Friday 1 February 2008

Protecting the people from the market crisis

by GRANT MORGAN chair of RAM - Residents Action Movement 19 November 2008 VALUING THE MAJORITY RAM wants a society based on the values of humanity, ecology, co-operation, equity and democracy. (For fuller details, go to The RAM Plan on These are the default values of workers, Maori, leftists, ecologists, immigrants, intellectuals, pensioners, feminists, religious believers, students, small proprietors and others at the grassroots who make up the vast majority of citizens. Yet these values are everywhere trashed by the corporate market, which revolves around profits, spoilage, exploitation, injustice and elitism. As the writer Howard Scott famously quipped, "a criminal is a person with predatory instincts who has not sufficient capital to form a corporation". The structures of a tiny minority can triumph over the values of the vast majority only so long as the majority remain divided, uncertain and disorganised. In today's Aotearoa, the key to disempowering the majority is the legitimisation of the corporate market by Labour politicians, despite these market liberals having marginal differences with the market fundamentalists in National. Once the majority become united and organised around their own plan, the door can swing open to sustainable and systemic change. What is the path towards empowering the grassroots? RAM answers this way: - Challenge the corporate market and its tame politicians. - Rally majorities around things most folks see as "common sense". - Use a combination of campaigning and electioneering. - Aim to build a broad movement for popular change. HOW WELL HAS RAM DONE? How well has RAM done? Since March 2008, when RAM went from being an Auckland-only coalition to a nationwide party, the political results have been generally positive except for the parliamentary vote: RAM's GST-off-food petition attracted 25,000 signatures and, together with the People's Procession to Parliament, gained considerable media exposure. RAM's Ten Commandments leaflet proved extremely popular, with countless people reading it with gusto at RAM stalls and a steady stream of membership clip-outs from the leaflet arriving in the mail. 3,000 party members were recruited as RAM tapped into popular (though subterranean and disorganised) discontent with the LabNats in low-to-modest income suburbs. RAM's activist base expanded significantly by between 200% and 400% (depending how you define "activist"). RAM's vote in the 2008 parliamentary election was tiny: 1,000 candidate votes, 400 party votes. A majority of RAM members put their party vote elsewhere. POLLING POORLY In addition to RAM, two other independent left parties contested the 2008 election: the Alliance and the Workers Party. Of the three, only the Alliance had previously contested parliamentary elections. Here are the results since the Alliance entered its post-Anderton phase (2008 results are preliminary throughout paper): - 2002: 25,800 party votes, 1.2%. (Laila Harre, a sitting MP and new Alliance leader, came within 2,300 votes of taking the Labour seat of Waitakere.) - 2005: 1,600, 0.07%. - 2008: 1,700, 0.08%. Coming in behind the Alliance in 2008 was the Workers Party with 800 party votes, 0.04% of the total. RAM finished last with 400 votes, 0.02%. The Alliance and, to a lesser extent, the Workers Party tended to get more party votes than did RAM in those places where the three parties had no organised presence. That was probably due to higher name recognition for the Alliance, and to identification with the red flag logo used by the Workers Party on the ballot paper. In eight of the 11 electorates where RAM was organised on the ground, they gained more of the party vote than the Alliance and Workers Party. But it was all fractional stuff. The independent left's combined party vote was just under 3,000, a microscopic 0.14% of the total. All three parties scored relatively better (but still tiny) electorate votes. The average vote for each party's electorate candidates was pretty even. The highest scoring individual candidate was the Alliance's Victor Billot. Nine candidates (four Alliance, three RAM, two Workers Party) got more than 100 electorate votes. They were (in descending order): - Victor Billot (Alliance) in Dunedin North: 405 votes. - Martin Kaipo (RAM) in Whangarei: 251. - Kay Murray (Alliance) in Dunedin South: 192. - Don Franks (Workers Party) in Wellington Central: 150. - Roger Fowler (RAM) in Mangere: 138. - Byron Clark (Workers Party) in Christchurch Central: 136. - Grant Rogers (RAM) in Rotorua: 133. - Andrew McKenzie (Alliance) in Port Hills: 130. - Paul Piesse (Alliance) in Christchurch East: 112. The 2008 election laid bare the independent left's traditional weakness in the parliamentary arena, something aggravated by the mood of change which squeezed out smaller parties. Even if a pre-election accommodation had been reached between the Alliance, RAM and the Workers Party, it would not have significantly inflated their minuscule vote so long as all else remained the same. All else, however, is likely to change as the chill winds of economic crisis start to blow across New Zealand. The crisis, not the election, is the real test for the independent left. A VERY STRANGE AFFAIR In general terms, the 2008 election was a very strange affair. It was conducted in the deceptive calm preceding the arrival of an economic storm which will be bad at best, and may become the most destructive in living memory. During the electioneering, Labour and National both claimed that the crisis wouldn't get too bad in New Zealand so long as there was good government. Their politically-inspired optimism is at odds with economic storm warnings around the world. A National-led government was swept to power by a mood for change, helped significantly by large abstentions in Labour-voting city suburbs. Most of these people will be seriously disappointed at the change they get. In market slumps, typically the grassroots are made to carry the costs of restoring corporate profitability. Despite all the hype, the 2008 election was not a cathartic event. It was not something propelling the country in a new direction (whether seen as good or bad). Rather, it was an interregnum event. It was a soft shoe shuffle. National and Labour stole each other's policies more openly and frequently than ever before as they staked out the political centre. THE GLOBAL CRISIS A Combo Crisis is a rare event. It's when most or all of the economic dominoes topple on a global scale: finance, currencies, commodities, manufacturing, trade, shipping, services, retail, construction, housing, profits and employment. And of course the business confidence so vital for private investment in a market economy. That's what we're starting to see now. The world economy is falling into the first Combo Crisis since the Great Depression which began with a stocks and bonds crash in 1929, bottomed as a slump in the physical economy during 1931-34 and was only laid to rest with the outbreak of the Second World War in 1939. An emergency summit of the G20 countries, comprising the world's biggest economies, was convened in hopes of stemming a Combo Crisis with co-ordinated state intervention and regulation. Their declaration was long on general wishes but short on policy solutions. The success of the G20 strategy is far from assured. Similar inter-government talks failed to halt the Great Depression. At best, say government and corporate leaders alike, the world faces a longish bout of recession. Here's what The Economist, the world's premier market magazine, said on the eve of the G20 summit: "Although the panic in the credit markets shows signs of abating, the economic news gets ever grimmer. Global demand is slumping as rich economies plunge into what, collectively, could be their deepest recession since the 1930s. Pernicious deflation, although still unlikely, is no longer an idle risk. Emerging economies are being hit by weakening exports and the collapse of private capital flows. The G20 summiteers cannot prevent this, but they can stave off a slump with zealous and co-ordinated action to prop up domestic demand and provide resources to cash-strapped emerging economies." When capitalism's cheerleaders at The Economist pin their hopes on government leaders saving the global market, you know two things are happening: 1. The world economic prognosis is dire. 2. The market faces a legitimacy crisis. 3. The future of global capitalism is being called into question by the market crisis. An appendix to this report contains two articles, penned by economists with hands-on experience of the market, which give a detailed analysis of the crisis and make some predictions. A CENTRIFUGAL FORCE In New Zealand, Treasury is forecasting that unemployment is heading for 5.7%, which would add 40,000 to the jobless queue. Their forecast is based on a questionable assumption: the local economy will handle the crisis better than most other countries. With farm export prices slumping, spikes in trade and financial deficits, and sharp contractions in retail and construction, the economic outlook may turn gloomier than Treasury thinks. Nobody can safely predict just how bad the downturn will hit New Zealand. The only certainty is that things are going to get worse for the grassroots. As the going gets worse, public opinion will become far more polarised. The elites will want the politicians to prioritise profits and privilege (which they call "market stability"). The grassroots will want the politicians to prioritise jobs, wages and homes. John Key will unveil the National-led government's stimulus plan in December. No doubt Labour and the Greens will be critical of details. However, both of the dominant political blocs will claim that a well-designed stimulus plan can meet everyone's needs. But this facade is bound to crack as the crisis continues. Throughout capitalist history, every major slump has forced the politicians to favour either the market or the masses. And the slump will fuel capitalism's war on nature, most worryingly seen in global warming, species extinction and resource depletion. National and Act will retreat from even the Labour-Green "pollution market" legislation which went nowhere near tackling climate change. All these pressures must exert a centrifugal force on today's crowded centre, claimed by both Labour and National. The dynamic political trend of the near future will almost certainly be movements (both left and right) away from the centre. This trend will be speeded up if the grassroots retain their hunger for change and start to express it in stronger ways. FIGURING THE BIG TWO The 2008 election results gave Labour 33.7% of the party vote to National's 45.4%, an emphatic gap of 11.7%. Here are Labour's results since 1999 when Helen Clark was elected prime minister: - 1999: 800,000 party votes, 38.7% of the total. - 2002: 838,000, 41.2%. - 2005: 935,000, 41.1%. - 2008: 706,000, 33.7%. National's results over the past four elections are: - 1999: 630,000 party votes, 30.5% of the total. - 2002: 425,000, 20.9%. - 2005: 890,000, 39.1%. - 2008: 951,000, 45.4%. Here is the combined party vote of Labour plus National since 1999: - 1999: 69.2% of the total party vote went to the Big Two. - 2002: 62.1%. - 2005: 80.2%. - 2008: 79.1%. CRISIS OF MASCULINITY ? According to Chris Trotter, a media-promoted "voice of the left", Labour's defeat in 2008 flows from New Zealand's "crisis of masculinity". Helen Clark was dumped by "men who just couldn't cope with the idea of being led by an intelligent, idealistic, free-spirited woman", he asserts. Blame for Labour's loss rests with "the gutless, witless, passionless creatures of the barbeque-pit and the sports bar (and the feckless females who put up with them)". (Sunday Star-Times 9.11.08.) Trotter cannot explain why many of the same men (and women) who he lambasts actually voted for Helen's party in 2005 and 2002 and before. His opinions are a vitriolic version of the blame-the-workers line often trotted out by Labour lads (and ladettes) when they don't want to look truth in the eye. Most workers, regardless of gender, no longer feel that Labour is "our party". And for very good reason. It is not their party. It is a party mostly run by middle class professionals mostly as the corporate market wants. It is a party of market liberals. Going by hearsay as well as polls, a large and growing proportion of the workers who vote Labour do so for pragmatic reasons, such as: They regard Labour as less bad than National. They don't relate to the Greens. They cannot see a winning alternative. Whatever the reasons, most Labour voters no longer feel an emotional or family or intellectual bond to Labour. The exceptions which prove the rule are now relatively small communities, notably most (but far from all) Pasifika, union officials, educationalists, older urban workers and cultural artisans. INTERPRETING THE CHANGE Most analysis of the 2008 election has revolved around the obvious: there was a mood for change which led to more voters opting for National to get Labour out. That point is conceded even by new Labour leader Phil Goff. Commonly, the media interpreted the mood for change along the lines of "New Zealand takes a big jump to the right" (as headlined by the Herald on Sunday 9.11.08). This simplistic conclusion, however, appears at odds with realities on the ground. Voter turnout was the second-lowest of the past eight elections, indicating a higher level of disillusionment with both major parties. The steepest falls were in the Labour heartland of South Auckland despite an unprecedented "get out the vote" drive by Labour activists and union officials. In Manurewa, many traditional Labour supporters stayed at home because they "didn't want to vote for us" but also wouldn't go to National, said Labour MP George Hawkins. In Mangere and Papakura, election day turnout dropped by 13%. In Manukau East, where turnout was down 20%, Labour MP Ross Robertson noted a "strong undercurrent for change". (NZ Herald 11.11.08.) In the months before the election, truly mass feedback at RAM's GST-off-food petition stalls indicated that most people were sick of "the politicians" in general, National as well as Labour. Their comments didn't point towards any swing to the right. They embraced "common sense" changes like GST off food, 3% state home loans, free lunches in poor schools, $15ph minimum wage and the free right to strike. While they loved the concept of "people power", there was little enthusiasm for overtly socialist objectives like "change the system". In light of this caution, it doesn't seem surprising that people wanting change would turn to the only party able to defeat an unloved government at election time: National. Or that people distrusting both major parties would stay away from the polls because they cannot see a realistic electoral alternative. Auckland University political scientist Raymond Miller believes the vote was for moderate change only. "John Key made a point of promising that he would stick pretty closely to what was acceptable to a majority of New Zealanders. I think the expectation on the part of voters is that while they will expect some changes, they will be more changes of party and leader than substantive policies." (Challenge Weekly 10.11.08.) Miller's observations are capable of being reconciled with RAM's experiences. Key tapped into a mood for change which was frustrated with Labour but did not want another round of right-wing extremism. This pressure from the grassroots has compelled Key to shift National towards the centre, a strategic setback for market fundamentalists. Shifting towards the centre brings National even closer to Labour in terms of policy and propaganda as well as core strategy. The centre is being crowded out at the very time that economic crisis is likely to exert a centrifugal force on the centre by sharply posing this question: Who should be bailed out? Grassroots people or corporate profiteers? CRISIS AND OPPORTUNITY As every strategist knows, crisis brings opportunity as well as pain and peril. The question is: who can seize the opportunity? A people's challenge to market politics could rise up swiftly in Aotearoa if three factors come into alignment: 1. Crisis conditions lay siege to the strategic consensus of Labour and National to protect and serve the corporate market. 2. The left solicits popular support for a plan to protect the people from the crisis at the expense of the market. 3. Mass enthusiasm for the people's plan is fanned as it finds favour among some members of parliament. The first factor will be driven by crisis events that are mostly beyond anyone's control. All the left can do is relate to these events in a timely and flexible manner. The second factor depends on the left's own capabilities. At a time of crisis, lack of numbers and influence count for much less than in normal times. Counting for much more are largeness of courage and vision. Most unpredictable is the final factor. It hinges on how the other two factors intersect with the small band of MPs who might risk a political storm by protecting the people ahead of the market. History shows that dissenting MPs can become rallying points for mass movements. Without discounting the possibility that Labour or National may produce such an MP, or even a handful, more likely sources are the Green and Maori parties. So let's take a closer look at them. GREEN PARTY The eight Green MPs (in order of their list ranking) are: 1. Jeanette Fitzsimons (co-leader). 2. Russel Norman (co-leader). 3. Sue Bradford. 4. Metiria Turei. 5. Sue Kedgley. 6. Keith Locke. 7. Kevin Hague. 8. Catherine Delahunty. Party votes for the Greens over the last four elections are: -1999: 106,000 party votes, 5.1% of the total. -2002: 142,000, 7%. -2005: 120,000, 5.3%. -2008: 134,000, 6.4%. The two central planks of the Green Party's philosophy are environmental sustainability and social justice. In theory, both planks carry equal weight. In terms of public perception, however, the Greens are usually seen as an environmental party first and foremost. That perception influenced the outcome of the 2008 poll, as did the Green pledge to go with Labour. Going into the election, three things were obvious. The mood for change would give National more votes than Labour. Barring a miraculous late surge, NZ First would be ousted from parliament. And the Greens would be returned to parliament, so all votes for them would count. On polling day, the Greens won 6.4% of the party vote, a gain of 1.1% which delivered an extra two MPs. This creditable result crowned the Greens as the third party in New Zealand politics. Yet the Greens had been expecting to benefit considerably more from the mood for change and the voters fleeing Labour. Russel Norman told the media he had been hoping for 10%. The party vote for Labour declined by 7.3%, NZ First by 1.5% and the Progressives by 0.3%. Added together, the erosion of support for Labour and its two government allies was 9.1%, over eight times higher than the lift in Green support. It's a reasonable assumption that most people deserting Labour, NZ First and Progressive were concerned more about social than environmental issues. It's a reasonable conclusion that most of them didn't go Green because they didn't feel a strong bond to an "environmental party", and because they reacted against the Green pledge to go with Labour. Yet in the past the Greens haven't been scared to go it alone. They were in public dispute with Labour over genetic engineering in 2002 when the Green vote rose to a high water mark of 7%. And in 1999 the Greens took the brave decision to leave Jim Anderton's Alliance and follow an independent path even though their parliamentary seats were put at risk. So why weren't the Greens in 2008 walking the same independent path as they had in 2002 and 1999? Part of the answer may lie in where much of their support is coming from. The ten wealthiest electorates (in terms of median income) gave the Greens 9.2% of the party vote, 2.8% higher than their overall tally in 2008. This "wealth bulge" has been a growing trend over the last three elections. While it allows the Greens to tap into some serious election funding, leaning on a social base more in tune with market ideology does carry critical implications. During the election campaign there were moves to re-define the Green accommodation with Labour on the Emissions Trading Scheme, which in plain language is a pollution market. No longer was the pollution market a better-than-nothing short-term expedient. Instead it became a sophisticated harnessing of market impulses to the Green vision. Lots of Greens worry about their core philosophy being politically modified by market forces. They are likely to embrace a broad campaign to protect the people from the market crisis. This would help them to show that social justice really is an equal partner with environmental sustainability in the Green ethos. MAORI PARTY The five Maori Party MPs, their Maori electorates and their majorities in 2008 are: - Tariana Turia, Te Tai Hauauru, 6,800 vote majority in 2008 (co-leader). - Pita Sharples, Tamaki Makaurau, 6,300 (co-leader). - Hone Harawira, Te Tai Tokerau, 5,500. - Te Ururoa Flavell, Waiariki, 6,000. - Rahui Katene, Te Tai Tonga, 700. Total party votes for the Maori Party since its formation four years ago are: -2005: 48,000 party votes, 2.1% of the total. -2008: 46,000, 2.2%. Electors on the Maori roll distributed their party votes between Labour and the Maori Party in these proportions: -2005: Labour 55% of Maori roll voters, Maori Party 27.1%. -2008: Labour 50.5%, Maori Party 28.4%. The foreshore & seabed mobilisation, which was supported by ex-Labour MP Tariana Turia, propelled the Maori Party into parliament. The party pledges to "uphold indigenous values" and promote Te Tiriti o Waitangi so that a "more ethical and inclusive community" can be built. (Policy Manifesto October 2008.) Staying independent of both major parties in the run-up to polling day, the Maori Party won an extra Maori seat off Labour, taking their tally to five out of seven. And they came fairly close in Hauraki-Waikato, where Angeline Greensill was 1,000 votes off the 8,200 scored by former junior minister Nanaia Mahuta. Maori are over-represented in statistics on poverty, unemployment, illiteracy, sickness and prison, out of which form large pools of despair and exclusion. Not surprisingly, the turnout of electors in the Maori seats was very low. About 55% voted, 20 points behind the national tally. In Tamaki-Makaurau, which covers Greater Auckland, the turnout was even more dismal at 50%. So half the voters on the Maori roll in our largest city were absent from the polls. "Something is terribly wrong with our democracy," commented Tariana Turia. "Our party worked solidly to spread the word about enrolling and voting... And yet, when we came face-to-face with some of the poverty-stricken communities across our electorate, we saw how seriously alienated and disenfranchised many whanau have become. It is an enormous task to bring hope to communities." (Manukau Courier 14.11.08.) Following National's election victory, John Key approached the Maori Party with the offer of a government "relationship". It seems certain that Key was motivated by pragmatic political objectives. He wanted to secure a left counterbalance to Act on his right so that National could portray itself as the party of the centre. He wanted a strong Maori Party which might be sympathetic to National in the likely event of a tighter race in 2011. Probably most of all, he wanted the Maori Party on board to gloss over National moves to shove the burdens of economic crisis onto the grassroots. The Maori Party, however, seized Key's offer and began to transform it into a history-making agreement. "This new turning point in our history," said Tariana Turia, "is another step in the journey towards fulfilling the promise of the Treaty. It is another step in the reconciliation between kawanatanga and rangatiratanga." (Maori Party media release 16.11.08.) In return for the Maori Party voting confidence and supply, National agreed to: - Retain the Maori seats and not include any question about their future in National's referendum on MMP. - Review the foreshore & seabed legislation to see if it promotes mana whenua and, if repeal of the law is needed, to protect full public access to the foreshore & seabed. - Appoint the Maori Party co-leaders to ministerial posts outside cabinet, with "control" over funding and service delivery in their areas of responsibility. - Pita Sharples to be minister of Maori affairs and associate minister of education. - Tariana Turia to be minister for the community & voluntary sector, associate minister of health and associate minister of social development & employment. - Only bind the Maori Party to a collective government line in relation to these ministerial posts, leaving the party free to act independently on all other matters. - Recognise that there are "areas of difference" between the Maori Party and National. Before signing the agreement, Maori Party MPs consulted tangata whenua at 40 hui throughout the land. "Our whirlwind consultation tour has been greeted with crowds of such significance that even we were surprised," reported Turia. "Our people [were] enthusiastic beyond all expectation." People attending the hui had "their eyes open to the risks that come with recession, the likelihood of unemployment rising, redundancies, hard times", she observed. "The people have spoken to us of the need to be wary, to be careful to avoid the pitfalls of the past," noted Turia. But the overwhelming message from the hui was that the Maori Party must sign the agreement in order "to make history happen". (Maori Party media release 16.11.08.) Almost before the ink was dry, Turia was resisting the notion that a corporate razor gang, part of National's deal with Act, should enter her areas of ministerial responsibility. The Maori Party's strategy is bold: get a foothold inside the citadels of power to improve the position of Maori while retaining the Maori Party's independence. This is an important struggle within the machinery of state in which success will go to the stronger. If the left gives solidarity to the Maori Party then it will be in a stronger position to make its strategy work. And that could foster co-operation between the left and the Maori Party on a people's plan to defend the grassroots from economic crisis. MOBILISING THE UNIONS Over 350,000 blue and white collar workers belong to New Zealand's unions. Given these numbers, what unions do can have a big impact. Most (but not all) union officials will be keen to organise mass mobilisations against National's moves to increase corporate profitability at the expense of workers. The left, as always, will give robust support to these union actions. For the sake of appearances Labour may give limited support, but only if the architecture of corporate power is not challenged. Labour politicians will bring their influence to bear against any union plan that wants to protect the people from economic crisis at the expense of the market. That's what market liberals do. Labour's sabotage within the unions can be overcome if the left strongly campaign for policies which workers see as "common sense". Co-operation with sympathetic union officials will be needed to reach out to networks of job delegates, the all-important opinion leaders among the general membership. And left-wing union leaders should be supported in their efforts to mobilise workers and communities around a mass-based alternative to market politics. Success may not come easily and quickly. But a "common sense" left campaign inside the unions is vital if workers are to protect themselves against government moves to make them pay for the market crisis. GETTING STARTED In December, John Key will unveil a stimulus plan to counter the economic slump. Under cover of tax cuts and a "relief package" for redundant workers, National and Act will begin moves to convert the crisis into an opportunity for the corporates. The economics, the politics and the propaganda of the crisis will test the NZ left. Can the left popularise a "common sense" plan to protect the people by making the corporates pay for their crisis? Will sympathetic MPs and union officials become rallying points for a serious left alternative to market politics? There are many barriers. There are many risks. There will be stumbles. So what. There are also opportunities. And there is no alternative. Where to start? Here are some fairly general suggestions: - Experiment. See what connects with the grassroots. Pool the results with other leftists. Start to pull together a people's plan. Amend as necessary. - Go broad. Knock on doors, including ones not painted red or green. Solicit wider co-operation on practical things. Start small and trailblaze towards broad grassroots unity. - Pick a suburb. Leaflet it. Poster it. Hold cottage meetings. Network with community activists. Build a base. - Pick a union. Leaflet its members. Hold pub meetings. Network with delegates and officials. Build a base. - Pick an issue. Publicise it. Run a petition on it. Host public meetings with drawcard speakers. Turn the issue into a popular crusade. We have a lot to do. We also have a lot of sympathisers to do it with. Tomorrow is a new day. Let us go forth and multiply! APPENDIX

Two detailed and thoughtful analyses of the global economic crisis appear in this appendix. The first is by Nouriel Roubini, a professor at the Stern Business School at New York University and chair of Roubini Global Economics. He warns of depression and deflation, traditional core elements of a market meltdown. See The worst is not behind us: Beware of those who say we've hit the bottom The second is by Paul Craig Roberts, assistant secretary of the US Treasury under president Ronald Reagan and former associate editor of the Wall Street Journal. He warns of depression and inflation, a non-traditional type of economic slump. See Economic crisis is beyond the reach of traditional solutions

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