REVIEWS

’Twas the week before Christmas and all through the House… our Government crowed about achieving 1.1% growth in gross domestic product (GDP) this quarter, and slashed our methane emissions reduction target. All through other houses, “hardship” withdrawals from KiwiSaver peaked and half a million families relied on foodbanks for Christmas dinner and prezzies for the kids. Our Minister of Finance promised she wouldn’t “splash the cash” this election year, but would nevertheless continue with tax cuts and business subsidies. With growth economics like this¹, you might well ask, who needs recessions?

What We Do Need Is A Major Change In Economic Strategy.

“Degrowth” doesn’t mean recession or depression; it means turning away from economic growth statistics as the goal and measure of Government. It means active policies to diversify economic activity away from carbon-emitting, environmentally destructive over-production for profit and hyper-marketed consumption, and towards putting people, planet and, in a word, care at the centre of our political economy. Its aim is “a good life for all” everywhere, not an “imperial mode of living” for the few.

The Future Is Degrowth² is a comprehensive and very interesting review of critiques and debates about capitalist growth, its environmental and social impacts and global injustice – and about what we can do instead, as part of a movement for transformative change under the label “Degrowth”. This goes way beyond tech-based green capitalist solutions to climate change.

Because of the material impossibility of a “new green deal” for everybody, and because – as they explain - capitalist economics is inherently driven by and for growth/profit/wealth accumulation. Capitalism is a socially-constructed relationship between capital, labour and nature; between the planet, the people, and the rich. It’s not just abstract economics or theory. It’s a relationship that must and can be changed.

This book was first published in German by Schmelzer and Vetter in 2019. They were joined by Vansinjan for this edition, to update and extend it for a global audience. And it deserves one. It is indeed a guide through a huge array of research, analysis and debate in several languages. It is a guide also in that it identifies and clarifies, for example, seven streams of critique, three principles in five policy areas, etc. The authors’ goal is to show that the Degrowth debates pose key questions that all emancipatory economic alternatives need to address – the challenges of ecological destruction, capitalist ideology and the industrial, hierarchical, imperialist mode of production.

Despite gaps and biases, the Degrowth literature offers answers, they say – or, in some cases, at least principles for developing answers. Because one of Degrowth’s answers/principles is that we should make our economic and social policy decisions democratically, collectively, and at the workplace, community, regional and/or national level most appropriate. So, we shouldn’t get too far ahead of ourselves by prescribing a magic pill.

Degrowth debates comprise multiple analyses and multiple, interlocking solutions. A holistic approach is taken to political economy, and to everyday life. This is about transformative change. I’ll zip through the very interesting and educative first sections of the book on growth and critiques of growth, so as to focus on what they suggest we do about it.

Returns On Capital Require Constant Expansion

The authors begin with an analysis of growth as a core feature of capitalism, which can be understood as “a society driven by accumulation”. The hegemony of the growth paradigm as a truism of economics, as the goal of Governments, as “natural, necessary and…linked to progress and emancipation” has only been so since the 1950s. Gross domestic product (GDP) became progress’s measure in both capitalist and actually-existing socialist nations. Growth as a social process – the set of social relations driving and resulting from capitalist accumulation – is an older concept.

Third, growth is a material process – “the ever-expanding use of land, resources and energy which fundamentally transforms the planet and increasingly threatens to undermine the foundations of growth itself”. In the early 20^th Century, human-made stuff accounted for about 3% of all biomass but by 2020 had surpassed it. The three perspectives have their own dynamics but as interlinked processes they are now fundamentally shaping how we now live, they say.

Economic growth can be analysed as a metabolic process: non-circular flows of materials and energy extracted from nature, passing through society, processed into some useful form, put to work or consumed, and eventually emitted as waste. Growth necessarily requires ever-increasing throughputs of materials and energy. Since the 1950s that energy has come from exponential growth in the use of fossil fuels, which continues to surpass growth in renewable energy. By 2009 we had already exceeded five out of nine planetary boundaries.³

But our focus on GDP and “the economy” disguises these unsustainable material flows as monetary flows. The hegemony of monetary growth helped overcome the focus on equality and redistribution in the post-Depression and post-war years, depoliticising the economy. The idea that economies should continue to grow at a “normal” 3% a year is not only an ecological nightmare, the authors point out, but a fantasy. It would mean doubling the size of the global economy every 24 years.

Critiques Of Growth

A large section of the book brings together distinct but overlapping strands of critique – ecological, socio-economic, cultural, feminist, critiques of capitalism and industrialism and a North-South critique. These have synthesised into the “Degrowth” movement. The name “Degrowth” is from the Adbusters/Occupy Wall St era, riffing on the hegemony of “growth”, seeking to “dismantle but also transform” the myths and promises of the growth paradigm.

Together, these critiques take seriously the material dimensions of growth, and what this means for global justice, without jeopardising the social, cultural and democratic achievements that have been achieved through social struggles. All the critiques recognise that humans and non-humans are part of complex interdependent networks and relationships. A purely economic description conceals rather than explains our relationship with nature.

These critiques are deep streams of research, scholarship, debate and activism, referencing many works I’d love to read. But let’s zip through them. Ecological critiques say constant economic growth is destroying the foundations of human life and cannot be made sustainable; growth and environmental destruction cannot be decoupled. They draw on thermodynamic arguments by Nicholas Georgescu-Roegen, ecological economics, the environmental justice movement and eco-Marxist analyses of “social metabolism”.

Growth will inevitably diminish as it meets material and thermodynamic limits, but infrastructure built around fossil fuels (highways, container ports, Shane Jones’ gas terminal) locks us into their continued use. Socio-economic critiques of growth and over-consumption⁴ say GDP mismeasures our lives, so stands in the way of wellbeing and equity for all. Cultural critiques show how the pursuit of economic growth produces alienating ways of working, living and relating to nature and each other. Critiques of industrialism show how prioritising monetary profits in fact gives rise to inefficient production and techniques.

The authors comment that ecology movements have tended to be class-and race-blind to the detriment of building wide-based support from other movements. However, that analysis is increasingly contributed to Degrowth from long-standing Left and Marxist critiques of capitalism as a system based on social relations of domination and exploitation of labour and the natural environment.

Marxist critiques see economic growth as “a necessary consequence but also a condition of capitalism accumulation”. Capitalism stabilises its tendency to crisis by changing modes of production and expanding to new markets and new exploitation. The limits of growth – the planetary limits – are the limits of capitalism. Transforming production and the social relations of work must therefore be a central concern of Degrowth.

Feminist critiques argue that capitalism and economics is based on gendered over-exploitation, and both devalue the daily and generational reproduction of labour. What counts as “the economy” is just the tip of the iceberg of activity that sustains human life. Neither nature nor reproductive work appear in neo-liberal economic models of money-mediated processes involving labour, capital and goods. The authors acknowledge that eco- and Left critiques were slow to take on board feminist critiques about women’s unpaid work⁵ which underpins daily life, labour and therefore capitalist production and growth.

Now, “care” takes the place of “profit” as the heart of Degrowth’s alternative economics, say the authors. Looking after people through policies on child and elder care, basic income, basic services, health, education and housing. But I notice the feminist perspective and the prioritising of care seems to fade when they propose three “common degrowth principles for a concrete utopia”: (i) global ecological justice; (ii) social justice, self-determination and a good life for all; (iii) redesign of institutions and infrastructure to function without relying on growth and expansion.

The South-North critique argues that economic growth relies on and reproduces relations of domination, extraction and exploitation of the global “periphery”, enabling an “imperial style of living” in the capitalist “core”. Corporate and financial globalisation from the 1970s shifted production and pollution to the South, and resources and profits to the North – resulting in an estimated $US152 trillion in growth lost to the South from 1960 to 2018.

This critique draws on “buen vivir” politics in South America, as well as the decolonisation politics and traditional knowledge of indigenous peoples. Importantly, the Degrowth movement recognises that, as economic growth and destruction is a global phenomenon, transformative national policies must include and financially support global social justice.

Pathways Towards Degrowth

Averting global and ocean warming, tipping points and climate catastrophe will require immediate emissions reductions of around 10% a year. This can only be achieved fast enough by ending economic growth in the Global North, probably lowering GDP by about 10%. But Degrowth is about reducing material and energy throughputs, not economic performance per se. Core Degrowth policies aim to reorient economy activities towards concrete needs and the common good, independent of growth, without exploiting people or planet.

Social movements and activists often focus on one policy area above others – in the case of climate, emissions reductions or, when worse comes to worst, climate adaptation policies. This tends to underestimate the change needed in the whole system for any one progressive policy to be successful, say the authors. For example, a basic income for citizens could entrench class and labour divisions with new migrants, or push women back into unpaid work. Transformative change to address the climate and biodiversity crises will only be politically possible if paired with a diverse set of policies to make that change sustainable, stable and just, that eliminate anxieties around poverty and deprivation. “The good news is these policies would, in themselves, make life a lot better”.

The book presents the diverse movement’s most characteristic policy proposals along six trajectories:

Economics Is Politics

Economic decisions must be seen as political problems, deliberated and decided democratically by more and more people, at the workplace, community and/or national level as appropriate. This is why many Degrowth initiatives seek to appropriate the economy from below. Degrowth policies from above aim to create the social conditions for these initiatives to flourish and expand, and to defend and expand the many community-organised commons in the cracks of the capitalist system.

Community initiatives share and manage resources outside markets based on money, competition and hierarchies, and the creeping commercialisation of life by digital platforms. Expanding the commons includes the democratic “re-municipalisation” of basic services – housing, food, water, electricity, communications, local transport, health services and education – available to all, regardless of growth or individual income. This includes expanding public ownership and investment in infrastructure.

Redistributing wealth and power is of fundamental importance. Capitalism’s supposed sharing of economic surplus or productivity gains via wages, taxes and transfers does not in fact happen. Instead, growth feeds wealth accumulation. Degrowth for ecological transformation will only gain political legitimacy and public support, the authors say, if greater social justice and equality is really felt by all. Equal access to resources, social security and basic services have been core demands from the beginning, alongside social justice policies such as “polluter pays” taxes.

Most popular is an unconditional basic income; enough to ensure full participation in society. These rights must be guaranteed through reappropriation and democratisation of existing infrastructures. They would entail a partial exit from “the economy”, a progressive demonetarisation of society. There are also proposals to radically cap incomes and/or wealth, or tax wealth out of existence – which would be an effective lever for reducing emissions. Globally, the richest 10% own 60-80% of all existing wealth, leaving less than 5% for the poorest half of humanity, and the richest 1% are responsible for twice the emissions of the poorest half.

The transformation we need requires a profound restructuring of the material basis of society. This cannot be achieved while economic efficiency (i.e. profit) remains the primary criterion, rather than sustainability and utility. The questions Degrowth puts at the centre is, which technology should society use? For what, by whom, how, and how much? And who decides? Technological development must be needs-based, not market-oriented. Its social and cultural effects must be evaluated, not just those of mineral throughput and manufacturing, but also of use over its entire life (re)cycle – think tool libraries, repair cafes, recycling minerals from electronics.

Socially meaningful work is recognised across the Degrowth movement as a central component of human life. All the critiques essentially revolve around work, the authors say – access to meaningful non-alienating work, just transitions from declining sectors, strengthening workers’ rights and autonomy through the provision of basic services independent of employment, equalisation of wages, and the valuing of caring, reproductive work and all socially necessary activities including Earth care work. The foregrounding of care work intends to overcome the division of the economy into monetarised wage labour - mainly male - and unpaid, low paid, invisible work - mainly women and migrants.

Employment relations can be transformed through cooperative ownership and practices. There has been a long-standing demand for reduced hours of work without reduced pay for low paid workers (since the 1830s! But hasn’t this approach been made problematic by precarious employment and zero-hours contracts?) Along with basic income and services, they say, this could spread employment as harmful and unnecessary jobs are eliminated (e.g. fossil fuels, military, advertising, “bullshit” jobs). An increase in free time will underpin greater democratic participation in decision-making and community initiatives.

Debate continues on how best to implement all this. The diverse policies across the movement are seen as complementary. “Degrowth is not a blueprint that needs to be followed,” say the authors. “Rather, it is an invitation, a broad set of principles and ideas, a path whose twists and turns have yet to be taken”. Another feature of Degrowth strategies, they say, is that we can start changing things here and now, not “after the revolution”.

Healing The Metabolic Rift

“Degrowth politicises and democratises social metabolism and consequent policy design”, the authors say. (Sorry, “social metabolism” is the Marx Volume III term for the dynamic relationship between humanity and nature. See also “metabolic rift”). Prioritising profits, growth and wealth accumulation has made relationships between production and consumption irrational, inefficient and exploitative, they say. What Schumpeter called “creative destruction” should no longer be left to capitalist markets, competition and prices, but debated and decided upon democratically.

Different sectors, technologies and resource uses need to be simultaneously phased out or expanded to meet social needs and basic services for all – with a much smaller material and energy throughput. Not by waiting for green alternatives to outcompete harmful activities in their own markets, but by deliberate policy-making. An essential measure will be to set global and national ceilings on resource extraction, emissions and land use.

The single most effective policy on climate change is to cap fossil fuel extraction – the core demand of the global climate justice movement (a conference towards a Convention on this is to be held in 2026, hosted by Colombia and the Netherlands⁶). Wealthy countries with less energy will then need to redirect their economies along Degrowth lines.

If Degrowth is about global ecological justice, international solidarity will be central to the agenda – to protect wildernesses, save land from enclosure and indigenous peoples from dispossession. The problem is not poor people inhabiting fragile ecologies, but the affluent world driving extraction, production and consumption. The Global South will need support to switch away from neo-liberal globalisation with its exploitative trade and finance system, imposed through “structural adjustment” programmes.

How Do We Make It Happen?

Is Degrowth achievable? History shows that changes of this magnitude encompass political, social, ecological and cultural dynamics, with different time lines. Conflict is likely when such changes directly oppose the interests of the powerful – and capitalism has never been as all-encompassing and global as it is today. The authors acknowledge a tension in the Degrowth movement between relatively top-down policy proposals and bottom-up small-scale alternatives and self-organised community initiatives outside the State.

They build on work by Erik Olin Wright⁷ that distinguishes three strategies. These are: (i) really-existing alternatives like cooperatives⁸ and other groups that allow people to test changes; (ii) cooperation between different social forces to achieve concrete reforms leading to eventual change, normally through existing political systems; and (iii) “ruptural” confrontation by mass movements to take down or take over the State. In Degrowth debates, the first two are often discussed, often juxtaposed, but the third rarely is. The authors claim that all three rely on each other for success.

“Top-down reforms allow the expansion and scaling up of nowtopias, while, without nowtopias, people will remain unable to imagine how radical reforms could improve their lives… Yet we also need ruptural strategies: organised resistance that builds up pressure for radical transformation and that eventually radically democratises and appropriates the State at all levels”. And not just the State.

Nowtopias And Non-Reformist Reforms

The authors give examples of “nowtopias” that provide autonomous spaces and act as laboratories for the good life – from “transition towns” to Barcelona to Kurdistan. But without a broader counter-hegemonic strategy, small initiatives risk helping keep the rolled-back neo-liberalism State afloat, they say. We see that here as Governments shift their responsibility for social services, even housing, onto self-organised community groups. These spaces and initiatives are a central part of the Degrowth transition but must be accompanied by radical institutional changes in order to expand them into common practice. “A mutual fertilisation between micro-practices and macro-policies is necessary”.

“Non-reformist reform” policies can start within existing political structures and regulations but point beyond the capitalist growth-oriented mode of production. Degrowth policies aim to shift the economy to low-emitting, environmentally protective production (using moratoria, regulation, taxation, public infrastructure, public finance) and support people through the transition (basic income, free basic services, support for cooperatives and community initiatives) to a society that operates within planetary boundaries, is much more egalitarian and caring, and is “structured around public abundance rather than private wealth”.

Anarchists and socialists argue for the need to democratise and decentralise the State, say the authors, but differ on how, and on what then? These authors argue that the scale and urgency of change require a powerful but democratised State, that can continue the struggle for global climate justice. Any Global Green New Deal Without Growth will need to be based on common Degrowth proposals like publicly funded, publicly owned renewable energy and transport, strong industrial transition policies, and expansion of welfare supports. In “the North”, radical policies for great equality and emissions reduction will reduce imperial lifestyles.

We will also need to build growth-independent international institutions, radically reduce global material throughput, and halt the present pollution-shifting and extractivism in “the South”. Global climate justice demands global solidarity – Wright’s “cooperation between social forces” – in the form of sharing technology, offering fair trade deals and reparations, wiping International Monetary Fund (IMF) and World Bank debt, and establishing a new global monetary system no longer dominated by the US. They cite Keynes’s “bancor”, but maybe BRICS?⁹ ¹⁰

Counter-Hegemony, People Power And Ruptures

Achieving radical reforms depends on building a counter-hegemony against capitalist growth – that is, the spread, approval and public legitimacy of Degrowth concepts as the new common sense. Counter-hegemonic thinking arises from people’s everyday experience – rising cost of living, child poverty, unsafe drinking water, unaffordable housing, insecure jobs, and the disjuncture with “lifestyles of the rich and famous”.

This feeds the mobilisation of successful social movements and the spread of nowtopias. Municipal-level changes can enable more people to experience Degrowth’s promise of “radical abundance” from shared benefits, rather than individual renunciation. In turn, the non-reformist reforms depend on political pressure from social movements and evidence of existing alternatives.

Questions of organisation and mass mobilisation are often neglected in Degrowth debates, say the authors. They note the importance Lenin gave to “dual power” – organisations or movements that can make demands on the State because they do not fully rely on the State. Think unions or iwi. Or think of the reverse: State funding of community organisations being weaponised against their advocating for policy changes.¹¹

Movements need people power, and to build connections and alliances with other movements for more people power. They also need to build their capacity to block or make demands of corporations or the State, through strikes, blockades and other actions. Sympathetic politicians need the pressure of that to progress policies within Government. “Those in power rarely care if you ask them nicely”.

Never Waste A Crisis

The economic transitions required by the crises we face imply the need to address ownership and finance – now globalised. Significant public investment will be needed in infrastructure and institutional change, including public control of banking, financial markets and monetary policy, so as to redirect both public and private money towards democratically decided goals, needs and economic activities and opportunities.¹²

Harmful or growth-driving sectors must be shrunk immediately, destroying capital investment, not slowly divesting to other private owners. There will be challenges in transferring certain industries and businesses, and privatised infrastructure, to common ownership. There will undoubtedly be confrontations with fossil capital and others who benefit from existing economic arrangements.

The authors cite a 2020 paper that gives hundreds of historic examples of US governments nationalising key industries and critical resources. It suggests it would be fastest and cheapest for the State to simply buy majority shares in every major oil, gas and coal company and take fossil fuels out of the market.¹³ (Hang on, our Government already owns majority shares in our overpriced, gas-guzzling electricity producers….).

“Degrowth by design or disaster” has become a catchphrase, but wholesale collapse is explicitly not what is meant by Degrowth, as this book explains. Yet in some cases, say the authors, a crisis may offer opportunity for re-design. Any bailout must provide leverage for radical policy change. They cite Naomi Klein and Milton Friedman on using crises to implement neoliberal economic policies – as did Elliot Crossan in the previous Watchdog.¹⁴

In 1984-85, our Labour neo-liberals created their own exchange crisis, since everyone knew Roger Douglas would devalue - followed by a series of post-election betrayals of voters by both main parties. From 2023 we’ve had another lesson – in how far a determined minor coalition partner can push policy change. We surely now face crises enough – cost of living, child poverty, unsafe drinking water, severe weather impacts, imminent climate and ocean tipping points, geopolitics going mad, militarisation and genocide.

Would Another Global Financial Crash Help Divestment?!

The Bank of England has warned of one and is currently “stress-testing” UK banks¹⁵, while our Government hypes economic recovery. The Bank of England Governor says it has not forgotten the lessons of the 2008 Global Financial Crisis. Let’s hope all of us have learned lessons from capitalism’s speculative bubbles, bailouts and austerity policies.

This book is saying, Degrowth is “not just a good, timely and necessary idea, but one that could really work”. Alternatives are on offer all around us – in the international debates in this book, in our own communities and indigenous traditions, in our disregarded history of cooperatives, in the non-reformist policies of our small Left parties and unions. Crossan is right: we need to demand “transformative change in quantum leaps” – now!

CONSUMPTIONOMICS

This book, which I picked up second hand, addresses the unsustainability of economic growth and resource consumption from the perspective of Asian countries and their future needs. Nair is a Malaysian environmental consultant who has spent 20 years in top business circles, talking about resource management, sustainability and environmental issues – and the conundrum this presents. Until 2004 he was chair of Environmental Resources Management, the leading environmental consultancy in Asia Pacific.

Will Exceed Planetary Capacities

“Developing” countries with their still growing populations simply cannot attain the current high consumption lifestyles of the West, he says. The material inputs required will exceed planetary capacities (as Australian mineralogist Simon Michaux details ¹⁶). The destruction of Asia’s already depleted environments would be not only disastrous but politically unacceptable (remember the public protests about Beijing’s unbreathable air).

Already the region is at its limits, he writes in 2011. Four of the seven biggest CO² emitters are Asian: China, India, Japan - and Indonesia because of its deforestation. Continuing down the high resource consumption path will increase the risk of international clashes over resources, particularly energy and water. There are already tensions over oil and gas in the South and East China seas, and over water flows from the Himalayas.

Rather than “catching up” with the West, Asian economies must reject “consumption capitalism” and the free market model pursuing GDP growth. The shift in economic direction will require strong, capable States, not minimal ones – and not necessarily democratic ones on the Western model, he says. But to achieve change with public support, they will need to be “ethical States”, publicly prioritising the public good, equitable distribution of resource use, and concern for future generations.

“Repricing” Resources Is A Solution?

Yet Nair points out that emissions pricing schemes don’t work, other than to benefit the banks running emissions trading schemes (ETS) markets. Nor have higher prices (or taxes) kept coal, oil or gas in the ground. On the contrary, profit drives extraction. Anyway, the fossil fuel industry already has its solution to renewable energy: more plastics.

I have always disliked “natural capital” conceptualisation (“natural”, “human”, “social” and “financial” capital). It’s just an expansion of what Marx called “exchange value”. It dismisses any “use value”, let alone the intrinsic value of the Earth, the biosphere, to itself. The complex ecosystems of which we are a small but very disruptive part. Conceptualising everything as simply capital we can invest or spend or profit from is part of the increasing commercialisation I have seen through my lifetime in so many of aspects of our lives. Priced or unpriced, seeing resources (including labour) as simply capital that can return a profit is surely the problem, not any kind of solution. But I’m digressing.

Nair says Asian countries must stop waiting for the West to lead. They must chart their own path. “Does anyone really think that the developed countries will forgo economic growth in order to leave room for the poorer countries to expand?”, he asks. International negotiations on the world’s most pressing problems – climate change, food, water – have little prospect of progress. The failure or cynicism of the West is just part of the reality the rest of the world has to live with, he says. Asian countries must devise their own policy programmes.

He proposes a “risk minimisation” policy framework that puts resource management and use reduction at its centre, and is legitimised by “good governance” in the public interest. Reduced resource use will be achieved through stiff royalties and taxes on resource use, carbon emissions and other “environmental services”. Improving land-use and urban planning to disperse development and avoid megacities will have benefits for food and energy security.

Foreign investment that is still thought desirable will continue to find Asia’s lower labour costs attractive, “if income taxes and other labour fees were cut”, for the development of service industries, in which skilled work and innovation can extract more value from less material (we see this already in India’s information technology [IT] industry, for example).

Should countries look to China to take the lead? He notes signs (in 2011) of a “Beijing consensus” – strong Government oversight, large scale investment in infrastructure, tax and other incentives for manufacturing, a compliant labour force, tight control of finance markets, strict management of exchange rates and capital flows. He sees two advantages in this: financial excesses and crises can be avoided; and it allows “greater freedom to act without…having to meet the demands of an electorate”.

What Nair proposes is an “Asian consensus” via regional groupings to address the different challenges the region faces: climate change, water management, resource depletion especially fisheries and forests, energy security, and rewriting rules on trade and also on finance. “Countries should note that finance tends not to benefit countries, just financiers”.

Reading this, I was not surprised that his concluding chapter is called “Reshaping Capitalism”, not transforming it. It’s an urgent call to reduce resource use and pollution to avoid crashing the planet, and capitalism with it – so it is definitely about Degrowth in its way. His vision of the future does include “collective nature and other resources shared equitably across society and conserved for future generations”, but nothing he proposes in this book requires, or involves, or responds to democratic participation. Political institutions vary across Asia, and democracy is “far more easily subverted in poorer countries”, he says.

What’s Missing From This Book

What’s missing from this book is any consideration of the impact of growth and resource extraction or reduction on ordinary people – except as cheap labour. In contrast, what puts the heart into the Degrowth vision – and could provide the people-power for political change – is its focus on care and “a good life for all”. Nair’s usual audience is corporate executives and Government elites.

He spoke at Davos in 2012, and has been a World Economic Forum member. By 2026 he describes Davos scathingly as where a “white Western elite talks to itself”. Their response to Trump’s Board of Peace speech was an “endorsement of a hierarchy in which Western claims to land, resources and security are treated as natural” – including Greenland and the unmentioned genocide in Palestine.¹⁷

Actually, I recommend reading the above-mentioned short 2026 article of his, rather than the book, because he’s wonderfully pissed off. That only Canadian Prime Minister Mark Carney spoke up against Trump, saying: “Middle (sic) powers must act together, because if we’re not at the table, we’re on the menu”. As if Canada were not a Group of Seven (G7) member. “For most of the world, being ‘on the menu’ …is the past and present of the global economic system”.

Need To See Past “Western” Perspectives

He’s also pissed off at the sidelining of Indonesian President Prabowo Subianto, whose speech barely registered in international coverage. Subianto presented “Prabowonomics”, a domestic programme for governance, poverty eradication and stability. His Government is providing free meals for nearly 60 million people a day – more than McDonalds’ global total – and seizing millions of hectares of illegally held land from oligarchs.

To build a country where “the poor and the weak can smile and can laugh”. For Nair, it is countries like Indonesia, and Brazil, the largest economy in South America and founding BRICS member, that will be decisive in determining whether the world can achieve sustainable development without repeating the Western model of ecological destruction.

In 2018 Nair followed up “Consumptionomics” with “The Sustainable State: The Future Of Government, Economy And Society”. This also argues for resource use constraints through effective State governance, and questions whether Western-style democracy is the optimal form of governance. Well, I hope for better myself. In 2022 came “Dismantling Global White Privilege: Equity For A Post-Western World”. Nair’s analysis and policy recommendations help us see past “Western” perspectives to consider other economic and political perspectives. Time for New Zealand to do that.

COBALT RED

Here’s a view of capitalist growth and extractivism, and of the “green” transition, from an African perspective. It’s a devastating read. How can a country this rich in high-demand minerals, diamonds and gold have 85% of its people living in extreme poverty?¹⁸ Cobalt is an essential component in almost every lithium rechargeable battery made today and in emerging low-carbon innovations. It provides maximum stability and energy density allowing devices and electric vehicles (EVs) to operate safely for longer – that is, not catch fire.

It is found bound to copper, close to the surface. The Central African Copper Belt from Kolwezi to Zambia contains vast mineral riches, including 10% of the world’s copper and half its cobalt reserves. In 2021, 111,750 tons of cobalt, 70% of global supply, was mined in the Democratic Republic of the Congo (DRC). This land is scarred by the mad scramble to feed cobalt up the chain into the hands of corporations and consumers across the globe. The scale of destruction is enormous, and local people’s suffering is incalculable, says Kara.

Siddharth Kara is a researcher and activist on modern slavery and child labour. He teaches at the University of Nottingham and gives courses at US universities. This book is based on his interviews and research in 2018, 2019 and 2021 in the Congo’s mining provinces. It was undertaken, he says, at considerable risk to his interviewees, his guides and himself.

Cobalt is the latest in a list of valuable resources stripped from the Congo – ivory (1880s), rubber (1890s), palm oil (1900s+), copper/tin/zinc/silver and nickel for industrialisation (1910+), diamonds and gold (always), uranium (1945), tantalum and tungsten for microprocessors (2000s+) and cobalt (2012+). The first European explorer reported the Congo’s “unspeakable richness”, but none of its contributions to world markets have benefited ordinary Congolese people.

Readers will probably know of colonisation in 1877 by King Leopold II of Belgium’s private company (estimated 13 million dead) and, after independence in 1960, the assassination of Prime Minister Lumumba so as to retain foreign control of Congo’s mines.¹⁹ All cobalt sources from the DRC are tainted by various degrees of abuse, Kara reports: “’slavery, child labour, forced labour, debt bondage, human trafficking, hazardous and toxic working conditions, pathetic wages, injury and death, and incalculable environmental harm”.

“Artisan” Mining…

Roughly 45 million people in the world work informally as “artisan” mining labourers. “Artisanal and small-scale mining” means anyone with a pick or shovel who can dig ore on a piece-rate basis. As in the Middle Ages. They are not employed by any mining company, but that is where what they mine ends up. The modern formal mining industry and the most advanced consumer devices rely on hard labour by artisanal miners to boost production at minimal expense. Low rates by weight, not wages, is a central difference between “artisan” and “industry” mining. Up to 30% of all cobalt is produced this way.

In the Congo’s Copper Belt, thousands of children are digging, crushing, washing and bagging cobalt ore²⁰ in family and other groups, because of poverty and because there are few schools for them. The DRC supposedly provides free education to age 18, but schools are underfunded and have to charge fees that many artisan mining families can’t afford. Mining concessions held by foreign companies and cooperatives require them to provide local schools for miners’ children but often this doesn’t happen. Many of the children Kara spoke had no schooling because they could not afford the fee or had dropped out of school to bring in money to support their family.

Adult artisan miners earn $US1-2 a day, most live in villages with no electricity, and none that Kara interviewed had even seen a smart phone. They dig with spades and rebar²¹ in shallow pits and tunnels on low grade, sometimes illegal sites. They crush it, wash it, and sell it by weight to “négociants”, also Congolese, who have a bicycle or other vehicle and can pay for a permit to transport ore. It is then sold by weight and quality to road-side depots, with price lists that never go higher than a 10% cobalt grade.

Depots are mostly run by Chinese who pass the ore on for processing in Congo’s formal mining sector, directly or indirectly. At Musompo market in Kolwezi, multiple flows of négociant/depot-bought ore converge for resale at a price 60% higher than diggers receive. The system is opaque and untraceable by design, says Kara, but négociants told him the main buyers were CDM (Congo DongFang), COMMUS (Zijin Mining), SICOMINES (Chinese consortium), CHEMAF (Shalina Resources, Dubai), and KCC (Glencore, Anglo-Swiss).

…For The Global Supply Chain

The formal segment of the supply chain begins with massive industrial copper-cobalt mines. They are typically joint ventures between the State-owned Gécamines and foreign companies. In 2021, 15 out of 19 of these were owned or financed by Chinese mining companies. They employ labour directly but also sometimes bring in artisan miners on a casual basis.

The copper and cobalt are chemically separated, then shipped mainly to China for further refining – because the Congo doesn’t have sufficient electricity capacity, a Gécamines official told Kara. In 2021 China produced 75% of the world’s refined cobalt and had the world’s two largest lithium-ion battery manufacturers. Six companies in China, South Korea and Japan produced 86% of all lithium-ion batteries, with China’s CATL producing a third.

The mining companies pay royalties – if they don’t evade them – which are the main source of Government revenue as well as lining the pockets of the local elite. The Chinese and Glencore companies are accused of keeping two sets of books so as to under-report both quantities extracted and taxable income. Yet Kara found the Government’s 2021 budget had no entry for revenue from the mining sector, and revenue from Lualaba province for 2018 and 2021 did not match production figures. There have also been allegations of money laundering, via the Congo’s Lebanese mineral and diamond trading network.

Some of the DRC’s deals with China trade cobalt for infrastructure, particularly roading – one of many such agreements across Africa (China’s “belt and road initiative”). The Congo is a vast system of rivers; few of its cities are connected by road or rail. The IMF and World Bank were not pleased at a large 2006 deal, which could have risked the mining assets used as collateral on their own loans.

The size of the deal was reduced by a third. For mining rights to two large concessions and the first $US6 million worth of copper-cobalt extracted, the Chinese consortium SICOMINES will pave 6,600 kms of roading, and build two hospitals and two universities. Then-President Kabila had a private firm involved in the projects. Progress has been slow and the deal is tax exempt, so the DRC will not receive meaningful income for many years.

Military And Mines

The State mining company Gécamines once employed its miners directly at better wages, and paid for village schools and other amenities. It collapsed in 1998, in large part because of embezzlement in President Mobutu’s last years. This suddenly left thousands of workers with no income. They began digging ore on informal sites to feed their families, at starvation rates. At that time Rwandan refugees and military were flooding in over the border.

Laurent Kabila, a Katangan backed by Rwanda, Uganda and also rebel groups, took over first the province of Katanga, then the whole country. He promptly did personal deals with the foreign mining companies, as Mobutu had. He then tried to expel his allies, which led to “Africa’s Great War” involving nine countries, 30 militias and multiple deals of mining assets for military assistance. When he was assassinated, his son President Joseph Kabila settled the war with more deals. To obtain World Bank loans, Joseph Kabila’s Mining Code 2002 to resuscitate the sector was designed to attract more foreign investment. But “the child of a snake is a snake”, Kara was told.

Unsurprisingly, then, the companies in control of huge mining concessions and processing plants have their own security forces, which also seem to patrol most artisan sites and the depots that buy ore from them. Some areas – and mines – are under the control of the Armed Forces of the DRC (FARDC). In 2012 the electronics market and the price of cobalt began to soar. The State revived Gécamines which expanded its partnerships with foreign-owned mining companies. The informal pit-and-shovel mining, including child labour, is built into the new system, and the profits. Education is supposed to be provided to age 18 by the DRC and schools built by mining companies and cooperatives under the terms of their concessions, but this is not happening.

Mining Other People’s Land

As well as visiting artisan sites, Kara tried to visit formal sector mines at Kolwezi and Kapata in Lualaba province: the massive Tenke Fungurume (CMOC aka China Molybdenum), Mutanda, Tilwezembe, and Mashamba East (all ultimately Glencore). Tilwezembe is smaller but the most dangerous as copper-cobalt can only be accessed by tunnelling.

Refused entry, he could only overview the sites from lookouts, count children and teenagers going in and out, and track the daily truck loads coming to be processed from depots buying copper-cobalt from artisan miners. At Kanina, Kara was also refused entry to the COMMUS mine, but observed it dumping broken stone just outside its gates. Why? Because artisan mining – local children picking over rocks – is more precise than indiscriminate machines and yields a higher grade, via the road-side depots.

The concessions granted to the foreign companies now cover huge areas in south-east DRC. Tenke Fungurume is the size of Greater London, he says. Congolese families have been evicted from dozens of villages, farm lands and forests destroyed, surrounding environments polluted, as each mine expands. This loss of land and livelihoods they had for generations was a constant hurt for the people Kara interviewed. They now have no choice but to seek a job with the mining companies that have done this, or to scratch up what ore they can for a dollar or two a day.

Cooperatives Of A Kind

Some artisanal mining areas are run by cooperatives, created under the 2002 Code. Kara was able to tour the Shabara mine, a COMAKAT cooperative right next to Mutanda. There is similar cooperative artisan mining at Kapata, in and around Glencore’s KCC and Mashamba East concessions at Lake Malo, and at Kanina, next to the massive COMMUS mine, where he was able to chat to women and children hand-washing ore in Lake Golf. These were created after locals refused to move out of Glencore’s way. I’m unclear in what sense they are cooperatives, since Kara says the two largest, CMKK and COMIKU, are owned by relatives and associates of political figures.

Shabara was surprisingly large, and crowded with registered workers who were paid wages of $U$4-5 a day. COMAKAT also paid for schools and other village amenities as stipulated by the Code - unlike the mines owned by Chinese and other companies. Nevertheless, Kara saw children at work, not employed directly by the Cooperative but by sub-contracted gang bosses. Some children told him they had lived in a different district; their boss had brought them there. At Lake Malo, some child groups were recruited and worked by FARDC soldiers.

Model Mining, Model System

Kara was shown around two model artisan sites north of Kolwezi, operated by CHEMAF and CDM. CHEMAF’s Mutoshi site had been designed in coordination with a well-regarded US non-Government organisation (NGO) called Pact, which was funded for this, and a school programme by Apple, Microsoft, Good, Dell and Trafigura. Mutoshi had low-grade surface ore and around 5,000 registered miners but only 8-900 currently working because of low piece rates and payments delays.

There were mismatches between the policies that Kara heard from Pact, what CHEMAF managers told him, and what he saw on site and heard miners he was able to interview off-site. He was told Pact had never visited the mine. Kara felt the problems could be fixed and, unusually, women workers said they felt safer there. But within months, CHEMAF closed its model mine.

CDM’s model mine at Kasulo was run together with the COMIKU cooperative. Kasulo is one of the largest artisanal mining zones in the Congo, with very high grade copper-cobalt buried like “raisins in cake”. CDM was obliged to pay compensation or resettle households removed from the zone, little of which had actually happened. Since 2018 CDM’s artisan zone has been walled off and guarded by Republican Guard and FARDC soldiers. As well as open pit mining, the mine comprises at least 1,100 tunnels, some as deep as 40m. There were only 20 air pumps. Miners use branches from nearby trees as tunnel supports. The miners told Kara, with a glance at managers, that there’d never been collapses.

They had initially received a wage to dig to find copper-cobalt veins, then had to pay that back at piece rates 20-25% lower than depot rates on the street. The crushed ore is weighed to determine miners’ piece rates, production fees that COMIKU receives from CDM, and royalty payments to the DRC. This mine failed more severely than Mutoshi to meet stipulated model standards, but miners Kara spoke to on-and off-site felt it was saver than mining elsewhere in Kasulo. A few days later Kara was invited to meet with managers of the largest mining cooperatives, who spun the merits of cooperatives and complained about the Chinese companies.

Artisanal mining at Kasulo exploded from 2012, after the highest-grade copper-cobalt in the Congo was discovered there. There are now tunnel mines operating all over and under the town. Kara met and interviewed two groups of about 30 miners, each working a tunnel entered down a hole next to someone’s house. It’s a well-established micro-version of COMIKU’s system: sponsors, diggers, sellers, buyers and enforcers.

It’s usually the property owner who provides tools and advance pay to diggers to find a vein of ore, then extract it at piece rates. The pit owner then sells it on, reimbursing himself from the miners’ earnings with little transparency. Miners told Kara a tunnel collapsed every month, and in the rainy season they often flooded. They are risking their lives for around $US7 a day. The most fortunate might earn around $US3,000 a year, says Kara, while global tech and car company CEOs earn $US3,000 in an hour.

“We Work In Our Graves”

The conditions in which copper-cobalt miners work are appalling. As Kara documents, miners, including children, are working in toxic streams, covered in mud in the wet season, in dust in the rest of the year. Men and teenage boys do most of the digging; women and children crush, wash and bag the ore. Sexual abuse was rife, particularly of orphaned children. Kara spoke to several young teenage girls washing ore, with babies beside them in the dirt.

Toxics in dust affect everyone in the district, coating villages. It’s in the food chain of vegetables and river fish. Some copper-cobalt ore includes uranium; that’s not just specific to the uranium mines. Mustard-coloured powder coating houses near Tenke Fungurume, and also near the COMMUS mine, was identified for him as dried sulphuric acid by a one-armed former employee of the neighbouring processing plant.

It’s dangerous work, with no safety gear and, for informal miners, no medical facilities at all. Pit walls and tunnels frequently collapse; only one that killed 41 people in 2019 made the news. Kara was told the mine companies will pay for a funeral, or an operation and a week’s care, then the injured person is jobless. He spoke with many, including a 15-year-old boy with both legs gone below the knee. He gave a few dollars to another for antibiotics for festering post-operation wounds. He interviewed distraught mothers whose sons or husbands – in one case, both – had been killed by collapses. Their stories are harrowing.

On 26 October 2020 Kara received a cell phone video of a screaming crowd and the bodies of two boys, aged 13 and 14. They had walked away from the depots with their sack of cobalt stones to try for a better price elsewhere, and were shot dead by the COMMUS security guards. In July 2021 he received a video of security guards viciously whipping workers lying in the dirt, overseen by three Chinese men in COMMUS uniforms. On 21 September 2019, he was interviewing girls washing rocks at Lake Malo when a tunnel collapsed at the adjacent CDM mine. Four bodies, including a boy no older than 15, were recovered from the 63 men and boys buried alive. “Our children are dying like dogs”.

What Problem?

The human suffering in the mining provinces is entirely preventable, says Kara. But why fix a problem if no one thinks it exists? The tech barons will tell you they uphold international human rights and their particular supply chains are clean. Kara quotes the sustainability statements of Apple, Samsung, Tesla, Daimler and Anglo-Swiss commodities company Glencore.²² Two industry organisations, the Responsible Minerals Initiative and the Global Battery Alliance, promote responsible sourcing according to UN Principles and independent assessment of supply chains.

In all of Kara’s time in the Congo he never saw or heard of any activities or inspections linked to these bodies. To increase supply chain transparency, the DRC decided in 2019 to make Musompo market the sole place where artisanal cobalt could be sold, at standardised prices and with evidence that no child labour was involved. The problem with this should be obvious: artisanal miners have no means of transporting sacks of cobalt without relying on exploitative négociants.

Kara could not return to the Congo in 2020 because of covid restrictions. Most foreign mining companies suspended operations; many Chinese employees, including those running depots, went home for Chinese New Year in January 2020 and did not come back. Demand for electronic devices and global cobalt prices soured during lockdowns. But, as buyers evaporated, the incomes of artisanal mining families collapsed, and thousands more children joined the digging. Covid spread rapidly among the miners and their families. By the end of 2021 only 1% of adults in the DRC had been vaccinated. The nun who sent Kara the video of workers being whipped estimated that more than two-thirds of children across the Copper Belt were not in school.

Our EV revolution relies on the work of the Congo’s poorest people, says Kara, few of whom have the most basic amenities of modern life: reliable electricity, clean water and sanitation, medical clinics and free schooling for children. Kara attests, on the basis of his research as of 2022, that there is no such thing as a clean supply of cobalt from the Congo. EV batteries require 10kg of refined cobalt each, 1000 times more than a smart phone. That means there will be no such thing as a Clean Green Transition.

The Resource Curse

In February 2026, as part of weaponising trade in geopolitics, Trump announced the US would start stockpiling critical minerals needed by its electronics and military industries (our obsequious Government promptly announced a new $80 million slush fund to fast-track critical minerals here).²³ Trump’s minerals policy was discussed on Al Jazeera’s weekly Counting The Cost programme.²⁴

A Chinese expert said China has a ten-year lead on minerals processing because the West chose to deindustrialise and benefit from low labour costs elsewhere. An African said that, to benefit more from their rich mineral resources, African countries needed to negotiate joint trade deals in their collective interest. A European pointed to important new European Union (EU) policies to recycle critical minerals in electronics. There was no discussion about the minerals being mined with manual labour at poverty rates, just a quick background picture of a man sorting rocks.

The paradox that countries with the richest resources have the lowest levels of per capita income, education, health services and other welfare provision is termed the “resource curse”. An excellent analysis of this, based on 15 years' research into oil and politics in sub-Saharan Africa, is by Nicholas Shaxson in his International Affairs article, “Oil, Corruption And The Resource Curse” (83(6), 2007) and 2008 book “Poisoned Wells: The Dirty Politics Of African Oil”.

He says change needs to focus on systems, not just actors, and identifies three factors: the very different tax systems in rich and “developing” countries; anti-corruption schemes within countries that ignore crucially important transnational flows; and the way natural resources provoke competition and factional politics, against the public interest – as well as pan-African ones.

Tax Differences

In “the North”, the privatisation of land and industrialisation of manufacturing forced people into labour markets and very long struggles for shorter hours, decent wages and social services – which are about three-quarters paid for by our own income taxes. In countries where most people are subsistence farmers or earn as best they can in the “informal” sector in cities, little income tax is collected and Government revenue relies on royalties, taxes and tariffs on exports and imports. As do Government cronies. So, better trade deals for African minerals may not raise the appalling low piece rates for “informal” miners. “Reducing material throughput” might possibly slow environmental destruction in the Congo but could reduce the miners’ opportunities to work, as happened when covid disrupted supply chains.

Kara’s account of cobalt mining in the Congo illustrates very well why Degrowth goes way beyond new green deals. A “good life for all” with basic income and social services has to include those who mine our critical minerals, wherever they come from. Degrowth demands a total transformation of capitalist economics with economic decolonisation and global justice at its centre.

PRIVATISATION & PLUNDER

Contributions by Geoff Bertram, Brett Christophers, Brian Easton, Max Harris, Jane Kelsey, Bill Mitchell, Jacqueline Paul, John Quiggin, Max Rashbrooke, Bill Rosenberg and Guy Standing

Neoliberalism is an ideology and a set of policies that whakapapas back via ACT and Atlas, Rogernomics, Ruthanasia and the NZ Business Roundtable to the Chicago School of Economics, Friedman²⁶, Hayek²⁷ and the Mont Pelèrin Society. Friedman and Hayek’s purpose was to deregulate capital flows and open up post-war social democratic economies to hyper-globalisation, privatisation and profit.²⁸

Neoliberalism’s economic assumptions and “principles” have been enforced by the International Monetary Fund (IMF) and World Bank’s “structural adjustment” requirements, including in New Zealand from 1983.

This book very usefully brings together recent Fabian Society talks, by locals and by overseas visitors, on the impacts on Aotearoa New Zealand of neoliberal policies, and privatisation in particular. As market failures become obvious around the world, there is growing public awareness of late-stage capitalism’s destructive impacts on most of us, and on the planet. Discontent risks being misdirected into racism and support for authoritarian leaders, layered on top of neoliberal capitalism, said Max Rashbrooke at the book launch.

Opportunities For Radical System Change

But disillusion and discontent also bring opportunities for radical system change. Max Harris, who also spoke at the launch, said neoliberalism was introduced faster in New Zealand than elsewhere and is more locked in, embedded in quasi-constitutional legislation, so dismantling it here will be different. We need to address not just neoliberal policies but capitalism itself, he said.

Rashbrooke feels the Left articulates its values quite well, and research shows substantial agreement from the rest of the country. However, that support falters when it comes to what is to be done, what will actually work to create change. That what this book is about. Taken together, these writers identify legislation to be reversed, State agencies to be redirected or rebuilt, and begin proposing alternative institutions and policies that can work for people, not just profit.

Of particular interest to CAFCA members will be the excellent, informative chapters by Bill Rosenberg and by Geoff Bertram. Rosenberg recounts our “appalling experience of privatisation”, with scandals, huge losses on sale, failure of privatised or partially privatised organisations to meet reasonable service objectives, and missed opportunities. Public investment and ownership of infrastructure and resources is not about making money for Governments, he says. These “assets” and organisations have use-value in the public interest. Their sale in the 1980s and 1990s was “more a political than an economic act”, as Treasury and successive Governments embedded rules that privileged outsourcing and privatisation.

As predicted, ownership and its financial returns passed not to John Key’s “mum and dad investors” but to large, often overseas, investors. Outsourcing construction of new infrastructure to public private partnerships with transnational firms is a future-forward form of privatisation, favoured by the present Government. Rosenberg notes that Māori have opposed privatisation and “mixed ownership” partial sales of public assets, both politically and through the Waitangi Tribunal. He quotes Pita Sharples on how privatisation affects workplaces employing many Māori and undermines iwi and hapu claims against the Crown, as well as adverse impacts on whenua and taiao. This helped explain for me the ACT Party’s attacks on te Tiriti.

Privatisation since the 1970s in other countries has been linked to sharp growth in private wealth and inequality²⁹. Rosenberg shows this for Aotearoa in graphs of the diverging share and value of assets³⁰ in private or Government hands, and the reduced share of national income going to wage and salary workers, in favour of owners of capital. Rosenberg and Bertram adjusted this labour share by employment rates, revealing the full impact of the Employment Contracts Act 1991 on bargaining power.³¹

What Part Did Privatisation Play?

Rosenberg provides a graph of labour’s share of income in parts of the public sector that act in a commercial way. The impact was even more dramatic, from around 70% in 1982 – when these public services were essentially non-profit – to 33% in 2000 – which is particularly low given that many are labour-intensive. Between 1986 and 1996 around 43% of foreign direct investment in Aotearoa went into purchasing existing State assets. Overseas remittances of profits are a significant factor in our current account deficit.

Overseas holdings of wealth in New Zealand (including debt owned overseas) now exceed the net wealth of the Government. Many of the privatised operations now in overseas ownership hold a monopoly or near-monopoly position. Neoliberalism’s enthusiasm for shrinking the State exceeded its opposition to business monopoly, notes Rosenberg. There is ongoing pressure from business groups, who seek to increase their profit-making opportunities by taking over more assets and services from Government.

Rashbrooke’s chapter draws on his book “Government For The Public Good”. He notes that regulation in the public good and the provision of public services are basic functions of Government that have been greatly diminished under neoliberalism. But he seems ambivalent about whether private providers aren’t or can be more efficient in delivering services than Government agencies. In this short chapter at least, he does not consider the returns on capital or the interest on leveraged investment in large-scale infrastructure or service provision, existing or future, that will be costed into prices.

Bertram makes a distinction between the rising cost of living and inflation. Inflation erodes wealth but is not much of a problem for working people if wages keep up. But they haven’t. Nor has employment. So, the neoliberal trope of inflation being caused by wage demands and employment above a mythical non-accelerating inflation rate of unemployment (NAIRU) level are not valid. He calls this “just class war in camouflage”.

He shows that post-covid inflation was mainly imported via global commodity chains, and over 1999-2024 came from excess profits in sectors insufficiently disciplined by competition, regulation or taxation. He shows price inflation in “non-tradables” like rent, housing costs, rates and electricity, but also in “tradables” like food and transport – i.e. the supermarkets and oil companies.

Inherent Anti-Labour Bias

The central bank’s sole focus on interest rates protects the rate of profit; it supports policies that weaken collective wage bargaining power. In short, he says, an inherent anti-labour bias is built into the basic neoliberal economic model. He describes an “extraordinary” failure of coordination of fiscal and monetary policy, between Treasury and the Reserve Bank, in 2020-2021 in which $40 billion more was borrowed than needed.

This created excess liquidity that flowed through wealthy private operators into mainly housing and further fuelled inflation. Governments (taxpayers) are paying interest on this borrowing while spending on Government services is at a “miserly” 16-18% of GDP. Bertram advocates spending more wisely on services and infrastructure, and taxing accordingly rather than borrowing. On this, Bertram gives a nod to modern monetary theory (MMT).

As Australian professor of economics Bill Mitchell explains, MMT is not so much a theory as a lens on how Government finance actually works, despite the myths and mirrors of neoliberal economics 101.³² Any sovereign Government with its own currency (let’s not join Australia or the Eurozone!) can actively direct its economy to meet social and infrastructural goals and balance it against inflation through its fiscal spending and taxation policies.

Spending money into the economy and taxing it out. The constraints on Government spending are not bond markets but the country’s resource limits, including labour (think Keynes: “Anything we can actually do, we can afford”). The key to sufficient fiscal spending and public investment to meet our needs and to inflation is taxation policy.

Other visiting speakers include Brett Christophers, interviewed by Max Harris on his work on rentier capitalists and their asset managers.³³ Back in Aotearoa in 2023, he advised the Ministry of Business, Innovation and Employment (MBIE) and the Left against relying on BlackRock to finance new green infrastructure – before they take their returns and capital gains and flick our assets on to some other overseas investor fund.

Need To Build Capacities Of People & Build Power

In place of the current economic model, Christophers told Harris, we need robust industrial policy, revival of competition policy, and public ownership of strategic assets. Guy Standing³⁴ says that globalisation and the shift from industrial to rentier capitalism has changed class structure and created destabilising levels of inequality and precarious employment. He argues that policies like universal basic income are urgently needed as a public good and a matter of justice.

Jane Kelsey sees opportunities for transformative change in the global unravelling of hyper-globalisation and liberal democracy. She backgrounds the legislative Acts that have embedded neoliberalism, including ACT’s finally-successful Regulatory Standards Act. What she wants from a progressive coalition Government in the next two terms is meaningful radical change that will be hard to undo.

Start constitutional dialogue based on te Tiriti, she says. Repeal or suspend the Regulatory Standards Act, the Fiscal Responsibility Act and harmful regulation that threatens people and environment. Jettison blind adherence to free trade and comparative advantage (on milk powder!). Ditch public-private partnerships and rebuild the State’s own capabilities to tackle the challenges ahead.

The proposal for a Ministry of Green Works by Max Harris, Jacqueline Paul and Workers First Union is summarised in this book, and discussed by Richard Werry. At the launch, Harris said we need to remember and rebuild other institutions that predated neoliberalism, such as the Development Finance Bank. He referred to the NZ Council of Trade Unions’ (NZCTU) proposal that our partially privatised electricity generation system be taken back into full public ownership, to provide affordable renewable energy for households and businesses, not profit for Government and other owners. This is part of NZCTU’s Reimagining Aotearoa Together project.

“We need a politics that takes material issues seriously… economic insecurity and precarity… the lack of power of unions…that tackles inequality at source, not just though the taxation and benefit system,” said Rashbrooke. “In particular, we need to revive and revitalise the idea of the common good”. Change will depend on a really good policy programme, said Harris, but it will also come down to building the capacities of people, and building power.

BIG TECH, LITTLE TAX

“Tax – it’s about what we all do together”. Better Taxes for a Better Future³⁵ is a campaign by a coalition of over 25 unions, churches and community organisations, working with Tax Justice Aotearoa. “To tackle the toughest challenges ahead of us,” they say, “Aotearoa needs better taxes. For the public good, we need tax changes to better fund healthcare, education, housing, infrastructure, community services, climate justice and action on poverty”.

Law Changes To Favour Rich & Transnationals

Over the last three years we have seen the tax cuts promised at the 2023 election being paid for with budget cuts across Government departments, with high losses of public service jobs. There have also been small policy changes that let global corporations and the wealthy off the hook of fairer taxation. Going through Parliament as I write is a Taxation (Annual Rates for 2025–26, Compliance Simplification and Remedial Measures) Bill that will, among other things, repeal s.17GB of the Tax Administration Act.

That’s the section that gives the Inland Revenue Department (IRD) power to request information and documents. This was used in groundbreaking research on 311 high-wealth New Zealand families that showed a median³⁶ tax-to-income rate of 8% – because over 80% of their income came from untaxed capital gains.³⁷ There is increased support for a capital gains tax, in line with comparable countries.³⁸ If s.17GGB goes, such research will no long be possible. In the view of Tax Justice Aotearoa, its removal will significantly reduce the transparency of the tax system.

In May 2025, the Government dropped a Digital Services Tax Bill that had been sitting in Parliament since August 2023. This would have put a tiny 3% tax on all revenue earned from New Zealand customers by large global digital services companies, who float out there in the cloud somewhere but gather in large “service and licence fees” from their many local subsidiaries. Treasury had to drop $479 million in expected tax take from its 2027-2029 Budget forecasts. Why? Because this Government prefers a “global solution” by Organisation for Economic Cooperation and Development (OECD) countries, Revenue Minister Simon Watts says. A solution that has been glacially slow.

Transnational companies use various means to shift profits from high-tax jurisdictions to low or no-tax locations, thereby eroding the tax base of the higher-tax jurisdictions. The OECD calls it “base erosion and profit shifting” and began working on it back in 2013. Profit shifting has contributed to a competitive downward spiral of countries’ corporate tax rates and tax takes. So too do tax havens and “secrecy regimes”.³⁹

In 2018 the Tax Act was amended to cover “transfer pricing”, i.e. shifting revenue offshore. In regards to new investments in New Zealand, s.33A “information for tax purposes” was added to the Overseas Investment Act in July 2021, which enabled Regulation 69D which is a requirement for information on “transfer pricing arrangements”. But these changes don’t seem to address the “transfer pricing” instances raised by Tax Justice Aotearoa in “Big Tech, Little Tax”.

Transfer Pricing

In this 30-page report, Tax Justice Aotearoa examines the tax practices of some of the tech giants that operate here. They identify three models of tax minimisation: service fees, inflated licence fees, and service companies. In the first, substantial service fees are paid by the local subsidiary to related offshore subsidiaries of the global company. Substantial can mean most of the firm’s revenue. All or part of these may in substance be royalties, which are potentially subject to withholding tax.

In 2024, Facebook NZ earned $166.6 million but purchased services of $157.4 million from Meta Platforms Ireland Ltd, leaving a taxable New Zealand income of just $3.9m. Google NZ earned $1.139 billion but paid $1.052 billion in service fees to a Singapore subsidiary, leaving an operating profit of just over $29 million. Amazon Web Services earned $384.6 million and paid “cloud service fees” of $306.8 million to unspecified related parties, incurring an operating loss of over $6 million here.

Use of proprietary intellectual property is likely woven through the activities of the New Zealand subsidiaries of tech giants, says Tax Justice Aotearoa. This would constitute royalties, which attract withholding tax under our double-taxation treaties. Our NZ-US Agreement stipulates a withholding rate of 5%. If this were applied to the service and license fees of Google, Facebook, Amazon Web Services and Microsoft, it would yield $130 million in tax revenue for the Government.

Under the inflated licence fee model, the local subsidiary pays a large percentage of its revenue to offshore subsidiaries for a licence to use certain intellectual property. In 2024 Microsoft NZ earned $1.32 billion but paid $1.075 billion in “purchases” to an Irish related party, leaving taxable income of $62.8 million. Oracle NZ, which provides “hyperscale” cloud services, earned $172.7 million in 2024, but paid licensing fees of $105.3 million to an Irish related party, leaving taxable income of just $5.3 million. In previous years it had disclosed royalties of between a third and 60% of total revenue.

Under the service company model, the local subsidiary is a marketing and support service for an overseas group company, with the sales or service revenue booked offshore. This model was more widely used before the 2018 law changes that made it easier for IRD to tax non-resident companies on revenue earned here. Credit card companies, who take commission from some $49.5 billion in card transactions, appear to deploy this model. Mastercard NZ hasn’t published financial statements since 2014 and Visa NZ stopped from 2014 to 2024.

“Big Tech, Little Tax” also looks at Netflix NZ, which has never published financial statements, despite its 1.2 million subscribers here likely generating around a quarter of a billion dollars a year. Booking.com NZ has also been intermittent in its filings. It signs up accommodation providers, which provide the revenue stream, but the actual contract is with Booking.com’s head office overseas. Although not considered in this report, Uber is another global “platform” business, registered in the Netherlands and other tax havens, that uses high service fees to minimise the tax obligations of its New Zealand subsidiary.⁴⁰

Audits

Microsoft NZ’s 2019 financial statement disclosed that it had been subject to audit over transfer pricing and paid just under $25 million in settlement. Tax Justice Aotearoa notes that Microsoft’s return on sales has declined significantly since, despite revenues increasing at a much greater rate in New Zealand than globally. Oracle too reported a settlement covering 2013-2021, comprising $8 million in 2022 and a (likely) refund of $4.3 million in 2023 – a very modest adjustment to profits over a nine-year period in which its revenue was just over $1.25 billion.

Lessons From Australia

In Australia, there is ongoing litigation between Oracle and the Australian Tax Office (ATO) on whether licence fees should be characterised as royalties – as they were here until 2017. A recently concluded PepsiCo case also has implications for New Zealand, says the report. An established Australian bottling company was licensed to make and sell Pepsi and use its branding.

To make it, they buy a concentrate from US Pepsi companies through separate “arm’s length” arrangements. The contracts do not prescribe royalty payments but the ATO considered these were bound up in the price of the concentrate. PepsiCo argued that the intellectual property was paid for in kind with marketing activities in Australia. The High Court ruled 4:3 in favour of PepsiCo, because licensing and concentrate purchase were separate contracts.

Tax Justice Aotearoa believes, however, that it is the minority judgement in favour of the ATO that would apply to the New Zealand practices described above. In each case there is one arrangement between subsidiaries of the same corporate group, not at all “arm’s length”. The minority opinion stated that the Court is not obliged to accept any label the parties themselves give to their dealings. Moreover, the fees paid here look excessive. Our existing legislation should be tightening to ensure withholding taxes on “embedded royalties”, Tax Justice Aotearoa says. From July 2026, Australia will introduce a penalty on any Australian subsidiary of a group with over $A1 billion in global turnover that is mischaracterised or undervalues royalty payments.

Tax Transparency Needed

Tax Justice Aotearoa wants immediate steps to increase public transparency on corporate financial reporting and taxation. The country-by-country reporting required of large corporations should made publicly available on their Websites. Our Companies Act should require all local subsidiaries of overseas-headquartered companies to file full public accounts here in New Zealand.

What Inland Revenue learns under automatic information sharing between OECD tax offices should also be made public, at least as general data. The OECD’s Common Reporting Standard for corporate financial accounts and other reporting makes it difficult to compare between corporations and countries. Tax Justice Aotearoa advocates that New Zealand requires corporation to adopt the accounting standards of the Global Reporting Initiative (which also requires reporting on issues such as climate change, human rights, and corruption).⁴¹ Australia has already led the way on this.

In regard to a fairer tax on capital gains or wealth, Tax Justice Aotearoa points to the current lack of transparency on who owns what. New Zealand should establish an asset or wealth register of significant assets not already covered (land and vehicles), with full ownership details. As well as the minimal information on the Companies Register, Tax Justice Aotearoa advocates for a publicly accessible register, with comprehensive information, of the beneficial owners of all companies and incorporated entities such as Trusts.

We also need better tax enforcement. Combatting corporate tax minimisation strategies will require significant resources but, more than that, political will, says Tax Justice Aotearoa. Progress through OECD and UN negotiations is slow. Here in New Zealand, we need to take up the challenge and reap the financial benefits, to better fund our public services – as Australia is already doing.

Catch Craig Renny’s excellent critique on Big Hairy Network, 1/1/26, http://www.youtube.com/watch?v=N5fJYCkclxA.↩︎
https://www.versobooks.com/products/2620-the-future-is-degrowth ↩︎
Stockholm Resilience Centre, www.stockholmresilience.org; K Raworth, “Doughnut Economics” (2017).↩︎
Drawing on earlier work by Thorstein Veblen, John Stewart Mills and John Maynard Keynes.↩︎
Ex-National Party MP Marilyn Waring’s “Counting For Nothing” (1988) (https://www.bwb.co.nz/books/counting-for-nothing) on the omission of women’s unpaid work from national accounts and statistics is referred to as “famous”.↩︎
https://transitionawayconference.com/?_hsmi=128270399 ↩︎
“Envisioning Real Utopias”, Verso 2010. https://www.versobooks.com/products/2143-envisioning-real-utopias ↩︎
Around three million in the world, they say, engaging 12% of humanity. See also World Cooperative Monitor’s 2025 report, and Cooperative Business NZ, https://nz.coop ↩︎
BRICS is a bloc headed by Brazil, Russia, India, China and South Africa, along with a number of other member countries and partners. - Ed.↩︎
C. Ogden, “What Is The BRICS ‘UNIT’, And Could It Really Challenge The US Dollar?”, The Conversation, 18/12/25 (https://theconversation.com/what-is-the-brics-unit-and-could-it-really-challenge-the-us-dollar-272163); RNZ Business or NZ Herald, 6/1/26.↩︎
Initiated by the tobacco industry against Smokefree Aotearoa in the early 2000s.↩︎
Post-war Japan is an example, see documentary “Princes Of The Yen” on Youtube (https://www.youtube.com/watch?v=p5Ac7ap_MAY).↩︎
“Doesn’t Mention Plastics”, M Paul, C Santos Skandier, R Renzy, “Out Of Time: The Case For Nationalising The Fossil Fuel Industry”, 2020, (https://thenextsystem.org/learn/stories/out-time-case-nationalizing-fossil-fuel-industry)↩︎
E Crossan, “Roger Douglas Has A Lesson For The Left”, Watchdog 170, December 2025, https://www.converge.org.nz/watchdog/70/08.html ↩︎
Bank of England, Financial Stability Report, 2/12/25 and “Stress Testing The UK Banking System”, 2/3/26; “Funding the Future”, 6/12/25; http://www.taxresearch.org.uk/Blog/2025/12/06/the-bank-of-england-is-warning-a-financial-crash-is-coming/↩︎
“The Unsustainable Green Transition,”
http://www.youtube.com/watch?v=pwmygkdoGgc&list=UULFVAmhbZxm23d0ILMiXKMe3A&index=3 ↩︎
A great short read. C Nair, “Davos And The Myth Of A Global Conversation” Pearls And Irritations, 5/2/26. https://johnmenadue.com/post/2026/02/time-for-non-western-nations-to-shun-the-western-worlds-economic-forum ↩︎
Less than $US3 a day, 2020 data, https://ourworldindata.org/poverty ↩︎
See “Lumumba” (2000), a film on Patrice Lumumba, www.youtube.com/watch?v=56oKpJVlX8E ↩︎
Heterogenite, which contains copper, nickel, cobalt and sometimes uranium.↩︎
Reinforcing iron, used like a crowbar.↩︎
Check out Glencore on Wikipedia (https://en.wikipedia.org/wiki/Glencore) for pollution, corruption, bribery and tax avoidance, much of it related to the Congo.↩︎
www.beehive.govt.nz/release/80m-rif-funding-critical-minerals-projects. Check out an interactive map of NZ’s critical minerals at https://data.gns.cri.nz/tez/index.html?map=GERM%20Occurrence See Fox Meyer’s article on what Trump wants from NZ’s mines, Newsroom 20/2/26, and Glen Banks and Sefton Darby on confusion, duplicity and agendas in the critical minerals debate, Spinoff, 23/2/26.↩︎
“Can The US Challenge China In Critical Minerals?”, 18/2/26, https://www.aljazeera.com/video/counting-the-cost/2026/2/12/can-the-us-challenge-chinas-dominance-in-critical-minerals ↩︎
$30 from https://steeleroberts.co.nz/product/privatisation-plunder/ or bookshops. Watch the Fabian Society book launch on www.youtube.com/watch?v=h0fXVPLuHcI ↩︎
Milton Friedman, 1912-2006, the US economist who was the father of neo-liberalism. -Ed.↩︎
Friedrich von Hayek (1899-1992), a reactionary economist who opposed the Welfare State and championed market forces. - Ed.↩︎
See my review of M Schmelzer, “Freedom For Capital, Not People: The Mont Pèlerin Society And The Origins Of The Neoliberal Monetary Order” in Watchdog 170, December 2025, https://www.converge.org.nz/watchdog/70/17.html.↩︎
T Piketty, Capital In The 21st Century, 2017. See Bryan Gould’s article about this book “Capitalism Produces Greater & Greater Inequality”, in Watchdog 136, September 2014, https://www.converge.org.nz/watchdog/36/06.html ↩︎
Excluding land and financial assets.↩︎
See greater detail in G Bertram & B Rosenberg, “The Employment Contracts Act 1991 And The Labour Share Of Income In NZ: An Analysis Of Labour Market Trends 1939–2023”, New Zealand Economic Papers, 2024. (https://doi.org/10.1080/00779954.2024.2330894)↩︎
UK economist and tax haven expert Richard Murphy is very good on this, see several talks on his YouTube channel (https://www.youtube.com/@RichardJMurphy).↩︎
PhD from Auckland, now teaching at Uppsala University, Sweden, author of “Rentier Capitalism: Who Owns The Economy And Who Pays For It” (2022), reviewed by me in Watchdog 162, April 2023, https://www.converge.org.nz/watchdog/62/08.html “Our Lives In Their Portfolios: Why Asset Managers Own The World” (2023); and essential reading for electricity buffs, reviewed by me in Watchdog 164, December 2023, https://www.converge.org.nz/watchdog/64/15.html “Why Capitalism Won't Save The Planet”, Greg Waite, Watchdog 167, December 2024, https://www.converge.org.nz/watchdog/67/04.html ↩︎
Labour economist at London University. His book Precarity [sic] (https://www.bloomsbury.com/us/precariat-9780755637072/) inspired a book of the same name (https://masseypress.ac.nz/products/precarity) about insecure employment in Aotearoa New Zealand.↩︎
https://www.bettertaxes.nz/; www.tjanz.org ↩︎
i.e. half of them have less than...↩︎
Inland Revenue, “High Wealth Individuals Research Project”, April 2023, www.ird.govt.nz/hwi-research-project ↩︎
See World Population Review https://worldpopulationreview.com/country-rankings/capital-gains-tax-by-country ↩︎
N Shaxson, “Treasure Islands”, 2012; “The Finance Curse”, 2019 (reviewed by Greg Waite in Watchdog 150, April 2019) https://www.converge.org.nz/watchdog/50/15.html ↩︎
A Zaki, “Report Claims Uber Avoided Millions In Company Tax” RNZ, 18/11/21.↩︎
www.globalreporting.org/↩︎

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THE FUTURE IS DEGROWTH