Learn from Kiwi Experience
Distant observers often see us more clearly than we see ourselves. Heard much about the "miraculous" New Zealand economy lately? Freelance journo Murray Dobbin in Vancouver has recently slammed (National Post 15/8/00) the 15 year free market experiment by NZ's economic rationalists.
Calling it an unmitigated disaster resulting in immense suffering among ordinary Kiwis, Dobbin lists such horrors as the highest youth suicide rate in the developed world; the increasing need for food banks; the increase in violent crime; the bankruptcy of half the farms; and the diminishment of healthcare, education and other social services.
Sound familiar?
Not relying only on these social indicators of an unwell economy, Dobbin looks at the very measures or performance indicators that “ec-rats” would use to define economic success: demolishing the "debt wall," wooing foreign investment, increased domestic productivity, and spectacular new economic wealth, new jobs, and so on.
The balance sheet looks bleak; the experiment has failed.
The debt of 1984 was NZ$22 billion; after liquidating crown assets, it still doubled by 1994 to NZ$45 billion; today it is back to NZ$22 billion through an even greater sell off of state assets.
The disparity between the wealthy and have-nots increased, with the top 10% of income earners measurably increasing their share of total income and the lowest 10% losing 21.6% of their 1984 income. More than 50% of the total working population, says Dobbin, had lower real income in 1996 than in 1984.
While some economic pundits blame failure on the 21st Century's favourite bogeyman - globalisation - it appears some wisdom is emerging from NZ's pervading free trade economic ideology. The coalition government is reversing many of the most destructive policies, including a rise in pensions, rebuilding public housing stock, a review of electricity pricing, the freezing of clothing and footwear tariffs, and the recognition of unions.
Perhaps the most hopeful lesson for us is that social and economic recovery may be possible after economic rationalism has proven itself bankrupt - look and learn, Aussie “ec-rats.”
Business News 31 August 2000
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