Alister Barry, the founder of Wellington’s Vanguard Films, is well known to CAFCA. We have been working with him since he asked our help to research the early 1980s’ TVNZ series on New Zealand’s Vietnam War, which he scripted. In the mid 80s we worked with him on “Islands Of the Empire”, the definitive study of the US/NZ military relationship (that film remains relevant today – a specially compiled extract was screened at the 2005 Christchurch memorial meeting for Owen Wilkes); at the end of the 80s Alister came back to Christchurch to work on Vanguard’s “Rebels In Retrospect”, a study of the Christchurch Progressive Youth Movement (from whence both CAFCA and the Anti-Bases Campaign ultimately sprang) of the 1960s and 70s. In 1985 CAFCA hosted the world premiere of “Islands”, in Christchurch; in 1996 we did the same with his “Someone Else’s Country”. More recently, Alister was a 2003 and 04 judge for the Roger Award for the Worst Transnational Corporation Operating In Aotearoa/New Zealand. He is an old friend of ours, one of the country’s best documentary filmmakers and a national treasure. Ed.

Alister Barry’s first film, made at home, was “Mururoa 1973”, a look at French nuclear testing. He subsequently made “Someone Else’s Country”* (1996), originally banned from TV because its direct honesty was deemed to exhibit a “Left-wing bias”. A study of neo-liberal unemployment, “In A Land Of Plenty”** (2002), followed. Barry’s thesis was that the jobs were deliberately destroyed, a means to privatise and deregulate. A generation later, and it’s gratifying to report that Barry hasn’t changed. His present study, the Lange and Bolger attacks on schools, has all the integrity and all the thoroughness of his earlier documentaries. It won’t get the wide commercial screening it merits, so see it when you can.

*See Watchdog 82, August 1996. To quote Gordon Campbell in the Listener (8/6/96, “Power From The People”): “Astonishingly, his new movie “Someone Else’s Country”, is also the only historical overview of the Rogernomics era”. ** Murray Horton’s review of “In A Land Of Plenty” is in Watchdog 100, August 2002, which can be read online at http://www.converge.org.nz/watchdog/00/07.htm. Except for “Mururoa 1973”, all of these earlier films mentioned above are available for hire from CAFCA (video only). Contact CAFCA for details. Ed.

Forcing An Anti-Social Agenda On the Country

The topic of the earlier films was the economy; here it’s education. Too often these have been seen as unrelated. If there is an overarching virtue of “A Civilised Society”, it’s that the film is consistent with its predecessors. Barry understands that the various restructurings had common elements. Each of his films critique the way in which an anti-social agenda was forced on the country. In each case the neo-liberals claimed that they were rescuing us from “special interest groups” which had ‘captured’ policy for themselves. They wrote a fiction in which the villains were trade unionists. In this variant, they’re teachers. 

“Provider capture” is a theological tenet of neo-liberalism, a dogma that insists that responsibility for making policy should be taken from those who know what they’re talking about and handed to economists. Teachers are biased, says the theory and will feather their own nests, whereas economists are uniquely dispassionate and concerned with the good of the nation. You have to hand it to the neo-libs. They’ve spread their doctrine far and wide.  They’ve created hospital chaos by keeping doctors and nurses away from health policy. They sidetracked proposals to provide a national retirement income or to fund university education by the claim that the basic principle of universality was really “middle class capture”. Sinister sounding, isnt it? 

Alister Barry has shots of delegates at education conferences being addressed by Ministers and other agents of destruction. You can see their frustration as they have to hear out yet another person with control over their working lives utter yet more nonsense. We could have had more of these scenes. That way, audiences too young or too old to have experienced a Rogernomic workplace would have shared the agony. They could have heard for themselves the trite management-speak, the empty platitudes that captured a society. It would have provided a grim comedy. Nothing ages as fast as the latest fad. 

As it is, we keep seeing Lockwood Smith. Even when he was National’s Minister of Education in the 1990s, and certainly in the immediate aftermath, Smith was lampooned. This had as much to do with his personal qualities as with his work, which was neither better nor worse than the Ministers who came before him or after him. We can expect a revisionist history to claim that the failings were an individual’s failings, when they are in fact systemic. Smith was a scapegoat. Few evaded responsibility as determinedly as David Lange (as both Labour’s 1984-89 Prime Minister, and Minister of Education for some of that time, Lange was the father of Tomorrow’s Schools. Ed). In the 90s, whenever there was bad news on the education front, Lange used to blame National for betraying the spirit of Tomorrow’s Schools when all they were doing was enacting his ideas. The crises to do with poor and unequal resourcing were the direct result of the Lange reforms. What the former PM and Minister of Education, a victim of Treasury Capture, never grasped was that they were the intended consequence.     

Employment Contracts Act Was Key Weapon

Barry’s judgement is sure. He picks out National’s 1991 Employment Contracts Act (ECA) as integral to the neo-lib attack on education, as it put workers on individual contracts in order to divide and rule, to weaken morale, and, above all, to cancel the ability of trade unions to negotiate collectively. You’d have to be credulous to believe there was any other purpose, and the teachers’ unions were not at all credulous. They knew that the ECA would be divisive, that salaries would slip, that school cultures would crumble. They were meant to (it’s this point that Sharon Beder makes in her “Suiting Themselves”, which I review below).

Of course teachers were not to capture curriculum. What would a science teacher know about designing a science course? Discussing curriculum, Smith, who usually affects an urbane, dismissive manner, gets excited. Subject-based learning, he gushes, is hopelessly obsolete. It’s been around since the 1940’s! The 1940’s! Amazing! In reality it’s been around for millennia, if only because it reflects the way we human beings have found it convenient to talk about our world. We’ve evolved concepts like the arts or the sciences not because they denote either immutable truth or dated prejudice but because they’re names that the conversation of civilisation has found convenient to employ in order to describe our habits and understandings. For the Lockwood Smiths of the world that’s their sin. Smith and his mates are “radical”. No other adjective figures as often in Barry’s film. The NZ Treasury, who wrote the holy texts, were social engineers on a grand scale. They thought - all the revolutionaries think this - that they were reclaiming a lost human nature. We are at one with our true selves, said the neo-libs, when we are alone, red in tooth and claw, looking after Number One. 

Much was made of the idea that existing schools were designed on an industrial model. They were “Fordist” (as in Henry Ford, who created the assembly line system of production – cars, in his case. Ed.). They reflected a 19 th Century need (see the remarks by National’s Leader, John Key, in my below review of Roger Moody’s “Rocks And Hard Places” for a discussion of this propaganda gambit). To anyone who had been bored in a classroom - that’s everyone - that’s not hard to sell. We hear Lange sneer at the “centrally-driven authoritarian” system that he was replacing. It was run by dullard teachers and those ever-faceless bureaucrats. It had failed women and Maori. The implication was that Tomorrow’s Schools would serve the learner, delivering the young and the free and the cool to a glorious future. Liberated from tyrant adults, children would learn at their own pace in their own way   

In a country cutting public spending to the bone? A country dedicated to enhancing private profit? Yeah, right. The mundane truth was that the restructurers wanted to free students from the 19 th Century only in order to chain them to the 21 st Century’s more stringent demands. We’re reminded of a principal - make that CEO - who claimed he’d be relaxed about renaming his Auckland institution Avondale Pepsi College. Now that’s provider capture.  

Barry emphasises the controversy over bulk funded independent schools. Again, it’s a wise choice in that the provision of bulk funding and the creation of boards of trustees empowered to spend the funds were to be the means to complete the revolution. Barry gives space to leaders of the Post Primary Teachers Association (PPTA) to refute the radical rants. The essential links between bulk funding, the ECA, privatisation and National’s obsessive need to abolish zoning are made clear. 

Bulk Funding To Hasten The “Creative Destruction”

The neo-libs assumed that trustees, sound business types surely, would see it their way. But all too often they didn’t. Despite the frenzied attempts of the cultural revolutionaries to persuade them otherwise, parents still identified with teachers. To hasten the creative destruction - a phrase much admired by neo-libs - bulk funds were set at a level that forced schools to lay off (expensive and mature) senior teachers, especially if they taught “non-market” disciplines. The Government hoped for fewer teachers and more computers. Less money meant more reliance on bake sales and ensured corporate capture. 

The Rogernomes never lost a chance to lecture us about the flippant spending habits of past governments. We had to pare costs and account for every cent. To achieve this, Government departments were divided into stand-alone units. Budgets were to be specific so that inefficiency would not be subsidised. Education being one of the State’s big budget activities, you’d expect the discipline expected of it to be extra tight. Yet bulk funding, which gives a few people within the schools discretionary power, is the negation of the new ethos. This is a contradiction only if we take the Rogernomes at their word, if we suppose, that is, that they were trying to stretch a dollar. They weren’t. The real agenda was the destruction of the public school system. The few schools which willingly adopted bulk funding did so as they were bribed with extra money. 

A scene from Barry’s 2002 film “In A Land Of Plenty” comes to mind. Young Treasury hacks, the first generation of neo-libs in charge, are seen planning a “poverty line”, calculating the amount of benefit that would be low enough to force the unemployed to take up work, less than what the lowest wage earner might scrounge, but just high enough to ward off starvation. Despite the blarney about the invisible hand of the market and all that, the reshaping of our society was always rationalist. It was an engineering exercise by ...  bureaucrats. Just as schools were to be taken apart and put back with a new function (goaded by a temporary flush of cash to the compliant) so was the non-inflationary economy to be fashioned through the deliberate creation of unemployment (which would depress workers and wage demands). Carrots and sticks.    

Of course when it came to enabling the State to wither away the public service, Lange and the neo-libs made a point of setting up a centrally driven authoritarian regime. Barry is showing us that while Rogernomics claimed to be about relevance and standards, it was really about power. In order to entrench its own more rigid control, it ridiculed authority when authority served a public interest. Meanwhile, it insulted its civil servants with its message that the airy aphorisms of managerialism were wiser than grounded experience. 

Think again of “provider capture”. Would the Rogernomes use the concept to remove financiers from influencing financial policy, or to remove developers from influencing town planning policy? Neo-libs in fact do the opposite: they try to shut out rival visions to those of their fellow true believers. Yet, despite the mad wisdom of managerialism, we all know that if you want to do well, you have to know what you’re doing. We might ask the managerialists why the All Blacks don’t sack the coach, Graham Henry and the manager, Sir Brian Lochore. Lochore was once captain, for heaven’s sake. When it comes to capture, that’s about equivalent to the head of New Zealand Education Institute (the trade union for primary school teachers. Ed.) being made Minister of Education. Why doesn’t Alan Bollard, the Governor of the Reserve Bank, select the test side? Why doesn’t Rodney Hide, Leader of the ACT Party, take off his “Dancing With The Stars” shoes and coach it?   

Barry, whose understanding of his topic is deep, frames the film with CE Beeby, Director of Education between 1940 and 1960. It was Beeby who demanded that all pupils, regardless of circumstance, be given an opportunity. He put public education at the core of the national endeavour. It was Beeby’s reforms that allowed a State house kid from Bryndwr named John Key to get a start in life. When, in “A Civilised Society”, an art teacher says she wants her pupils to be well rounded, able to think for themselves, confident and aspirational, she is honouring the Beeby legacy. So is Jane Kelsey, who refers to the “intrinsic value of the human being”. Schools, Kelsey suggests, need to teach that “everybody had a role to play”. That’s how we become a civilised society. It is little wonder that Lockwood Smith tried so hard to expunge the 1940s from our collective experience.

“Rocks And Hard Places:
The Globalization Of Mining;”
by Roger Moody

Roger Moody has, of course, been very well known to CAFCA members and Watchdog readers for a quarter of a century. We toured him through NZ in 1990. As already mentioned, we reviewed his previous book, “The Risks We Run”, in Watchdog 111, April 2006. “The Gulliver File”, Roger’s 894 page encyclopaedia on mining companies, was reviewed in Watchdog 72, November 1992. “The Indigenous Voice – Visions And Realities”, edited by Roger, was reviewed in 62, September 1989. “Half Left: The Challenges Of Growing Up ‘Not Quite Normal’, co-authored by Roger and his late brother Pete, was reviewed in 58, January 1988. In 1991, we co-published his book “Plunder”, about Rio Tinto Zinc (represented in this country by Comalco and its notorious Bluff aluminium smelter). Roger is a world expert on mining and mining transnationals and, more importantly, an old friend, whom we, sadly, haven’t seen for far too long. Ed.

 “There is a disconnect” John Key, the Leader of the Opposition, told West Coasters in June 2007, “between what the public think about mining and what actually happens over here. People should shake their 19 th Century idea about what mining is, propagated frankly by the Greens, with no idea about what modern mining practice actually is. We’re protecting ourselves against things that are never going to happen” ( Press, 7/6/07).

Key made his remarks in the course of touting the Dobson River hydro project. What’s wrong with a dam on a river which is pretty much out of the way? If not hydro, what? Key was tapping into a local Westland resentment, but the rhetoric is as familiar as a power pylon. The real disconnect is in the logic of the Prime-Minister-in-waiting. Key says “people” are deluded, two centuries behind the times, led astray frankly by the Greens. On the other hand the Greens are a ludicrous minority, uniquely ignorant about the benign habits of 21 st Century mining corporations. Which of these opposites - if either - does he mean?      

When we look at 19 th Century ideas, we don’t expect to see much greenery. Key possibly meant that our present notions about mining are shaped by our sense that back in the Industrial Revolution officialdom cared little for the health of the environment - or of miners. That’s obviously true, but why is it true? It’s because ordinary people didn’t have the ability to defend their interests against the owners of Europe’s mines and mills, who were free to send children up chimneys and down mines with no Nanny State to worry about.

Key would do well to read “Rocks And Hard Places”, a survey of mining that is succinct yet thorough. Roger Moody is a reliable guide. He has devoted years to unearthing the facts about how mining companies actually operate. That’s more useful than repeating industry spin, as favoured by campaigning neo-liberal politicians. In 2006 I reviewed Moody’s important analysis of “political risk insurance” *. This, essentially, is the way the rich world governments hosting the head offices of Big Mining - for example, the US, UK, Australia, Canada - back the transnationals so that their exploitation of (usually) poorer, distant countries is undisturbed. The present book shows why they need their insurance    * Jeremy’s review of “The Risks We Run” is in Watchdog 111, April 2006, which can be read online at http://www.converge.org.nz/watchdog/11/10.htm. Ed.

It’s Still The 19 th Century For Mining TNCs In The Developing World

From both studies two conclusions emerge. The first one, Moody’s central point, is inescapable. Mining might have cleaned up its act in Organisation for Economic Cooperation and Development (OECD) countries but it’s still business as usual in the developing world. There, to borrow a phrase from Key, it’s still very 19 th Century. It comes as no surprise that mining is a nasty business. We knew as much, but only in general terms. Moody documents the type and extent of the damage. 

Moody’s second conclusion is more significant in that some might find it counter-intuitive. The Key assumption is that freeing up Big Mining so that it can increase production will trickle down as more overall wealth for all. Moody doubts that it happens this way, a conclusion that John Key would regard it the greenest of folly. Key is accustomed to a conventional wisdom that we can be efficient or we can be nice. How many Westland trees should be chopped down and how much coal should be dug up if the economic benefits come at the cost of a degraded countryside? It’s easy to say we are condemned to choose either jobs or snails*, but Coasters expect both. Key is providing his choice. Moody’s work, however, is based on a conviction that picking between a better balance sheet and a better environment is a false dilemma. *The Save Happy Valley Campaign is waging a very vigorous struggle to protect endangered native snails from coal mining in Buller. For details see Watchdog 112, August 2006, “Stripping Aotearoa Tonne By Tonne: A Critique Of Solid Energy’s Coal Mining In Buller”, by Frances Mountier, which can be read online at http://www.converge.org.nz/watchdog/12/06.htm. Ed.

The “Minerals Curse”

In the “ Third World” they talk about a “minerals curse”. The more oil or gold your country has, the worse off you’ll be. Moody offers Bolivia as an example. On a per-population basis it has the most resources of any South American country yet it has the lowest standard of living. And the poorest parts of the poor country surround the mines. To some extent the cause is internal, because easy booty fosters nepotism and bribery, but it is facile to conclude that this absolves the foreigners who forged these dependent relationships. As Moody points out, the biggest crooks have often been the closest of mates with Big Mining and Big Mining’s home governments. Indeed, it was the patronage of the West that created grotesque excesses such as the billionaire Mobutu in the former Zaire(now renamed the Democratic Republic of Congo. The neighbouring country is just plain Congo. Ed.). Because he presided over vast resources in a strategic part of Africa, Mobutu lucked out. He was a Cold War baby and perhaps a special case (the late President Mobutu was the incredibly corrupt dictator of Zaire from the early 1960s until his overthrow in the late 1990s. He, Indonesia’s Suharto and the Philippines’ Ferdinand Marcos were the most corrupt and brutal dictators of that era. All three were much valued allies of the US in its murderous global war against Communism and all three were overthrown by their own people. Ed.

However, the pattern of corruption and poverty is systemic, aided and abetted by the very institutions charged with helping the disadvantaged. In 1992, when neo-liberalism was running hot, the International Monetary Fund (IMF) set out three conditions for advancing loans. Mines should be converted from public to private ownership; recipient governments should privilege exports over attempts to foster internal development, and “qualified firms” (the big transnationals) would be preferred. These commandments are a recipe for increased foreign control. They’re a sure way to deepen inequality and official malfeasance. Having dug their holes, Big Mining and the IMF wanted to keep digging. Local governments were being told to relax foreign exchange controls, ease up on their tax laws and loosen their labour markets. The world’s metals were lying around, inert, open for extraction. 

There are sins of omission. Moody writes that in Sierra Leone a tailings dam collapsed, leaving 10,000 homeless and spreading water-borne diseases like malaria, cholera and polio. The dispossessed were relocated to inferior land where it is harder to tend the soil. A range of spiralling plagues, another inter-generational collapse, had been unleashed. And there are sins of commission, when governments are directly complicit. In the Democratic Republic of Congo in 2004 a mining company’s trucks ferried troops so they could kill 50 unarmed rebels.

A 2006 survey identified the world’s ten most polluted sites, some of which - thanks to international protest - have been shut down. They’re in Russia, India, China, the Philippines and Zambia. By the time it runs out of rocks one Indian mine is expected to affect the health of 3.5 million people. Moody cites a World Bank man who stated that “private investment is the primary goal”. In other words, a transfer of assets to private - and usually foreign - owners is the whole point. It’s not, as apologists like to say, the means to help development. It’s the end. Perhaps that’s why the banker continued by noting that the result was “health risks, property takings and damage, changes to traditional life and culture..., the wastage of the country’s non-renewable resources, as well as ... violence and [the] weakening of the quality of governance”. If you’re in Africa or Asia or the Pacific, having valuable rocks under the ground makes you poor. It also raises the chances of violence ( Nigeria’s oil industry is another notorious example). 

Moody has a section on the pressure brought to bear on the American government, and how President Jimmy Carter’s 1980 law mandating a cleanup of domestic toxic sites was undermined by a polluters’ tactic of filing for bankruptcy or absconding. In 1995 a Republican Congress ended a polluter-pays tax which had funded the programme. That is, the people who brought us the user-pays ideology, the characters who prattle on about taking responsibility for our actions, abandoned basic principle when it affected their profiteering mates.

Last year the US brought in “remediation” to bypass anti-pollution laws, with cosy chat about how nice people could be trusted to take voluntary action. Moody remarks: “Urgently needed was a new project to deflect growing public alarm. It should appear innovative, inclusive and committed, but without making too many hard commitments. Above all, it must divert attention away from specific corporate misdeeds by involving the industry per se in civil discourses about sustainability and corporate social responsibility”.

Marginalising Critics

In OECD countries the tactic is to marginalise critics. They are left off research panels - the panels, that is, that have been set up to soothe critics’ claims. “Partnerships” are forged under the auspices of corporations and governments with all those stakeholders we hear about. Moody reminds us of an emblematic 1999 moment when Rio Tinto addressed the annual elite gathering of movers and shakers at Davos, Switzerland, backed by Kofi Annan, the then head of the United Nations. 

Unless they’ve already compromised their objectivity by caving in to Big Mining, conservationists are held to be “political”, with the implication that unlike, let’s say, BHP and the governments of Australia and America, they have axes to grind. The hypocrisy is absolute. We’re supposed to accept that, yes, nasty things happen, but that’s the way of the world. At least the money men make us all richer. Maybe a few more species have gone extinct and a few more rivers have run dry, but that’s the price we have to pay. Moody shows that this not the case. An unfettered drive for profit is a loser, not just environmentally and socially, but economically. His topic here is the poorer part of the world, but any similarity his analysis might suggest to NZ is not a coincidence.    

This brings us back to the Coast. John Key wants to think that mining is now responsible. To the extent that he’s right, it’s due to agitation from an informed citizenry and the restraints imposed by public authorities. We’ve been greened. In those parts of the world described in such detail by Roger Moody, places where there is little or no accountability, landscapes are being laid waste and miners are dying at a rate as great or greater than ever before. It’s true that in some instances technology has enabled minerals to be extracted more efficiently, but that is countered by the greater scale and greed of modern mining. In Key’s terms, mining is still 19 th Century. And that’s what makes it so 21 st Century.

“Suiting Themselves:
How Corporations Drive The Global Agenda”;
by Sharon Beder

200 years ago, at a time of rapid change, the British were apt to talk about “the spirit of the age”. Germans pondered the “Zeitgeist”. Academics these days go on about paradigm shifts. They’re all ways of describing the way the received wisdom and the way societies conduct themselves change. At the time we don’t recognise these tipping points. An outfit called the World Economic Forum (WEF), a private club for global business bigwigs, has set up a Centre for the Global Agenda, announcing an intention to “serve as a catalyst in defining, monitoring and driving the global agenda. It will act as a hub of networks and alliances on important global issues and will play a key role in the world’s international system”. The WEF wanted to engineer a paradigm shift. 

It sounds conspiratorial, a case for 007, but the WEF is one of several such outfits. It makes the news annually when the deep thinkers gather in Davos, Switzerland, where celebrity corporates compete in lecturing starstruck journalists. The WEF’s role is to make explicit the daily chat between its members and to act as a conduit for influence peddling. Its job is propaganda. So when Sharon Beder starts her analysis of the international business elite with a look at WEF she does so because they express the received wisdom. WEF wants to “set the agenda” in the sense that it wants to nudge the rich and powerful, its own members and their peers, to its new Zeitgeist. The essence of the WEF vision, Beder argues, can be detected in a remark made at its 1999 Davos gathering by its President Klaus Schwab. Klaus told his mates that the “sovereign state has become obsolete”.   

The wish was meant to be father to the fact. Beder points out that the 1970s had been a rough time for business. The stock market was flat and profits were falling. Worse, because the business cycle always deals out temporary setbacks, was that between 1969 and 1972 the US “Congress enacted a significant tax reform bill, four major environmental laws, an occupational safety and health act, and a series of additional consumer protection statutes. The Government also created a number of important new regulatory agencies...investing them with broad powers over a wide range of business decisions”. Business wasn’t hip. As Bob Dylan strummed it, the times they were a-changing. 

No wonder David Rockefeller, founder of the Trilateral Commission - one of the richest and most extreme of the lobbyists - complained that “somebody has to take Government’s place, and business seems to me to be a logical entity to do it”. One of his mates, the historian Samuel Huntingdon, warned of a burgeoning “excess of democracy”. Profits don’t need those meddling Nanny Staters with their threat of public participation. But how to conjure up a new spirit of the age? How to install neo-liberalism? Beder quotes a 1995 Australian book, superbly titled “Taking The Risk Out Of Democracy”. One sentence summed up the corporates’ task: “The tactic by which such changes in the political agenda are secured is for corporations to search out articulate conservative economists and amenable academics, gather them together in lavishly funded tax-deductible think tanks and pay them handsomely to inundate relevant debate with an endless stream of book and research reports”.    

Rogering New Zealand

The dismal culmination of this project in this corner of the world has been documented by Nicky Hager. “The Hollow Men” (reviewed by Jeremy in Watchdog 114, May 2007, which can be read online at http://www.converge.org.nz/watchdog/14/03.htm. Ed.) is remarkable. It is the most detailed expose that has yet appeared, certainly in NZ and possibly the world, of how the think tanked operate once they have captured a political culture. Having tired of firing their slingshots into the once implacable walls of Parliament, the Hollow Men built their hollow horse and left it outside for all to admire. They knew that allies inside Parliament would convince their mates to drag the wooden horse into the Beehive. 

Hager’s expose of public relations men and religious cults is sad reading, but its content is not surprising. Around the world journalists and politicians have marvelled at the beauty of the wooden horses. They must be gifts from the gods. They might even be the handiwork of Overseas Experts. What harm could come from a closer look? NZ’s gaudiest horse was copied from a design by an American, the Chief Executive Officer of US Steel. In 1972 Roger Blough inspired “Roger’s Roundtable”. In 1969 Blough had founded a steel and construction lobby he called the Construction Users Anti-Inflation Roundtable. This was an early example of the now ubiquitous idea that Big Business wants nothing more than price stability. In fact Blough’s outfit was lobbying against the ability of unions to negotiate wage increases that kept pace with inflation.  Soon NZ was to have both a Roundtable and a couple of Rogers of our own (Sir Roger Douglas, Minister of Finance in the 1984-90 Labour government, and Roger Kerr of the Business Roundtable. These two leading architects of Rogernomics have been immortalised in the annual Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand. Ed.).

It was not long until opinion makers meeting in the American capital established a “Washington Consensus” not only about what needed to be done - the neo-liberal agenda was well known - but, more significantly, about how to implement the agenda. The first need was a crisis, because without a disruption to their habits, politicians could not be trusted to break with their habits of compromise and moderation. A think tanker suggested that “it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform. For example, it has sometimes been suggested in Brazil that it would be worthwhile stoking up a hyperinflation so as to scare everyone into accepting those changes that would finally make price stabilisations attainable... Is it possible to conceive of a pseudo-crisis that could serve the same positive function without the costs of a real crisis? What is the least unpleasant type of crisis that seems able to do the trick?”.

These were the 1992 musings of John Williamson, the leader of a US think tank, the man who coined the “Washington Consensus”. Williamson had the gift of the gab, so his take on tactics might be one of the more explicit, publicly available statements. It might seem that talk like this merely states the obvious, but Williamson was not thinking about the many countries the Marines have invaded*. Crises in the “ Third World”, where military forays are assumed necessary, do not have to be pleasant. The new, somewhat more restrained gambit of “creating a crisis” is what you do in the rich, developed world. *See Jeremy’s reviews of Stephen Kinzer’s “Overthrow: America’s Century Of Regime Change From Hawaii To Iraq” and John Perkins’ “Confessions Of An Economic Hitman”, both in Watchdog 112, August 2006, and which can be read online at http://www.converge.org.nz/watchdog/12/08.htm. Ed. 

But in fact, even in this context, Williamson was giving a name to established practice, one clear example being the 1984 election night currency panic that ushered in Rogernomics. While Beder is a New Zealander, now based in Australia, her frequent references to NZ are integral to her international theme. She opens a chapter with a 2002 quotation from John Gray, a UK philosopher: “The neo-liberal experiment in New Zealand is the most ambitious attempt at constructing the free market as a social institution to be implemented anywhere this century”.

The Washington Consensus & Crisis Creation

For a while, following the announcement of the Washington Consensus, crisis creation talk was all the rage. Hacks in downsizing neo-liberal regimes loved the smell of manly action and the flattering proximity to power. In one typical excess, an Ontario, Canada, Education Minister, a nonentity whose own schooling had been modest, was selected precisely because of his lack of interest in education. John Snobelen launched a downsizing assault on standards in the province’s public schools with a jaunty: ‘If it ain’t broke, break it”.

Beder discusses the Australian version of what became a global scourge. The leading Aussie neo-lib thinktank, the Centre for Independent Studies (CIS), bemoaned “strong professional cultures” that had survived in public services. The CIS saw that bad old habits had to go because the “natural tendency of individuals” to respect public institutions and services was incompatible with the needs of “an entrepreneurial, profit-driven company. There were quite strong opinions expressed by people in the ministry that there were certain things that were important in the way they did business.... Things like professional integrity, strong standards of professionalism, the ‘one-stop shop’ concept, a total life-cycle approach to doing business, a belief in certain things like plant replacement policy”. 

Those pesky natural tendencies of individuals are best curbed by removing their ability to influence public policy. Beder notes that decisions are made by lawyers and officials, not by experienced citizens or by elected politicians. Presented as rule-based objectivity, this is in fact the way in which the suits suit themselves by evading scrutiny and accountability. It’s another reason the business elites never tire of ridiculing professionals, especially those with some residual mana who are connected to important government roles like health (doctors) and education (teachers).      

“Until the 1980s”, Beder continues, “developing nations got most of their foreign capital through loans from banks, governmental and international institutions, and from aid. These sources of capital declined during the 1980s, to be replaced by direct investment by private investors. At the same time, interest rates increased and commodity prices fell, further depleting the capital that poorer countries had access to”. By replacing loans with foreign direct investment (FDI) governments have surrendered much of their ability to invest in the public interest at low and predictable interest rates. Private creditors are in it to make money. Beder points out that profits on FDI typically range from 16% to 30% a year. These are funds that could be invested locally for the public. Instead they go offshore into private hands. And although we are told that FDI is efficient and benign, the evidence suggests that the more profitable projects tend to be speculative.    

Beder concludes with a discussion of the defeated 1990s’ Multilateral Agreement on Investment (MAI)*. The MAI, intended to serve as a global constitution for private investment, would have removed elected governments almost entirely from public policy. The only items up for discussion were to be the severely limited exceptions to absolute rights to FDI that might be allowed. Beder reminds us that the NZ government of the time was among the true believers opposing the right of governments to set labour and environmental standards. So far international outrage has thwarted this disaster.  

*See Jeremy’s review of the United Nations Conference on Trade and Development’s “International Investment Agreements: Key Issues” in Watchdog 109, August 2005, which can be read online at http://www.converge.org.nz/watchdog/09/08.htm and Bill Rosenberg’s article “WTO ‘New Issues’ = Old MAI”, in Watchdog 101, December 2002, which can be read online at http://www.converge.org.nz/watchdog/01/01.htm Ed.

Replacing Rules For Companies With Rules For Governments

This is an excellent introduction to the politics of globalisation from a good researcher. More than most, Beder balances an appreciation of the global situation with detailed empirical knowledge. Her “Power Play” which I reviewed in Watchdog 104, December 2003, and which can be read online at http://www.converge.org.nz/watchdog/04/12.htm) is a stimulating analysis of how these policies allowed a huge ripoff in world electricity.   

It’s called deregulation. Re-regulation would be more accurate. Beder concludes: “Given the thousands of pages of rules that the World Trade Organisation now presides over, ‘free’ trade is not about doing away with rules altogether, but rather replacing rules for companies with rules for governments, and replacing rules that protect citizens, consumers and the environment with rules that protect and facilitate traders and investors”.