the major banks and eight of the ten top insurance companies are overseas owned.

Many years ago when I was a young undergraduate, I was taught in my political science class that government ownership of strategic assets – transport, communications, minerals and the rest – was part of New Zealand’s strategic and defence policy. Since we were so isolated, and couldn’t possibly defend ourselves, it was important to retain the key infrastructure in government hands. Some years later Bill Birch’s Think Big projects were sold to me, as a young backbencher, as part of our strategic and defence policies – that our dependence for energy on the Gulf region was destabilising and we had to push for a measure of self-reliance and independence.

Where  “communities” are concerned, Kelsey chooses three case studies to monitor throughout: the approaches and responses of  “labour” (and in particular the International Confederation of Free Trade Unions (ICFTU)), the environmental lobbyists, and that of the first nations or indigenous peoples. On the global stage the analysis of labour is the strongest of these threads, and in the New Zealand context, as we might expect, the description of the Maori response is thorough. At both levels, the author appears to be reticent and ambivalent in commentary on the environmental agenda. This is perhaps because the scope of the environmental challenge is so vast, and the movement so diverse and dispersed, that it is difficult to generalise. Frequently too, the priorities of indigenous peoples spring from environmental values, so that this broad issue cannot stand as a case study in isolation.

Yet the research on the environment offers some of the most chilling commentary. The author reports on a memorandum that Larry Summers, a former Secretary to the US Treasury under President Clinton, wrote to his colleagues. Because poor people in poor countries have shorter life spans and less earning potential than wealthy people in rich countries, “shouldn’t the World Bank be encouraging more migration of dirty industries to the Least Developed Countries (LDCs) … I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

4

Kelsey writes that “the cumulative effect of globalisation is deeply disempowering.” So the focus of the final chapter is “to identify what power remains in, or can be restored to, local hands.” Kelsey reaches two conclusions about the freedom available to a new government in New Zealand to set a new policy direction. First, the policies of recent New Zealand governments have not been dictated by inexorable pressures from global markets, but reflect choices made ultimately at home. As a consequence, future governments retain more than enough room for policy manoeuvre and change. The chapter suggests what the focus of a new, well-rounded economic debate might be, and who might participate.

Information empowers, and this book is one that can give both tools and impetus for activity to communities. As the author writes on the last page: “Once people believe that collectively they can influence the major decisions that affect their lives and can shift the political will, it is a small step to believing that a greater change is possible.”

The book concludes: “The state of the future still rests largely in our hands.” I am tempted to ask, “but does the future of the state still rest largely in our hands? what form will this state take, and will it be contested? whose voices will be heard and how?” The author has said elsewhere that this is the last book in the series, but it seems to me that we are left at the end hoping that, in time, she will cast her fine mind and conceptual grasp to the questions we are left with.

Marilyn Waring is the author of Counting for Nothing and is an Associate Professor in the Department of Social Policy and Social Work at the Albany Campus of Massey University.

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