New Zealand and the Tragedy of Neoliberalism

New Zealand – In a Land of Plenty

Directed by Alister Barry (2002)

Film Review

This documentary provides a blow by blow account of the advent of “neoliberalism” [1] to New Zealand in the 1980s and 1990s. The feature films of British filmmaker Ken Loach document the tragic consequences of Margaret Thatcher’s brand of neoliberalism (Thacherism). I have yet to find similar films tracking the brutal effect of American neoliberalism (under Reagan, Bush senior and Clinton).

In 1984, the assent of Labour Prime Minister David Lange (and Finance Minister Roger Douglas [2]  to power resulted in a sudden shift from New Zealand’s 40-year commitment to full employment to a regime in which jobs and living wages were deliberated sacrificed to a brutal campaign to quash inflation.[3]

The film traces the stepwise process by which Douglas collaborated with the Reserve Bank of New Zealand to increase unemployment by massively increasing interest rates. With no access to credit, businesses quickly began shutting down and laying off workers \.

This move was followed by cutting public sector employment (in the government owned railroad, state energy companies and post office) and the elimination of farm support by way of price stabilization and crop subsidies. Squeezed between prohibitive loan rates and loss of government support, thousands of families lost their farms and livelihood. Unemployment skyrocketed as cheese factories and freezing works depending on the agricultural sector shut down.

At the end of 1984, the Lange government also ended protective trade barriers that protected New Zealand manufacturers, immediately flooding the domestic market with cheap imports from China. The move effectively killed New Zealand’s home grown manufacturing sector (mainly auto, shoe, garment and home appliance production).

During its two terms in government, Labour persisted with these draconian reforms despite massive public protest and open rebellion by rand and file Labour Party members. During the 1990 election, Labour voters stayed home, and the conservative National government took over the neoliberal agenda.

by the mid-90s, more than half of New Zealand’s unemployed (many of whom were over 55) had been out of work more than six months. The National government responded to the chronic unemployment crisis by slashing unemployment and welfare benefits. Despite a big increase in free food distribution at schools, foodbanks and other charities, resulting malnutrition levels resulted in an epidemic (which persists to the present day) of rheumatic fever, meningitis, asthma and other illnesses of poverty.


[1] Neoliberalism is a model of extreme free market capitalism that favors greatly reduced government spending, deregulation, globalization, free trade, and privatization.

[2] It’s unclear how Roger Douglas, a right wing conservative, became Finance Minister under a Labour Government. He later helped form the pro-corporate ACT Party and served as an ACT list MP between 2008 and 2001.

[3] Inflation hurts bankers far more than it hurts workers, especially those relying on credit cards to pay for basic survival needs. In reducing the value of money, it simultaneously reduces the value of debts owned to banks. See Who Does Inflation Hurt Most

 

 

 

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