Category: governance

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In Hellas, out with the new and in with the old.

The outcome of the latest Greek election is not surprising. When faced with uncertainty and dire predictions of collective and individual doom in the event that radical change occurs, voters often tend to go with the status quo or what is already in place. Confronted with the “valley of transition” to an unknown future, voters rationally calculate that their interests are best served by staying with what is known rather than leap into the unknown. Add to that the orchestrated litany of woes predicted by bankers, capitalist-oriented politicians, and lender nations, who pretty much predicted the end of the world as we know it if Greece were to default on its debts and withdraw from the Eurozone currency market, and it is easy to see why a plurality of Greeks decided to stay with the hand that they have been dealt with.

The trouble is that hand, in the form of a New Democracy/PASOK coalition (the so-called “bailout coalition”) is exactly the hand that got Greece into the debt crisis in the first place. It was first New Democracy, then PASOK governments that set new records of corruption, clientalism, patronage and nepotism while running up the public debt on state-centered labor absorption and entitlement projects that did nothing for productivity or the revitalization of the Greek private sector (which remains fragmented and dominated by oligarchic interests in the few globally viable Greek industries such as shipping). It is to this pro-Euro political cabal that the responsibility for “rescuing” Greece is entrusted. That is not going to happen.

True, the terms of the bailout will be relaxed even further now that a pro-Euro government can be formed. That much is clear given that Andrea Merkel has hinted that the repayment terms can be “softened.” The hard truth is that repayment can be softened because what is being repaid in Greece is the compound interest on the foreign loans. The logic is that of the credit card: the issuer of the card would prefer for users to not pay off their total debt on a monthly basis and instead accumulate interest-accruing cumulative debt while paying off less than the total owed. If the user reachers a credit limit with interest debt accruing, the limit is raised. If the user defaults on the debt after a series of credit limit raises, measures are taken to seize assets of worth comparable to the outstanding amount.

States are different than individual credit card users because as sovereign entities they can avoid asset seizure on home soil even while bankrupt. As Argentina proved in 2000, they can default and renegotiate the terms of debt repayment according to local conditions (after Argentina defaulted on its foreign debts it was eventually able to negotiate a repayment to creditors of US 36 cents on every dollar owed. The creditors took the deal, then began lending again, albeit more cautiously. The devalued Argentine peso sparked an export boom of agricultural commodities that led to post-default growth rates unseen for 50 years). The short-term impact of default can be painful (witness the run on Greek banks as people try to cash in and export Euros), but measures can be taken to curtail capital flight and to mitigate the deleterious effects of moving to a devalued currency (the Argentines did this by placing stringent limits on currency transfers abroad in the first months after they de-coupled the Argentine peso from the US dollar while at the same time issuing interest-bearing government bonds to dollar holders in the amount valid at the exchange rate of the day before the de-coupling). Greece has not adopted any of these measures as of yet, but that is because a pro-Euro caretaker government, as well as the PASOK government that preceded it, wanted to heighten the sense of doom should an anti-Euro coalition look to be winning majority support.

That scenario emerged in the form of Syriza. Although it is formally known as the Coalition of the Radical Left it is anything but “radical” (no matter how many times the corporate media tries to emphasize that point). Instead, it is a coalition of Socialists, Social Democrats, Greens, Trotskyites, Maoists and independents not associated with the Greek Communist Party (KKE). It has an agenda that includes a possible default, and will now be the largest opposition bloc in the Greek parliament. Contrary to the perception that it came out of nowhere in this year’s elections, Syriza has been steadily building a popular voting base since 2004, increasing its electoral percentage significantly in 2007, 2009 and May 2012. Although it has had splits and defections (which are endemic in Greek politics, particularly on the Left), Syriza was the second largest vote-getter in the May 2012 elections and its margin of loss to New Democracy in the second-round elections held last weekend is less than it was in May. The bailout coalition may have a narrow majority, but Syriza and other Left minority parties will prove to be a formidable parliamentary obstacle to the implementation of  its pro-Euro agenda.

That is why the new Greek “bailout” government will not be successful even if it renegotiates the terms of the bailout along more favorable lines than in previous iterations. It will be forced to deal with the combined pressures of Syriza opposition in parliament and the angry–and I reckon increasingly violent–opposition of the non-parliamentary Left in the street. Greece has a long tradition of student and union militancy and urban guerrilla warfare. Even during the best of times militant groups have used irregular violence to make their points about Greek capitalism and its ties to Western imperialism. They have burned and they have killed (including a CIA station chief, a British embassy official and various Greek security officers) during the decades after the Colonel’s dictatorship fell in 1973. These militant strands have not gone away and instead have been reinforced as the debt crisis drags on and the impact of austerity measures take their toll on the average (and increasingly unemployed) wage-earner. With unemployment at 20 percent and youth unemployment at 50 percent, the recruitment pool for Greek militants has grown exponentially.

Some of this has been siphoned off my neo-fascist parties like Golden Dawn. But the bulk of popular rage has been channeled by the Left, divided into the institutional vehicles of Syriza and the KKE (and various off-shoots), and the direct action, non-institutionalized vehicles comprised by the likes of Revolutionary Sect (who favor political assassinations) or Conspiracy of Fire Nuclei (who appropriately enough favor arson), that follow a long line of militant groups with a penchant for violence such as the N-17 and Revolutionary Struggle (and may in fact include former members of the latter), to say nothing of various anarchist cells.

These militant groups are not going stay quiet. Instead, I foresee a rising and relentless tide of irregular violence coupled with acts of passive resistance and civil disobedience so long as the political elite continues to play by the Euro rules of the  game. Every Greek knows that the solution to the crisis is political rather than economic because the bankers have made more than enough profit on their loans and it is now time for them to draw down or write off the remaining interest owed. A softened bailout package only goes halfway towards easing the collective burden of debt, and the continued imposition of fiscal austerity deepens the stresses on Greek society (urban crime has ramped up significantly this year, and it already was pretty bad when I lived in Athens in 2010). Instead of continuing to cater to banks, the political decision palatable to most (non-elite) Greeks is not a softened bailout package, now into its fourth iteration. It is a complete re-structuring, with or without default, of the economic apparatus so that national rather than foreign interests prevail on matters of employment, income and production. This may require a retrenchment and drop in standards of living over the short-term, but it at least gives Greeks a voice in the economic decisions that heretofore and presently are made by Euro-focused elites more attuned to the preferences and interests of European finance capital than they are to those of their own people.

If there is a domino effect in other countries in the event that Greece eventually (I would say inevitably) defaults, then so be it simply because that is the risk that bankers and their host governments assumed when they lent to PASOK and New Democracy governments in the past. Perhaps it is time for bankers to pay the piper as well. After all, although their profit margins may fall as a result of the Greek default, they have already insured against the eventuality (the write-off of Greek debt by large financial institutions in the US, UK and Europe is the story that never gets mentioned by the corporate media). Moreover, and most importantly, the banks can accept the default and take their losses on projected interest as a means of keeping Greece in the Eurozone market, thereby avoiding the contagion effect so widely predicted at the moment. Default does not have to mean leaving the Euro currency market. Greece can default and stay in the Eurozone so long as the banks accept that it is in their long-term interest to shoulder the diminished profits (not real losses) that a default will bring.

Again, the economic decisions about Greece had already been made by the European banks, and they are now simply waiting, while claiming gloom and doom, for the political decision to terminate their interest-based revenue streams. The PASOK/New Democracy bailout coalition only delays that political inevitability, and Syriza and the militant Left will ensure that the next bailout is just another stopgap on the road to default and regeneration along more sustainable lines.

Whatever happens, it looks to be another long hot summer in the Peloponnese. Expect a lot of wildfires.

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They Never Learn.

There is an old rule in politics that states that it is not the original sin that gets politicians in trouble. It is the cover-up or lying about it that does them in. The examples that prove the rule are too numerous to mention and span the globe. This week we have another classic case in point: Shane Jones and his explanation as to why, as Associate Minister of Immigration (the Minister of Immigration at the time, David Cunliffe, had earlier refused to revoke Liu/Yan’s residence visa and for some reason unknown to me was not involved in the granting of citizenship), he ignored expert legal advice and granted a Chinese fraudster expedited citizenship.

According to Jones he did so on humanitarian grounds because he was told by an unnamed Internal Affairs official that the applicant–he of at least three different names and an Interpol warrant out for his arrest–would be executed and his organs harvested if he were sent back to China. Forgive me if I cough. That is up there with Annette King’s claims that no one in the Labour government knew about Operation 8 until the weekend before it began.

Others have already torn Mr. Jone’s supposed rationale to shreds. Beyond the fact that not even the Chinese execute people for common fraud, even if they are members of Falun Gong (a claim supposedly made by but never proven by Mr. Liu/Yan), a legitimate fear of a politically-motivated death sentence would result in an asylum request, not a citizenship application based  upon a business visa. Nor would Mr. Liu/Yan speak of traveling back to China with a delegation of Kiwis in order to explore business opportunities in the PRC (as it is claimed he did in his conversations with immigration officials now testifying at his trial on false declaration charges). But according to Shane Jones, not only was he facing certain death but also certain organ harvesting (which raises the question as to how the unnamed Internal Affairs official could know this in advance given that the Chinese do not harvest organs from all executed prisoners because the health of the condemned varies). Put bluntly, Mr. Jones is simply not credible, and unless that unnamed official comes forward to take responsibility for the bogus claims (which Mr. Jones could have ignored), his justification simply does not wash. Add in the fact that Mr. Liu/Yan had donated considerable sums of money to Labour coffers in the lead-in to his citizenship application, and the smell of something fishy permeates the affair.

What is amazing is that when confronted with the evidence presented in court, David Shearer continued to back Mr. Jones and even allowed him to go public with is ridiculous justification. That violates a second rule of politics, which is that when smoke begins to surround a politician on ethical issues his or her party needs to move swiftly to prevent a full-fledged fire from erupting by distancing the tainted one from the party as a whole. By not doing so immediately and only leaving open the possibility of standing Jones down if an investigation proves him guilty of wrong-doing in the Liu/Yan affair, Mr. Shearer has failed the basic test of leadership that involves saving the party from further uncomfortable scrutiny on the issue of campaign financing and political donations.

Once again, let us remember the iron law of oligarchy that governs all political parties: the first duty of the party is to preserve itself. Individual political fortunes come second. Legalities aside, it is the appearance of unethical behavior on the part of Mr. Jones that is at play here.

What is even more amazing is that this comes on the heels of the John Banks-Kin Dotcom scandal and John Key’s equally egregious mistake in not removing Banks from his ministerial post while the Police investigated whether Banks violated political finance laws in his dealing with Mr. Dotcom. Regardless of whether the press played this sequence of events on purpose, the scenario unfolded as follows: National was on the ropes in the weeks leading up to a dismal budget announcement, beleaguered by policy and personal conflicts and dogged by an increasingly assertive mainstream press. Rather than strike a contrast in approach that would give it the moral high ground that would allow it to score major political points against its weakened rival, Labour’s response to revelations of the dubious ethics of one of its senior members in a past government–dubious ethics that are being aired in court for crikey’s sake–is to bluster and blow more smoke on the matter. Do they never learn?

Just as Mr. Key should have removed Mr. Banks from his ministerial position as soon as his denials and lies about his relationship with Mr. Dotcom were exposed, so Mr. Shearer should have moved quickly to demote Mr. Jones until such a time as an independent investigation exonerated him. Given the passing of a few news cycles and the issue would have faded into the political “bygones be bygones” category. By not doing so Mr. Shearer has allowed the Jones-Liu/Yan relationship to become a distraction away from National’s peccadillos and policy failures. He has, in fact, thrown National a life line in the days before the budget announcement and the decision to demote Banks (who could stay in government but not be a minister pending the resolution of the Police investigation), and I would imagine that the National caucus are high-fiving and back-slapping each other in delight.

Of course there are political calculations in all of this. By-elections are costly, list candidate replacements are unproven or unreliable, internal Party factional disputes run the risk of being aggravated or exposed.  National is clearly waiting for the Budget to be announced before moving on Banks. Labour does not want to lose a senior figure who “ticks the boxes” of important internal constituencies. And yes, there is a difference between illegal and unethical activity.

But in putting these calculations ahead of ethical considerations given the appearance of impropriety, both parties have once again shown their contempt for the NZ public. And on this score, Labour’s contempt is much worse. After all, Mr. Banks was just a greasy-palmed private citizen seeking to be mayor when he approached Mr. Dotcom for support. Mr. Jones, on the other hand, was a Minister of State who apparently used his office to bestow special considerations on an individual in exchange for, uh, party “favors.”  Both actions were slimy, but it is the official nature of Mr. Jones’s intercession that makes his behavior worse. Which is why he should have been stood down straight away, because rightly or wrongly, it is the attempt to downplay or cover up past impropriety, rather than the potentially unethical or illegal behavior itself, that will cling to the Labour Party long after Mr. Liu/Yan’s case is adjudicated.

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Showing The Money versus Making Numbers Work.

That simple phrase “make the numbers work” catches John Key’s approach to the perennial tension between efficiency and transparency in a democracy. To simplify things, it can be said that the more democratic and transparent the policy process, the less efficient it becomes. That is because the more actors are involved in policy decisions, the more likely that additional decisional sites and veto points will be placed in front of policy choices. They key is to find an appropriate balance between efficient policy formulation and implementation and open participatory representation by all potential stakeholders. If forced to choose, democrats err on the side of representation. Authoritarians prefer efficiency.

The corporate world has no objective need for balance. What matters are balance sheets in the black. Firms are structured so that decision-making is hierarchical rathe than horizontal, with decisions flowing from the top rather than as a result of inputs from the bottom or from external parties. Managers rule, workers obey, and shareholders or owners reap profits. Given the sensitivity of any given project, public consultations might be invited and consideration might be given to mitigating factors that impinge on profitability, but the bottom line is that the numbers work in favor of owners, investors and share-holders.

John Key came from (and is likely to go back to) such a world. In fact, with a personal net worth of around $60 million he is a small time member of the “Masters of the Universe:” the network of financial elites (stock brokers, money managers, currency traders, hedge fund administrators and bankers) built up in the 1990s and headquartered in London, New York, Geneva, Hong Kong and Singapore who made the calls on how global liquid assets should be invested. Theirs is a world of numbers, not morality or ethics, and their worth to the network was and is their ability to make the numbers work when constructing investment deals. They answer to themselves and their clients without regard to the public interest because, quite frankly, they are interested in private gain rather than the public good.

With that in mind the self-styled CEO of NZ Inc., John Key, advised himself that changing gambling laws so that SkyCity can have another 500 slot machines in return for building a convention centre on adjacent land at no tax payer expense was a neat deal that was in both the private and public interest (the public presumably being interested in the tax revenues and ancillary benefits that will accrue from having the convention centre up and running, which is a whole different story). By that logic the numbers work.

In order to come to this conclusion, however, NZ’s self-styled CEO had to ignore the counsel of the Auckland City Council, local iwi, problem gambling-related mental health organizations, the Police, traffic authorities, tourism operators and a host of other potential stakeholders (I mention these because the proposed site of the convention centre involves a myriad of urban planning considerations and is only handy to the Casino and not to the Viaduct, Cloud, Winyard Quarter, Ponsoby, Newmarket or other entertainment districts that depend on tourists). When I say “ignore” I mean that he chose not to solicit advice from any of these parties rather than turn his back on advice already given. Mr. Key’s self-advice also told him to order an end to all other tenders once SkyCity got involved, some of which might have contained the input from non-investor interested parties such as those mentioned above. But as a minor Master of the Universe why should he bother with pretenders and outsiders when he could seal the deal with SkyCity for a small change in an industry-specific law? The Hobbit saga taught him that allowing non-investors to have a say could well kill the deal, so this time around he made sure that negotiations were kept quiet.

Clearly Mr. Key is a man who understands numbers and efficiency. But perhaps he spent a bit too much time in Singapore, where public input into policy decision-making is inconsequential to the point that it is not even considered even when it comes to large public works projects (such as the expansion of the MRT train lines currently underway, which have displaced thousands without any input from them and with compensation determined not by market value but by government fiat). In Mr. Key’s world he does not have to waste time and money listening to the blather of a host of obstructionists and self-interested losers (because, after all, he only deals with winners). He is there to crunch the numbers and do the deals. In the pokies-for-convention-centre trade he has done so, efficiently.

No wonder it is rumored that he is tiring of the job. Here he is, cutting deals and helping commercial players make serious money just like in his good old days in the private sector. But now he has to put up with ex-post whingers and other plebians who all want a voice without a full command of the power of numbers. Plus, he is surrounded by career politicians who for the most part could not make a buck even if they won lotto, and the opposition is nothing more than a bunch of special interest namby-pambies who would not get past the lobby of his former corporate headquarters. Why should he stick around and have to listen to their nonsense about addiction, traffic and other social costs?

You have to feel for Mr. Key. Once he was in the stratosphere, unaccountable to anyone but his corporate masters and the private interests that they served. He made money off of money without having to add value or increase production anywhere, and he got rich doing so in part because he made his name in an authoritarian country in which numbers, not people, matter most. Now he has to smile and wave to a bunch of provincial hicks self-absorbed in some weird Antipodean PC navel-gazing where everyone has a say and little gets done.

Then of course there is John Banks, and how he reads the numbers. For Mr. Banks the deal is not about making public and private numbers work. It is about private interests showing him the money in order to advance his political fortunes. Whereas Mr. Key was looking for a way to balance a specific private actor’s desire with a vague public interest (again, assuming that a convention centre adjacent to SkyCity is in the public interest), Mr. Banks was looking for campaign contributions. Presumably there was a quid pro quo involved with at least two known private parties, SkyCity and Kim Dotcom (there are plenty of others who donated “anonymously” to Mr. Banks but let’s focus just on these since they are in the news). What the expectations were for deliverables from Mr. Banks is as of yet unknown, although whatever they were it appears that Mr. Dotcom now feels that he was stiffed on the deal and is exacting his revenge by releasing details of his donations to Mr. Banks’ mayoral 2010 campaign. Whatever it was it was not in the public interest unless one thinks that granting Mr. Dotcom special favors is a collective good.

In the end, what Mr. Key did was not very democratic but it was legal and efficient as far as the tightly defined numbers behind the deal are concerned. Mr. Banks, on the other hand, had no public interest in mind when he solicited funds from Mr. Dotcom and accepted those from SkyCity, even if the latter’s donation was the same as the amount donated to Len Brown at the time (to his credit Mr. Brown reported the donation from SkyCity to his campaign, which mirrored that given to Mr. Banks “anonymously”). SkyCity was just papering both sides of the mayoral aisle with its symmetrical donations to the two leading candidates, and whatever favor was purchased was bound to be equally small given the amounts involved no matter who won the election. But Mr. Dotcom was an individual who papered only one candidate as far as we know, and he did so in excess of the corporate entity known as SkyCity. He was, in other words, trying to purchase individual favor by backing one candidate over another.

That is why there is a difference between the two men. Mr. Key is an authoritarian-minded money man who thinks he knows what is best for the country without regard to the naysayers and whiners, and who makes the numbers work in favor of his preferred vision. Mr. Banks is an egotistical “show me the money” weasel. With the possibility of more revelations about Mr. Banks forthcoming, it could well be the case that the weasel brings down the money man, or at least accelerates his departure from office.

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Labour’s new Tui Ad.

Former Police Minister Annette King says that she and her cabinet colleagues were not informed about Operation 8 until the night before the dawn raids. She says this after stating that the Solicitor General advised the Police at the time to charge those arrested under the Terrorism Suppression Act, only to change his mind after the raids were completed.

Annette King expects us to believe that she, as Police Minister, had no clue about a police operation that was going to invoke the TSA for the first time, not against foreign terrorists but against a collection of well-known domestic dissidents with long histories with the Police. She expects us to believe that Helen Clark, the micromanaging, all-knowing Prime Minister and Minister for Intelligence and Security, had no clue about Operation 8 even though the TSA was used to justify the electronic surveillance of the suspects a year before the raids, that SIS assets were used to that end, and that the raids would be carried out on Tuhoe land as well as in cities (a delicate political issue, to say the least). She expects us to believe that Phil Goff, the Defense Minister, was clueless about the operation even though, as the foremost counter-terrorism unit in the country, the NZSAS could be called into action should the situation warrant (which would require some advance notice). She expects us to believe that the Combined Threat Assessment Group (CTAG) was not involved in the build up to the raids, or if it was, that this inter-agency task force did not inform any senior government minister until the night before the doors were kicked down. She wants us to believe that then-Police Commissioner Howard Broad, well known for his ties to the the Prime Minister, did not utter a word about who was targeted and why until less than 12 hours before the cops rolled.

She would like us to believe that with the possible exception of the PM, no one in the 5th Labour government was aware of Operation 8 until October 14, 2007. This, even though multiple agencies were involved and the lead-up  to the raids was over a year in the making.

Yeah Right.

 

 

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Theater of the Absurd.

Is there something in the water that trial lawyers drink?

First the prosecution claims that the Urewera Four and their merry band of role-playing wanna-be commandos were in the bush training for urban guerrilla warfare and posed an imminent threat to New Zealand’s peace and tranquility. The defense answers that all the gun play was just a wanaga exercise designed to train people for private security jobs so that they could move off the dole (even though all of the original defendants were well-known Left activists of various stripes, and several had jobs). Then Tame Iti’s lawyer sums up his defense by claiming that Iti is comparable to Nelson Mandela in the historical scheme of things. WTF?

Are these lawyers high? Is there something about the High Court that brings out the hyperbole in barristers? Do they think that juries are idiots? Or do they think that by offering up a mountain of bluster that the jury will not differentiate between smoke and fire? One thing is clear–the lawyers in this case clearly have Ph.D.s in argumentation: they Pile it High and Deep.

The sad fact is that after more than a million tax-payer dollars have been spent on punitively prosecuting some deluded and/or foolish people for acts that are otherwise commonplace in rural New Zealand, acts that happen on a weekly basis, we have been saddled with a four year court process ending in a trial in which both sides make patently absurd claims to bolster their respective cases.

Whatever the outcome of the trial, if this is the state of the art when it comes to criminal prosecutions and defense, then New Zealand is being very poorly served. And having to pay for that poor service is as galling as having the case go to court in the first place.

 

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Accumulation versus Distribution.

The bottom line of any political economy resolves around the question of accumulation versus distribution. Productive activity that generates surpluses (profits) can be accumulated by those who control the means of production (workers or capitalists), or can be distributed throughout the larger community in which production is located. In capitalist system decisions about accumulation and distribution are done by capitalists. Workers organizations fight or bargain for better distribution of profits. Capitalists would prefer to accumulate for their own consumption. Because production is essential for the material standards of everyone, in democracies capitalists and workers negotiate the proper ratio of profits saved to profits distributed. Once distribution has occurred (via wages, benefits and the like) the saved part of profit is re-invested or “taken” by capitalists (owners) for personal use. Both sides adopt minimax negotiating strategies by making maximum claims on the preferred ratio, then settling for a mutually acceptable minimum. By doing so neither wages or profit-taking rise too recklessly or out of proportion to productive gains or inflation, as that would lead to inefficiencies and potential social unrest.

Or so the system is supposed to work. Depending on relative political balances and the specific location of a given productive sector in the capitalist world cycle at any specific moment, workers or capitalists may have structural and political advantages to play in their favor. Workers will attempt to maximize distribution in the form of job security and wage and benefit gains; capitalists will attempt to maximize accumulation by rolling back worker’s redistributive gains.

For the last twenty-five years logics of accumulation and profit-taking have dominated macroeconomic thought. Workers have steadily seen their distributive gains eliminated. As the process has deepened capitalists have pushed not only to reduce the material aspects of the distributive process. Sensing a favorable economic and political environment in places like New Zealand, they are launching attacks on the rights to collectively organize in defense of distributive stakes or goals. Capitalists well understand that for people to have economic rights they must have political rights.  The right to organize collectively is a political right. Reduce that right and previously held economic rights are more easily curtailed or eliminated. The more the concept of economic rights based on distribution is pushed towards a minimalist definition (encapsulated in the saying “you are lucky to have a job”), the more workers will limit their distributive demands in the quest for basic subsistence. The more that they do so the more working class internal competition will further push down the overall wage bill and increase job insecurity. The process of “casualisation” is the result of that trend, with “labor flexibilisation” being the managerial jargon used to describe employment precariousness.

Today in New Zealand the scales are tipped in favor of accumulation over distribution. The political and economic elite (including many in the Labour Party leadership) overtly side with the logics of accumulation argued by capitalists. They accept the reasoning that in the current global economic moment distribution to workers is contrary to future growth. Thus they accept that not only worker’s distributive demands but their political rights must be curtailed in order for economic benefit to occur. Of course, that benefit accrues to capitalists rather than workers, and if the low rates of re-investment in many productive sectors is anything to go by, profit-taking out of accumulated surpluses have been very good for capitalists indeed.

None of this is particularly new or surprising, even if recent labor conflicts had led to commentary about an impending class war in New Zealand, among other places. What is happening today is just the logical conclusion of a process of market-driven accumulation that began in the 1980s and which is reaching deep into the foundations of modern political economies today. The purpose is to forever privilege accumulation over distribution, and to ensure the political conditions in which workers can no longer challenge that logic or have a say in fixing the “equilibrium” ratio of accumulation to distribution.

Such a system has long been noticed and understood by the materialist school of class conflict. It is called the Asiatic Mode of Production, which relies on super-exploitation of human labor for accumulation gains. Given that New Zealand’s original market ideologues borrowed some of their policy prescriptions from the Chicago School of monetarist economics (later conceptually distorted in the word neoliberalism) as widely applied by capitalist authoritarians in the 1970s and 1980s, it seems  that their heirs have borrowed from the Chinese or Singaporean models, which are also heavily reliant on authoritarian political and social controls. This shift in preferred macroeconomic models makes perfect sense when we consider the move, shared by both major parties, to focus NZ’s diplomatic and trade relations on Asia and the Middle East, where democratic “niceties” are in short supply and where capitalists are largely unencumbered by human rights, much less labor rights or worker’s substantive rights to a share of the benefits of production.

The modern Asiatic model is as ruthlessly efficient as its predecessors, but is also based on a downwards redefinition of the concepts of economic and political rights that is generally considered anathema to democratic values (which in the labor market are enshrined in International Labor Organization conventions, now under siege in NZ and elsewhere). It would seem that in this particular market-driven moment, authoritarian capitalist reasoning prevails, accumulation is the sine qua non of macroeconomic policy, and the notion of egalitarianism as the basis for stable social order reflected in a fair ratio of accumulation to distribution has been abandoned in favor of the all-mightly profit-taking “bottom line.”

That is the state of play in New Zealand today.

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In an age of increased international interdependence, NZ shrinks diplomatically.

The lunatics have taken over the asylum. Not only has National adopted an incoherent foreign policy in which it attempts to straddle the fence between China and the US by tying its trade fortunes to the former and its security fortunes to the latter (something that it thinks is hedging but which is untenable given the looming strategic conflict between the two great powers). It has now decided that it can dispense with 305 MFAT employees, including diplomatic staff assigned abroad (as it closes embassies and consulates). This, at a time when global interdependence is increasing and the range of international relations is getting more rather than less complex.

Diplomacy and its support infrastructure are good value for money because the service it provides helps NZ’s position in the world. For the cost of diplomatic and home office salaries, travel, conferencing, housing (abroad) and foreign aid programs, NZ can avoid military entanglements (the costs of which are exponentially higher than diplomatic chit chat), engage in negotiations on matters of national interest (for example, non-proliferation, arms control and climate change), and generally steer a safe course in the turbulent seas of the post 9-11 world. To do so requires personnel with varied skill sets, so reducing the complement of personnel dedicated to diplomatic functions reduces NZ’s capacity to engage its foreign interlocutors on a broad range of issues. Numbers do matter here.

The market zealots of the National razor gang want to cut all perceived public sector fat regardless of consequence. This is like choosing a skinny marathoner to run an Antarctic ice race instead of a distance runner with a sturdier (read thicker) constitution: the short term look may seem impressive, but once the choice is placed into real context it is bound to suffer, likely fail and in the end be more costly to maintain. We have already seen the domestic consequences of such logics. Now we will see them in our international affairs.

Add to this the privatization of NZAID programs in which fostering business opportunities is given priority over human developmental assistance, and what you have is foreign policy debacles in the making.

Of course, the National government may be doing this because it already knows that it is going to lose the next election and does not care if it saddles Labour (or more likely a successor Labour/Green government) with the costs of the diplomatic re-build after McCully and co. have reduced NZ’s diplomatic footprint to that of a child in the sand. But that, in a phrase, captures what National is all about when it comes to foreign policy: a child playing an adult’s game without regard to long-term consequence.

Eventual ratification of the much hyped Trans-Pacific Partnership, should it occur, will not save National from its folly and will in fact exacerbate the tensions between the Chinese and the US. That in turn will have very negative consequences for NZ since it is increasingly dependent on China for trade and on the US/OZ for security. This, with less people employing the skills to smooth over the differences between the two contradictory positions.

Couple the above with the erosion of morale and skill sets within the NZDF as a result of similar cost-cutting measures, and what is left is a shell of NZ’s former international presence. Sometimes the bottom line is not measured in monetary terms but in terms of competence, reputation and committed presence. This is particularly true for international relations, where the belief that NZ punches above its weight in international affairs is being put paid to by National’s incompetence and dogmatism.

In my opinion National has put ideological partisanship ahead of the national interest. If the proposed cuts are more than a bargaining chip, then the only questions left are who will profit from National’s increased privatization and out-sourcing of the country’s international relations and who will pay the price? I suggest that in response to the latter, all Kiwis will pay a price for this decision, including the private interests who may short term profit from National’s grossly myopic and self-interested approach to foreign affairs staffing. Let us remember: most developed states consider foreign policy making and implementation to be an essential and universal function of government not susceptible to narrow partisan logics, precisely because of the long-term common need for diplomatic continuity in a difficult world.

 

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A question of citizenship.

I am a US citizen permanent resident in NZ. I got here on  a normal (i.e. not a business or student) visa after going through a “good character” check and because there was an employer vouching for me. I am now beginning the process of taking out NZ citizenship and am amazed by the level of detail and bureaucratic hurdles I need to go through to get it after living in NZ for nearly 15 years (things like the names and last addresses of my long deceased parents and name and address of my long-divorced American ex-wife are just the start). The process is said to take 6-12 months and I need to surrender my US passport during that time. I guess that is a good thing as it verifies my bonafides.

I say this because I have read reports that Mr. Kim Dotcom, the Jabba the Hut of the internet world according to the US government, purportedly has a NZ passport. He also apparently has a Hong Kong passport as well as that of his birth country Germany. These are said to be legitimate, not fraudulent passports.

My understanding is that you have to be a NZ citizen to hold a NZ passport, and that applies even though one may have entered the country in the investor plus scheme by buying 10 million dollars of NZ government bonds. This makes me curious because Mr. Dotcom arrived in NZ in 2010, which means he was granted citizenship very quickly (as a contrast, a friend of mine of British birth lived in NZ for 30 years, married a Kiwi, served in various official roles including as a JP, and it still took him a year to get his NZ citizenship even though he has never been arrested anywhere and had several NZ people of import vouching for his good character). I am thus curious as to how, with his prior convictions and assorted other odd baggage, Mr. Dotcom managed to get a NZ passport so quickly, especially if there are residency and character requirements involved in acquiring citizenship and he is not claiming refugee status. I also wonder if he surrendered his foreign passports during the time his application was being processed because I have read that he traveled extensively after his arrival in NZ.

I also understand that in order to be an MP one has to be a citizen. I remember some minor scandals a few years back surrounding MPs who turned out to be non-citizens, something that forced their resignations. That also makes me curious because there is a new list National MP who may or may not be a NZ citizen as far as I know. He is a decent chap for a Righty and certainly will improve the intellectual calibre of the NAT backbenches, so good on him for making a go of it. But I am not sure that he is a citizen even though he arrived in NZ about a decade ago. I could be wrong and certainly harbor him no malice, but wonder if all the ticks were checked off on his citizenship prior to the election.

More generally, I am just curious about the flexibility of NZ citizenship laws and the process of granting citizenship because I too hope to join the NZ citizen ranks in the near future. Since I do not have 10 million bucks and am not the darling of any political party, can I instead run for local office with my PR status? I already own property, pay taxes, married a Kiwi etc., so if my citizenship application is rejected (presumably on “good character” grounds), can I still make a nuisance of myself at the local political level?

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A Culture of Impunity?

During the dark years of dictatorship in South America in the 1970s and 1980s, there emerged a phrase to capture the attitude of the elites who benefitted from such rule: the culture of impunity. It referred not only to the attitude of the uniformed tyrants who ran the regimes, but more to that of the civilian elites who gave them social and economic support, and who benefitted lavishly thanks to the repression and restrictive laws on basic rights of association, dissent and movement. These civilian elites literally lived above the law, since they could, if not be directly protected by the regime’s thugs, be immune from prosecution or liability for crimes and other transgressions they committed simply because of who they were. Murders, rapes, abuse of servants, violent attacks on members of the public–all of these type of behavior were excused, ignored or bought off rather than be held legally accountable (I do not mention justice simply because it is impossible to have real justice under dictatorial conditions). Although there was variation in the attitude of some elites and cross-country differences appeared as well, the bottom line is that during the authoritarian period in South America a culture of impunity developed that was one of the salient social characteristics of the regimes in question.

With that in mind I ask readers if such a culture of impunity exists in NZ. I ask because it strikes me that although diluted and less repressive in genesis, there appears to be an attitude of impunity in the political and economic elite. They can buy silence and name suppression when they misbehave; with a wink and a nod they accommodate employment for their friends and provide sinecures for each other (think of various Boards); they consider themselves better informed, in the know, more worldly and therefore unaccountable to the popular masses when it comes to making policy (think of the use of parliamentary urgency to ram through contentious legislation and the NZDF command lies about what the SAS is actually doing in Afghanistan); they award themselves extraordinary powers in some  times of crisis (Christchurch) while absolving themselves of  responsibility in others (Rena). They use the Police for their own purposes (Teapot Tapes and Occupy evictions, the latter happening not because of public consensus but done by summary executive fiat). More generally, think of the lack of transparency in how government decisions are made and the duplicity of elite statements about economic issues (say, the price of wage goods) and political matters (e.g., recent internal security legislation). Coupled with equally opaque decision-making in NZ’s largest publicly-traded firms, or the cozy overlap between sectors of the judiciary and other elites, the list of traded favors and protections is long.

None of this would matter if NZ was run by Commodore Bainimarama. It would just be another Pacific island state ruled by a despot and his pals. But as a liberal parliamentary democracy NZ regularly scores highly on Freedom House and Transparency International indexes, to the point that it is often mentioned at the least corrupt country on earth (which is laughable on the face of things and which raises questions about the methodologies involved in such surveys). To be sure, in NZ traffic cops do not take cash bribes and judges do not have prostitutes procured for them by QCs representing defendants, but corruption does not have to be blatant and vulgar to be pervasive. And in the measure that elite sophistication in accommodating fellow elites outside of the universal standards applicable to everyone else is accepted as routine and commonplace, then a culture of impunity exists as well.

My experience in NZ academia, two respectable volunteer organizations and in dealing with national and local government officials suggests to me that such a culture of impunity does exist. It may not be that of Pinochet, Videla, Stroessner, Banzer or Geisel, but it seems pervasive. It appears to have gotten worse since I arrived in 1997, which may or may not be the fault of market-driven social logics and the “greed is good” mentality that has captured the imaginations of financiers, developers and other business  magnates (or it could just be a product of a long-established tradition of bullying, which has now spilled over into elite attitudes towards the country as a whole).

Mind you, this does not make NZ a bad place. It simply means that there is an encroaching, subversive authoritarian sub-culture at play amongst the NZ political and economic elite that undermines the purported egalitarianism and equality on which the country is ostensibly founded (I am sure there are sectors of Maoridom who will take reasoned exception to that claim). And if so, has the corrosive culture seeped into the body politic at large so that almost anyone is a relative position of power vis a vis others thinks that s/he can get away with behavior otherwise contrary to normal standards of decency and responsibility?

Does NZ has a culture of impunity?

 

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On Dynastic Regimes.

The death of Kim Jung-il and the ascent of his youngest son Kim Jung-un to the Supreme Commander’s role in North Korea highlights the problems of succession in dynastic regimes, particularly those of a non-monarchical stripe. Monarchies have history and tradition to bank on when perpetuating their bloodlines in power. In authoritarian monarchical variants such as absolute monarchies and kingdoms the exercise of political authority is complete and direct, if not by Divine Right. In democratic variants such as constitutional monarchies royal power is circumscribed and symbolic. There are also hybrid systems where royal privilege and power coexist and overlap with mass-based electoral politics, making for what might be called “royalist” democracies (such as in Thailand or the sultanates in Malaysia). In all versions royals are integral members of the national elite.

There are also differences between authoritarian and democratic non-monarchical dynastic regimes, and they have to justify themselves in other ways.  Democratic political dynasties such as the Gandhi’s in India, Bhutto’s in Pakistan, Kennedy’s in the US or Papandreou’s in Greece reproduce the family lineage within the context of political parties inserted in competitive multi-party systems. Their power is exercised via party control and influence reinforced along ideological lines and buttressed by inter-marriage with economic elites. They can come to dominate national politics when in government and their access to national authority is preferential in any event, but they do not have direct control of the state bureaucracy, courts or security apparatus. In a way, dynastic political families in democratic regimes are akin to organized crime: their influence on power is mostly discrete, dispersed and diffused rather than immediate and direct.

Non-monarchical authoritarian dynastic regimes have more direct control of the state apparatus, including the judiciary and security agencies. They tend to reproduce themselves politically via mass mobilisational parties, and tend to divide into religious and secular variants. Religious variants fuse family bloodlines with clerical authority (say, in the ordained status of fathers, uncles and sons) in pursuit of theological constructions of the proper society. Secular variants mix nationalist and developmentalist rhetoric with charismatic leadership or cults of personality, often with military trappings. In both types the dynastic leadership leads the security apparatus, which is often expanded in size and scope of authority (particularly with regard to internal security). In both sub-types personal ambitions are blurred with political objectives, often to the detriment of the latter.

There can be hybrids of the non-monarchical type that are religious or secular-dominant, where a controlling dynastic family accommodates the interests of smaller dynasties (this happens in clan-based societies).

The issue of succession is problematic for all authoritarian regimes but particularly those of non-monarchical dynastic bent. The more institutionalized the authoritarian regime, the less dynastic it tends to be. Institutionalisation of the regime provides mechanisms for political reproduction beyond bloodlines. This most often happens through the offices of a political party and a strong central state bureaucracy. The more personal dynasties fuse family fortunes with institutionalized political reproduction, the better chances they have of holding on to power. Even then, relatively institutionalized non-monarchical authoritarian dynastic rule such as the Assad regime in Syria, Qaddafi regime in Libya, Hussein regime in Iraq, Somoza regime in Nicaragua, Duvalier regime in Haiti or Trujillo regime in the Dominican Republic have proven susceptible to overthrow when their rule proves too pernicious for both national and international constituencies.

Monarchies can also be overthrown (such as that of Shah Mohammad Reza Pahlavi in Iran), although that type of regime change was more prevalent in the 19th century than it is in the 21st. Some monarchs have seen the writing on the wall and willingly accepted a constitutional status stripped of political power, such as in Spain (after the aborted coup of 1981 known as the “Tejerazo”) and more recently in Bhutan (where the last Dragon King voluntarily relinquished absolute status as part of the 2008 Constitutional reform). Other monarchies are under pressure to liberalize, such as in Tonga or (much less so) Brunei.

Add to these scenarios the problems inherent in the universal law of genetic decline and the prospects for long-term dynastic succession have markedly decreased in modern times. Many non-monarchical authoritarian dynasties span two generations but few go further than that. The transition to the grandchildren is the big demarcation point between non-monarchical authoritarian dynastic wannabes and the real thing.

The key to non-monarchical authoritarian dynastic succession is for the family bloc to embed itself within a technocratic yet compliant non-family political, military and economic circle of influence peddlers, who together form a symbiotic relationship based on patronage networks in order to govern for mutual benefit. The more that they can justify their rule on ideological grounds or in the efficient provision of pubic goods, the more they will succeed in securing mass consent to their rule. Although the bloodline becomes increasingly dependent on the entourage, the overall effect is a stable status quo. The Singaporean PAP regime exhibits such traits, although the passage of the Lee dynasty from its founding father to its third generation is increasingly problematic. The Kim regime in North Korea is in reality a military-bureacratic regime with a dynastic core that has now moved into its third generation leadership (the next six months should tell whether Jung-un will consolidate his position). Its vulnerability is its inability to deliver basic necessities to a large portion of its people, which requires ideologically-justified repression and isolation in order to maintain mass acquiescence to its rule.

Dynastic authoritarian regimes also suffer the same divisions between hard-liners and soft-liners that are common to non-dynastic authoritarians such as the military-bureaucratic regimes of Latin America in the 1960s and 1970s or the South Korean and Taiwanese regimes of the 1970s through the 1990s. These divisions on issues of policy and governance are exacerbated when played out within family circles. For example, intrigues of succession and future policy direction within the House of Saud are legendary, but the same can be said to be true about the current North Korean transition or palace politics in Morocco or Kuwait.

The bottom line is that non-monarchical dynastic successions are hard to maintain over time, and increasingly rare. The need for regime continuity is no longer as tied to family fortunes as it once was (even during the Cold War), and the pressures on family-run polities are more myriad and complex than before.  With the ongoing fall of dynastic regimes in the Middle East amid the general decline of bloodline influence on political power in most of the integrated world (“integrated world” defined as politically independent and economically inter-dependent countries), what we may be seeing in North Korea is the last of a political sub-species: the non-monarchical dynastic authoritarian regime. No matter what happens to Kim Jung-un, at least we can be thankful for that.