Book and Video Reviews

"At the Crossroads: Three Essays"

by Jane Kelsey. Bridget Williams Books, 2002.
$34.95, 137 pages

- Jeremy Agar

The biggest 200 global corporations account for a quarter of world economic activity, yet they employ only 1% of the world’s workers. And 90% of the world’s foreign investment takes place between rich countries, none of which is devoted to new activity.

These points, which Jane Kelsey makes near the start of her discussion of globalisation, the first of three essays in her book, indicate that the big money moving around the world does little to create new wealth or new opportunities. For big global companies the easy money is made from mergers and takeovers or from speculative flights of capital. As a result, inequality between rich and poor countries is increasing, as is inequality between rich and poor within each country.

The justification offered by the Rogernomes, when they ushered in their version of "shock therapy" to New Zealand, was that, while it might be true that their vaunted free markets created inequality, they would make us all richer. The poor performance of the New Zealand economy since 1985 is attributed to our failure to go the whole way. To make this claim, the ideologues ignore not only our recent and failed past. Neoliberalism recycles failed orthodoxies from the last two centuries. In fact only in the post-WW11 period, from 1945 to around 1972, did Keynesian* economics provide an alternative to the type of deregulated capitalism in the rich industrialised countries that now struggles for public acceptance. The Rogernomic hope seems to be that once a system has failed repeatedly, success will come from trying the same thing again in the name of innovative thinking. When the National Party president was chopping down the dead wood in her party, one vigorous sapling she planted was the 62 year-old Reserve Bank Governor. Don Brash indeed offered his candidacy to Parliament on this basis of going back to the future. *Named after the theories of English economist, John Maynard Keynes (1863 –1946) who advocated government spending on public works to stimulate the economy and provide employment. Ed.

The best analysis of the revolution, as its agents liked to dub their reforms, remains Kelsey’s earlier writing. "The New Zealand Experiment" was called "Economic Fundamentalism" in some markets overseas, a title which aptly captures both the obsession with abstract formalism with which the maxims of the free marketers are invented and the cultist dogmatism with which its devotees preach the word, no matter what the empirical evidence.

In this shorter account Kelsey draws the broad strokes to show the real picture. It’s not just Godzone which reels from the mad experiments - as the late Bruce Jesson called them. The United Nations calculates that the policies of the World Trade Organisation (WTO) have impoverished the poorer 48 countries in the world at an average rate of around $US1billion a year. The rich are getting richer, but others are getting poorer.

Don Brash and ACT Leader, Richard Prebble, might say that the post-Lange* governments have been wimps, but as Kelsey observes, with more respect to facts, by the end of the Bolger** administration, "New Zealand had done everything globalisation required of it. The result was a pathologically dependent, vulnerable and under-performing economy". * David Lange was Labour Prime Minister from 1984-89. ** Jim Bolger was National PM from 1990-97. Ed.

The last Labour Prime Minister of that 1984-90 government, Mike Moore, went to Geneva to run the WTO and bewail the lack of revolutionary zeal of his successor. But the fifth Labour government’s electoral success is based on Helen Clark’s wisdom in not being National and not being like Roger Douglas* or Mike Moore. Kiwis have never cared for rhetorical excess or grand theory. Clark is a pragmatist, but these days you have to have a slogan or the pundits who mediate between elites and the rest of us don’t take you seriously. Clark apparently is enamoured of something called "The Third Way" * Sir Roger Douglas was the Minister of Finance in that 1980s Labour government and the father of Rogernomics. Ed.

In her second essay Kelsey shows that this "Third Way" means nothing much at all. It has been a favourite with Britain’s PM, Tony Blair, who seems to be a model for Clark. The phrase is designed to be reassuring to battered voters. Originally it suggested something that was neither unabashed capitalism - never a popular option with Kiwi voters, as the Rogernomes have found - nor Communism - which is no longer a contender anyway. Kelsey quotes ten definitions of the Third Way from people more or less sympathetic to its possible tenets. All ten say it has no precise meaning. (At one stage the "Third World" denoted states like Nehru’s India and Tito’s Yugoslavia, places claiming to be "non-aligned" to either the USA or the former USSR, offering a "Third Way").

The vagueness is helpful to Clark, who cannot be accused of having wandered from any true path. In her third essay, Kelsey offers alternatives to TINA, the paralysing superstition that There Is No Alternative to globalisation. She is sure that the "Third Way" is not one of them. Kelsey argues that while the Clark government has not pushed globalisation, especially by avoiding the big totemic actions beloved by the true believers, it has done nothing to reverse the trend to integrating our economy with the dictates of foreign capital. The immediate question is whether this relative inaction will result in us losing our revolutionary edge, as the Rogernomes fear, or in our allowing the revolution to embed itself, as progressives fear.

If You Don’t Like It, You Can Bugger Off To Australia

 Here Kelsey’s look at Treasury is interesting. In 2001 Treasury confirmed that "not only is agglomeration a powerful trend, it is not one we would want to tamper with" [quoted by Kelsey, p100]. "Agglomeration" refers to the natural trend for people to drift to fewer and fewer cities, resulting in urban chaos and rural depopulation. Treasury does not discuss this. Neither does Treasury care that "agglomeration" describes the sort of developmental imbalance that typically marks Third World economies. This is because Treasury sees New Zealand as a Third World country.

How else to explain Treasury’s suggestion that the solution for "poor outcomes of health and education... sharp divisions in values and attitudes [and] a regional picture of increasing deprivation" is emigration to Australia? Rather than consider that the dismal record of the New Zealand economy has been the avoidable result of the Rogernomes’ experiments, Treasury would have us believe that it is the victim of some sort of law of Nature.

This being the case, Treasury warns against Government efforts to sustain declining communities, particularly if, in doing so, it is "discouraging adjustment" to the world of reduced expectations. About all that can be done, Treasury suggests, is to help out Auckland, the only place which will really "agglomerate", as to "divert resources from our major cities to more rural regions may, in effect, be promoting Sydney". This might sound bad if you’re looking for a job in one of our towns, but to Treasury it might not matter: "Even if people remaining in New Zealand were worse off after closer integration, it would not necessarily be a disadvantage to all New Zealanders, as some will migrate to take advantage of the higher wages" [quoted by Kelsey, p101]. In this view, it is better that the world provide good jobs for expatriates in Melbourne - or New York and London? - than that we provide work here. It’s seen as promoting individualism.

Treasury’s policy might be dubbed Opening the Gaps. For them, Government policies to create jobs and develop regions are a destructive waste of money. When Treasury advocates some better public education for the bottom income quintile*, it is hoping that young people in Northland, parts of Auckland and East Cape (to cite Treasury’s own examples) will learn enough to know how to leave the country. Or, that if they stay, they will make themselves available to the economy as efficient "factor inputs". Treasury holds the view that public schools exist to condition young people to slot into mindless work. By implication, public investment to allow high quality education is not a good idea. *The bottom 20%. Ed.

In Treasury terms, "social capital", as the trendy expression has it, should be concerned with "bridging", but not with "bonding". Not content with creating inequality, the policy experts are bent on fostering divisions, most obviously between income and ethnic groups. Readers from south of the Bombay Hills who might be tempted to accept Treasury’s invitation to hope to improve their lives by Auckland bashing would be well advised to note that, despite being the intended local beneficiary of "agglomeration", Auckland is identified as a mere "periphery" in the wider scheme of things, a stopover between Sydney and the bush.

Another trendy and vague notion is that of the "Knowledge Economy". Hopeful talk of "innovation", all the rage in the ‘90s, is "Third Way" stuff. It means whatever you want it to mean. As Kelsey notes, the future, as envisaged by Don Brash at the "Catching the Knowledge Wave Conference" in 2001, is a place where pensions are privatised and the rich don’t pay much tax. For others, it is a place where computers replace humans because they’re cheaper. For almost everyone who talks in these terms, Catching the Future is said to have something to do with "better education", even if that’s the activity that occurs in poorly resourced public schools.

For the Clark government, the future is something to align yourself with, without having to be specific. It sounds self-evidently a good thing, what the Americans would dub Mom and apple pie. In the present context, that is not good enough. It used to be that talk of better worlds to come was the preserve of the periphery types who lived beyond Queen Street’s towers and the Wellington Beehive. Owning the future and creating hegemonic beliefs about it has always been an ideological battleground. When the Left takes back the Future, we’ll be going places. [Bill Rosenberg’s article, "Foreign Investment and the Innovation Strategy", Watchdog 99, April 2002, is a helpful discussion of what’s really involved].

In this context, "At The Crossroads" is an excellent guide. When TINA shows signs of age, yet progressive forces remain weak, static and divided, a unified walk down the path away from globalisation is surely a first step to take from the crossroads. The election showed how far we are from this. Kelsey offers the basis for a general agreement about how to reclaim our future. There will always be differences as to which details of policy are more important and there will always be room for coalitions to express varying emphases. But when we look ahead at the landscape and see it laid waste, a good starting point is to understand what destroyed it. Kelsey is clear and authoritative in her explanation of the underlying causes of our malaise. She offers a way to avoid divisive squabbling over symptoms.

The global view, internationalism, is another concept that never used to belong to giant corporations. It used to be ours.




Frontyard Films, Australia, 2000

- Murray Horton

Some people do actually wage revolutions and wars of independence against the transnational corporations (TNCs). One such struggle has been going on in our backyard – since the 1980s the people of Bougainville have succeeded in shutting down the cause of their misery, the gigantic Panguna mine, owned by Rio Tinto of Britain, the world’s biggest mining company, and the owner of Comalco in this country. That war of independence against a TNC and its client government exacted a terrible cost in human suffering for the people of Bougainville and, in 1997, led to the extraordinary spectacle of the Papua New Guinean (PNG) government hiring foreign mercenaries to try to succeed where its own military had failed. This use of mercenaries by TNCs, particularly mining TNCs, has become common in Africa, and is the logical development of corporate feudalism. State violence has become privatised, along with all other State "services". But we owe the people of PNG a big vote of thanks - they rose and physically chucked out the mercenaries, forced the Government to back down, and voted out the politicians (including the Prime Minister) who were responsible. The mercenaries fiasco provided the breakthrough to the present peace settlement on Bougainville, which has achieved autonomy (with a guaranteed vote on independence to be held in ten to 15 years). The people of one of the world’s most "primitive" countries defeated the world’s biggest mining company and its local agents. And they did so with a minimum of bloodshed, using home made weapons or those retrieved from where the retreating Japanese had stashed them during WW11.

For most of the 1990s, Bougainville was sealed off by a particularly brutal blockade by the PNG military (backed up by helicopters piloted by Australians and New Zealanders), which closed off all contact with the outside world and led to the deaths of more than 12,000 people, many from perfectly treatable illnesses. No medicines could get in and anyone requiring hospitalisation had to risk violent death from PNG forces on the short but extremely risky sea crossing to the nearby Solomon Islands. Rather like East Timor, Bougainville was a mystery to the world, and only a handful of brave journalists and filmmakers, mainly Australian, defied the blockade to get in and get Bougainville’s story out.

This video is particularly valuable because it tells the story of how Bougainvilleans survived during this terrible decade. To quote from the blurb: "From scratch the Bougainvilleans built their own schools and tertiary colleges; without Western medicines or health professionals they turned to their traditional bush medicine; without weapons they made their own guns out of waterpipe; without communications they charged batteries using solar power to run satellite telephones and two way radios; without power they produced their own electricity by harnessing the waterflow of the rivers. But the most fascinating invention was the use of fermented coconut oil as a substitute for diesel fuel. The Bougainvilleans called this phenomenon of inventiveness ‘Mekim Na Savvy’ or learning by doing". There is another very unusual characteristic of Bougainvillean society – women own the land, not men, and this video features a number of very strong, forthright women leaders.

Bougainvilleans paid a terrible price for defying the world’s biggest mining TNC and the government which was its loyal servant. But not only have they succeeded in permanently removing that cancerous tumour from their evergreen island, they survived a decade of enforced isolation and rebuilt their own society on their own terms. This puts the lie to the oft heard cry: "You couldn’t live without the TNCs and their jobs, money and products". Well, Bougainville did – it wasn’t easy but they did – and is now facing the future very much on its own terms. They deserve our help and support, not as an act of charity, but because they fought our battle and showed that victory is possible.

For details on how to purchase this excellent video, contact the makers at VEA Australasia; 111A Mitchell St, Bendigo, Victoria 3550, Australia; Phone (61 3) 5442 2433; Fax (61 3) 5441 1148; Email: :




Written and directed by Alister Barry. Produced by the Community Media Trust, in association with Vanguard Films, Wellington, 2002.

- Murray Horton

I’m old enough to remember full employment. Not only to remember it, but to have positively benefited from it. As a student, I never had any problems finding holiday jobs in the late 1960s and early 70s, even for the shortest holiday period. I still have a vivid memory of receiving a letter from the foreman at the wool store I used to work at, saying that they had a labour shortage and asking if I could come back. I can’t imagine that happening anytime in the decades since (it was certainly unique in my experience). When I first got politically active, in the Progressive Youth Movement, none of us were unemployed, the great majority were young workers. If the job was boring or you got sick of it, then you very quickly got another one. It was only when I lived in Sydney, in the mid 70s, that I first experienced mass unemployment and was on the dole. I have an equally vivid memory of (unsuccessfully) standing in a long line of jobseekers at a construction site one cold morning. When I came back home, in 1976, the factory closures and mass job losses were just starting here and Piggy Muldoon* was instituting the policies that made unemployment a permanent feature of the economy. But it was still easy to find jobs – I needed a few months work, so I went to the Railways and was hired straight away (and ended up staying more than 14 years, until I joined the unemployment statistics). * Muldoon was National Prime Minister from 1975-84. Ed.

Alister Barry’s new documentary should be viewed as a companion to his seminal "Someone Else’s Country" (CAFCA had the privilege of hosting its world premiere, in Christchurch, in 1996) and like that, has taken several years to appear. Nobody can ever accuse Alister of being hasty. The phenomenally successful earlier documentary recorded and analysed the takeover, sale and betrayal of New Zealand by the familiar crew of villains from the 1980s. They’re all here in the latest film and what memories they bring back – for instance, I was in the protesting crowd outside a Christchurch church hall the night Richard Prebble, then still in the Labour Party, was hit smack on the forehead by an egg. It was all captured on camera and he just carried on his TV interview with (literally) egg on his face. Perhaps that’s the normal way the Rogernauts have their eggs. Alister has performed the invaluable service of spending thousands of hours going through film and TV archives and editing it all into one highly incriminating, seamless whole. So there they are – Lange, Douglas, Bolger, Shipley, Richardson, and the ever present Don Brash, all slickly explaining why mass unemployment is not only inevitable but downright good for you. My favourite segment is Lange suggesting that redundant freezing workers should move to where the jobs are, which are always elsewhere. The most chilling footage is from inside Treasury, where the bloodless theorists calmly discuss how to establish a viable poverty line and then advise the Minister of Finance (Ruth Richardson) to set benefits below that. This led to the infamous benefit cuts, which have never been restored.

It is a long documentary, at 103 minutes, but it is very far from boring. Interspersed with the ideologues and eggheads (sorry, I couldn’t resist that again) are interviews with real people – workers, farmers, beneficiaries, solo mothers, etc. The new poor talk about the impact that deliberate mass unemployment has on them, and how they have been reduced to seeking charity, in the form of the food banks that had disappeared since the 1930s Depression and are now a permanent, and shameful, part of the New Zealand landscape.

The Reserve Army Of Labour

There’s no great mystery about why mass unemployment was institutionalised as an instrument of political and economic policy by the 1984-90 Labour government (and has been carried on by every government since). Bare knuckle capitalism needs a reserve army of labour – the unemployed – to keep wages and conditions down, by frightening workers into accepting low pay rises/no pay rises/pay cuts/job cuts by pointing out that there’s plenty more desperate to take their jobs. Keeping wages down keeps down inflation and interest rates (double digit inflation and interest rates were the hallmark of the Muldoon era), and low inflation and interest rates keep down the cost of money, which is of paramount importance to capitalists. Permanent mass unemployment weakens the power of unions (Bill Birch gave that a mighty shove with the Employment Contracts Act) and immeasurably strengthens and enriches Big Business, both local and foreign. It also creates a permanent underclass, with all the Third World social problems that we now have, including rampant drug use, psychopathically violent crime, meningitis and poor housing. Mass unemployment has been (and is) a major policy tool in the two decades-long obsession to "make New Zealand attractive to foreign investment". This translates more accurately to "the race to the bottom". The present Labour government has simply stopped some of the worst excesses of Rogernomics but has, quite deliberately, done nothing to reverse it. And it only went that far because it is electoral suicide to still embrace Rogernomics. Labour’s front bench is full of leading figures from that era, and they are not about to repudiate their handiwork. Their newfound ally, United Future leader, Peter Dunne, left Labour because he disagreed with its not persevering with Rogernomics, so things are unlikely to change.

Alister identifies the Reserve Bank, legally independent of any political influence, as the key institution in enforcing structural unemployment. Whenever the unemployment rate fell (6% was seen as the trigger point) the Bank, in the person of its long term Governor and leading New Right ideologue, Don Brash, would manipulate interest rates to keep the number of unemployed at a steady 100,000-150,000. The Bank’s obsession is to keep inflation down, within its statutory band, and more people in work could drive up wages and thus lead to higher inflation which, as we all know, is A Bad Thing (for Big Business).

Part of the brainwashing of the past two decades has been aimed at making us accept mass unemployment as a permanent fact of life. No recent (or present) Government has proclaimed any commitment to full employment. Yet, for nearly four decades, New Zealand had exactly that, making us virtually unique in the capitalist world. Of all the politicians interviewed in this documentary, only Jim Anderton mentions full employment as his goal, and his regional development programme, in the 1999/02 Government, has created jobs in the most desperate areas. But, essentially, such policies are aimed at alleviating unemployment, not eliminating it.

Full employment has been consigned to the historical rubbish bin, along with other funny old relics like free education and publicly-owned assets. This didn’t just happen as some inevitable, organic process – it was deliberately done as a coldblooded policy, for the benefit of a few and the impoverishment and disempowerment of the many. All New Zealanders should see this documentary, to learn how we got to where we are today, how the society that we knew was stolen from us, and who stole it.

Alister’s work doesn’t get screened on TV – which is a great pity, because this is the real Crimewatch. But, following the phenomenal success of "Someone Else’s Country" (which sold thousands of copies, completely outside the usual commercial channels) he can no longer be ignored. "In A Land Of Plenty" got high profile exposure on the International Film Festival circuit (I recommend that people see it in conjunction with "Lumumba" which, with its grisly true scenes of political murders, dismemberment and incineration, shows how political changes are effected in the Third World). For 30 years Alister has made a living as an independent documentary maker, and one with a distinct political viewpoint. He eschews the old shibboleth of "balance": "That’s not my approach – which is to research a subject very thoroughly and present my conclusions. In a sense I’m being a social historian rather than a current affairs programmer" (New Zealand Herald, 20/7/02; "Plenty but not for all"; Geoff Cumming). Once again, we owe him a heartfelt vote of thanks.

Copies of "In A Land Of Plenty" can be ordered from Community Trust Media, Box 3563, Wellington; fax (04) 4725259. For individuals, copies cost $30; groups $70; institutions $110. All prices include GST, packaging and post.



Alan Marston presents a regular show on Auckland regional channel, Triangle TV. This 30+ minute programme features the 2001 Roger Award event (held in central Auckland, in April 2002), and a lengthy interview with CAFCA’s Murray Horton. So it’s not the usual sort of thing seen on TV. Copies cost $19 (including GST, packaging and post). Order them from PlaNet TV, Box 6594, Auckland 1;

Both "In A Land Of Plenty" and "Right Rogered" can be hired from CAFCA, for one week, for $10 each (including postage). Send payment, in advance, to CAFCA, Box 2258, Christchurch.

It takes a lot of work to compile and write the material presented on these pages - if you value the information, please send a donation to the address below to help us continue the work.

Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2002.


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