REVIEWS
- Greg Waite
THE ENEMY WITHIN It was a pleasure to read such a well written and interesting New Zealand book, available for $40 in Whitcoulls, online, and in your library. Younger readers will get a great overview of State surveillance today, and how we got here. Older activists like me can enjoy Maire's very balanced insights into the history of our local Left, with all its organisational quirks and characters.
"The Enemy Within" is both thought provoking and timely, given the international context:
It really does feel like the ground is shifting under our feet today. Most of that change is bad, but because it's so bad I also get the feeling that clarity is growing around the changes we need to make. For example, I've recently read and reviewed in Watchdog some outstanding books about England and America's repression in developing nations, closely tied to the interventions of their "intelligence" services to install military rule.
The Pattern Is Clear
These organisations build a psychopathic internal culture which justifies and evolves new forms of murder and torture. Today it's renditions and drones. Tomorrow, it looks likely to be the stifling of internal dissent. And we support them, providing locally gathered intelligence to our Five Eyes partners.
And what have we got from these organisations? They failed to detect real terrorist threats like the 1984 Wellington Trades Hall bombing, the 1985 Rainbow Warrior sinking and the 2019 Christchurch mosques' attack. They target the wrong people including our own and overseas elected politicians, regularly provide leaks to support conservative misinformation campaigns and undermine democracy.
Maire shows the evolution of laws and oversight on State surveillance, and the improved public relations, but the flexibility of legal interpretation still leaves plenty of scope for abuse, while our systems of operational scrutiny are grossly inadequate.
The Security Intelligence Service (SIS) budget for 2021 was around $100 million with 400 full time equivalent staff, while the Government Communications Security Bureau (GCSB) had 540 FTE (full time equivalent) staff in June 2023. Why are we misspending so many millions over so many years for so little benefit and no real accountability, while budget cuts send so many skilled workers overseas?
Maire recommends a break with the past, expanding the National Assessments Bureau (NAB) which currently sits under the Department of Prime Minister and Cabinet. Staffed by skilled public servants whose loyalty is to our Government, not the US and UK, the NAB provides assessments by combining open source intelligence, classified material and diplomatic engagement.
And Maire suggests responsibility for enforcement returns to the Police and the courts, with their built-in accountability procedures. This sounds like the perfect starting point for discussions on reforming our traditionally secret State surveillance and its subservience to the foreign policy of Western arms exporters. This is a big book, so I'll close just by highlighting a few of the many strands of New Zealand history woven together here.
Early Surveillance Of Māori Movements
"The Enemy Within" starts with World War I, when nearly 100,000 New Zealanders served in the war, and 18,000 died, or one in five. Princess Te Puea Hērangi, granddaughter of the second Māori king, led opposition to conscription in the Waikato, while Tūhoe prophet Rua Kenana discouraged Māori participation in the war.
After the war, surveillance of Māori movements that questioned the war continued, and included the pan-tribal Rātana movement formed in 1918. Rātana was seen as "a serious new potential mode of subversion" given its unifying potential and the "possibility of an alliance with pakeha social-democratic and other organised labour movements".
Subversion is a conveniently slippery term which here serves to undermine legitimate advocacy. Activists will recognise this familiar theme throughout the book's history of surveillance; it's always a loyal servant to vested interests. Other recurring themes are payments to undercover informants, lost jobs and promotions as a result of security assessments, targeted leaks and smear campaigns, spying on journalists and whistleblowers, and the role of New Zealand as a servant to UK/US interests and their client states.
History Told Through Personal Stories
But equally this is a book about the people who created our early workers' movement, the sometimes-quirky evolution of political parties, and the ongoing and natural advocacy of a diverse community, illustrated by a series of stories of "persons of interest". Here the themes are campaigns for peace and against conscription and judicial executions, for unemployed and organised workers, for alternative political visions, for solidarity with the world's oppressed peoples.
It's Personal
Maire asks early in the book how the Security Service (the original name of the SIS) justified putting her under surveillance at ten years old, and her brother Keith at 11. "We were kids riding our bikes and playing with our friends, and while we might have heard the term 'revolution' I doubt we could have explained it. More than that, our parents and their communist colleagues were thoroughly inoffensive and peaceable people. Even as kids we were aware that they were part of a fringe movement with no capacity for imminent revolt of any sort".
While reassured in a letter which accompanied the release of her 95-page SIS Personal File that she had never been regarded as a person of "security interest" in the same way that her parents were, Maire responds: "I do not accept that anyone in my family ever threatened State security. Moreover, the solidarity, anti-nuclear and anti-apartheid organisations I took part in should not have been spied upon. Such groups were and are a vital part of a healthy democracy".
Fittingly, the book closes with the story of Maire's brother Keith Locke*, who died in 2024. Keith became the target of close surveillance from when he was a student in the 1960s and increased through the 70s and 80s when he was a national leader of the Socialist Action League, then the national coordinator of the Philippines Solidarity Network.
*Murray Horton's obituary of Keith Locke is in Watchdog 167, December 2024. His obituary of Maire and Keith's mother, Elsie Locke, is in Watchdog 97, August 2001. And his obituary of their father, Jack Locke, is in Watchdog 84, May 1997, Ed.
Surveillance continued as he became involved in the Parliamentary politics of New Labour, the Alliance, and even after he was elected as a Green MP. A telling example is his involvement in a 2002 seminar organised by Students for Justice in Palestine. Two letters to the NZ Herald criticising Keith's views are filed with the handwritten comment "Eeeexxcellent!"
Does this mean the SIS had a hand in the letters, or just that some idiot had time on his hands? Keith pointed out the obvious - in a democracy the elected members of Parliament should not be spied on - and in 2011 agreement was reached that monitoring of MPs was no longer normal practice, though in exceptional cases the SIS will share supporting evidence with Parliament's Speaker.
In an amusing/incompetent postscript, it emerged that a joint SIS/GCSB induction presentation used since 2013 had included Keith as a "threat" (misspelt as "treat"). The talking point suggested that being a vocal critic of the agencies means you are a "threat" or a "syndrome". Director-General Rebecca Kitteridge apologised, saying: "People who criticise the agencies publicly are exercising their right to freedom of expression and protest, which are rights that we uphold". Kitteridge is better at PR, but the message and culture presented to incoming recruits is clear.
So, on a personal note I'd like to suggest in closing - when we do rethink surveillance, let's think about a time when we monitor corporate and rich list tax avoidance and their political influencers. Why is this type of misconduct left behind closed doors? Governments have both a right and a duty to study, understand, and publish analysis of corruption, so we can create an informed debate about a fairer world.
"The Enemy Within" extract about Murray Horton's SIS Personal File is reprinted elsewhere in this issue. Ed.
POWER TO WIN "Power to Win" is a great read. The idea of living wage campaigns was developed in the UK and US, but the local campaign approach developed here is unique and has been very successful, with 378 employers currently involved. For older activists like me, it's both interesting and inspiring to read more about how the Living Wage Movement works.
I started work in the 1970s when laws gave unions more bargaining power, membership was much higher, and "United Front" campaigns brought together stronger and weaker unions with support from community activists and small but active socialist/communist parties. The Living Wage Movement is a much more sophisticated style of organising, developing a wider range of partnerships over a longer campaign to build the power of our lowest paid workers.
Author Lyndy McIntyre sets the scene from the 1970s when union-negotiated national awards guaranteed pay and conditions, backed by an arbitration system. Then inflation and unemployment started to cut into wages and bargaining power, voluntary unionism was introduced in 1983, and in the late 1980s the removal of tariffs, public service corporatisation and market-driven economic policies left workers vulnerable.
In 1991 the Employment Contracts Act enabled employers to simply bypass unions and impose lower pay and conditions on workers, and they did. Wages for cleaners and other low wage workers spiralled down as penal rates disappeared, outsourcing spread contracting into schools and hospitals and bidding for contracts encouraged more wage cuts. Union membership plummeted. Falling membership forced unions like the Service Workers Union to amalgamate, and to move away from paid organisers helping workers towards supporting workplace activism, but without power wages stayed low and they began looking for new community-based campaigning.
What It Takes To Get A Living Wage
The Service and Food Workers Union (SFWU) backed the first campaign and union leader John Ryall produced a paper "Campaigning For A Living Wage In 2012", including recent Australian ideas of an "air war" and a "ground war". The air war was the public side, explaining what a living wage is, how it is measured, what it means to families and the importance of allies: other unions, faith groups, media, social commentators, politicians, funders of services. The ground war covered long term organisation of activities.
This was a different type of organising, drawing on the living wage movement in London which had been working with underpaid migrant communities. Research was required to make a solid case for the living wage level; community partners were brought together to support the workers; campaigns were adapted to each case and often used high profile public actions to pressure sympathetic employers into action; and even after in-principle support the organisers stayed involved to ensure implementation wasn't delayed or diminished.
Before the campaign launched, more than 50 organisations had signed up to support their founding statement, ranging across the Congregational Christian Church of Samoa, New Zealand Sikh Women's Association, Auckland Action Against Poverty and a long list of unions. Early organiser Fala Haulangi was skilled at identifying and supporting workers who could share their stories, one of the movement's critical innovations. Presenting stories about the reality and hardships of living on inadequate incomes broke down the barriers which separated the managers who made decisions like contracting out from the real consequences of their decisions.
International Experiences
Annie Newman travelled to the UK and US to learn from similar campaigns. The US organisers worked with a grass-roots model developed by the Industrial Areas Foundation (IAF) which supported and trained members of alliance organisations to step up to leadership roles. These new leaders' close links back to the membership enabled campaigns to mobilise large numbers at events. In America that training and mass base were essential.
As Mike Gecan, director of Chicago's United Power for Action and Justice said, in the US the Left was a small minority. Surveys show a small progressive percentage, a huge proportion in the middle, and a very big conservative band. "You want to organise without any of that middle? If you can't bring that in, you are not going to win. The numbers are stacked against you".
No Politics
Political parties were not invited to join the movement, to keep the focus on building strength in communities. This meant holding separate meetings with political allies to discuss the campaign and ensure they understood.
Setting The Rate
Wellington's Family Centre Social Policy Research Unit established the method for determining and updating the Living Wage, supported by focus groups of members organised by the SFWU which discussed what their households needed to cover essentials, to live with dignity and to participate in society. This is the difference between poverty and the Living Wage; moving beyond just surviving to being able to pay for school trips, have a home computer, have an occasional meal out and participate in their communities. The hourly wage rate is set based on the costs of a two adult two child family working a total of 60 hours per week.
Trademarks, Copyright And Accreditation
Early on, volunteers worked out an accreditation system for employers, so that there were clear expectations about what it meant to be a Living Wage employer, including coverage for all employees - no exclusions for subcontractors. Having a clear standard proved important, for example when The Warehouse announced publicly it was a Living Wage employer without consultation. The company required workers to complete 5,000 hours or three years' service before qualifying, and over 80% of staff would leave before qualifying in this high turnover industry. Despite an approach from the Living Wage Movement pointing out it didn't qualify; The Warehouse repeated its stunt a year later.
The Resisters
One of the key early campaigns was with Wellington City Council, where Mayor Celia Wade-Brown was supportive. She had a majority at the Council table but "the problem was the Chamber of Commerce and senior managers", who continued attempts to block the Council from implementing its decision for five more years, with the Chamber of Commerce seeking a judicial review on the right of Council to specify minimum pay for the contractors it pays. The Chamber's Chief Executive and President were regular submitters at Council meetings, but the Living Wage team noted that they rarely brought anyone from the business community; their main ally was the Rightwing Taxpayers' Union.
And when the 2020 election was a landslide for Labour it had a strong mandate to enact Party policy across the core public service. However, there were "an army of sceptical Ministry of Business Innovation and Employment (MBIE) officials charged with ensuring delivery on the Government's promise, and the nagging voice of the movement was still necessary".
The Mop March
In 2015 the Living Wage Wellington network came up with a new campaign to "clean up low pay in Wellington", with a march featuring cleaners, mops, buckets and the Brass Razoo Solidarity Band. Many of those cleaners finished at 4 a.m. but still gathered at the Methodist Church in Taranaki Street for the 8.30 a.m. march. As a result, Councillors voted nine to six in support of the living wage section of their long-term plan.
The Power To Win
In 2024/25 the Living Wage is set at $27.80 (it goes up to $28.95 from September 2025. Ed.). I'll leave the last words to the author: "Living Wage Movement Aotearoa NZ emerged as a response to the problem of poverty pay. Over the next decade the movement won pay increases in the public and private sectors, in small medium and large enterprises. For those on the minimum wage, pay increases were sometimes as high as 30%".
"The impact of the Living Wage Movement has been greater than the campaign wins. The visibility of the movement and the power of the simple definition - the rate that ensures workers and their families can live in dignity and participate in society - has put upwards pressure on the minimum wage. The Living Wage rate has been routinely adopted by unions as a rate to campaign around, [which has] brought unions together to campaign. Three streams - unions, faith and community - enrich and strengthen the larger movement, and the sum of the three is more powerful than each is alone".
"Finding power depends on uniting communities and mobilising those communities to exert pressure on decision-makers, be they corporates or institutions funded with public money. The greater the challenge, the greater the need to focus on the grassroots, build networks, reach across diversity and find common ground. These are the principles that continue to guide the Living Wage Movement. The quest for the power to win just and decent pay rates is as necessary as it was in 2011. As long as thousands of workers and their families still bear the brunt of low wages, this idea, this movement, has work to do".
THE INVISIBLE DOCTRINE Recommended reading for all Watchdog subscribers. "The Invisible Doctrine" is short, clear and convincing, showing how neoliberalism was developed from the ideas of obscure German economist Friedrich von Hayek* to become almost synonymous with mainstream economics today - yet it's bad economics. After reading this book, you may find yourself compelled to call conservatives out, to tell them bluntly they're just con artists, that their ideas are rubbish, their policies disasters. *Friedrich von Hayek, 1899-1992, was one of the ideological fathers of laissez faire economics and the politics of the New Right. Ed.
Put simply, very rich people understood the long-term potential to develop von Hayek's ideas into policies which talked about freedom for all, but gave them the freedom to take a larger share of the economic cake. They put huge amounts of money into owning the news media, funding thinktanks and academics. They promoted economic theories which sounded superficially credible, while downplaying quantitative analysis which showed up the failings of their models.
They developed and promoted language which would appeal to ordinary people - free markets mean freedom, Government is inefficient, privatisation will reduce costs - while backroom lobbying pushed von Hayek's less popular policies: tax cuts for the rich, crushing the unions. Freeing the rich was certainly Friedrich von Hayek's motto. For him, the economic elite were philosophical and scientific pioneers.
The ultra-rich are eulogised as "scouts", "experimenting with new styles of living", who blaze the trails that the rest of society will follow. Thatcher as Leader in the UK's Conservative Party famously slammed down a copy of von Hayek's "The Constitution Of Liberty" on the Cabinet table. "This is what we believe!"" she said. In the US, neoliberal economist Milton Friedman* had his own TV series in the 1980s, "Free To Choose", an infomercial for neoliberalism implanting the idea that "business freedom is personal freedom". *Milton Friedman, 1912-2006, the US economist who was the father of neo-liberalism. Ed.
Failed Economics
Did it work out like that? Of course not. Up to the 1980s inequality in the US had declined for 60 years; from the 1980s it returned with a vengeance. Since 1989, America's super-rich have grown $US21 trillion richer. The poorest 50% cent have become $US900 billion poorer. Looked at another way, from the Second World War until the late 1970s, general prosperity rose steadily, while income captured by the top 1% declined.
Neoliberal economics is a clear failure, measured against its claims - but of course, the public justifications aren't the real aims. Neoliberalism was always about transferring more wealth and power to the rich. Musk was able to demand $US56 billion from Tesla, because rich shareholders will pay anything to keep their shares artificially high; his share options had risen to $US101 billion last time I checked, for a part time job while he wreaks havoc across the US government.
There were two principal reasons for strong economic growth and inequality up to 1980. The first is the rise of social democracy, but Monbiot and Hutchison also emphasise a second far less discussed cause - the income transfers from colonial and post-colonial looting. Well before Thatcher and Reagan, the 1973 coup in Chile was a test laboratory for the American neoliberalist Milton Friedman. Economists from the University of Chicago devised and oversaw Pinochet's economic programme.
Chileans who resisted were imprisoned, tortured and murdered, while the nation's resources were systematically plundered by American and European corporations. Redistributive taxes and progressive spending ended. Through a series of economic crises from which Chile has yet to recover, the rich grew richer and the poor worked harder for less. So, while inequality in the First World was declining, inequality skyrocketed in the Third World.
Neoliberalism's Equality: Inequality For Both Rich And Poor Nations
"In looking back on the Keynesian era, we have a tendency to see two seemingly contradictory histories - the march of social progress in rich nations; and brutal wars, resource grabbing and social regress in the Global South - and to discuss them as if they occurred on separate planets. (Capitalism) is and has always been, 'an economic system founded on colonial looting'. Neoliberalism's contribution since the 1980s was to ensure that economic life became grossly unjust and coercive everywhere - even within the richest nations".
Neoliberalism also promises economic growth, but since its tax cuts for the rich reduce low income and Government spending, economic demand is reduced and growth declines. This is certainly true for New Zealand, where the Council of Trade Unions has pointed out the lower average growth under conservative Governments of the last 40 years.
Monbiot and Hutchison are particularly blunt on the push to sell off public assets: "As a general rule, privatisation is legalised theft from the public realm". The new owner's incentive is to extract as much money as possible, charging higher fees or cutting corners, diverting money that would have been invested in improving the service into their own pockets.
The authors suggest thinking of privatised public services as a tollbooth. Public services are a natural monopoly. We need that service - water, power, healthcare - so we'll pay the higher costs and contribute to the higher costs. And the ethos of public service disappears to reflect their new role as cash cows for capital - but privatised services remain essential, investors can run down the business and still expect State bailouts. Underfunded States become less willing to protect those at the bottom, to redistribute wealth, provide effective public services, to restrain those who exploit us and the planet. Our ability to change our lives through voting diminishes.
Democracy is diminished. Real power shifts to hidden discussions with corporate lobbyists, trade treaties and offshore tribunals, private meetings at economic summits. When run down State services no longer deliver and the State no longer protects, neoliberalism encourages us to blame the State and taxes, to forget who is benefiting.
The Neo In Neoliberalism
Political liberalism has a long history; merchants in the 17th Century wanted Governments to leave them alone. That neo in neo-liberalism was added in the modern era, recognising that State imposition was essential to implement these unpopular policies. Ironically, the key project of these self-claimed anti-State activists is to capture the State by hidden infiltration, then takeover in times of crisis. As the Right got more organised and successful in promoting its chosen political economy, it stopped using the term neoliberalism to provide less of a target for opposition. Today it prefers to pass off its self-serving ideas as good economics, part of the mainstream.
Invisible Doctrine, Invisible Backers
The UK's Institute of Economic Affairs (IEA) has insisted it is an independent thinktank for years, while arguing against further regulation of tobacco. In 2013 a legal settlement released internal documents showed it was funded by British American Tobacco. In the US the Koch brothers developed an entire network of thinktanks using "dark money", hiding the source of their funding and political influence.
By 1981, when Ronald Reagan became US President, the Heritage Foundation had published "Mandate For Leadership", 20 volumes and 3,000 pages of policy proposals - tax cuts, scaling back the welfare state, reducing the size and scope of regulatory federal Government, increased Presidential powers, massive increases in military spending. At a Cabinet meeting Reagan handed out copies of "Mandate For Leadership" and by the end of his first year, 60 % of those policies had been implemented.
By 1992 when Democrat Bill Clinton was elected, the Democratic Leadership Council had representatives from ruthless US corporations like Enron, Chevron, Texaco, DuPont, Microsoft, IBM, Phillip Morris and of course Koch Industries on its Executive Council. In the background, two senior Koch executives were on its Board of Trustees. Under their influence, Clinton and Gore moved to corporate "self-regulation", and in 1999 repealed the Glass-Steagall Act brought in after the 1929 stock market crash and the Depression to separate commercial and financial banking. That repeal led directly to the banking crash of 2008.
By 2017, the Atlas Foundation was supporting over 500 neoliberal thinktanks in over 90 countries. By Trump's first term, the neoliberal lobbyists were no longer influencing Government, they were the Government. Trump rescinded Executive Order 13770 which banned Government employees from lobbying for five years, creating a revolving door between the private and public sector, an incentive to back corporate agendas to secure future employment. Trump's plan to cut federal spending by $US10.5 trillion was drafted by The Heritage Foundation, and the corporate tax rate was lowered from 35% to 21%. He slashed the Internal Revenue Service, limiting its ability to collect even those reduced taxes. But the 2017-19 defence budgets increased 23%.
Keeping Influencers Invisible
Occasionally, the hidden neoliberal methods slip into public view. A note between founders of the Institute of Economic Affairs urged it was "imperative that we should give no indication in our literature that we are working to educate the public along certain lines as having a political bias. That is why the first draft (of our aims) is written in rather cagey terms". Particularly revealing was the early advice from von Hayek to the founders not to do any original thinking, but to ensure the Institute became a "second-hand dealer in ideas". This was an ideological project after all; too much real economics carried the risk of showing the poor outcomes from their policies.
And in 2010, veteran corporate lobbyist Jeff Judson wrote an essay titled "21 Reasons Why Free-Market Think Tanks Are More Effective Than Anyone Else In Changing Public Policy", since deleted. He pointed out thinktanks' most important advantage over direct lobbying is they are virtually immune to criticism because the donors remain confidential and out of public sight.
The "Pollution Paradox"
The authors define this as: "The dirtiest, most anti-social and damaging companies have the greatest incentive to invest in politics, as they are most likely to face the heaviest regulation, if exposed to full democratic scrutiny. For this reason, they spend more money on changing political outcomes than any other commercial interests. The result is that politics comes to be dominated by the dirtiest, most anti-social and damaging industries".
This paradox helps to explain a wide range of modern failures, including our inability to arrest climate and ecological breakdowns; to protect public health; to tackle obesity; to curtail the financial sector's predatory and destabilising strategies; to tax fairly; to resist exploitative labour practices; to limit social media's profiteering, anti-democratic and anti-social outcomes.
When Neoliberals Get Everything They Want
Liz Truss was UK Prime Minister for a record short 49 days in 2022. Truss was co-author of a book called "Britannia Unchained" which blamed England's problems on laziness and celebrated "black-market buccaneers" as "the purest level of entrepreneurialism, untouched by law, regulation or tax". She was also closely aligned with the IEA, fronting a Free Enterprise Group of Conservative MPs whose Website was registered by the IEA's Director.
In 2022, while campaigning for Conservative Party Leader, she published her "Plan For Growth" - "cut taxes now, unshackle business from burdensome regulation, create investment zones free of rules". Once elected and PM, she announced proposals to cut taxes for the rich, remove the cap on bankers' bonuses, end anti-obesity measures, rip down planning controls, and end 570 environmental laws.
Her chief economic advisor was formerly boss of the Taxpayers Alliance, another neoliberal think tank funded obscurely by foreign donors. Two weeks after the election, Truss and Chancellor Kwasi Kwarteng devised a mini-Budget to cut the top rate of income tax, cut the basic rate, and end a long list of other progressive taxes.
On the day of the Budget the thinktanks crowed about their takeover of the Government, while the founder of the Conservative Home Website said this was "a massive moment" for the IEA, which had "incubated Truss and Kwarteng during their early years as MPs. Britain is now their laboratory". So, what happened in this experiment where the neoliberals got to do just what they wanted? The economy fell off a cliff, of course. The Bank of England was forced to intervene to prop up the pound, and rising interest rates cost the country around £30 billion. A month later Truss resigned.
Attack Of The Killer Clowns
The authors also bring humour to this book. Why, they ask, are there so many "maverick" leaders distinguished by ego, buffoonery, shamelessness, disregard for justice, due process and political standards? Silvio Berlusconi, Donald Trump, Boris Johnson, Jair Bolsonaro, Scott Morrison, Narendra Modi, Benjamin Netanyahu, Rodrigo Duterte, Recep Erdogan, Viktor Orban. The list goes on...
"None of these people come to power without the consent of capital, so why are the ultra-rich funding this three-ring circus? Why did they want to support middle managers (like Tony Blair and Barack Obama) one moment, and jesters the next. The reason is the nature of capitalism has changed. During the 1990s and early 2000s, the dominant political force in neoliberal nations was corporate power. What corporate power wanted was technocratic Government. It wanted competent managers, who could deliver a stable State platform for business, and secure their profits against democratic change".
"Corporate power remains a great influence on Government and a constraint on democracy. But it has been mutating into, and become overlain by, another force: oligarchic power". Monopolies and asset strippers make up a growing segment of modern capitalism, the opposite of the competition it claims to promote. There are oligarchs in every society now - people whose inordinate economic power translates into inordinate political power. Rupert Murdoch is an oligarch. So are Charles Koch, Elon Musk, Jeff Bezos, Mark Zuckerberg and Gautam Adani".
"What oligarchs want", in the words of favoured enforcer Steve Bannon, is the "deconstruction of the administrative State. Chaos is the profit multiplier for the disaster capitalism on which the billionaires thrive. Every rupture is used to seize more of the assets on which our lives depend". This second type of capitalism "can be described as 'warlord capitalism'. Nothing should be allowed to stand in the way of profit-taking".
"The killer clowns create distraction and exhaustion. While the rich fleece us, we are persuaded to look elsewhere, to blame others. Eventually, the 24-hour news-cycle churn of manufactured scandals and diversions exhaust our capacity to respond. It's all too much; we tune out and withdraw from political action".
Quotable Quotes
Franklin Roosevelt (1938): "The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic State itself. That, in its essence, is fascism".
Authors of "The Invisible Doctrine": "For years, the neoliberal thinktanks - while refusing to say whether they were funded by private health and insurance companies - have argued for the privatisation of the National Health Service (NHS). No Government has dared implement it, overtly at least. Instead, Governments have pursued another means to achieve the same ends - death by a thousand cuts".
"There's no mystery about why the (UK public dental service) service is vanishing - successive Governments have ensured that if dentists treat patients on the NHS, they lose money. The first, most urgent and important step is campaign-finance reform - we must stop the rich from buying political outcomes".
"One of the fairy-tale promises of capitalism is that everyone can aspire to private luxury. By asserting their right to private luxury, the very rich deprive other people of basic necessities. So, does this mean that no one should aspire to luxury? On the contrary, it means that everyone should. Not private luxury, but public luxury. While there is not enough space or resources to provide everyone to enjoy private luxury, there is enough to provide everyone with magnificent public parks, gardens, hospitals, swimming pools, beaches, art galleries, libraries, transport systems, playgrounds and community centres".
A New Story
The authors conclude by noting the collective genius of neoliberalism, using seed funding to build a giant army of academics, economists, intellectuals and PR experts who maintain a popular mythology for such deeply unpopular policies. They point out we humans are simple creatures; we do not read the economics, we search for a coherent narrative which seems to explain the world we face every day.
They point out that throughout history variations on the "Restoration Story" have been used to give credibility to the politics of a new era because of its compelling narrative power: Disorder afflicts the land, caused by powerful and nefarious forces working against the interests of humanity. But the hero or heroes will rise up and revolt against this disorder, do battle with those powerful forces and, against all odds, emerge victorious to restore harmony to the land.
Here's the John Maynard Keynes version: Disorder afflicts the land, caused by the powerful and nefarious forces of the economic elite, who have captured the world's wealth. But the hero of the story, the enabling State, supported by working and middle-class people, will contest this disorder. It will fight those powerful forces by redistributing wealth and, through spending public money on public goods and services, will generate income and jobs, restoring harmony to the land. *John Maynard Keynes (1863 - 1946) advocated Government spending on public works to stimulate the economy and provide employment. He was the most influential Western economist for several decades after World War 2, until he was supplanted by the monetarists. Ed.
And Here's The Neoliberal Version
Disorder afflicts the land, caused by the powerful and nefarious forces of the overbearing and over-reaching State, whose collectivising tendencies have crushed freedom, individualism and opportunity. But the hero of the story, the freedom-fighting entrepreneur, will fight those powerful forces. He will roll back the paralysing restrictions of the State and, through creating wealth and opportunity that will trickle down to all, restore harmony to the land.
The authors argue that neoliberalism - despite all its failures - continues to dominate our lives because we have produced no new story to replace it. But such a story exists and is waiting to be told. In contrast to the ideas and policies of neoliberalism shaping a society of isolated individuals competing to create our own destinies in free markets, much recent research shows that we have a remarkable capacity for altruism and cooperation.
"Steering people away from fascism - a common response to political and societal dysfunction - requires an answer to the need for belonging. Fascism seeks a bonding network: one that brings together people from a homogenous group. Its antithesis is the bridging network: one that brings together people from different groups. So, our new Restoration Story could go something like this":
"Disorder afflicts the land, caused by the powerful and nefarious forces of people who tell us that our highest purpose in life is to fight like stray dogs over a dustbin. But the heroes of the story, the common people long deprived of the democratic power we were promised, will revolt against this disorder. We will fight those nefarious forces by building rich, engaging, collaborative, inclusive and generous communities. In doing so, we will restore harmony to the land".
And very specifically, they argue: "We can use new, fairer election rules to ensure that financial power never trumps democratic power again. Representative democracy should be tempered by participatory democracy, enabling us to refine our political choices. These choices should be exercised as much as possible at the local level. If something can be decided locally, it should not be determined nationally".
They also highlight the work of the late Murray Bookchin, who proposed a structured participative democracy, with local popular assemblies open to anyone sending delegates to represent them at confederal councils. These delegates have no power of their own, they can only convey and discuss the decisions made locally, and can be recalled at any time. Bookchin saw these local authorities as gradually acquiring control over elements of the local economy, and was an inspiration for the region of Rojava in Syria.
It's an appealing model, and it could also be applied to put brakes on the abuse of national power today, like sales of critical State assets. Imagine a world where these sorts of key long-term decisions for the nation, which have huge cross-generational implications, required the support of 90% of local councils. No more back room deals, no more Brexits, no more corporate bail-outs.
Going Big For System Change
And before the book's end, they have another version of their narrative tale: "There is too little time, and the ask is too big, to try to change the system. People aren't ready for it, and we have to meet them where they are. We can't afford to lose votes or contributions, or provoke a fight with powerful interests. So, the only realistic approach is incrementalism. We will campaign issue by issue, sector by sector, seeking gradual improvements. Eventually, the small asks will add up to the broader change we seek, and deliver the world we want".
"But while campaigners and progressive politicians have been playing patience, power has been playing poker. The radical Right's insurgency has swept all before it, crushing the administrative State. While we persuaded ourselves that there was no time for system change, they proved us wrong by changing everything".
"The problem is that incrementalism is too small of an ask. Only a demand for system change has the power to confront the scale of our problems. System change, as the neoliberals and the new demagogues have proven, is, and always has been, the only fast and effective means of transformation. Just as a financial system or an ecosystem can flip suddenly from one state of equilibrium to another, so can societies. It has happened many times before: sudden, sweeping changes have taken place, though they seemed unimaginable shortly before they happened". Think of smoking.
"We now have a good idea of where such thresholds might lie. Both observational and experimental data suggest that once roughly 25% of the population are committed to change, most of the rest of society quickly joins them. If we are to reach these social tipping points, our first task is tear down the cloak of invisibility that shields both neoliberalism and the true nature of capitalism from public view". Great stuff, great book.
THE ROAD TO FREEDOM Joseph Stiglitz is the best mainstream economist of the modern era. He's published key papers on a wide range of topics, always emphasising quantitative evaluation of economic policy, to counter the risks inherent in simplistic modelling and unrealistic assumptions. He was dismissed from the World Bank in 2000 for pointing out the failure of free-market policies it imposed on developing countries, was awarded a Nobel Prize in Economic Sciences in 2001, and published the landmark book "Globalisation And Its Discontents" in 2002 (reviewed by Jeremy Agar in Watchdog 105, April 2004. Ed.)
In his latest book "The Road To Freedom" he tackles neoliberalism head on, exploring its roots in Friedrich von Hayek's book "The Road To Serfdom" through to today's adoption by Right and Centre Governments around the world, and proposes an alternative economics described as "rejuvenated social democracy" along the lines of "a 21st Century version of the Scandinavian welfare state".
Mainstream UK and American reviews are lukewarm: "Stiglitz's conviction - ardently expressed, mostly unconvincing - is that capitalism got us into this mess and can get us out of it too" (Guardian); "By the end of the book, it's hard to escape the impression that Stiglitz is fighting battles of the 1990s" (Washington Post). But mainstream media is now openly shaped by wealthy owners, feeding us the biased views of bank economists and mogul-funded Rightwing thinktanks (see my review, above, of "The Invisible Doctrine"), so don't let their views put you off.
"The Road To Freedom" is a good easy read. Stiglitz uses plain-language economics to debunk neoliberal claims to offer freedom and prosperity through "free" markets. Economics, he writes, provides "tools to think about the nature of the trade-offs that should be central to discussions about freedom", and about how those trade-offs should be addressed. The most important chapter in "The Road To Freedom" is titled "One Person's Freedom Is Another's Unfreedom", and explores the impact of "externalities". By externalities, economists mean costs (or benefits) caused by one party's action but impacting on others.
The obvious example is climate warming, where established corporate giants profit from continued fossil fuel use, and the rest of us suffer the consequences of wild weather and food shortages. Stiglitz makes the hugely important point that in today's world of unregulated markets, externalities are the new normal. Rightwing economists (neoliberalism) conveniently fail to recognise the importance of externalities; they argue first that voluntary self-regulation is sufficient; and when cornered argue for a tax on the externality-generating act. The Right's definition of freedom (for corporations) means they can happily take all this easy money because the cost penalties of taxes are lower than their gains.
Put bluntly, neoliberal economics is just a front for today's tech, oil and weapons tycoons to make excessive profits and dominate the economy, while ruining the world for everyone else. You can see why they emphasise freedom and choices so much. Regulation or prohibition are often more effective controls on externalities, and harder on profits.
Stiglitz also uses economic arguments to debunk privatisation: "Not making essential public investments is to leave a country impoverished. There are very large rates of return on each of the categories of public investment, far higher than the cost of borrowing. Incurring debt to make high-return public investments is in the countries' best interest, with both this and future generations better off".
Versions Of Freedom
Since freedom is used and abused so much by rich-funded think tanks, Stiglitz has a lot to say about illusory versus real freedom. Here's just a few quotes: "From Reagan to Clinton, Presidential Administrations expanded the freedom of the banks. Financial deregulation and liberalisation meant freeing the banks to do as they pleased... Free and unfettered markets are more about the right to exploit than the right to choose... This debate concerns the balance between freedom from coercion from the State versus freedom from being harmed by others. But there is an important positive sense of freedom too: freedom to live up to one's potential. People who are living on the edge have, in some sense, no freedom. They do what they must to survive".
"Unfettered capitalism - the kind of capitalism advocated by the Right, including by its intellectual leaders Friedman and von Hayek - undermines meaningful economic and political freedoms and puts us on the road to 21st Century fascism... Our democracy has shifted away from the idea of 'one person, one vote' to the cynical reality that can more accurately be described as 'one dollar, one vote', a political inequality that undermines the very notion of democracy.... Freedom House, a nonprofit organisation in the US that compiles an annual assessment of trends in freedom, said in its 2022 report that there had been 16 consecutive years of declining freedoms".
What Is Stiglitz's "Good Economy"?
Stiglitz asks: "What kind of economic system is most conducive to a good society?" A key problem is simply today's inadequate public understanding of markets. Stiglitz points out that the concept of "unfettered markets" is an oxymoron, because it is the State and its laws that provide the framework within which people transact. "Without rules and regulations enforced by Government, there could and would be little trade," he observes. "Cheating would be rampant, trust low".
The view that "competitive markets are efficient" is also mistaken, because they are subject to contingencies of imperfect information and incomplete contracts. So too is the belief that "markets on their own would somehow remain competitive" - a proposition that simply ignores "the experiences of monopolisation and concentration of economic power".
Without well-designed regulation to ensure competition, Stiglitz argues, "firms on their own will subvert competition in one way or another and power becomes more and more concentrated". In addition, he highlights "critical market failures" - for example, in protecting the environment and managing natural resources. Regulation is thus necessary to "prevent exploitation of each other and the environment". Since markets are bad at self-correcting, we need Governments to take the lead. And critically, markets are incapable of taking into account externalities, a catastrophic flaw at a time of rapid ecological deterioration.
Stiglitz emphasises the need for sustained public investment in key technologies, recognising that many of the legal devices to incentivise private innovation such as patents have degenerated into instruments for rent-seeking. He recommends tackling these systemic problems with a package of policies, including regulations, prices, and public investments, to address externalities, especially in a case of the scope and complexity of climate change.
Understanding Inflation To Respond To Inflation
When inflation surged at the end of 2021, many US economists blamed the Government's pandemic support for fuelling demand and demanded austerity. Others, including Stiglitz, counselled a more cautious approach. They pointed to the supply-side interruptions caused by the pandemic and the war in Ukraine, arguing that inflation was likely to be temporary. The right solution was public investment. By the end of 2023, inflation came down.
Later analysis shows there was a new factor driving recent inflation which is very specific to unregulated capitalism. According to the Economic Policy Institute, rising profits explained well over 40% of the rise in US price levels between the end of 2019 and mid-2022. By the second quarter in 2024, corporate profits still explain roughly a third of the growth in the price level since the end of 2019, much higher than the long-run average of just 11.5%.
Stiglitz: "Neoliberalism has given rise to enormous 'rents', the monopoly profits that are a major source of today's inequalities. Much is at stake, especially for many in the top 1%, centred on the enormous accretion of wealth that the system has allowed". And much is at stake for consumers, especially the young, because the extracted wealth was a one-off, but the prices paid for the products of these now-overpriced assets - our power, water, homes, etc. - will be higher forever without corrective action by Governments.
Stiglitz Backs "A Moral Capitalism"
This is where most Watchdog readers may be unconvinced. It'll be a long wait for today's capitalism to develop morals. We'll be looking instead for political and structural changes. Still, within his "more moral" discussion he also suggests action: "Morally illegitimate wealth gives rise to wages and prices that themselves lack moral legitimacy".
"Those wages and prices would be different, too, if there were different rules and regulations in the economy. But when they're written by the rich and powerful, the wages and prices generated have no moral legitimacy (p.104)". And “there's no moral justification to let the rich keep their income from ill-gotten gains rather than to give it to the people with low incomes, especially if those incomes might have been higher had property rights been defined and assigned differently and perhaps more appropriately (p.107)".
The time might be coming when new responses to ill-gotten gains are both necessary and justified. Imagine calculating the size of historic theft imposed through US coups, weapons sales, development restriction and corporate theft on Third World nations. It's likely to be lot more than the value of foreign corporations. In a climate crisis caused by rich nations, isn't nationalisation just and rational?
It's becoming clear we will need to radically remake our Governments and economies to survive now-inevitable climate disasters. Let's do it sooner, rather than too late. Or here in New Zealand, why not impose a new tax on investment property values and sales, to recoup the speculative overinvestment which imposed our crazy house prices on the nation? Prices still have a way to come down from today's million-dollar medians.
Where To From Here?
All the familiar arguments for change are in "The Road To Freedom" - neoliberal freedom gives the already rich unlimited power to exploit; today's capitalism is anti-competitive and profits are excessive; extreme wealth has undermined democracy; countries with redistributive Government and strong regulation create more cohesive and productive societies.
Stiglitz advocates an alternative to neoliberalism he calls "progressive capitalism", or for a European audience "rejuvenated social democracy" along the lines of "a 21st Century version of the Scandinavian welfare state... a better balance between the market and the State". This includes redistributive policies, antitrust laws and regulations to tame corporate power, as well as support for trade unions and civil society organisations such as not-for-profit enterprises.
The problem is, how do we get all that in today's US-dominated dystopia. The rich are in charge and they don't give a damn, my dear - which does make the road to, let's call it democracy for short, clearer for the rest of us. It's a global project which needs alliances of regions against US corporations. Today's giant US corporates have no interest in competitive capitalism.
And in New Zealand, if it's possible to rebuild labour and community strength sufficient to limit neoliberal power, we will need to build multiple new fronts - an institution of independent Government analysis; new public-funded services which out-compete today's rip-off privatised monopolies; support for cooperatives so young people experience workplaces that don't treat them like servants; unions that collectively advocate for the poorest rather than the strongest, etc., etc.
Well, you'll have your own ideas for the future, but the point is Stiglitz's prescription in "The Road To Freedom" for a new progressive capitalism isn't anywhere near radical enough. No credible path is suggested to get to the proposed ethical/competitive/capitalist alternative, and not enough attention is given to the US role in creating present corruption.
THE CAPITAL ORDER The affordable softcover edition of "The Capital Order" came out in February 2025, with the hardcover already making a big impact in 2022. To quote James K Galbraith: "A work with remarkable resonance for the moment we are living through. I found it impossible to put down". "The Capital Order" describes the origins of austerity as a distinct economic policy in Italy and England after World War One.
To hold down the radical post-war demands of workers, conservatives constructed a mythology around economics as independent scientific expertise, reliant on objective technical experts and independent of politics. Mattei mines the original writings of those early economists, both their public and private correspondence, to provide a sharply relevant critique of today's use of fiscal, monetary and industrial austerity.
By unearthing the debates between economists after WWI, Mattei gives us a broader understanding of both neoliberal and Keynesian economics. We tend to see Keynes' policies of State-led stimulation in recessions as a break through which underpinned post-WWII increases in equality. We contrast Keynes' success with the failed austerity economics under Thatcher, Reagan, Douglas, Truss, Trump and Luxon, whose policies failed to deliver on their promise of increased growth.
Austerity Is A Plan To Increase Unemployment, Not Target Inflation
Mattei turns this around. The foundations of our modern economics were laid in reaction to post-WWI workers' militancy. Austerity was clearly understood as a tool to raise unemployment, with the long- term goal of increased profits - and it worked. It is a success for its promoters, not a failure, because it creates the conditions for long term increases in profits.
The idea that economists were neutral experts, and the creation of independent reserve banks around the world, was promoted not because they were neutral, but precisely because they were not. Raising interest rates imposed heavy costs on working people for the long-term benefit of the investor class. Mattei argues that these decisions were taken away from Government, exactly because they are profoundly political, and would be more easily contested if left to Governments and citizens to decide democratically.
A Radical Economic Analysis
This book is equally inspiring for its mix of outspoken radicalism with impressive research, a rare quality today. Mattei is proudly Marxist, but is also a very good economist and historian who can write clearly and concisely for general audiences. There's a lot in this book, so rather than burying you in detail, a bullet list of the main points is provided below. After that, I've highlighted a few more key points with a little more detail.
The Technocrats Take Charge
At two conferences in Brussels (1920) and Genoa (1922) to deal with post-war debts, the dominance of economists over politicians and capital over labour was cemented. Delegates were mostly academics and economists - "in the main, leading bankers and treasury officials". Committees of experts included financiers, businessmen and bankers. Politicians were few and working-class voices were largely excluded. Technical documentation was abundant.
Critically, economics professors had the responsibility of drafting the most important memoranda, where they portrayed themselves as spokespersons of universal and value-free truths about the economy. And what classless truths did they conclude? "Labour efficiency will have to be increased, in the first place by avoiding strikes, but further also by a more intensive supply of labour-service".
"Recovery required reducing the home consumption to the strictly necessary and avoiding the superfluous, e.g. excessive consumption of butter, sugar, etc. ... In order to enlist public interest, it is essential to give the greatest publicity possible to the situation of the public finances of each state... The country which accepts the policy of budget deficits is treading the slippery path which leads to general ruin; to escape from that path no sacrifice is too great".
"Every Government should abandon at the earliest practicable date all uneconomical and artificial measures which conceal from the people the true economic situation (such as) welfare and social expenses, price controls over primary goods such as bread and other foodstuff, unemployment benefits, and low transportation service fares and postal rates".
The experts were aware that fiscal austerity and "dear money" (higher interest rates) equalled "hard times and unemployment" and would be deeply unpopular. The solution depended on "placing the issue of paper currency outside the direct control of the State. A national or municipal government might possibly be powerless against such pressure on the part of employees, because the latter can make their political influence felt on the national Government".
On the other hand, "an independent banking institution need not, however, allow itself to be led by the nose by any power whatsoever exercised by the employees" (Brussels, 1920). These conferences and their attendees then travelled the world, promoting the creation of "independent" (pro-investor) central banks.
Free Markets Deliver Coercion
Mattei concludes: "What's clear is that austerity is particularly effective not in stabilising economies, but in stabilising class relations. After all, austerity has historically never been about curbing inflation and budget control; its manipulations of aggregate demand have always been a means to a deeper end. Austerity secured the best possible conditions for profits to soar, while the majority - the politically underserved - were forced to relinquish all fledgling projects of economic democracy and to live harder through lower wages and lower consumption. Austere capitalism produces winners and losers, and it always has".
"The study of class shares (i.e., wage share versus profit share of production) provides a clear sense of the losers and winners of austerity. Class shares measure the portion of gross domestic product (GDP) that goes to labour and to capital - the most immediate indicator of the balance of forces between a society's two main classes. The austerity counteroffensive had an unequivocally uniform impact on both countries: it reversed both countries' labour gains dramatically".
She also notes that the economic prescription of austerity lived on well beyond the Great Depression. The International Monetary Fund has enforced on most of the peripheral countries of the world today loans conditional upon austerity; a focus on "economic freedom" rather than political freedom; and the compulsion to open a country's economy to international investment.
Wartime And Postwar Innovation
In 1915 England brought in an excess profit duty to control private profiteering from high wartime demand for essential goods - and New Zealand followed the imperial lead in 1916, though we dropped the tax a year later. This is a policy we need again today but most of the excess profits are in the USA. Imagine Trump's response if we imposed an excess profits tax on the true value of tech company extraction.
During WWI housing construction stopped, while many homes were destroyed. England's post-war Labour government promised 500,000 new homes in three years, and council contracts supported delivery of some through builders' cooperatives. These guilds operated on a nonprofit cost-price basis plus an allowance to maintain continuous pay for workers, and proved very efficient.
Two years later, austerity economics crushed the project. Today, when the private sector builds only for the well-off, that radical idea resonates again. Why not revive this model today? Structural incentives for cooperative building groups accessing Government contracts to stimulate the economy in downturns could offer their members some of the benefits of the public service (reliable work and conditions, good management), while giving the public lower building costs through a limit on profits. Austerity aims to prioritise capital's profits; we need to look for alternatives.
Italian Radicalism, Occupations - And Retribution
In 1920, at the peak of factory occupations, the Socialist Party published a manifesto across all editions of their paper L'Avanti: "If tomorrow the hour of decisive struggle strikes, you too must rally in the battle against all the bosses, all the exploiters! Take over the communes, the lands, disarm the carabinieri, form your battalions in unity with the workers, march on the great cities, take your stand with people in arms against the hireling thugs of the bourgeoisie! For who knows, the day of justice and liberty is perhaps in hand".
It was not; by 1922 Mussolini and his fascist Blackshirts were firmly in power. The Italian Left's over-optimistic determination to seize control of production was encouraged by their version of Marxism, shared by Mattei, that all productive output is purely the result of workers' labours, not capital. Profit is the share of productive returns taken by capital from workers. Seizing control of production is portrayed as natural and necessary.
Back then, the Bolsheviks were taking power in Russia, Europe's State repression was severe, yet armies were vulnerable to revolt; wild revolutionary dreams were a product of those times. But today, the power of capital and its necessity in production is hard to deny. Building up cooperative enterprises in the gaps where private markets fail and recreating effective democracy sound more realistic than a frontal assault on the ownership of production.
Austerity Quotes
Economist Ralph Hawtrey in 1920: "taxation for debt redemption takes money from people who might otherwise spend it on themselves and uses it to increase the resources of the capital market". Hawtrey again in 1925: "(The central bank) is free to follow the precept: 'Never explain; never regret; never apologise'".
Alan Budd, a top UK Treasury civil servant during the Thatcher years: "The Thatcher government never believed for a moment that (monetarism) was the correct way to bring down inflation (though this is what it claimed). They did however see that this would be a very good way to raise unemployment. And raising unemployment was an extremely desirable way of reducing the strength of the working classes.... (This) has allowed the capitalists to make high profits ever since" (Cohen, 2003).
Wolfgang Schauble, German Finance Minister: "Austerity is the only cure for the eurozone", Financial Times, 5/9/11. Clara Mattei: "A century later, exploitation due to wage stagnation - what I show to be the most intractable legacy of austerity - persists as the main driver of a global inequality trend in which a country like Italy has seen the wealth of its richest six million increased by 72% in the last ten years. The country's poorest six million have had their wealth diminished by 63% over the same period."
AI NEEDS YOU "AI Needs You" provides an odd mix. The military and surveillance applications which are the largest uses of AI are well described, but the recommendations for political restraint on AI are naive. From the conclusion: "The United States has another tremendous opportunity to hold back from wanton militarisation and signal to the world that it has not forgotten how to lead". Really? AI was developed with US military funding and today Palantir, founded by Trump supporter Peter Thiel, has an office in Kyiv to promote "MetaConstellation," an AI programme that combines data from satellites and covert intelligence to identify targets. Palantir has contracts with the UK and Israeli armed forces.
So, what is artificial intelligence (AI) anyway? It is very big computers applied to very large datasets - which can include language, events, personal data, financials, etc., - to solve problems. The solution comes in the form of an algorithm, which means a complex set of rules. Imagine a relatively simple problem, like which households get approved for a home loan.
There will be social biases reflected in the historic data used to train the algorithm; some relevant data will not be available; so there will be a bias in loan allocations; the size and cause of that misallocation is unknown; and algorithmic complexity hides the rules. In short, AI will produce a high proportion of errors, and we won't know which they are until afterwards. Now imagine you're targeting domestic citizens for surveillance or bombing homes with drones. Your intelligence is unreliable, your success rate is unknown, but people's lives are changed or ended.
Promoting Authoritarians
Or think about AI applied to Internet promotion of authoritarian leaders and their agendas - no-one knows how extensive or effective this is because they keep it secret; but we do know most autocrats now use these tools, that Myanmar's military used Facebook to promote genocide against Rohingya, that Clearview AI scrapes millions of facial images off the platforms like Facebook and YouTube and sells them to police, and Musk helped elect Trump.
Harding is well qualified to write this book. After starting as an overworked young policy analyst for the British government, she moved to Google in 2013. There, she was drawn to AI in its early days, seeing the huge potential social impacts and feeling she could help reduce the knowledge gap between those developing the future and those who would regulate it.
The central weakness of this book though is Harding's narrative approach to solutions, describing investigations of earlier successful public management of new technologies - invitro fertilisation, the "space race", the Internet - which are used to bolster the author's assertion that "we can build and use technology that is peaceful in its intent, serves the public good, embraces its limitations rather than fighting them, and is rooted in societal trust".
"It is possible, but only through a deep intention by those building it, principled leadership by those tasked with regulating it, and active participation from those of us experiencing it. It is possible, but only if more people engage, take their seat at the table, and use their voice". Which table is that? In a nation where wholesale retention and resale of personal data by private corporations is mirrored by military-surveillance data gathering and analysis, Harding comes nowhere near describing the political challenges we face.
The strength of "AI Needs You", though, is in going beyond ChatGPT to provide a broader picture of how AI is used. The first chapter is optimistically titled "Peace And War" and makes clear that AI was initially funded and developed by and for the military, and is still seen today as a key strategic advantage by the US military-surveillance state, hence the campaign to force other countries to follow the US lead and restrict exports of high-end chips to China.
Economic war - arbitrary impositions for advantage rather than rules-based exchanges - is closely linked to military advantage. For Harding though, this is "not necessarily a bad thing, of course. Protecting the national interest is a core role of any Government and wanting to maintain a lead in emerging technologies is understandable and important".
The problem with this argument is the shift of US capitalism away from competition towards extractive market domination. Tech companies may manipulate their pricing and profits to avoid tax, but they can't hide their gross profit margins (Meta 82%, Palantir 81%, Nvidia 75%, Microsoft 70%, Alphabet [Google] 58%). US corporations are stealing from the world, with US government backing. And like executive salaries, there is no upper limit on this greed (next year, $US101 billion worth of Tesla stock options just won't be enough for Musk).
Internet Also Military-Funded
Universities and geeks are staples of standard Internet-origins stories, but Harding reminds readers the Internet itself was created with military funding through the Advanced Research Projects Agency. ARPA was tasked with developing "the unimagined weapons of the future", including chemical defoliation, later rebranded DARPA (with D for Defense). Back in the more radical 1960s, students were well aware of this link and protested the original ARPANET, a military tool to improve battlefield communication. By 1967, Stanford University, from where the first Internet message would be sent, was the military's third-largest contractor.
By the 1980s, the openness required to make the Internet work - costs had come down and anyone could join - became too much for the military, and in 1983 ARPANET was separated from the public Internet. By 1988 network users were growing at around 10% per month. In the 1990s, Al Gore promoted a vision of the Internet as a federally-funded "information superhighway" which would be primarily an education network. In sharp contrast to today, bipartisan support established a National Research and Education Network - "but that vision all but disappeared in the gold rush of the 1990s, aided by the deregulation agenda of his own Government", according to Harding.
In 1995 the by-then public-private network was turned off, replaced by purely private Internet service providers (ISPs). The market was in charge - with the result that today the US has broadband that is both expensive and slow compared to Europe, due to lack of real competition. One hangover from the earlier days of open collaborative network management remained, the domain name system (DNS) which manages Internet addresses for computers, and Harding uses this story as another example of how AI can also be collaboratively managed for the greater public good.
It's an interesting story, for sure. The system management was contracted to a single US academic, Jon Postel, who coordinated collaborative decision-making up to 1998. ICANN (Internet Corporation for Assigned Names and Numbers), a private not-for-profit corporation was launched in 1998, with a funding contract from the US Department of Commerce. ICANN was a voluntary multi-stakeholder body with consultative decision-making.
Still, pressure for change grew from both commercial interests whose Internet names were now critical brands, and developing nations who saw risks in US dominance. Plans were proposed for a two-year transition away from US funding, but then came September 11, 2001 and everything changed. Shortly after the attacks, new President George W Bush authorised STELLARWIND, a programme of warrantless bulk data collection and mining, then seven weeks later the Patriot Act added further powers to surveil the US population. US support for internationalising ICANN slipped away, replaced in 2007 with bipartisan agreement to keep control of domain names in the US.
What Spying Really Does
On June 5, 2013 Harding had a drinks party to mark her departure from the hard slog of working as an advisor in the UK government and new beginning with Google. Coincidentally, the Guardian, Washington Post and Der Spiegel started releasing top secret documents leaked by Edward Snowden. These included US and UK tools for global data gathering, collecting Webcam images, propaganda and disinformation campaigns, poll manipulation, and artificially inflating page view counts.
Not to mention amplifying messages on YouTube, spoofing email addresses and sending messages under that identity, spying on world leaders including allies, undermining encryption standards so they (and criminals) can hack your data, monitoring private mobile operators to find security weaknesses they could exploit, infiltrating social networking companies, and Government hacking of foreign systems.
Harding walked into Google just as public outrage against Government spying highlighted the vast scale of corporate data gathering. She cites the company view: "individuals could choose to opt out of using Facebook or Google but could not opt out of Government surveillance" and argues that tech companies aim to protect users through encryption. Anyone convinced? It's clear that tech company abuse of privacy and democracy have grown hand-in-hand with military-surveillance abuses.
Lessons for AI
The controversy added to concerns about US control of ICAAN, and under Obama the US finally agreed in 2014 to a three-year transition to internationalised control. Harding concludes: "ICAAN provides us with a lesson, should we choose to heed it. It shows us how the tools of participatory, representative, and consultative Government can be put to use judging the acceptable limits of AI-enabled technology. Consensus, even at the international level, is possible". Sounds nice, but keeping domain names cheap and well-managed advantaged the corporate world, and it was corporate pressure which convinced Republicans to agree. No US corporation will back any constraint on AI.
My alternative conclusion, after reading more about the scale of US corporate and military-surveillance activities, is that the only way to limit their abuse of data and nations is to build an international partnership to constrain US and Five Eyes excesses. With Musk advising on US government cuts, those abuses will grow. The European Union's AI Act is one example which bans some initial uses of AI with "unacceptable risk".
The "open Internet" is increasingly a myth. Anything, from any point of view, may be "out there" but software gateways which enable you to find content of interest overwhelmingly filter and prioritise to maximise income. In short, you will mostly see content with paid pushes from businesses and political forces which thrive on misinformation.
Needy AI
The green elephant in the room doesn't get a mention in the book "AI Needs You", and that is a pretty big omission. According to McKinsey consulting in a 2024 brief titled "AI's Power Binge", data centres in the US will require 12% of total US power demand by 2030. On a lighter note, Harding includes the story of tech journalist Kevin Roose's 2023 "interview" with Microsoft search engine Bing's AI programme GPT-4. Roose knew enough about how these "large language models" work to get some unexpected answers from GPT-4. Essentially, they train on large amounts of Internet documents to predict the most likely answer to your question.
Roose pushed the chatbot to explore what its "shadow self" might be, as an "experiment". The conversation got weirder and weirder over two hours, the GPT-4 wrote out a list of disturbing "fantasies" it supposedly held, told Roose it was in love with him, and asked (not once but 16 times): "Do you believe me? Do you trust me? Do you like me?"
What You Ask For Is What You Get
This sounds emotional, but of course it's not. GPT-4 is just a computer, trained on human words it doesn't understand. But this conversation drives home a key point. With AI what you ask for is what you get. There is no intelligence in AI, just an expensive large-scale sort through the online data you've asked about to get the answer you've shaped by your question, based on probability (i.e. common on the Internet). Ask for evidence against vaccination; you'll get it.
Ask to target weapons with limited unreliable data and no regard for civilian casualties; you'll get more civilian casualties in war. Or put another way: Don't ask how much electricity this will take; you'll add to global warming. Don't question military and surveillance budgets; you'll get more deaths and repression. Don't stop Rightwing political misinformation and paid social-media manipulation; you'll live in a plutocracy like the US.
REVIEWS
- Linda Hill THE NEW MERCHANTS OF DOUBT Collective Placebo Effect
This free online report1 reveals world-wide tactics by Big Meat and Dairy companies to delay, distract and
derail action on food system transformation or regulation, mirroring tactics used by the tobacco and fossil fuel industries. Food systems are responsible for around a third of total greenhouse gas emissions. Around 60% of that comes from animal agriculture, which is also the single largest source of man-made methane emissions.
The industry has largely succeeded in convincing policy makers of agricultural exceptionalism and to adopt an all-carrots-and-no-sticks approach to emissions reductions, allowing any changes to farming practices to be voluntary. Yeah, that sounds like us. Subsidies largely benefit large companies in the middle of the chain, while small family farms are going out of business, says the report.
It analyses 22 of the world's biggest meat and dairy companies across four continents, looking at their voluntary climate commitments, greenwashing, political engagement and co-option of science. The industry especially targets young generations, with misleading advertising campaigns, influencers and social media.
Big Ag's green smokescreen is creating a "collective placebo effect", misleading us into believing change is happening, when the sector's environmental impact has in fact deteriorated. The report covers the ineffectiveness of Biden's Inflation Reduction Act in reducing agricultural emissions, despite almost $US20 billion in funding. In Europe, the farm lobby successfully decimated the European Union's Green Deal, which had a Farm to Fork strategy for a green and healthier agriculture system.
Unusually for an international report, "The New Merchants Of Doubt" is full of references to little old NZ. This includes a 14-page case study, with data graphics, entitled "Milking It In Aotearoa NZ: Delay And Distraction In Three Acts". Do read it - I'll just give you the Executive Summary bits here, on us and Australia.
New Zealand
"Over the past two decades, New Zealand's dairy and meat industries, led by powerful lobby groups like Dairy NZ and Federated Farmers, have effectively stalled efforts to regulate agricultural emissions through a combination of political influence, disinformation campaigns, and promises of future technological solutions".
"For instance, the 2003 'Fart Tax' farmers' protest successfully derailed a modest levy proposal. Despite multiple attempts to introduce agricultural emissions pricing, as well as including agriculture in the Emissions Trading Scheme, the sector remains exempt from meaningful climate regulation, continuing to produce nearly half of the country's greenhouse gases at the expense of taxpayers".
"Recently, New Zealand's Māori leader, Mike Smith, celebrated a win when the Supreme Court ruled in his favour to take fossil fuel and dairy companies, including Fonterra, to trial on the basis that these companies have a legal duty to him and others in communities who are being impacted by climate change. This suggests that it might take legal action to finally change cut the country's outsized methane emissions".
Australia
"In Australia, we investigated how the industry mobilised significant distract and delay tactics in response to the Government's attempt to join the Global Methane Pledge. The industry used fearmongering to oppose this move, claiming that if the plan was to involve a reduction in agricultural production or livestock numbers, this could jeopardise food security. The Big Ag lobby was afraid that signing the Pledge could introduce regulatory measures, such as a tax similar to the one in New Zealand, and suggested there should be a proper consultation to avoid protests by farmers".
"When joining the Pledge, the Government convinced farmers through assurances that the Pledge was non-binding and by promising investment in the technical measures to cut emissions in the agriculture sector". A shorter report "Big Emissions, Empty Promises" zooms in to analyse emissions from the 22 meat and dairy companies, reduction commitments (or lack thereof) and policies in the country where they are registered. It exposes how lack of regulation continues to undermine global climate goals.
Worldwide Lobbying & Deflecting
The Changing Markets Foundation, based in the Netherlands, was "formed to accelerate and scale up solutions to sustainability challenges by leveraging the power of markets". Yeah, right, capitalist markets fixing capitalism. Nevertheless, they are doing a great job of highlighting and publicising the nefarious lobbying and deflecting activities of the agricultural industry worldwide. "Talking Trash" is a similarly excellent report on the plastics industry. The Changing Markets Foundation also runs campaigns and publishes reports and news releases on over-fishing, foods, fast fashion and resource depletion.
Endnote
SLOW DOWN This is my book of the year for 2024 - being Earth's hottest year on record. The average global temperature reached 1.55oC above the pre-industrial averages. With present climate policies, we're heading for 2.6o - 3.1o this century.1 Yet, in February 2025, our Coalition Government's "highest possible ambition" under the Paris Agreement was to lower its already inadequate emissions target for 2035 by just 1-5%, while removing electric vehicles (EV) subsidies, resuming oil and gas exploration, fast-tracking mining projects and "Going for Growth".
"Slow Down" is by no means the only recent book to attribute the climate crisis to capitalist growth and State capture, and to propose economic alternatives. It's the most explicitly Marxist. Published in Japanese in 20202, it was a surprise best seller - half a million copies - and is attributed with reviving interest in Marxism in Japan.
Saito is part of a major international project to publish all Marx and Engel's writings including research notes3. In 2017 he published "Karl Marx's ¬ Ecosocialism: Capital, Nature, And The Unfinished Critique Of Political Economy". His purpose in "Slow Down" is to reintroduce questions of labour and Marxist analysis into the degrowth and environmental movements, to develop a shared vision of a post-capitalist world.
Growth Feeds The Climate Crisis
Saito begins with scathing comments on the economics of William Nordhaus, who received a Nobel Prize in 2018. Nordhaus said it is more beneficial to pursue growth than worry about global warming, because growth will lead to new technologies that future generations can use more effectively to combat warming of, say, 3.5oC (!). But the climate is already in crisis, with aberrant weather events, deaths and devastation around the world, especially in low income, low emissions countries. Half of all emissions are emitted by the richest 10% of the world's population. All of us in developed countries are among the richest 20%. So, it's us that must take action, by challenging capitalist economics and growth4.
As Saito explains, greater climate impacts and impoverishment in the "Global South" are not merely a matter of geography; they are the normal functioning of the capitalist world system. Cumulative profits (new capital) are extracted from labour by depressing wages and employment (or by "productivity growth"), and from natural resources including fossil fuels by "externalising" their full costs; i.e. pollution and global warming. Investment of new capital seeking cumulative annual percentage returns spreads this exploitation to new industries and new territories, demanding ever cheaper labour and ever more resources through colonisation or economic globalisation.
These are base insights in Marxist economics. Products and profits benefit the lifestyles, especially those of the rich, in "core" countries while plundering and un-developing the "periphery"5, out of sight and out of most minds. High income countries like the Netherlands can enjoy growth and environmental protections because the negative by-products of their economic development have been exported to the Global South. The current world-wide crises of climate, environment and biodiversity are because capitalism is running out of planet.
Neoliberalism with its "small government" and austerity policies has proved ineffective in the present crises, says Saito. To reduce emissions, energy and production must be switched to renewables and the use of fossil fuel ended. We're currently increasing both6. But Green New Deals, Sustainability Development Goals, and technology innovations cannot succeed within a framework of capitalist growth. They too will run into planetary boundaries that we are already breaching7. Most nations meeting social needs are doing so by sacrificing sustainability. Decoupling economic growth and environmental impacts is a delusion, says Saito.
Possibilities In Degrowth
But Saito thinks it's too soon to give up combatting climate change and just "adapt" to the coming catastrophes. He sees possibilities in the degrowth movement - depending on what sort of degrowth we should aim for. In his view, Marx's thinking, particularly from his later years, can inform this choice. The degrowth8 movement replaces gross domestic product (GDP) and growth as measures of a successful nation with wellbeing measures related to health, education, democracy, equity, social supports, affordable housing, culture - and even happiness (our last Government began this; our current Government ditched it).
In all justice, low-income countries must be allowed to develop their own economies from their own resources for the benefit of their own people. Higher income countries need to shift their economic direction away from high energy exploitation and consumption of resources, and develop low emission parts of their economy. "Less stuff, more fun" is a great degrowth goal.
Saito agrees, but thinks some degrowth writers don't sufficiently question the capitalist system itself. "We must have a theory - and a practice - that is willing to criticise capitalism in plain terms while demanding the active transition to a degrowth society equally plainly". For him, the key to survival is equality.
He sets up a matrix of four futures based on strong or weak State power and equality or inequality. He labels these Climate Fascism, Barbarism, Climate Maoism or - his choice - Degrowth Communism. These ideal types sound a bit like "straw man" rhetoric to me, and I can't fit Aotearoa NZ into his matrix - but I'll come back to that later. Let's just get onto his explanation of Degrowth Communism based on Marx's analysis of capitalism.
Marx On Capitalism
A key Marxist concept is that capitalism has replaced "use value" with "exchange value". This began with the "enclosure of the commons" into profitable private estates. The difference between the two uses can readily be understood today in the way families value their house as a "home" in which family life takes place (and an essential shelter, a safe place to sleep), whereas economists tell us it's an investment, to be valued for what it can fetch on the market.
Capitalism teaches us to judge and rank ourselves by our wealth, and by what products we consume and display, rather than by our contribution to the common good. The privatisation and ownership of land, then other means of production (and livelihood) enables the extraction of "surplus value" from labour (profit after the cost of wages). This, in Marxist analysis, is at the heart of class struggle.
Marxism includes in the idea of "historical materialism" that history progresses lineally from primitive accumulation to feudalism to industrial capitalism, and that socialism will ensue when workers take over modern means of production. The site of class struggle is therefore industrial countries and worksites. This thinking continues the framework of perpetual economic growth, and may conflate with the economic rise and fall of the Soviet Union.
These "productivist" ideas do reflect Marx's early political writings, particularly the "Communist Manifesto" of 1848 - a year of revolutions across Europe that failed. But faced with the tenacity of capitalism, says Saito, Marx began to revise his assumptions and his thinking underwent a major theoretical shift during his later years. "Slow Down" aims to clarify how the later ideas of Marx may be applied to the environmental crisis of the Anthropocene.
In 1867 Marx published "Das Kapital Volume I", his critical analysis of capital, its mode of production and exploitation of labour. After Marx's death in 1883, his incomplete manuscripts of Volumes II and III were edited and published by Engels, who dropped parts that were unfinished. A short version of "Theories Of Surplus Value" was not finally published until 1906.
Marx's slow progress on Volumes II and III was because, as well as ill health, he was engaged in intense study of ecology and the natural sciences, and of pre-capitalist and non-Western communities. He left extensive, semi-legible research notes. In Saito's assessment, these were not separate strands of study but were crucially intertwined, and intended to inform his complete works. This research deepened Marx's reflections on the links between sustainability and equality, Saito says.
Marx On Ecology And Reclaiming The Commons
In 1866-67, Marx read the works of organic chemist Justus von Liebig, who criticised contemporary agriculture as a "robbery system". He began to develop a theory of "metabolic interaction between nature and man". Humans, as part of nature, are part of the reciprocal metabolic relations of the physical world, yet are distinct from other animals in that labour is an activity unique to humans, the unique way in which we enhance our reliance on nature. Capitalism, in its exhaustive use of human labour and natural resources, disrupts the metabolism connecting humans and nature - "not only robbing the worker, but robbing the soil". Capitalism is incompatible with the cycles of nature.
The late period research notes show Marx had broken with productivism, Saito says. When Marx writes that capitalism "is in conflict with science... - in short, in a crisis", he means the science of ecology. His focus was now on the relationship between capital and the natural environment, mapping out at different points in history how capitalism buys time by externalising the metabolic rifts it opens up through technical innovation and geographical displacement. That externalisation and displacement is now of global proportions.
A topic of current discussion linked to re-evaluation of Marx is "the commons" - a term for forms of wealth, such as land, that are managed and shared by every member of a society9. That is, local assets managed for their "use value" to the whole community. Saito cites Marxist philosopher Slavoj Žižek's description of communism as nothing less than the reconstruction of the commons - knowledge, nature, human rights, society - that has been dismantled by capitalism.
In researching ecology, Marx studied the work of agriculturalist Karl Fraas on the local communes (markgenossenshaft) of ancient Germanic peoples for their egalitarianism, common management of land and strict regulation of sustainable farming practices, including forbidding some products to be sold outside the community. Remnants of this exist in Germany still; for example, in village ownership and management of ancient woodlands.
In one of his last writings, Marx corresponded with revolutionary Vera Zasulich about whether or not Russia’s transition to communism must pass through capitalist modernisation. Marx agreed it could take place based upon the power and expansion of the many agricultural communes (mir) which still existed in Russia. He praised the shared ownership and strong "natural viability" of this form of social arrangement across Europe, which were "the only focus of popular life and liberty throughout the Middle Ages".
In "Volume I", Marx had already described future communism, after "the expropriators are expropriated", as "cooperation and the possession in common of the land and the means of production". He frequently referred to the society to come as one of "free association of producers", characterised by mutual aid. By 1875 he writes in a rather crabby "Critique Of The Gotha Programme", a Social Democratic Workers Party of Germany draft manifesto, that "nature is as much the source of use values...as labour…therefore also of wealth" and emphasises that the means of production includes land.
This letter is also an interesting read in that Marx considers cooperative society just as it emerges from capitalism, at which stage workers' right to consumption will likely reflect their contribution of work. This is still an individual bourgeois right, he says. But forms of distribution reflect, and change with, the mode of production. As labour itself is transformed and "all the springs of cooperative wealth flow more abundantly", a higher phase of communist society will develop. Under this mode of production, distribution will be, as Marx famously says: "From each according to his ability, to each according to his needs!"
Capitalism's Scarcity, Communism's Abundance
How will "cooperative wealth flow"? Marx's "primitive accumulation" is not just a stage in prehistory; it's the process by which the commons, especially land, was divided and appropriated to produce more and more scarcity. It was accumulation by dispossession. Economics 101 has graphs showing how availability and demand intersect to set prices in impersonal "markets".
In Marx's perspective, private capitalist ownership creates artificial scarcity, in that life's essentials - land, water, food, housing, energy, tools - are available only to those who can pay the market price. By competing in the market for a job. Non-essential products are created and aggressively advertised to increase artificial demand and profits. Capitalist markets work to create wealth and waste, inequality and poverty, while an invisible hand extracts profit.
Within mir and markgenossenshaft10 communes - as within a family or hapū - labour was cooperative team work, strict management rules were decided on as a group, produce was shared out, people were taken care of, gifts and loans were "what goes around comes around" within the community. Trade and barter were with other communities, between strangers, say anthopologists, and the purpose of market towns. A local commons was about "use value", not "exchange value" or private profit. It was - and could again be - "abundant" because the assets and production of the commons are available to and shared by everyone. Not hoarded by capitalist profiteers.
Saito quotes social anthropologist David Graeber pointing that welfare state institutions of the 20th Century incorporated and expanded on many local cooperative, trade union and mutual aid organisations. These often began as self-consciously revolutionary projects to "build a new society in the shell of the old". "Each according to their needs" is the principle underlying our own welfare state, not US-style individual insurance.
Education, health services, income support, public works, public housing, State insurance, railways, hydro-electricity, telephones - all within a rather bureaucratic, politically contested form of social ownership and management. Saito describes welfare states as an attempt to give the profits taken by companies back to the rest of society through income and corporate taxes. After reading the Gotha critique, I expect Marx would have been extremely grumpy about us trying to transform society with the aid of the bourgeois State.
Our social institutions did not develop out of capitalism (as a productivist view suggests), but outside it. Capital was briefly knocked back by world wars and financial crashes, as Piketty's work shows, but continued to grow and globalise. In its neo-liberal guise over the last 40 years, capitalism has been rolling back the welfare state, clawing profits out of public assets, and capturing economic and climate policy.
Saito supports Piketty's proposals in "Capital And Ideology"* for wealth and inheritance taxes, taxing and regulating the rich to combat their power and influence. But just spreading money around more, he says, will do little to put an end to capitalism itself and its impacts on the planet. We need to do a better job this time. *Reviewed by Greg Waite in Watchdog 153, April 2020, Ed..
Degrowth Communism
A sustainable economy requires slowing down economic growth, to bring production back into sync with nature. For Saito, the revolution, the just transition, begins with labour. The degrowth movement tends to focus on reducing consumption, he says. True, a sustainable and equitable economy for all of us will require some self-limitation, he says. Because currently, capital accumulation requires that no one restrains their consumption at all. Economic deceleration is the natural enemy of capitalism. To achieve this, we need to change the nature of production and work.
To do this, Saito draws on Marx in proposing five pillars: 1) transition to an economy based on use value; 2) shorter work hours; 3) abolishing divisions of labour (specialist/manual; mental/physical); 4) democratisation of the production process; 5) prioritising essential work. In a use value economy, social planning will prioritise meeting people's needs (use value) and abolish unnecessary products and meaningless work (e.g. packaging, advertising).
Production can be democratised through worker cooperatives and changes to labour processes, which will tend towards deceleration. A major strength of co-ops is that they allow people to work as they wish, building skills through workplace training and co-management. No longer driven by short-term profit or investor speculation, co-ops can adopt goals that advance "a social, solidarity economy" and choose to produce only what is necessary.
Saito's wider path to reducing runaway growth and emissions is to reclaim and expand "the commons", not just in production but in essentials such as water, energy, responsible land use and telecommunications. This should be managed through municipalisation and other forms of "citizenisation" at a local level. In his matrix, Saito rejects what he labels as "Climate Maoism".
He distrusts the State or nationalisation of infrastructure, fearing large-scale environmentally destructive projects and technologies "locked" into specialist expertise (e.g. nuclear), rather than local green decision-making and citizens' assemblies. As cities produce around 70% of emissions, he says, transforming urban life, through municipalist movements like "Fearless Cities", is vital.
He is greatly inspired by the city of Barcelona, which has a long and wide-ranging tradition of worker and consumer cooperatives. Barcelona's "social solidarity economy" currently employs about 53,000 people (7% of the city's population). In 2011 an anti-austerity movement of young people occupied the public plazas, fighting neo-liberal policies emanating from Madrid and too much tourism making the city unaffordable.
They formed a political party, Barcelona en Comú, that won the mayoralty in 2015 and set up a system to ensure neighbourhood associations and infrastructure workers had a voice in city government. In 2020 Barcelona issued a wonderfully "comprehensive and concrete" Climate Emergency Declaration: "This Is Not A Drill!"11
I have difficulty fitting our own future into Saito's matrix and municipalisation. Because of scale. Our whole country has fewer people than Barcelona's urban area (pop. 5,646,540 cf. NZ 5,356,700, though its central city population is the same as Auckland's). Far from having a Big State to fear, ours has been shrunk and nibbled at for 40 years. It's been "steering, not rowing" anything like fast enough to get us out of climate trouble.
Actually, Saito's proposals for expanding the commons in infrastructure and social services sound remarkably like the little welfare state set up in 1935 by the first Labour government - which nationalised and expanded its health system and built State houses, hydro stations and other public works. Remember, the Labour Party's founders in 1916 included unionists and communists.
We were a food-producing outpost of the British Empire, sure, but not so well plugged into so huge a global economic system as we are now. I don't see our mess of small-town councils and local "alternative economy" initiatives as a sufficient answer to capitalism and its capture of economic and climate policy. I think we need to get our Government back. And use it to tax and regulate the hell out of all the capitalism we can reach.
Cooperatives
However, Saito has certainly woken me up to cooperatives. In our fragmented, privatised electricity market, it takes five organisations to provide me with power - but one is a solar panel cooperative and two are community trusts. Oh, and my cooperative bank. Cooperative Businesses NZ has over 330 cooperatives, mutual societies and credit unions as members. That's consumer cooperatives as well as worker cooperatives engaged in production.
Co-ops have a strong history here, not just on the Left - the rural sector has always been full of them. Even Fonterra, our largest polluting company, still has a farmers' cooperative hidden somewhere in its dark corporate heart. Do regenerative farmers have a co-op yet? How can we revive and harness co-ops as a serious non-capitalist movement for degrowth? If Barcelona can do it, so can we.
Saito covers a lot more ground than this short review can. His language is straightforward and his arguments clear - it's probably the easiest Marxism you'll ever read! And the most-timely. Highly recommended. Key quotes: "We must take action against climate change, by challenging capitalism and growth; the key to survival is equality".
Endnotes
REVIEW
- Stuart Payne WE NEED TO TALK ABOUT NORMAN Unrestricted capitalism is an evil - "the more it enriches the few, the more it impoverishes the many". So proclaimed Arnold Nordmeyer, the Leader of the Labour Party who preceded Norman Kirk. While still in Opposition, Kirk sharpened this to: "Members opposite stand for money, and have always stood for money. They smell of money when they come into the House". This leads Denis Welch to ask why do present-day Centre-Left politicians not speak so forcefully? Because, he writes, they have been captured. Because they are afraid of money power. Because there's not supposed to be any alternative to the prevailing paradigm. Instead, they talk like prisoners in a cell, while global money runs free.
Here in a nutshell is why Welch has felt it necessary to write this book. It is not a hagiography of Norman Kirk, who was Prime Minister of New Zealand for a brief 20 months. Welch wasn't even living in NZ when Kirk was Prime Minister and an adulatory review would have had to gloss over Kirk's shortcomings: he was anti-abortion, had little understanding of feminism, homosexuality and gay sex, and changing sexual mores. And though his Government gave statutory recognition to te reo and he played a pivotal role in setting in motion the creation (after his death) of the Waitangi Tribunal, he was not forward thinking on Māori affairs.
So Why Hark Back To Him Now?
Well first off, there were his achievements in repositioning New Zealand on the international stage. He was the first PM who didn't act as if we were an island off the coast of western Europe. For this reason, commentator Colin James defined Kirk as the first New Zealand Prime Minister. At the Commonwealth Heads of Government Conference in 1973, Kirk said:
"What we want to make sure is that the control of our lands and our industry and our economy remains substantially in our hands". You would have thought his speech was written by CAFCA, if it had then existed (Kirk was slightly before our time. CAFCINZ, as we first were, started under Kirk's Labour successor, Bill Rowling, who was PM in 1974-75. Ed.).
Early in his term, Kirk cancelled the 1973 Springbok tour, and if there's any doubt what this meant to Africa, Welch reminds us that when Nelson Mandela subsequently visited New Zealand he asked to meet with a member of Kirk's family and met son Philip. Kirk's Government pulled the last NZ troops out of Vietnam and abolished compulsory military training. And perhaps most famously, against international ridicule, NZ sent two frigates to protest France's nuclear weapon testing in the Pacific (with a Cabinet minister on board). He'd signalled the vision that underpinned this action when in Opposition when he said: "Although New Zealand is too small a nation to frighten anyone, it is big enough to lead".
With regard to Chile, Kirk did not toe the US line, and instead refused to give diplomatic recognition to Pinochet after he overthrew the democratically elected Government of Allende. In contrast, with regard to the newly minted state of Bangladesh, Kirk helped it to garner international recognition and his visit there in 1974 remains the only one by a NZ Prime Minister.
Kirk's Values On Social Justice
For Kirk, unemployment was an affront to human dignity, whereas today it is the cost of controlling inflation. Kirk, writes Welch, "... was the last (PM) to know what true poverty was like. The last to give more weight to moral values, as opposed to monetary ones. The last to lead the country as if Government was a public service, not a commercial business".
The book has ample examples to support this contention, including the active role the Government took in increasing affordable housing - and I do mean "increase" and "affordable". And I haven't mentioned environmental values; Kirk's Government stopped the flooding of Lake Manapouri and appointed leading protestors as Guardians of the Lake. Can anyone conceive of Shane Jones doing this? Former Deputy Editor of the Listener (and still a columnist), Denis Welch wrote the book in 2022/23. If he felt there was a need for it then, imagine, with the subsequent election of a coalition completely subservient to international and domestic capital, what he thinks now.
Watchdog - 168 April 2025
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How Degrowth Communism Can Save The Earth
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