Political societies and economic preferences.

Much discussion has been held over the Regulatory Standards Bill (RSB), the latest in a series of rightwing attempts to enshrine into law pro-market precepts such as the primacy of private property ownership. Underneath the good governance and economic efficiency gobbledegook language of the Bill is an interest to strip back regulations in order to give capitalists of various stripes more latitude of action.

The RSB is interesting for two reasons. One, it is the type of omnibus bill that is designed to supersede other legislation in the policy enforcement chain. It is a “mother of all laws”or foundational stone type of legislation that its proponents hope will serve as a basis for future legislative reforms and policy-making and to which all existing laws must be retro-fitted. Although it varies in its NZ specifics, it emulates the “Ley Omnibus” (later named “Ley Bases” (Base Law) pushed through by Argentine president Javier Milei last year, which basically allows for the dismantling of the Argentine State bureaucracy, reform of labor and environmental laws, slashes the public budget, and opens the economy to foreign investment.

As a result, although the inflation rate has been drastically reduced and some foreign investors have taken interest in the Argentine economy, the poverty rate now reaches nearly 60 percent, health indicators (and facilities) have cratered, pension and social welfare plans have been decimated, unemployment and crime have risen, and basic public services are on life support (including power and water provision in some areas). Despite these deleterious effects, Milei’s “chainsaw” approach has been celebrated by the ACT Party, sponsor of the RSB and its predecessors, so here again we see an example of NZ politicians borrowing concepts from similarly-minded foreign governments.

They are not alone: the incoming Trump administration’s Project 2025 and Project 47 copy aspects of Hungarian president Viktor Orban’s authoritarian-minded constitutional reforms (since it centralises power int he Executive Branch and restricts civil liberties and opposition rights). More ominously, because it is an omnibus bill that redraws the NZ constitutional map in a preferred image, it echoes the Nazi “Empowerment Law” that Hitler pushed through in the German parliament after the was named Chancellor in 1933, albeit without the repressive powers later confirmed upon him. As in the case with Milei and his Base Law (and Hitler at the beginning of his legislative campaign), the RSB depends on securing a slim parliamentary majority in order to to pass into law.

What is important to note is that such omnibus legislation is most often used in democracies by authoritarian-minded politicians who are afraid that they cannot get their policy reforms passed and accepted otherwise. It is a soft form of constitutional coup whereby the “rules of the game” are stacked via legislative reform in favour of a specific set of interests, not the public good. In a perverse way it is a sign of weakness that they do so, as if they know that their preferred policy prescriptions will be rejected by the electorate in the absence of an overarching law forcing the public to follow them.

There is a second, more fundamental problem with this approach. It involves the distinction between political society and economic society and why they should not be intertwined.

Political societies are aggregations of people within given physical boundaries who agree upon or are forced to accept certain rules of collective decision-making regarding representation, leadership and collective decision-making. Because NZ is the subject of this post, we shall leave aside for the moment various authoritarian political communities. As a liberal democracy, NZ has a form of rule based on majority contingent consent to the system as given, formally expressed through elections but more granularly in the everyday actions of voters who accept their positions in the social order. People go to work, play, attend school, have relationships and generally comport themselves as members of society in accordance with commonly accepted notions of acceptable behaviour (e.g., “live and let live,” “due onto others as one would do onto oneself,” respect difference and the rules of the road, etc.).

Political society is about governance and civil engagement, no more or less. It can co-exist with a number of economic arrangements and is not inherently linked to any one. For example, over the years democracy has coexisted comfortably with varieties of capitalism and socialism. Authoritarianism has also co-existed with capitalism and socialism. The particular combination of economic framework and governance structure defines specific variants of regime type: NZ is a “liberal” democracy because it is based on a capitalist economic foundation (first settler colonialist, now primary good export, real estate ownership and services dependent production). North Korea is a Stalinist country because it combines one-party authoritarian rule with State control of the mixed industrial/agrarian economy.

What this means is that laws in a democracy are basically a means of adjudicating disputes, avoiding collective conflicts and regulating individual and collective behaviour regardless of economic status (think of the “justice is blind” adage). Ideally, they should be agnostic or neutral with regard to economic preferences because it is possible that future generations of voters will elect to support different types of economic arrangements that they believe suit their collective and individual material interests better than current schemes.

But that is not what has happened. In NZ and elsewhere in liberal democracies, things like private property rights have been enshrined in law and thereby protected by the State. The evolution of this marriage of political and economic societies is complex but the bottom line is that NZ is a capitalist society governed by a democratic capitalist State that enforces the primacy of capital above all other things. To be sure, much lip service is given to civil liberties, human rights, equality before the law, even adherence to the principles of Te Tiriti o Waitangi. But the foundation of the modern NZ State is not based on a contract between interested parties such as the Treaty, or on respect for the rule of law per se, but on the structural dependence of NZ society on capitalism. The role of the NZ State is to help resolves the contradictions that inevitably emergence in a political system where a minority of voters control major parts of the productive apparatus but rely on the labour of others (wage labour) in order to generate the material surpluses (profits) that allow them to exercise (indirectly) political as well as direct economic control in NZ society.

The RSB seeks to further deepen that structural dependence of NZ society on capital by giving certain capitalist fractions more leeway in the conduct of their self-interested affairs. The RSB codifies the State’s role (or non-role) in facilitating capitalists’ (aka businesses) self-interested pursuit of profit. From then on self-interested maximisers of opportunities, individual and corporate, will seek comparative advantages in the deregulated marketplace.

The problem, again, is that enshrining a specific set of economic preferences or biases in a political charter interferes with voter’s freedom of choice when it comes to their own economic interests and desires. Depending on their circumstances and structural location in the productive apparatus, not everyone may be a fan of capitalism or accept the primacy of private property rights. Some may even prefer socialism, however that is defined. Prioritizing and facilitating the pursuit of specific economic preferences contravenes the commonweal (public interest) basis of democratic political charters such as that governing Aotearoa. Instead, it rigs the societal “game” in fair of a select few.

Other, more astute minds have already voiced their opposition to the RSB on a variety of grounds. Here the point is to remind readers of why omnibus bills are inherently anti-democratic even if there legally constitutional, and why democratic political society is distinct from and should remain “above” economic society however construed. The former deals with universal values and interests; the latter involves specific sectorial interests and their material objectives in a system structurally based on the pursuit of profit. Although they may be overlapped in fact because of NZ’s history of structural dependence on capital, the public good is best served when the political/legal framework is agnostic or neutral when it comes to sectorial interests. That is what democratic collective bargaining systems are for and why political lobbying needs to be tightly regulated. Instead, the RSB seeks to tilt the game board in the direction of a specific set of interests, not the public interest at large.

Alas, although it is not meant to be, the rightwing NZ economic and political twain have met, and the outcome is the RSB. For the reasons outlined above, that is why it should be opposed.