The missing alternative, Tim Hazledine

At The Crossroads: Three Essays
Jane Kelsey
Bridget Williams Books, $34.95,
ISBN 1877242918

Re-launching his New Left Review for the new millennium, the veteran British socialist Perry Anderson conceded with apparent equanimity that “the only starting point for a realistic left today is a lucid registration of historical defeat. Capital has comprehensively beaten back all threats to its rule.”

So why bother, then?  “Capital” – specifically, global capitalism; specifically, the great late 20th-century wave of expansionist transnational enterprise underpinned by neoliberal ideology – has penetrated wider and deeper than any economic movement before in history, sweeping away alternative systems – notably the communist regimes of the former Soviet Union and its satellites – with spectacular ease. What can stop it now? What hope for the sovereign nation state, especially piddly little post-colonial outposts like New Zealand?

This is the challenge taken up by Jane Kelsey in her latest (and, commendably, shortest) book: At the Crossroads. The title itself promises the possibility of choice; of alternative paths, even though the job is going to be at least as hard here as in any country. The aggressive unilateralists who have commanded our economy since 1984 have dragged us further down the neoliberal/globalized road than perhaps even the enforcing institutions of the “Washington Consensus” (US State Department and Treasury, International Monetary Fund, World Bank, World Trade Organization) would have dared to demand.


The international critical literature is not, yet, much help. There is by now plenty of it, its authors mostly rather less acquiescent in tone than Perry Anderson. Indeed, anger and outrage are the stock in trade of today’s anti-globalization tract. Naomi Klein’s lively bestseller No Logo (2000), which “makes the blood boil” (Paul Foot) with indignation about the shonky excesses of the multinational global brand-builders, concludes that “political solutions deserve another shot”, but is reticent about the substance of such solutions. Klein’s rather less successful British rival Noreena Hertz preaches salvation by shopping in The Silent Takeover (2001). The ubiquitous journalist John Pilger rages on apoplectically, splendidly unencumbered by any scruples about the need for balance or even basic factual accuracy – but what would he do? Michael Hardt and Antonio Negri, in their bestseller, Empire (2000), which is  – I think – about globalization (they leave undefined their central concept of “Empire”), offer as their alternative to a corporate monster whose magnificent malevolence they have described in almost loving detail over 478 pages, a sketchy vision of rootless, roaming rentier backpackers that to me is at least as repugnant – and equally “globalized” – as the old monster.

The “bad mood rising” in the streets of Seattle and Genoa and Quebec and Turin, which rattled the Washington Consensus, is possibly all the scarier for being basically directionless: free-trade economist Jagdish Bhagwati has warned of reaction to the “tyranny of the missing alternative” creating an “intolerable void among the idealist young” frustrated by the End-of-History triumphalism of the neoliberal establishment.

But surely the fires of outrage must eventually burn out if not fuelled by something more solid than distaste for Big Macs and Nike and Men in Suits. There has to be a theoretical alternative – a cogent paradigm or model to set up against the smooth certainties of neoliberalism. Well, there is already something out there, and it has a name if not substance. I refer to the famous or infamous “Third Way”, that notoriously slippery concept which has nevertheless clung for a time to the manifestos of most of the West’s leaders, including Blair, Clinton and Clark. Jane Kelsey is very good on the Third Way (that is, I quite agree with her). In a (rare) detour into levity, she provides a list of quotations, definitions, etc, from which the pick is P J O’Rourke’s: “A sort of clarion call to whatever”. Precisely.

If there is an actual idea lurking in the background here, it might be expressed as the politics of being smart but nice – smart in embracing the efficiencies of the market economy, but nice about giving everyone a jolly good opportunity to participate in the market game. This is quite foolish, but the fatuity of the Third Way is far from being frivolous – behind the fog of platitudes and woolly concepts, the cautious commissars of the so-called centre left (Blair and Clark, in particular) are able to manoeuvre their forces to stay out of trouble – in particular, to avoid any confrontation with the globalization juggernaut.

Whenever Third Wayers do descend into the real world, they always come to rest in the school yard or campus – education being their panacea for all ills – and here, for once, we can examine their conceptual contraption up close. It does not reassure. The platitudes are pumped out as usual: NZ Labour’s goal after the 1999 election was to “equip the country for the transition to the knowledge economy in a global marketplace”, which is, blah blah, harmless enough, but then came the practicalities, which were mindlessly misdirected: “If New Zealand is to be a knowledge based society, it is vital that teaching, scholarship and research in the tertiary sector are guided by a clear understanding of where the nation is headed.”

Well, no, actually it isn’t. What we do in universities – teaching, scholarship and research – is in no direct way determined by a “clear understanding of where the nation is headed”, and cannot be. You would think that, as a former academic, the Minister for Tertiary Education, Steve Maharey, would have known this – but then again, maybe not. In any case, that little mischief of a manifesto has spawned a morass of commissions and controlling, top-down funding bureaucracies, wasting our time and taxpayers’ money and effectively discouraging research.


So what does Jane Kelsey herself have to offer in the way of policy proposals? In a truly bizarre review of At The Crossroads in The Independent, erstwhile comrade Chris Trotter first attacks Kelsey for not offering an alternative prescription and then goes on to lambast in the most lurid terms the proposals that the book does indeed put forward, linking them to Lenin and Bolshevism.

In fact, Kelsey’s suggestions are cautious and moderate, perhaps to a fault. Take the most radical-sounding of them: “renationalisation of core infrastructure and public services, without compensation where massive profit taking, asset stripping and degeneration has occurred”. State Socialism redux? Well, excuse me, Air New Zealand, anybody? It is, sadly, precisely when all the assets have been stripped out that the State is left to come in and pick up the pieces, of course without compensation because there are no profits left to compensate for.

Repudiation of Third World debt – another proposal – is a quite mainstream idea, discussed seriously and occasionally implemented, albeit piecemeal, by the rich lending countries and international financial institutions.

But I am certainly not comfortable with everything here. “Democratisation of political life by resurrecting an activist and popularly accountable state … and public forums for participatory debate and informed decision making at local, regional, national and international levels” irresistibly calls to mind the (very serious) joke attributed to Oscar Wilde: “Socialism will never work  – it would take up too many evenings.” And apart from the transaction costs, what will all the democratic decisions be about? The point is that the point is the economy, and the economy happens in markets, not meeting halls. The problem is that Kelsey, Klein, Hertz, Hardt and the gang are none of them economists, and that “tyranny of the missing alternative” will only be taken out by a coherent economic challenge.


Well, I am an economist – what do I suggest? In my last 250 words, here is the outline of a four-pronged attack:

First, de-demonise globalization. Kelsey repeats, without sources (there are no sources given in this book) but familiar from John Pilger, a bunch of scary statistics, such as “the top 200 transnational corporations account for over one quarter of the world’s economic activity.” Rubbish! Wrong by a factor of five, thank God. The true figure is about 5%, which is still a lot, but not something we couldn’t handle if we had the will.

Second, ridicule neoliberalism. The irony is that the prophets of so-called free markets actually don’t understand how a civilised market economy functions. In their obsession with individualism, they neglect the crucial importance of values, norms, cultures to rubbing along in the marketplace. Their model is not only morally repugnant but also quite inefficient.

Third, celebrate sovereignty.  “Culture” matters, and cultures differ. Countries are the natural sites for people of like mind and inclination to gather together to develop internally cohesive but externally distinctive economic cultures. Reports of the death of the nation state are therefore much exaggerated.

Fourth, focus on work. Work – market work – well-paid market work – was always at the core of the progressive programme, and its primacy must be restored. This means taking on not just the neoliberal surplus-strippers, but also the “new rights left” of entitlement and identity politics and the proponents of the “stakeholder” economy. Taking on just about everyone, in fact. It should be fun.


Tim Hazledine is Professor of Economics at the University of Auckland.


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