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Keith Rankin: Whither National?

Whither National?

Keith Rankin, 8 August 2002

Will the National Party wither? Yes, if it doesn't stand for anything. So what could it stand for? I see it having a future if it adopts a 'libertarian centre' position in contrast to Labour's 'authoritarian centre' place on the political grid, and in contrast to Act's 'libertarian right' position.

So what do these words mean? How many of us could give a clear-cut definition of what we mean by 'left-wing' and 'right-wing'?

Helen Clark stated in the election campaign that Labour is a party of the left because it is "redistributive". To an Act supporter, such comments bristle. Clark is not merely justifying theft, she's openly recommending it.

Since Adam Smith published the Wealth of Nations in 1776, taxation has come to be understood as a kind of theft that is justifiable up to a point. Hence he argued that taxes should be minimised, given that governments were necessary and therefore had to have some revenue.

The sub-text of Smith's position is that 'property' is, by its very nature, private. In this sense, Smith was a man of the right. The right emphasises the primacy of the private side of the economy (and of society in general), and seeks to minimise the kleptocratic propensity of the 'state'. (It was in Smith's time that the concept of 'sovereign' gave way to the concept of 'the state' in the language of political economy.)

Tax becomes the key issue then that separates left from right. Right-wingers believe in minimal taxation, socialists (the authoritarian left) believe in a high level of taxation to fund social wage goods such as 'free' health and 'free' education. A centre party subscribes to an intermediate level of taxation.

I propose to redefine left and right, slightly. To be 'right' is to define legitimate public revenue as a relatively small share of gross national income (GNI, formerly GNP). To be 'left', then, is to define legitimate public revenue as a relatively large share of GNI. The key change is that public revenue is no longer theft, per se. Public income is at least as legitimate as private income. It represents a return on public assets.

Indeed, once we define the public share of the economy as being legitimate, if there is theft, it may well work in the opposite direction to that which is normally assumed. If most of the nation's income is appropriated as private income, then we could easily argue that many private individuals have their hands in the public till. After all, in the aftermath of Enron etc., we know all about the way that private executives can steal from their shareholders.

So, to be left is to believe that the public share of the national economy is large. To be centrist is to believe that the public share of the national economy is neither large nor small. That is National's natural position. Certainly, National now knows there are few votes in advocating the transfer of public wealth into private pockets through tax cuts. Only Act can secure those votes, and even Act has had to turn to other issues to grow its vote.

So what is 'libertarian'? Well, there are two ways that public wealth can become private wealth. Only one is legitimate. Public wealth is the equal property of every permanent resident. So, distributing public income as cash dividends is legitimate, just as distributing company income as dividends to shareholders is legitimate. What is not legitimate is transferring public income (or company income) to private individuals other than the owners of that income.

An extreme libertarian position is to advocate the complete distribution of a nation's public income equally to all permanent residents of a nation. An extreme authoritarian position is to advocate that the nation's public income should be 100% withheld by the government, and spent by the government on behalf of the owners of that income.

Defining one's position on the authoritarian-libertarian scale is partly a matter of science and partly a matter of belief. Similarly, defining a position on the left-right scale is as much a matter of good accounting practice as it is a matter of philosophy.

No economist would argue that allowing everyone to spend 100% of their publicly-sourced income would be economically efficient. This is because, due to market failure, most public goods must be funded and purchased collectively. Few economists therefore would be extreme libertarians. Many libertarians however are little concerned about economic efficiency. Some people have a congenital cynicism towards any form of government spending on our behalf. So, for example, people like Lindsay Perigo are virtually 100% libertarian.

The National Party could be neither as right nor as libertarian as Perigo's Libertarianz. National activists are realists who recognise that there are a wide number of public and merit goods that require substantial collective funding; we only have to nominate the usual suspects: health and education.

What matters is that National can stake out a position that is distinctly more libertarian than Labour, while holding the same centrist view about what proportion of national income represents public revenue. So rather than talking about tax cuts, they should be talking about things like tax credits, social dividends, growth dividends. These represent an equitable distribution of public revenue, whereas tax cuts represent an inequitable redistribution of public revenue to, mainly, a small number of already rich private individuals.

We already receive various tax credits and social dividends. All that we need to see them is a radical modernisation of our public accounting systems.

(A left libertarian position favours a substantial distribution of a public fund that is understood to be a large share of gross national income. A universal basic income would normally be understood as a left-libertarian policy initiative.)

A vision that promises all New Zealanders a cash return on our public assets has the potential to make National relevant once again.

© 2002 Keith Rankin

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