Labour's Socialism by Stealth
Weekly Column by Dr Muriel Newman MP
The beginning of a new year is a time for reflection - where have we come from and where are we going to as a nation.
While we undoubtedly finished last year with a buoyant economy, the country continues its inexorable slide to Third World status. From being a world leader in living standards we have now dropped to 21st position in the OECD rankings, below Puerto Rico. As a result, many working families are struggling, with average wage growth not keeping up with inflation. It has been estimated that taxpayers' real take-home pay has declined by 3.3 percent since Labour was elected.
So what lies ahead?
As a self-confessed social democratic government, Labour's long-term goal is to introduce socialism through the democratic process.
In his classic 1945 work "The Road to Serfdom", London University Professor of Economics Frederick A. Hayek warns against the dangers of creeping socialism: "Democratic socialism, the great utopia of the last few generations, is not only unachievable, but to strive for it produces something so utterly different that few of those who now wish it, would be prepared to accept the consequences".
He argues that the goal of socialism is the abolition of private enterprise, and of private ownership of the means of production - in order to create a planned economy in which a central planning body replaces the entrepreneur working for profit. He sees central planning - using coercive powers to establish protectionism, picking winners and creating privilege for the few at the expense of the many - as the greatest threat to freedom.
Throughout the ages, political freedom has been the catalyst for progress, unleashing energy, innovation, creativity, harnessing the skill of the entrepreneur, and building prosperity. Civilisation itself was built on the liberal ideal of respect for the individual who, endowed with freedom, could be ambitious, happy, and build a successful life.
Hayek warned that socialists now regard freedom as the root evil of modern society. Since the embodiment of freedom is competition and the free market, along with its accompanying price system, the erosion of competition is a prime target of socialists.
Labour's progress in this regard has not gone unnoticed. New Zealand Herald Business Editor Jim Eagles, in a December 28 article looking at the year in review, stated, "the most significant development which has gone almost unreported, may have been the downgrading of competition as the best way to achieve an efficient economy". He concludes that "even a small move back to the government seeking to take decisions by fiat, rather than by allowing consumers and producers to decide for themselves by exercising choice, is a retrograde step".
During its term of office, Labour has done much to erode competition: ACC and Air New Zealand have been renationalised and the largely state-owned power operators now enjoy a virtual monopoly. The Fonterra monopoly was approved without Commerce Commission scrutiny, and the merger of New Zealand's second and third largest supermarket chains creating a near monopoly will undoubtedly lead to higher prices for milk and other food products.
Corporate welfare is back on the agenda as Industry New Zealand uses hundreds of millions of dollars of taxpayers' money to pick winners … like Sovereign Yachts! Regulators now have control of the telecommunications industry and tertiary education sector, with centralised surveillance and administration for clubs, sports bodies and organisations with gaming machines.
Sweeping new powers of general competence have been given to local government, which will take centralised planning to new heights. Signing up to the Kyoto protocol, while damaging New Zealand's economy, will satisfy the socialists' international agenda of redistributing wealth between nations.
In considering these issues, two important questions spring to mind: firstly, does this government have any mandate to destroy competition; secondly, how do they get away with it?
The answer to the first question has to be "No". While Labour won office on a credit card of pledges in 1999, it returned to power last year with no agenda. That leaves us vulnerable to a plethora of socialist legislation that could be passed without public mandate, but with the support of the radical far-left Green Party or ex-Labour led United Future.
To answer the second question, it is important to remember that propaganda is the greatest weapon of socialism: Labour won power in 1999 with a promise of 'no tax increases for those earning under $60,000', yet since they have been in office, more than 20 new levies, fees and charges - all of which are essentially new taxes - have been sanctioned through parliament onto an unsuspecting public.
Labour's propaganda extends to rewriting history - transforming the right to 'one law for all' enshrined in the Treaty of Waitangi, to a highly creative 'partnership with the Crown', enabling the creation of special privilege in legislation for Maori.
Labour uses anti-capitalist propaganda: commercial enterprise is disreputable, making a profit is immoral, and anyone who employs people is exploiting them. They promote anti-competitiveness by persuading people that the formation of monopolies is in the public interest. Even private property, historically one of the most important guarantees of freedom, is no longer sacrosanct, with Labour giving more power to planners at the expense of property owners.
New Zealanders need to recognise that socialism hasn't gone away at all; it has donned more modern attire and is now threatening our fundamental right to be free to pursue success and achievement in our own way. The concluding words of Hayek: "The guiding principle, that a policy of freedom for the individual is the only truly progressive policy, remains as true to-day as it was in the nineteenth century", is surely a principle worth fighting for.