Jane Kelsey

1996 University of Auckland Winter Lecture Series, 13 August 1996

Beginning with the election of a Labour government in 1984, elites in New Zealand initiated a powerful and rapid transformation of the economy. Previously a secure social democracy, New Zealand was quickly refashioned according to extreme free-market ideology -- so-called "structural adjustment" -- causing economic decline and a dramatic increase in inequality. Jane Kelsey, professor of law at the University of Auckland, is a prominent critic of neoliberal policies in New Zealand, notably in her book The New Zealand Experiment (University of Auckland Press, 1997, 2nd edition; London: Pluto, under the title Economic Fundamentalism). Her paper "The closure of critique" documents the fate of dissent in New Zealand under the new regime.

This paper is located on the

Suppression of dissent website

in the section on Documents

I wasn't born when Bill Pearson wrote Fretful Sleepers. Yet parts (although not all) of it read like it was written yesterday. Quote: 'in countries nominally democratic, fascists have first to prepare the ground. In New Zealand, the ground is already prepared . . . : a docile, sleepy electorate, . . . a willingness to persecute those who don't conform, gullibility in the face of headlines and peptalks. . . . Remember how flattered we used to be to read those . . . articles about New Zealand the Social Laboratory, the experiment watched by the whole world?' 'New Zealanders', he predicted, 'may well wake up one day to find a . . . dictator riding them and wonder how he got there.' And then, 'here were are, in mid-ocean, adrift and alone, confused and talking aloud, wondering where to go next. In the meantime, perhaps, we hope to sleep it off.'

How depressingly familiar this sounds: the lack of direction, the gullibility, the sense of dis-ease coupled with an expectation that someone else will put it right, the hypocrisy of those who say 'I think what you're doing is really important, just don't ask me to do it too'. Today, as in 1952, we live in a culture in which critique is silenced. This is not just because historically complacent political parties, social movements, media and academics have abdicated their watchdog roles, although all bear part of the blame. Nor is it simply the power of public authority and private elites to intimidate and harass those who step out of line, although there is an element of that too. I want to suggest that the shift from the colonial, corporatist welfare state to a colonial neoliberal one has brought with it new techniques of governance and new ways to police the silence. The resulting lack of any genuine contest of ideas over the past twelve years has served to normalise our radically altered world and embed the neoliberal regime. It is that silence which I want to interrogate here.


Initiation and Consolidation of Structural Adjustment

First, I want to dispel any notion that our situation is either accidental or unique. In a study published in 1992 Stephen Haggard and Robert Kaufman identified two-stages to a structural adjustment programme -- the initiation and the consolidation of change -- with significant differences in the political logic of each. The initiation phase, they suggest, is best secured through relatively autonomous, free-floating, technocratic 'change teams', and requires a more activist and capable state than classical liberal theory contemplates -- paradoxically, the state needs to be strengthened before the government can reduce its role in the economy and extend market forces. This means creating new bureaucratic structures or significantly reorganising existing ones to operate outside routine decision-making channels. The authors conclude that 'reform initiatives are more likely where and when political institutions insulate politicians and their technocratic allies from particular interest group constraints, at least in the short run'.[1]

The greatest political risks are seen to lie with party fragmentation, unstable coalitions, populist appeals, favouritism and wide policy swings. Terry Moe points out that the first-past-the-post system of majority rule makes controversial reforms especially vulnerable until they are consolidated, because the government that put the changes in place, or a future government, can reverse them at will.[2] Changes cannot be formally insulated from this possibility, short of constitutional entrenchment. However, the risks can be minimised by instructing change agencies

"to hit the ground running -- getting benefits in the hands of recipients, organizing recipients into support groups, . . . and otherwise building a powerful clientele that will strongly resist any attempt by the government, whether this one or those that follow it, to change anything about programs or structure. The more quickly and effectively this can happen, the more durable the deal will prove to be in practice . . . ."[3]

There are some, like John Williamson from the Institute for International Economics in Washington, who believe that consolidation follows naturally from the successful initiation of change; by 'success' he means the changes have been made, not that they are producing positive results.[4] Initiation requires strong leadership, unconstrained by the need for social consensus -- reflecting the oft-expressed view that people can't appreciate what is good for them until it is done. Once the changes have been made, social consensus and ideological convergence should inevitably emerge.

Other analysts believe that consolidation has to be worked on. While initiation can be secured through crude political tactics, narrow economic models and a disregard for the political, social and cultural context, consolidation requires considerably more sophistication, skill and engagement with social reality. Haggard and Kaufman point to the importance of

"stabilising expectations around a new set of incentives and convincing economic agents that they cannot be reversed at the discretion of individual decision makers. Consolidation is most likely where governments have constructed relatively stable coalitions of political support that encompass major private sector beneficiaries, and have secured at least the acquiescence of the major political forces competing within the political system. Without such tacit or explicit alliances between politicians, technocratic elites, and those gaining from the policy change, reform attempts will necessarily falter." [5]

This implies a different form of autonomy from the short-term, insulated change teams of the initiation phase. What Haggard and Kaufman refer to as 'embedded autonomy' requires a prosperous entrepreneurial elite who will act as private interlocutors against threats to the new regime from either the state or civil society, and whose interests are protected in return. These private beneficiaries act as 'fire alarms' and mobilise resistance if new regulators look like changing course.[6]

The options for political actors have also been reduced. Institutional, legal, economic, international and reputational barriers exert strong pressure to conform and impose a high price on those who threaten hostile change. State actors also play a less activist, but equally directive, role -- broader organisational autonomy is built into the structure, so that state agencies which were responsible for the initiation phase retain control over bureaucratic recruitment, the definition of the state's mission, and the boundaries governing the state's relations with social groups, as well as sustaining the constituency of private sector support.[7]

Alongside this embedded autonomy comes a wider need for 'social learning', which Haggard and Kaufman describe as the

"evolution of a broader ideational consensus among leaders, interest groups, party elites and attentive publics that sets some boundaries on the range of economic debate. Such a consensus does not imply stasis or the absence of conflict; distributive struggles will always arise over policy. Nonetheless, it is possible that the long-term sustainability of policy choices will depend on a convergence of thinking about fundamental means-ends relationships in the economy. If so, then the formation of elite preferences, ideas, and ideology, as well as the evolution of public opinion, are potential important explanatory variables."[8]

While this is a consensus of the elite, a broader adjustment of popular expectations is also required. Citizens and firms are encouraged to lower their expectations and make individual, non-political adjustments, such as sending more family members into the work force, entering into informal sector activities and reducing consumption. Even if their demands for relief become politicised, they more likely to be directed at the government in power than at the system as a whole.[9]

Peter Evans emphasises the difficulty of the consolidation process and insists that connections to civil society must be seen as part of the solution, rather than part of the problem. Because 'markets are always inextricably embedded in a matrix that includes both cultural understandings and social networks composed of polyvalent individual ties', state structures and strategies require complementary societal counterparts.[10] The state therefore needs to construct a solid network of external ties through which it can assess, monitor and shape private responses to policy initiatives, both prospectively and after the fact. This is no simple task. While initiation, with its focus on less state intervention, goals and means, is relatively straightforward, 'reconstructing the state is an amorphous and frustrating task, a project of decades if not generations. . . .Constructing the parties and labor movements that form the basis of a broader embedded autonomy is an even more difficult project than constructing a Schumpterian industrial class. . .'.[11]

This does not imply a high degree of popular support. Joan Nelson suggests that mere acquiescence is enough, although achieving even that requires positive effort.[12] In particular, where economic changes are slow to produce widespread benefits, or international conditions remain difficult, popular sectors may become restive. Assuming the state eschews pure coercion, the alternatives are to attract sufficient support from other groups, to co-opt some popular leaders, or to develop positive strategies to bring some popular elements on side through creating the belief that they will share in future gains: 'Ordinary people must be able to see some positive returns from adjustment if they are to convert what is at best initial skepticism into more durable grumbling acquiescence.'[13]

These latter theories imply a partial hegemony which enjoys the active support of state actors and private elites, and where opposition forces are co-opted, passive or diffused. The theories have many defects -- they focus on the national state and domestic policy to the exclusion of the international economic, political and intellectual contexts; their preoccupation with state agencies, regulatory techniques and change agents detaches structural adjustment from its driving imperative to accommodate the changing nature, role and requirements of international capital; and their instrumental focus on the process of securing change devalues or ignores the existence of contest and resistance, as exemplified in Mexico. But they do provide an important insight into the strategic thinking of those who are committed to instituting and embedding the neo-liberal agenda across the globe.


The New Zealand Problem

Instinctively, I want to argue that both approaches are wrong and that people will organise to resist this assault on their economic, political, social and cultural lives. But the response from Pakeha [New Zealanders of European origin] over the past 12 years does not support that. We have been transformed from citizens of a social democracy whose government was philosophically (if not always in practice) committed to a society in which all could participate and belong, to individual consumers in the commercial market-place, driven by self-interest and responsible only for ourselves. Polls and surveys consistently show a majority of citizen-consumers feel uncomfortable about increasing inequality and poverty, are deeply cynical about the political process, feel insecure about the present and the future, see no relationship between the values espoused by the government and our own, with a strong sense of having lost control. Yet most of the victims, along with many who sympathise, remain unorganised, passive and publicly silent. Sparks of resistance from Maori, for whom the past 12 years has been a variation on the colonial theme, offer the exception that proves the rule.

Does this paralysis mean that consolidation has already taken place? In Haggard and Kaufman's terms, there are clear signs that an 'ideational consensus' around the new paradigm has been created amongst an elite of political parties, bureaucrats, private sector, media, unions and powerful interest groups.

At the party political level, National has proclaimed itself the natural government of neo-liberalism. Labour has accommodated the tensions between its traditional philosophy and its actions in government by offering to smooth the edges and distribute the benefits of neo-liberalism more sensitively. While the ascendancy of New Zealand First (NZF) could be seen as a populist reaction against the most visible symbols of change -- Asian immigration, foreign investment and the power of big business -- in its economic policies it has capitulated too. Only the Alliance remains outside the paradigm -- and appears increasingly anachronistic for endorsing policies which were accepted as orthodox in 1984.

Paradoxically, the move to MMP [mixed-member proportional representation] -- prompted by a rejection of the political strategies and substantive policies adopted since 1984 -- will help to bed the changes in. The fundamentals of market-driven regulation and free trade, the obsession with low inflation, labour market deregulation, a privatised and entrepreneurial state and a pared-back welfare regime have deliberately been made difficult to reverse. Significant changes under coalition governments seem unlikely, especially if the Alliance remains weak and Labour remains compromised. While short-term political instability may result from MMP, most economic analysts believe the fundamentals will end up being more secure.

Within the bureaucracy, strategically-placed technocrats committed to the new regime now control the policy process. Qualifications for appointment depend on technical skills in management and institutional design, rather than familiarity with the agency's substantive function; indeed, public choice theory renders actual experience a disqualification in itself. Whether this is seen merely as a generational changing of the guard,[14] or as the progressive colonisation of the senior public service, the effect is the same. Any re-emergence of a career public service will take place within the new paradigm.

Changes to funding and provision of policy, where ministers contract for advice from public agencies, staff advisers or private consultants, sit uncomfortably with the notion of a professional, independent public service that serves the minister, the government, the law and the public good. Nor is there scope in a purchaser/provider relationship for proactivity or expanding a minister's knowledge base to ensure properly informed decisions. The high turnover and low morale caused by constant state sector restructuring, hard-line employment practices and ongoing funding cuts further undermine institutional memory, professional independence and the public service ethos. In spite all these concerns, a pilot PSA [Public Service Association] audit of public service staff in 1996 reported that the new regime was now the accepted norm:

"There was an interesting reflection of the new structures as simply being what is there, and what agencies now do -- they had assumed an identity quite distinct from the departments they grew out of. This outlook suggests that with time, the new order becomes the established order and there is a loss of an historical appreciation of what used to be and why it was that way."[15]

The historically weak trade union movement has also 'gone over'. The NZCTU [New Zealand Council of Trade Unions] now supports a style of corporatism that seeks to cooperate with government and (less-than-enthusiastic) employers within the deregulated market-place 'to make the economy grow'. A 1993 CTU policy paper explains: 'Tripartism introduces a social dimension into structural adjustment policies through active dialogue and consultation. Tripartism can help the social partners meet their economic objectives through cooperation.' While the alternative Trade Union Federation continues to challenge both the new regime and the NZCTU, it has been effectively excluded from mainstream economic debate.

As predicted by the theorists, the representatives of capital and commerce, or at least those who prospered from the change, provide a powerful line of defence. The role played by the Business Roundtable as an adjunct policy agency for government has been supplemented in recent years by the cheer brigade from the finance houses, investment advisers, sectoral lobbies of employers, farmers and the like -- plus a bevy of politicians-turned-consultants -- all eager to proselytise the New Zealand model at home and abroad. As they campaign to retain the fundamentals of structural change, the line between private sector lobbies and political parties has become increasingly blurred.

The New Zealand media, too, has a feeble history of investigative journalism and independent critique. Senior journalist Alistair Morrison argues that since 1984 the media has performed its own consolidating role:

"In reporting the flow of radical and unheralded reforms of the last decade, the news media messengers inevitably became entwined in the message. Editorially, the country's major newspapers generally cemented any notion of collusion by supporting the reforms without giving much regard to the damage that was being done to the political system by the way they were being introduced. . . . The politicians preached there is no alternative and the news media wrote its acronym, Tina, into the language."

The lack of resources for current affairs reflected a low commitment from proprietors and owners to investigation and critique. This was not mere sycophantism: 'For the news media, the revolutionary ethos of governments making "tough decisions" was good for business. Editors, by and large, backed it. Industry had a vested interest in the status quo.'[16] Amongst the journalists Morrison observes how a 'cosy, symbiotic relationship' developed between the press gallery and the government. Key public servants sought out selected journalists and fed them confidential information; there was no incentive to question the relationship, as privileged access depended on compliance. Poacher turned gamekeeper as gallery journalists became 'spin doctors' for politicians, or public relations agents for state corporations and pro-market lobbyists. The institutional memory of the media was eroded, and reporting of policy gave way to stories about party and personality politics. When challenges were reported, they created barely a ripple. Forays into genuinely investigative journalism, such as the BNZ [Bank of New Zealand] and the Cook Islands tax scams, were notable because they were so rare.

Socially progressive movements of feminists, greens and anti-nuclear campaigners, many of which were traditionally aligned with the Labour Party, were muted during its years in power and have now largely dispersed. Students, few of whom remember who even Ruth Richardson [Minister of Finance in the National Party government elected in 1990] is, are overwhelmingly conservative and instrumental in their outlooks. The churches fill an ambiguous role: bastions of neo-conservatism form a potent, but potentially contradictory, alliance with neo-liberalism in what is known as the New Right[17]; those with social conscience express moral outrage against racism and poverty; and the charity wings of both fill the void left by the state in an increasingly commercialised mode. Maori continue to resist, drawing on a strong historical identity, political organisation and value base. But while Maori nationalists have periodically forced the issues of sovereignty and decolonisation to the fore, Maori entrepreneurs have profited from and support the new regime. Both espouse the politics of empowerment -- one in the constitutional, anti-colonial sense, the other as equal participants in the capitalist marketplace. The latter are both celebrated and maligned by the media, while the former are ignored or vilified. All are viewed by most non-Maori, from whatever perspective, as a threat, rather than a potential ally.

This progressive consolidation has advanced through bad economic times and good. When the experiment began in 1984 few understood what was taking place. Most who did were captivated by it, paralysed because of Labour's role, or marginalised from any position of influence. As recession and rising unemployment set in, some critical analysis occurred but it was fragmented and tentative, while the apostles of the new regime dominated the stage and smothered any debate. Three years of economic recovery and falling unemployment from late 1992 to 1995 offered hope, bringing with it greater acceptance of, or acquiescence in, the change. But now the economy has slowed again, unemployment is rising and business confidence has plummeted, there is a sense of resignation in the air. People might express their anger through demands for electoral reform or political support for the popular nationalism of NZF, but they have neither the energy nor the inspiration for a further round of traumatic change. Meanwhile, the 'children of the market', the generation for whom this new regime is the norm, are now in their 20s, and bring a different understanding and expectation to their lives.


Intolerance of dissent

Complementing this hegemony of the political, bureaucratic and business elites is an intolerance of dissent. In the parliamentary arena, strict party discipline has seen MPs who publicly attacked their government being censured, expelled from their caucus or forced to resign.[18] With National and Labour in control of the whips, those who might embarrass them or the corporate elite have had difficulty securing a platform. At the extreme, Winston Peters was prevented 16 times by the government from tabling the winebox of Cook Islands documents; once they were tabled the (Labour) Speaker sacrificed fundamental constitutional principles to prevent them being printed and published by the press.

Constitutional watchdogs also had problems speaking out. Brian Tyler, the Auditor-General from 1983 to 1992, found his jurisdiction and reports repeatedly attacked by the government, Treasury, the state agencies and the private sector lobby, because he insisted that commercial accountability under the public finance regime did not replace constitutional accountability to the taxpaying public. Ombudsmen who criticised were not tolerated either, as Nadja Tollemache found in 1992 when, for the first time ever, the government refused to reappoint an Ombudsman for a second term. In the 1992 Ombudsman's report, she observed: 'Unfortunately, the factors which would appear to make for more open and honest government are opposed by an increasing sensitivity of some politicians and officials to public scrutiny of their decision-making.'[19]

Dissenting judges, too, have become the subjects of what appears to be a concerted campaign by the Business Roundtable, Employers Federation and business media. Specific judges have been charged with economic illiteracy and usurpation of parliament's role, notably when they have sought to soften the harshest edges of the Employment Contracts Act.[20]

Strong-arm tactics have been felt by some critical journalists too. The 1989 TVNZ documentary which sought to connect the Labour government and big business drew hefty defamation writs which TVNZ refused to defend on the grounds of truth; many of the journalists and producers involved now work overseas. There have been direct political attempts to influence attitudes toward government policy expressed on public radio and its choice of staff.[21] Journalist Ian Wishart has told his own story of attempts by television management to censor his Cook Islands tax expose.[22] Personalised media attacks by columnists and editorials on activists, academics, judges and others also seems to have increased, rekindling memories of the witch-hunts under Muldoon [Robert Muldoon, Prime Minister until 1984].

Policing the silence also had a literal sense. Despite the turbulent and unpopular programme of change, few groups have tried to mobilise -- a retreat epitomised by the decision of the CTU not to launch a national campaign to fight the introduction of the Employment Contracts Act [ECA]. Ironically, free speech and free assembly have been recognised in the Bill of Rights Act 1990, but they have become more difficult to exercise. By the time of CHOGM [Commonwealth Heads of Government Meeting] in November 1995, the police deemed it a criminal offence to walk along the footpath in single file. With memories of the 1981 Springbok Tour now in the distant past, Pakeha New Zealand has become a society out of practice, and out of sympathy, with protest and prepared to tolerate the suppression of active protest by the persistent few.

Maori dissent was the one significant area of resistance which the neo-liberals found difficult to understand, let alone control. After a hiatus in the mid 1980s, a strong sense of promises betrayed and a clearer set of demands for decolonisation and constitutional change have rekindled Maori militancy. This campaign being pursued through a network of Maori nationalists who were given the imprimatur of Sir Hepi Te HeuHeu at a series of hui [meetings] in 1995 and 1996. Their activities have clearly hit a nerve. In May 1995, when the government hosted the Asian Development Bank meeting in Auckland, at least eight land occupations were underway across the country. As the carefully nurtured image of New Zealand as a haven for foreign investors came under attack from Maori nationalists, the government threatened charges of sedition against two of those who spoke. At exactly the same time, three cabinet ministers separately proclaimed that the sovereignty of the New Zealand Parliament rested not on the Treaty of Waitangi but on a 'revolutionary seizure of power'. Revolution, said Simon Upton, 'rests upon what is done, not what is legal, or necessarily moral or just'.[23] The government wisely decided to abandon the sedition charges, but the threat to, and of, Maori nationalists was clear. Meanwhile, those who occupied the land faced almost universal condemnation from the politicians, police, courts and media.

The sense of closure was fuelled in December 1995 when the government moved, with support from Labour, to extend the power of the Security Intelligence Service to 'ensuring New Zealand's international and economic wellbeing'. The reference to 'international wellbeing' was apparently aimed at Maori nationalists, while ensuring 'New Zealand's economic well-being' presumably meant defending the neo-liberal model from enemies without and within. Suggestions that these powers could be used to monitor critics of neo-liberalism regime were dismissed by the government as paranoid and naive. Yet within weeks of the Bill's report back, those involved with an alternative meeting on APEC [Asia Pacific Economic Cooperation forum] in Christchurch had their houses searched in a bogus, but legal, quest for bomb-making gear and in an apparently illegal break-in by the SIS.


The techniques of closure

Some may argue that these tactics are nothing new. Historically, the forces of resistance have been weak and critics have, in varying ways and degrees, been suppressed. Under Muldoon, any vaguely progressive voices amongst Maori, Pacific Islanders, unions, feminists, media and academics were subject to vitriolic attacks. But those could be attributed to an abuse of power by one man and his cronies who could be, and were, voted out of power.

Two factors seem different here. First, all these examples involved attacks on the neo-liberal regime. The message to existing and potential critics was clear: those with public and private power would actively intercede to silence embarrassing exposes or sustained campaigns which might undermine the international economic reputation of, or domestic acquiescence in, the new regime.

There is a second, qualitative difference about the silence of today; the barriers are as much structural, legal, economic and ideological as they are political. The paradigm shift from welfare interventionism to neo-liberalism has brought with it a new form of governance, pursued through new techniques. The centralised bureaucratic state is replaced by a market-driven regime where the self-maximising individual transacts under the regulatory umbrella of contract law. The theoretical justifications provided by public choice, agency, transaction cost economics and new public management seek to control behaviours, circumscribe options and exclude participants and ideas. Fundamental changes are conveyed as shifts of technique -- how we regulate markets, control inflation, order labour relations, deliver education, health or housing, levy taxes, provide policy advice or ensure accountability. Constitutional law, political philosophy and administrative theory give way to the quasi-scientism of economic and managerial theory. Treasury's 1987 Government Management illustrates the closure at work. On page one they claim:

"A key concern for policy makers is whether a different regulatory rule or institutional arrangement would yield better outcomes. In this sense the purpose of economic analysis and the function of policy advice is to compare difference institutional arrangements in order to find the best mix of legislative and regulatory rules, and institutional and market arrangements. . . . This is the comparative institutional approach which underlies much of the discussion in this book."[24]

Yet the next 700 pages spread over two volumes offered only one set of options, built on assumptions which confined any debate within the neo-liberal paradigm. As John Toye has observed, 'the axiom of methodological individualism . . . simply prohibits any explanation of behavior that cannot be deduced from the rational calculations of the abstract individual. Social structure is acknowledged only to the extent to which it can be logically reduced to the rational self-interest of individuals'.[25] So Maori can participate in policy debate provided they accept the primacy of the atomised, self-interested individual, the commodification of nature, knowledge and human endeavour, and the property rights existing under colonial law. Women, too, can engage -- on condition that the paradox of the self-maximising 'market man' and altruistic, hence irrational, 'family woman' on which the market model depends remains unexplored.[26] Indeed, any who seek to challenge risk disqualification per se, whether as vested interest lobbyists out to capture policy for their own ends; agents unwilling to be held to account by their principals; or apologists for an outmoded and failed regime. The truth value of Treasury's own theories is simply assumed, with no burden of proof or empirical support, while their lexicon of market-speak turns social democratic notions of accountability, equity, empowerment, liberation on their heads, and deprives critics of the linguistic tools through which to express themselves. Any visible failure in the programme requires a mere technical adjustment or the removal of further obstacles to achieving its logical outcome.

Whether the theoretical model is as a revival of old theories of management science or a new political economy, their quasi-scientific truth claims are the same. As Boaventura de Sousa Santos explains, science appears as 'an organized, specialised, professionalized knowledge susceptible of being produced ad infinitum in apparently context-blind settings, according to formalized and replicable methodologies . . . It thinks of itself as making only cognitive claims (the truth)'. Indeed, 'the specific normative claim of science is to purport to make no normative claims.'[27] Yet as a form of knowledge it reflects a cultural perception of the nature of world to the exclusion of other perceptions, and it is capable of powerful and drastic interventions in society. What it claims as truth is but a discourse of truth, and is subject to actual or potential contest.

Neo-liberal discourse makes similar claims to being instrumental, devoid of culture, context or power. Jonathan Boston observes how '[t]he essence of managerialism lies in the assumption that there is "something called 'management' which is a generic, purely instrumental activity, embodying a set of principles that can be applied to the public business, as well as in the private business."'[28] Hence, fundamental changes to constitutional powers, political structures, laws, and economic and social relations become technical adjustments which are devoid of ideological content and benign in their effect.

The artisans of neo-liberal governance, whether politicians, officials, academics or advisers, perpetuate this quasi-scientism, driven by the belief 'that there exist fundamental economic tests or yardsticks according to which policy decisions can and should be made'.[29] Positive political economists have coined the term 'epistemic communities', comprised of professionals with shared normative and causal beliefs, a common policy enterprise, and a belief that their principled approach to policy is supported by scientific tests of validity.[30] This makes them a qualitatively different breed of policy-maker, immune from the failings which public choice and agency theories attribute to other government officials. Because of their inherent objectivity, there is no room to question the nature and source of their ideas, their mandate to impose their ideological and policy agenda, or their contempt for democratic procedures and constitutional conventions that get in their way.

The critical shift from state regulation to classical liberal contract law is again perceived as a matter of technique. Liberal jurisprudence portrays law as inherently objective, value-free and rational. Its truth value excludes any other legitimate source and form of law, and precludes any analysis of its historical and contextual role. Yet techniques of law are a strategy for control. The law clothes with legitimacy the formal shift in power from citizens of the state to private actors who wield differential power in the commercial market-place. The law redefines and reorganises the ownership, funding, management, activities and priorities of state agencies to facilitate that. The law excludes citizens from participating in transactions which directly affect them unless they are commercial parties, whereupon they become private consumers with contractual rights in whatever market it might be. The law commodifies information, education, research, books, current affairs and news which once belonged to the public domain and places it beyond reach. The law provides the excuse for state or private agencies not doing more because of statutory, commercial and contractual constraints, and for monitoring and suppressing those who do not conform. Ultimately, the law redistributes the power to participate in decisions which determine the course of people's lives.

These discourses of economic science, managerialism and contract law have erected an intellectual barrier which seeks to insulate them from critique and constrain any debate on alternatives to variations within the theme. The closure is epitomised by the description of the structural adjustment formula itself as 'the Washington consensus'. Toye asks whether this so-called consensus is a statement of what economists really believe, ought to believe if they are 'serious' economists or must believe as a statement of 'wisdom' going beyond what can strictly be proved in economics 'i.e. a core vision, a professional creed or a neoliberal ideology'; he concludes that it is no one of these, but resembles them all:

"No one feels the need to test it empirically because the facts are too obvious; no one really wants to delve into welfare economics because its results are vulnerable to a whole raft of academic quibbles; and no one is really going to call in the Spanish Inquisition if the occasional economist harbors sincere doubts about, say, the privatization proposition. We are . . . in the realm of the Empowering Myth."[31]

The process of 'consensus-mongering', which implicitly disqualifies any 'unorthodox' economic views, seems to conflate

"what economists believe with what is economic truth. We ought to question what other people believe, not believe it because they believe it. That, at least, is how we got where we are now. Truth is always provisional, and it is the product of criticism just as much as the attempt to promote 'economic correctness'."[32]

Intellectually, this fetish with the economically correct seeks to 'freeze or concretize ideas, losing sight of the fact that they are always in flux, always embedded in critical debate. The learning process disappears.' At the practical level, it posits a body of settled conclusions immediately applicable to policy, far beyond what the discipline of economics can actually provide.

The challenge, then, is to expose and fracture the (dis)empowering myth and break the silence that currently suffocates policy debate.


Access to information

If the theory and discourse of neo-liberalism are self-legitimating, the application of these new techniques of governance is equally critical to securing closure and consolidating the new regime. At the most basic level, there is a dearth of empirical data from which to test the policies against their stated goals or claims to success, even if the criteria for doing so can be clearly defined. The instrumentalist, output-based approach to government operations means that vital information which is needed for long-term planning, for evaluating the impact of government policy, or which involve politically embarrassing or sensitive areas, may simply not be collected. For example, the actual financial costs of initial and on-going state sector adjustment, redundancy payments, relocation costs, recruitment expenses, systems creation and management remain unknown, let alone the social, human and employment impact of the continual change. Housing analysts complain that no systematic data is kept on the growing problem of homelessness or the effect of the accommodation supplement; while teachers point to overcrowded schools and teacher shortages as evidence that the information systems for forward planning have broken down. The ECA only requires contracts involving 20 or more workers need to be lodged with the Labour Department, and those are exempt from the Official Information Act -- a highly selective sample when the bulk of the workforce is employed in workplaces of less than 10. Similarly, information collected by state-owned enterprises [SOEs], Crown Health Enterprises [CHEs], Housing New Zealand and the Crown Research Institutes [CRIs] is determined by their own commercial needs or contracts with their shareholding ministers. The alternative of private data collection is extremely difficult, expensive and subject to claims of inaccuracy and bias.

Even agencies specifically created by government to collect information have problems doing so. Statistics NZ has been chronically underfunded for years, producing a seriously inadequate statistical data base. In 1993 the government reluctantly established the Crown Companies Monitoring Advisory Unit to monitor the performance of SOEs and their clones, who seem equally reluctant to cooperate. In response to a request for information in 1995 on profit and staffing levels of the SOEs an official from CCMAU explained: 'Some of the figures are incomplete, but that is because in many ways this office is restricted to publicly available information. It can be a real struggle in even getting firms to reveal staff numbers.'[33] Likewise, the parliamentary select committee established in 1992 to interrogate the performance of Crown agencies, within the bounds of commercial confidentiality, has been dissolved under the new standing orders in preparation for MMP.

Some previous rights of access have been withdrawn. The Health and Disability Services Act 1993 no longer requires health authorities to notify the public of their meetings, or allow public and media to attend. Public opinion is gathered instead through consumer satisfaction surveys, and accountability provided by annual reports to the two shareholding ministers which are not publicly released. In 1995 the government unsuccessfully sought to reduce the already limited information on foreign investment applications to the Overseas Investment Commission [OIC], imposing fines of between $30,000 and $100,000 for unauthorised disclosure, presumably to dampen controversy and boost New Zealand's appeal to the international investment community. A massive outcry, including from the business media, forced a rare backdown and the government agreed to rely only on the Official Information Act [OIA]. What could not be achieved through legislation was then attempted through price: in January 1996 fees of between $100 and $6000 were imposed on requests to the OIC for information about applications and applicants.

Privatised state agencies, including those dealing with transport, telecommunications, media, banking, electricity, are no longer covered by the OIA. Even where information has to be lodged, as with charges of the privatised electricity companies, there are problems of comparability and it is dated by the time of release. Where the Act still applies, commercial interests almost always take precedence over public rights of access. Crown agencies required by statute to run as an equivalent private sector enterprise can claim commercial confidentiality for almost all their operations. So annual statements of corporate intent, which set out content of the agreement between the shareholding ministers and an SOE, may be withheld. While CHEs are formally covered by the OIA, guidelines issued to the CHEs in 1992 said: 'The reformed health sector requires coverage from a business perspective and the "commercial" model with its emphasis on competitive contracts will require a different approach to the accessibility of commercial information and coverage of CHE and RHA decisions and meetings.' Requests frequently meet with obstruction, delays or refusal even to disclose performance standards or levels of service, let alone sensitive financial information from which to assess their efficiency gains or commercial success. The Ombudsman has compounded the problem by ruling that public interest is outweighed by the need to protect CHEs' commercial activities, at least in their initial stages of commercial development.[34]

Where service delivery, policy and regulatory activities, are contracted out, the bidding process and contractual arrangements are generally protected too, creating problems, for example, in monitoring the new prisons-for-profit regime. The new privacy laws, purportedly introduced to protect individuals from the state, are also used to withhold details of salaries, background and other commercial interests of state executives and government appointees. In general, the statutory presumption of open government has given way to a tightly controlled public relations machine whose task it to minimise embarrassing fall-out from system-failure, such as the 'bad blood' and Cave Creek affairs.

This secrecy has created an ethical dilemma and significant private risk for employees who still feel obliged to speak out, with health workers in particular being punished for doing so.[35] Pressures on public and private workers to remain silent, or positively support their employers' views, have been compounded by the ECA. It is known that some contracts have contained a gagging clause -- Auckland zoo employees, for example, were barred from raising concerns about the treatment of animals and standard of care, on pain of dismissal.[36] In places of high unemployment, leverage under the Act has been used for broader political ends, such as a Coromandel company's distribution of standard form submissions opposing anti-mining legislation, to be returned to the select committee via the employer.

In 1992 the State Services Commissioner called for a safety valve, in recognition that 'instability and structural change have eroded people's loyalty to the Public Service.' In February 1994 the Chief Ombudsman also expressed 'an urgent need for a person who genuinely blows the whistle to be protected from harassment and victimisation.' When the government refused to respond, a private member's Whistleblowers Protection Bill was introduced to create a new watchdog to investigate complaints. This Bill languished before the select committee from June 1994 until last week [early August 1996]. The government's new version requires the whistleblower to raise matters defined as 'serious wrongdoing' in-house, with recourse to an existing external watchdog in special circumstances; should they be victimised they would receive personal grievance protection under the ECA. There is no provision for public disclosure even where the allegation is well-founded; indeed, the very existence of this new law may justify harsher action against those who choose instead to 'leak' information or disclose wrong-doing into the public domain.

Problems with availability of, and access to, data are compounded by the commodification of knowledge which was once belonged in the public domain. The conversion of the former DSIR into ten commercialised Crown Research Institutes [CRIs] means that government research is seen as a commercial, rather than a public, good. In carrying out its public-oriented research functions a CRI is now required to be financially responsible, secure an 'adequate return on shareholders' funds' and operate as a successful going concern. According to the information policy of one CRI:

"In the past a free and open information exchange policy has operated but given the commercial requirements on [the CRI] and its clients it is appropriate that we examine how we release information externally and establish a consistent policy. A good relationship with client industry groups is vital to [the CRI] and we must be seen by them as being aware of and sensitive to their commercial requirements. This means that exclusivity and confidentiality will often be critical. [The CRI] must exercise discretion in releasing information which could disadvantage an industry and must confer with the client or industry concerned before release. The emphasis on scientific and technical publication as an end in itself must be reviewed in the light of these changing circumstances."

The sale of CRI research thus allows industry to capture the benefits of publicly-funded research for its private use, and may enable them to ensure that potentially damaging findings are withheld. CRIs have no duty to disclose information about public risk: according to one, this is 'a commercial organisation which does not act as a consumer watchdog in . . . identifying product problems to the general public or other interested parties.' Funding through one- to three-year grants, combined with increased use of short-term employment contracts, has diminished the commitment to longer-term strategic projects and the pool of experienced scientists. Understandable tensions have emerged between the statutory responsibility of the CRIs to protect commercially valuable information and intellectual property, the needs of scientists to publish, speak at conferences and engage in peer review, and their ethical responsibility to contribute to responsible scientific debate and the public good.

State broadcasting has faced similar constraints. Former editor Judy McGregor attributes the muted voice of journalists to fallout from continual restructuring, a demoralised working environment and lack of debate between journalists themselves.[37] Commercial imperatives once more dominate. Once public television became fully commercialised most news and current affairs were reduced to infotainment and sound bites.[38] RNZ [Radio New Zealand] has suffered a similar fate. Its financial problems arose when it was converted to an SOE, bearing the costs of restructuring in the deregulated environment while competing for advertising revenue as the number of operators dramatically increased.

The privatisation of state-owned RNZ's commercial network is expected to reinforce the declining standard of news and current affairs. While the residual public radio company must exhibit a sense of social responsibility to the communities it serves, it must also maintain its financial viability and generate an adequate rate of return on shareholder funds. Chronic government under-funding of news and current affairs in the past has been supplemented by sales to RNZ's commercial stations. But the new foreign owners, who also own the Wilson and Horton newspaper chain, predictably plan to rationalise. The quality of news for both public and commercial radio listeners is predicted to fall once more.

The publishing industry is in no position to fill the void. Publisher Bridget Williams recently observed: 'Book publishing in this country has, over a long period, not been profitable enough to offer security, consolidation or development. The state does not . . . attempt to address what is to me a fundamental question for New Zealand creative and intellectual life.' That applies in particular to political critique: 'we do not articulate and therefore do not understand; we do not fund political writers readily, especially those who challenge; we do not commit readily to large projects, to wider perspectives. There is a distinct preference . . . for the regional view, the confined period, the limited topic.' This 'lack of diverse perspectives on contemporary New Zealand experience impoverishes our lives and, I believe, fosters the ideological dogmatism that has driven the so-called New Zealand experiment.' Economic restructuring, a high exchange rate and the stranglehold of Whitcoulls on the retail book trade intensified the problem.[39] The recent sale of Whitcoulls, including the publishing arms of GP books, and the publication of legislation, Hansard and government reports, to US-owned Blue Star deepens this concern and, as Bill Hodge has observed, potentially jeopardises the constitutional right of public access to basic sources of law.[40]

And then there are the universities. According to the Education Act 1989 the universities have a statutory 'critic and conscience' role, while the freedom of academics 'to question and test received wisdom, to put forward new ideas and to state controversial or unpopular opinions' is protected by law. Yet New Zealand's public culture has not traditionally encouraged academics and universities to undertake that role; nor have academics and institutions generally sought to do so. In part that reflects a residual colonial cringe and the historical lack of self-confident intellectual nationalism. Power structures within the universities have also favoured conformity and an Anglo-male world view. Both factors are only slowly breaking down.

There is also limited funding for academic research and independent think tanks. The Foundation for Research, Science and Technology [FoRST] funds research through competitive tender, but government decides on subject priorities and the amounts those receive. Critical analysis of neo-liberal policies is not high on their list. Funding constraints, combined with a sense of isolation, impotence and apathy from many academics, has meant the only effective think tanks to produce a flow of research, and widely broadcast the results, have been those the neo-liberal lobby supports.

The universities now face a new threat to their 'critic and conscience' role. Like all state agencies which are deemed inefficient, unaccountable, captured and unresponsive to consumer demand, they must be exposed to market forces. So public tertiary education has been redefined as primarily a private good, with education and research now private commodities to be bought and sold. Funding for the provision of any 'public good' element -- or 'social benefits not captured by individuals'[41] -- is for government to determine as the putative beneficiary. Any risk to academic freedom is considered insignificant because only a small proportion of universities' non-teaching functions involve social or public benefits, and academic freedom affects only a small sub-set of that. Moreover, according to the Treasury, the universities are no longer 'a key source of free information and discussion on political and other sensitive issues. In the information age, the very multiplicity of information sources is itself a form of protection -- as modern totalitarian states have found.'[42]

Consistent with this formula, the government has cut per student funding, fees have increased and universities are engaging more in private commercial arrangements. Already pecuniary interests are impinging on the right of academics to speak. Earlier this year a lecturer at the Christchurch medical school was censured by his Dean, following a complaint from the chief executive of Canterbury Health, for publicly expressing concerns over the patient safety under the health reforms. The academic considered such comments were not just his right, but his responsibility. The more universities depend on sponsorship and commercial relations, the more powerful such pressures will be.

The universities are now fighting government proposals to impose a capital charge for use of state assets, to replace representative councils with government-appointed boards of directors to ensure the financial risk to government is minimised, and to force university degrees onto a uniform qualification framework of 'education for life'. The latest proposals, commissioned from Ernst & Young, would see the SOE/CHE/CRI template imposed on the universities.[43] The proposed strategic plan agreed between the minister and university would apparently be secret, while the public statement of intent will exclude material considered commercially confidential. Despite a purportedly hands-off role for the shareholding ministers, they could effectively dictate the parameters within which the university operates by directing the inclusion or omission of specific objectives, performance targets, and nature and scope of activities. The hypothetical statement of intent makes the agenda of cost-cutting, staff reductions and niche marketing very clear. Nowhere is there any recognition of, or room for, a public good and 'critic and conscience' role -- although, to be fair, it reads very like the bland public-relations exercise that constitutes Auckland University's commitment to 'government and community' under the 1996/7 Statement of Objectives and recommendations for action on the strategic plan.

If the universities intend to rely on their public good and 'critic and conscience' roles to hold back the 'forces of darkness', they need to move beyond the ritual recitation of their statutory functions and rhetorical commitments in strategic plans, and provide concrete financial and moral support. The small number of academics who continue to speak out are easy targets for more powerful opponents in government, private sphere and media. Attacks on them, even if deflected in the short-term, affect their credibility and more importantly serve to deter others whose jobs and careers are less secure. Some senior academics are no longer prepared to speak out because of the cost to themselves and their institutions, as in the bleakest days of Muldoon.



Taken in isolation, many of these examples might be explained away. Collectively they signify an environment which serves to dampen, and at times to silence, critique. This sounds rather apocalyptic, so let me put it in perspective. Major paradigm shifts are nothing new; but they do differ in their extremity and effect. The neoliberal version is significant for us because with many of its elements there is no going back. That is not intrinsically a bad thing, if it forces us to rethink who we are, how we relate as Tauiwi and tangata whenua [immigrants and indigenous Maori], what are the core values we want to protect, and how we maintain these and adjust to the rapidly changing global and local world. Nor is the absence of an effective contest of ideas anything new. The agencies through which such a contest should be prosecuted are historically weak, and popular culture has been luke-warm-to-hostile to critique. But the techniques through which that silence is secured today are new, and raise unique problems of how we break through.

Finally, of course, the closure is not complete. The number who are prepared to speak out has visibly declined, but there are still politicians, public servants, workers, unionists, academics, researchers, journalists and activists who are prepared to, and there are people in all categories who deny they have a problem doing so. Nor have the 'forces of darkness' won all the time. But the situation cannot improve until the number of people who feel capable, free and motivated to speak out is increased. That means:

* consciously dismantling the barriers to debate between Maori and non-Maori, across disciplines, and between academia, politics, media and diverse communities;

* training New Zealanders, at university and in a wide range of communities, to analyse what is happening around them and formulate alternatives;

* providing an environment in which they can collaborate and gain mutual protection and support;

* building private archives of documents and data bases which draw from both government and civil society;

* developing alternative avenues for publication, including electronic networks;

* establishing forums where genuine debate and exchange of ideas can take place; and

* building international linkages with those working on similar issues, especially those being led down the New Zealand line.

This really is not so difficult. In Australia a consortium of universities and sector groups have begun work on a framework of citizenship indicators to provide the benchmarks against which the performance of state and federal government, private enterprise, international agencies can be assessed. Similarly creative initiatives could take place here, drawing together the existing pool of inter-disciplinary expertise; building the links between academia, communities, sectoral groups and business; and working with Maori to address the critical question of sovereignty in a reconstructed and reconceptualised state. But no-one will do this for us; it needs committed individuals and funders who are determined to make it work. We have to take the responsibility on ourselves, so we can rebuild people's belief that there are alternatives, and work collectively to construct a vision for a future which belongs to the diverse communities that make up New Zealand, not just to international capital and a local elite.



[1] S. Haggard and R. Kaufman, 'Institution and Economic Adjustment' in S. Haggard and R. Kaufman (eds.), The Politics of Economic Adjustment, Princeton University Press, New Jersey, 1992, p.19.

[2] T. Moe, 'Political Institutions: The Neglected Side of the Story', Journal of Law, Economics, and Organization, 6 (1990), pp. 213, 243.

[3] Moe, p.244.

[4] J. Williamson, and S. Haggard, 'The Political Conditions for Economic Reform', in J. Williamson, (ed) The Political Economy of Policy Reform, Institute for International Economics, Washington, 1994, pp.527, 574

[5] Haggard and Kaufman, pp.19-20.

[6] M. McCubbins, R. Noll and B. Weingast, 'Administrative Procedures as Instruments of Political Control', Journal of Law, Economics and Organization, 6 (1990), pp.243, 261.

[7] P. Evans, 'The State,' in Haggard and Kaufman, pp.178-79.

[8] Haggard and Kaufman, p.36

[9] S. Haggard and R. Kaufman, 'The Prospects for Democracy', in Haggard and Kaufman, p.349

[10] Evans, p.145

[11] Evans, p.181

[12] J. Nelson, 'Poverty and Equity', in Haggard and Kaufman, p.222

[13] Nelson, p.260

[14] J. Boston, et al, (eds) 'Ethos and Ethics', Public Management. The New Zealand Model, Oxford University Press, Auckland, 1996, p. 322

[15] PSA, 'The workers' audit. Downsizing the State Sector--Views and Experiences', March 1996.

[16] A. Morrison, 'The Challenge of MMP', in J. McGregor (ed.), Dangerous Democracy? News Media Politics in New Zealand, Dunmore Press, Palmerston North, 1996, p.33

[17] See D. King, The New Right: Politics, Markets and Citizenship, Macmillan, Houndmills, 1987, p.2

[18] Jim Anderton, a former President of the Labour Party, quit Labour under threat of expulsion to form the NewLabour Party in 1988 and now leads the Alliance; Gilbert Myles and Hamish McIntyre quit National in 1992 to form the short-lived Liberal Party; Winston Peters was dismissed from the Cabinet and the caucus in 1993; Michael Laws left National in 1996 to join Winston Peters' New Zealand First.

[19] Annual Report of the Ombudsmen 1992

[20] The executive director of the Roundtable made several speeches vigorously attacking judges of the Employment Court and Court of Appeal, citing uncritically from US law-and-economics gurus Richard Posner and Richard Epstein. (R. Kerr, 'Appeals to the Privy Council', New Zealand Bar Association, 22 July 1995) The same arguments, examples, and often words, were repeated over time by fellow-travelling columnists and editorials in the business and popular press. Most recently, an article by Epstein has appeared in the local press, copies of his books have been sent to certain judges, and editorials, and articles continue to criticise dissenting judges by name.

[21] Personal communication from a former senior Radio New Zealand executive; see Kelsey, p. 330.

[22] I. Wishart, The Paradise Conspiracy, Howling at the Moon, Auckland, 1995, p.195

[23] Simon Upton, The Dominion, 1 May 1995

[24] Treasury, Government Management, Introduction, 1

[25] J. Toye, 'Comments', in Williamson (ed), op cit, p.38

[26] Seemingly progressive and gender-neutral proposals to pay care-givers for remaining at home, with interesting flow-on effects for fiscal policy, employment statistics and calculations of GDP, offer an alternative form of social control. Entitlement is limited to those within the two-parent, nuclear family model, while the labour market, and hence the roles of earner and care-giver, remains deeply gender-based.

[27] B. de Sousa Santos, Toward a New Common Sense. Law, Science and Politics in the Paradigmatic Transition, Routledge, New York, 1995, pp.440-41

[28] M. Painter, quoted in 'The Ideas and Theories Underpinning the New Zealand Model' in Boston et al (eds), p. 25

[29] Toye, quoting P. Self, p.36

[30] P. Haas, 'Introduction: epistemic communities and international policy coordination', International Organization 46(1), 1992, p.1

[31] Toye, p.39

[32] Toye, pp. 39-40

[33] Private correspondence, 1995

[34] See J.Tully, 'Piercing the Veil of Health Reporting', in McGregor (ed.), pp. 160-61.

[35] eg. in 1993 a psychiatric nurse publicly criticised the decision of ministers to release a potentially dangerous patient despite his warnings. The patient subsequently attacked a number of children. The Minister of Health called on the Wanganui CHE (called Good Health Wanganui) to suspend the nurse, and he was given the choice of demotion to a clerical position or the sack. A public outcry ensued and he was eventually reinstated. Opposition MPs observed that the censure was not just directed at the individual; the CHE's intention was 'by severely disciplining this man, others would be warned off from making further disclosures'. In a similar case in 1995 another psychiatric nurse was suspended, then reinstated, by a CHE for allegedly breaching patient confidentiality at a public meeting when he spoke about the release of patients he considered a community risk. He was given final warnings for issuing two media releases without authority, and finally left the job in May 1996 after settlement of a personal grievance claim.

[36] Metro Magazine, May 1994

[37] McGregor (ed), Introduction.

[38] The TVNZ board has already declared a special dividend of $20m to the government this year; for criticism see New Zealand Herald 12 August 1996

[39] B. Williams, 'Publishing History and Present Anxieties', paper to the NZ Historical Association/Te Pouhere Korero Annual Conference 1996.

[40] Dominion, 2 August 1996

[41] Government Management, Vol. I, 1987, Wellington, Treasury, p.178; also termed 'spillovers' by the Report on Funding Growth in Tertiary Education, Education Department, Wellington, 1994 (the Todd Report)

[42] Treasury, Government Management, Vol. II, 1987, Wellington, Treasury, p.178

[43] 'Overview of the Proposed Ownership Monitoring Process', Ernst & Young, May 1996