Ignore the privatisation scaremongerers

I remember the time before what socialists call the “neo-liberal” era which “sold out” the country to “rampant capitalism”. Sure I was at school, at the time when people and businesses had to plan weeks ahead to get the Post Office to install a phone line (no mobile phones then, as the Post Office hadn’t deemed that to be appropriate until 1987, even though Australia had had a limited carphone mobile service from 1981 and the UK had launched mobile telephony in 1985).

It was an era when the 100% state owned Air NZ had to get Cabinet approval to buy new airliners, and was made to buy Rolls Royce engines for its Boeing 747s, because it was thought it might improve trade prospects more generally, even though the airline had the spares and the staff training for General Electric engines (and the Board had recommended such aircraft). Such is the ways of nationalised industries.

It was also an era when phones calls beyond your local calling area (which in Wellington did not include Kapiti) cost tens of cents a minute, so a ten minute call (remember no SMS or email) to Auckland might cost several dollars. Phone calls internationally cost dollars a minute, so twice a year my grandmother would talk to her sister in Scotland, for birthdays, for around 10 minutes. Those calls cost $30-$40, and it wasn’t because of technology, it was because the Post Office used money from phone calls to cross subsidise its unprofitable postal monopoly. Then there was the Post Office Savings Bank, a government bank that at a time of double digit inflation had children’s “savings” accounts paying 2% interest. Effectively a scheme for the state to steal savings from children, but hey it wasn’t privatised nor “foreign-owned” (strange how supposedly “anti-racist” socialists are so agitated about foreigners when they own businesses they use), so it was great - the socialists got kids' money to spend on "the People" (which is of course what they always say).

Wellingtonians 40 plus might remember the Wellington domestic terminal, later the Air NZ domestic terminal, which on a windy wet day would leak, with the lino floor flooded, being drafty with not enough seats for people waiting for flights. Until (foreign and local capitalist owned) Ansett NZ was allowed to fly domestically, all jet flights were boarded through steps in the wintery Wellington windy rain. The Government and Wellington City Council argued over decades about who should pay for a new one. They would also remember Wellington City Transport, which was 100% owned by the City Council and subsidised by ratepayers, so that on Sunday evenings hardly any buses ran at all, all of the routes terminated in the city centre (needed more buses and drivers for that, and the Tramways Union would hold the city to ransom if it didn’t get what it wanted). New buses required the Council to order them, and as a result the fleet would be on its last legs before new vehicles would get ordered. 30 year old diesel buses would be operating (the economic life of a diesel bus is around 15 years) and of course Wellington’s trolley bus infrastructure would be patched up for decades.

None of this is reflected on by Max Rashbrooke in the Spinoff. He wrote a piece last week that followed on from the rather awkward set of comments between David Seymour, Chris Luxon and Nicola Willis which indicated various interest in looking at further privatisation, but unfortunately Rashbrooke didn’t demonstrate a great deal of depth in thinking. Most of it was parroting the claims and slogans of former union economist Bill Rosenberg, and high level papers written overseas by leftwing researchers.  

I couldn't resist, it was so full of nonsense, it deserves a response:

- “Privatised TranzRail had an appalling safety record, its staff dying at work at eight times the national average. And while cutting maintenance to a level Rosenberg labelled “abysmal”” What was the safety record before privatisation, before SOE status, before corporatisation (before there was safety regulation of rail)? Rosenberg, a former CTU economist bases the maintenance level on “what”? Bear in mind that in 1984 Booz Allen reported on how the rail network had been over-maintained in places, but also how 

- “Fay Richwhite and their fellow owners took out at least $370m in profits from a firm for which they had paid just $328m”. Dividends over a 12 year period, but of course taxpayers have never taken a dividend from Kiwirail or NZRC, ever. Socialists need to decide if the state owning trading enterprises is to make money from them for “the People”, or for them to be moneypits for the “Public Good”, but that isn’t clear.  Truth is most are primarily commercial but they might want certain services delivered at taxpayer expense, but this doesn’t require entire operations to be operated Soviet style.

- “Helen Clark’s Labour government was then forced to repurchase the railways, creating KiwiRail as we now know it. The whole episode cost the state around $4bn, according to then business commentator Brian Gaynor”. Nobody was forced to repurchase it, in fact there were three transactions from buying the Auckland track for $81m (Treasury valued it at $20m), buying the network and then buying the whole business. If nothing had happened, it still would exist, it just would have seen a series of lines close that carry little traffic, and the state has poured much more into Kiwirail since.  For what end though?

- “Profits flowing offshore to wealthy interests rather than ordinary New Zealanders” What profits? Kiwirail has never generated a dividend, and besides “ordinary New Zealanders” wouldn’t get it, it would go to the Minister of Finance to wash in with other spending.

- “The maddest examples have come when monopolies – water, rail – have been sold to private firms, even though competition is the only thing that makes markets work” Rail isn’t a monopoly, and in NZ water hasn’t been privatised (and corporatisation was opposed by economists like Rosenberg in the 1990s, see the resistance of the Alliance to the creation of Watercare Services, and demonstrates the utter failure of the socialist model of democratic control of the provision of services.  

- “A private monopoly is the worst of both worlds: no competition-based incentives to improve, and no public-good ethos pushing the organisation to look out for citizens’ interests”. Do tell us about this public-good ethos, the one that saw the Post Office take weeks to install phone lines, that gouged consumers for toll calls, that saw rampant theft of freight on the railways as a monopoly government department (it had a statutory monopoly until 1983 on long haul freight), the Post Office Savings Bank that gave kids 2% interest on savings accounts when inflation was in double digits. Please!

- “in the UK, privatised railways have been such a disaster – massively increasing costs with no corresponding rise in quality”. If you think rail travel in the UK is no different in quality today compared to the era of British Rail you need help. By any measure, frequency, number of routes, reliability, speed and capacity, and indeed patronage (which has grown to record level turning round decades of patronage decline), it is a remarkable transformation. Yes subsidies have spiralled as well, but it’s overly simplistic to think the UK has a private rail system now, as Network Rail effectively renationalised the network over 20 years ago, and most services are franchised (with the franchisees either paying to operate services on routes that are commercially viable, or pay to operate those that are not). Furthermore, rail freight volumes have increased 80% since 1983, hardly a failure if a key goal is to shift more freight off of congested roads. Socialists (mainly the unions that can’t shut down the entire system with a strike anymore) say privatisation didn’t cause the rise in patronage, but if privatisation “harmed” services, wouldn’t people have just abandoned rail in favour of buses and driving? Well of course they didn’t.  The system has been highly flawed, that’s for sure, mainly because it is highly politicised and Train Operating Companies have been poorly incentivised to control costs (because their main client isn’t their customers but the state), but that’s an argument for less state control, not renationalisation.  As usual, it's much more complex than simple slogans

- "Even worse has been the privatisation of British water services, whereby firms have extracted tens of billions of pounds in shareholder dividends, hiked water fees and discharged large amounts of effluent into local waterways." Yet DIA’s own report on the Three Waters reforms noted the performance of English water companies exceeded that of any in New Zealand, and Scottish Water. A huge amount of investment has gone into renewing water infrastructure in England, in fact OfWat requires it, and regulates water user fees. New Zealand HAS the model the UK had before privatisation and it’s an abject failure. NZ has local democratic control of the water and waste water system, and it is falling apart in many centres. It doesn’t generate dividends, it charges people based on the value of their property, not what they use, and effluent gets discharged into waterways regularly.  We have socialist water and it doesn’t work. 

- "Privatised bus companies, the OECD concluded, are cheaper than public ones only because they cut wages." This is simply false. The OECD did not conclude that, the link is to a report on a roundtable discussion involving case studies in four countries, three in Europe, plus the USA (which has few privatised urban bus services). It is not an official report from the OECD. EVEN then it said that private operators can be more innovative than public ones. The idea you can compare the performance of the Yellow Bus Company in Auckland in the 90s (let alone the ARA), or Wellington City Transport in the 1980s to their equivalents today is extraordinary.  When bus services were moved into the contracting model, there were savings of around 15-20% which enabled more routes and frequencies to be offered, but it did stop the Tramways Union from being able to shut down an entire bus network when it didn’t get what it wanted.  

- "Even when three of them were fully state-owned, the “gentailers” that supply our electricity were able to operate rather like a cartel, generating excess profits and freezing out potential competitors." Wait what? So it ISN’T state ownership you oppose, it is running trading enterprises as “enterprises”. So you don’t want the state to make dividends from its businesses?  Well we did the socialist model before, for decades. It saw massive investment in generating capacity (politicians liked power stations then), but let the local distribution network fall apart (politicians don’t like charging people for what they use), a bit like water.  Were they operating as a cartel? Well shouldn’t the Commerce Commission be dealing with that, in which case, maybe this claim of it being a cartel (which is serious), is actually not true? Maybe if they were all fully private, they could be properly subject to scrutiny because politicians wouldn’t be worried about loss of dividends.  In fact there may be a case for structural separation of generation from retail, but that's about ownership.  Not a lot of coherence in the issue here is there?

- US healthcare – not voucher-based, admittedly, but the nearest thing the developed world has to a private health system – is a catastrophe. It’s not the nearest thing the developed world has to a private health system, as there are umpteen other examples. Nobody, literally nobody advocating for more market-oriented healthcare thinks the over-regulated, highly subsidised US model (Medicare and Medicaid are uncapped liabilities to US taxpayers) is a model for anyone to follow, but it doesn’t stop socialists from the Anglosphere blanking out Switzerland, France, Singapore or the Netherlands. Australia’s system is a mixed model, but that doesn’t fit the narrative.

After all of this selective agitprop (yes education vouchers “fail” but let’s not mention Sweden which to this day maintains one of the most open market education systems in the world, but that doesn’t fit either), we get the philosophy:

There is a basic philosophical issue: public services – health, education – are things people deserve as of right, as a basic entitlement of citizenship. They are not the equivalent of buying, say, another item of clothing, and treating them as mere consumer goods risks degrading their deep importance.

Hold on, most of this article focuses on railways, then water, and talks about electricity, then ends with health and education.  Is the claim that the state has to provide everything that is a “basic entitlement of citizenship”? Should the state own all housing? Should the farms be state owned and all food supplied by state shops (after all food is MORE important than health and education, because most can last months or years without health and education, nobody can last more than weeks without food)?  The sneering comment that “treating them as mere consumer goods” says a lot about attitudes, that when the public are allowed to choose it is “degrading”. Really?

If, as is often the case, privatisation means charging for something once paid out of taxes, it is likely to have a harmful effect on poorer households.  Why? Because poorer households use the most electricity, rail freight or water? Of course they don’t, but is the argument here that everything people need should be free at the point of use, but that half the population should pay taxes so the others don’t?  We can see what “free” water has done to demand for it, and the infrastructure. We see it with roads everyday where consumers aren’t exposed directly to the costs of what they use, with the result of queuing. Public health systems are all about queuing after all, socialists seem to think that is fair, as long as the workers get paid well, the workers not in those systems should be grateful “is isn’t ‘Merica”!

You see the problem is, the common people are stupid and ignorant, whereas public servants, producer unions (especially those run by people paid much more than the average wage) and politicians are enlightened, capable and benevolent…

People don’t generally know what healthcare they need; in education, research suggests “competition” between schools is often driven either by parents making calls based on external factors like uniforms, or by prejudiced views about keeping their kids away from certain other children.  

Well just give them what you think they deserve, parents are incompetent clearly. The state should probably feed kids too (already started with that). Parents must make lots of bad calls too, so maybe the state should buy groceries, buy clothes, maybe run activities for the children to keep fit and socialise, maybe ensure they don’t have “prejudiced views”, maybe build a sense of community. Maybe we can call them Brigades, give them uniforms. Maybe they can help identify grownups who express “hateful and harmful” views. You can see where this attitude that parents know least can head, but it is exactly the arrogance of people who think because some parents make poor choices, none should be allowed to. 

I could go on, there is a misconstruing of how Telecom performed in the 1990s (which from a consumer point of view saw prices plummet across almost all services, essentially enabling people to communicate across the country and internationally affordably for the first time). 

The only interesting part of the article is the claim that if only the public could be “involved” in the decision-making of state owned organisations they could be more responsive.  This is quaint but delusional.  Most people have the time to work, look after their families and then spend quality time enjoying themselves. A small, but vocal minority get involved in activism and inevitably those who will shout the most and get involved the most will be those with spare time or motivation, either because of their political ideology or in many cases simply having time because they are retired or not working. The citing of the “successful German model” for electricity companies is laughable given some of the highest electricity prices for consumers in the EU. If that's success I'd stick with the status quo thank you very much.

It ends with this “We could also entrust frontline public servants with more responsibility, putting them in charge of locating efficiencies and potential innovations” Sure, because public servants are well known to be at the frontline of identifying the most efficient ways of doing things, and innovating with technology and service delivery, that’s why they have jobs they rarely can lose, and don’t get paid based on performance. It's naive at best.

I get that socialists hate private enterprise at worst or are highly sceptical of it. What I don’t get are the absolutely contorted contradictions of, on the one hand hating private enterprise making a lot of money from former state enterprises, and then not wanting the state to make money from them (but rather for taxpayers to subsidise them, for no clear aim other than to make sure people don’t pay for what they use).  I absolutely don’t understand how intelligent people who purport to be interested in public policy outcomes parrot agitprop slogans from trade unions.  What is the point of the state owning Kiwirail? Is it to get more freight on rail and off of roads? If so, is that the best way to do it?  None of this is clear.  What is the point of the state owning a power company? To make it cheaper for some consumers? To reduce emissions (which will make it more expensive for someone)?  Nobody knows.

Socialists have successfully scaremongered about privatisation in NZ for decades. This scaremongering stopped water getting reformed in the 1990s outside Auckland, and has stopped serious reform of ACC, and making the electricity market more competitive (by the state not having a stake in generation and retail). It’s largely banal slogans pushed by Marxists with a strong vibe of xenophobia, and it deserves to remain back in the 1990s with the Alliance.

POSTSCRIPT: By the way, I am not in favour of privatising prisons. The state has a core function to protect law and order, and to protect citizens from the initiation of violence by individuals and state.  Politicians and public servants should be held accountable for the success and failure of managing them, and with the monopoly of the legal power to incarcerate people being quite unique, passing that responsibility to a business - regardless of efficiency - dilutes that accountability.  

Charles Moore on the prospects of Trump in Foreign Policy

 From the Daily Telegraph:

One of Mr Trump’s clearest messages, amplified by his choice of J D Vance, is that he does not want to help Ukraine defeat Vladimir Putin’s invasion. His strategic “realism”, advanced by policy advisers such as Elbridge Colby, looks at these issues through the “lens of pragmatism” and decides that America cannot deal with the Russia and China problems at the same time. Since the US and China are “the two heavyweight boxers”, that is where all the action should be, they say.

If this were just a military division-of-labour argument, it would make some sense. Mr Trump has always been right that America cannot help defend Europe if Europe will not defend itself. But he goes much further than this.

He seems not to accept that China and Russia see very clearly the link between grabbing Taiwan and grabbing Ukraine and wish to use it to break Western, especially American, power. His faith in the capacity of “one telephone call”, made by him, to calm it all down is astonishing. Despite his pugnacious character, his role model seems to be Neville Chamberlain, not Winston Churchill.

Trumpian neo-isolationism thinks as if the Second World War had never happened. Even then – an era of much slower communications and far fewer human and commercial links than today – the Western allies recognised that it was impossible to see the war in Europe and the war in the Far East as separate entities, except in operational terms. The threat was global: victory had to be global, too.

Mr Trump’s failure to acknowledge the globalisation of war threatens not only the Ukraine he proposes to neglect but also the Taiwan he says that he wants to help. He criticises that tiny island, up against opponents about 1.5 billion strong, for not doing enough for its own defence. He also recently complained, “They did take about 100 per cent of our chip business” (semi-conductors, not fried potatoes).

Compare this transactional carelessness with China’s long-term, implacable intent, and you can predict the likely winner.

I come back to the God stuff with which I began. As a believer myself, I welcome the signs of renewed interest in Christianity among the Western young. It is an awakening against nihilism, and against Islamist fanaticism.

But – more in the United States than in Britain – it contains a strand so disgusted with the degeneracy of Western liberalism that it falls for a charlatan like Putin when he says that he is doing the Lord’s work against our godless decadence.

It was much to the credit of the Leave campaign in Britain that – except for a few Faragiste/Ukip outliers – it never fell into this pit that Putin had tried to dig for it. But the Trump team has. Its effects could disable the free world.   

and no, Biden hasn't been stellar either, but if the US thinks it is expensive keeping a global order it used to care about, intact, like it has since 1945, wait till it sees the new multipolar, multi-nuclear weapons (and other WMD) states world isolationism would bring to it.

Particularly when it is patently clear Russia is largely full of bluster and could easily be defeated if the will was there.

Pity the UK

Pity the UK today. I lived there for fourteen years, five years under the Blair/Brown hate-hate partnership (oh they loathed each other, but needed each other) and then watched as the Conservatives squandered multiple electoral mandates by, in most cases, doing little substantial to address the growing issues the country faced.

It seems most likely the UK will vote to give Labour a significant majority, in part because Keir Starmer seems benign and stable, and in large part because Starmer has either cauterised or silenced the lunatic communist/post-modernist rump that cheered on the friend of Hamas, Jeremy Corbyn (now purged from the party).  Starmer gains largely because the Conservatives have almost entirely failed to deliver on what voters wanted from them in 2019, but he is also gaining because of the implosion, at last, of Scottish socialist nationalism in the form of the corrupt SNP.  That band of Anglophobic Marxists, whose excuse for poor performance was always to blame the English, have finally tired Scots enough that they’ll swing back to Labour largely.

Although it is patently obvious from the coverage of the BBC, ITV, Sky News and the Guardian that much of the media is chomping at the bit to see Labour elected, there is little real sign that Starmer can deliver much other than stability.  Public debt under the Conservatives went from 71% of GDP to 98%, and only a fraction of that increase came from action on Covid. There will be much talk of the end of “austerity” which was a myth, as the Conservatives raised spending on health, education and welfare, increased debt and more lately increased taxes. The state sector in the UK is at levels not seen since the 1940s – when Labour was in power bringing “democratic socialism” through large-scale nationalisation of much industry from coal to railways to bus services to steelworks, all preceding the decades of relative decline of Britain compared to its war damaged equivalents on the continent. 

To say the Conservatives have been disappointing is an understatement. The first five years saw David Cameron, a man who was far too guilty about his gilded upbringing that his focus was on atoning for the industrial revolution by slashing emissions and in pouring money down the endless maw of the state religion – aka the NHS. His main techniques for doing that were to kneecap electricity generation using fossil fuels whilst not enabling much new generation to be built at all – except for a highly subsidised nuclear power plant being built, still, by French and Communist Chinese companies.  There might have been more nuclear power plants, but his even more useless Deputy Prime Minister – Nick Clegg of the poorly named “Liberal Democrats” (for they are neither liberal nor democrats) didn’t want more nuclear power stations because, in 2010, he said they wouldn’t open until 2021 or 2022.  The Liberal Democrats did hogtie the Conservatives in their first term. One of Cameron’s most ludicrous moves was in stopping a third runway being built at Heathrow Airport, only to commission a report on options to address airport capacity in the UK, which after the following election recommended (like the two previous report on the issue) building a third runway at Heathrow. Bumbling Dave’s original promise was part of his kneejerk reactionary approach to climate change. However he was keen on building high-speed rail, so ran with Gordon Brown’s proposal to build a ridiculously expensive new railway from London to Birmingham and then onto Manchester and Leeds, because “climate change” and his other trendy term “levelling up” (code for trying to make the North as wealthy as London through state intervention).  Of course neither the third runway, nor any of the high speed rail line are open, because more fundamentally, Britain has a planning system designed to stop anything being built anywhere.  Houses, airports, businesses, railway lines, power stations, are all stopped because most politicians – Conservative, Labour, Liberal Democrats, Greens and yes Reform/UKIP – are NIMBYs, and don’t want anything built near anyone who whinges. 

So during that first term Cameron’s achievements were to significantly boost NHS spending, to raise state spending on foreign aid to 0.7% of GDP (to atone for Britain’s imperial past and to show him to not be “nasty”), and hold a referendum on Scottish independence, which was narrowly won by the “no” side. He did of course buy the pensioner vote with the “triple lock” on the UK’s state pension system, which promised it would rise each year by the highest of inflation, average earnings or 2.5%, an enormous wealth transfer from future generations to current pensioners. So after five years governing as a “wet” David Cameron successfully defeated the more hopelessly wet Ed Miliband in the 2015 election, and also cut the Liberal Democrats back to a rump and gained a majority in his own right. He also gained support from the EUsceptic wing of his party by promising a referendum on EU Membership and negotiated a weak “deal” to help convince voters to stay in the EU. Of course, getting a EUphilic Prime Minister to negotiate a deal to placate EUscepticism was doomed to fail, and so the 2016 EU referendum was a disaster for him.  The UK voted to leave the EU, in part because of xenophobia towards some EU migrants (mainly from the poorest countries in the east), but also being fed up with the attitude of the EU towards the UK. The UK was seen as needing rules generated from Brussels for “solidarity” and of course the EU’s economic policy was dominated by a highly protectionism dirigisme model. David Cameron found the vote too hard so just resigned like the gutless spin doctor that he is. So then the UK got Theresa May.

The UK’s second female Prime Minister was, however, very unlike the first. May was more wet that Cameron, was enamoured by a nanny state that embraced new rules and regulations on personal behaviour, and wanted more intervention in the economy and in society.  She didn’t support Brexit, which of course hardly helped in her negotiating a deal with Brussels, but her fatal mistake was her conceit in seeking an electoral mandate in 2017 because she thought she could destroy Labour with its newly elected Trotskyite terrorist sympathising leader Jeremy Corbyn.  In fact she destroyed her electoral majority, as Corbyn rode on a wave of moronic Marxist students and media commentators who embraced his highly principled stand for socialism, as he lifted multiple backbench MPs from the sewers where most of them resided, onto his front bench. This included luminaries like Diane Abbott who once said on TV she thought Chairman Mao did more good than harm.  The Conservatives lost seats and Labour gained 40% of the vote on a socialist platform. It was only because the Democratic Unionist Party (hardline Protestant unionists from Northern Ireland) were willing to grant the Conservatives confidence and supply that May was able to govern.  

May limped on for two years of ineffective government during which the UK suffered from horrendous Islamist terrorist attacks at Manchester Arena, Westminster Bridge and London Bridge, and she proved she couldn’t negotiate a Brexit agreement that would obtain either Parliamentary support or support from Brussels. She passed the banner to Boris Johnson, who proved, much like when he was Mayor, to be a loudmouth blowhard attention seeker, who is better placed to be a comic character and writer than a serious politician.  Johnson’s greatest achievement was in the 2019 seeing off Corbyn and his band of terrorist sympathising thugs, anti-semites and communists, and seeing an unprecedented level of Conservative support for “getting Brexit done”. The problem with Johnson is that his rhetoric wasn’t matched by action, not least because his relatively new wife was infected with the same guilt complex posh Tories have about their lives, so it saw him double down on climate change policy, and do next to nothing to address issues around economic productivity, the unsustainable health and welfare systems and the perpetual housing crisis, let alone increasing issues of urban crime in major cities. 

Johnson did deliver a Brexit deal that would have given the UK freedom to innovate, to liberalise regulation around much of the economy, but he squandered his chance. Brexit and support for Ukraine were his greatest achievements, but after all that, there is next to nothing. Yes, the pandemic didn’t help, but neither did his “I don’t give a damn about the truth” approach to the rules he instituted during the pandemic. There were ample opportunities to liberalise laws from shop trading (big shops still can’t open all day Sunday in most of the UK), to planning, to financial services, but no.  He could have greatly simplified taxes, lowering costs to businesses, but no.  He could have scrapped vanity projects like HS2, but no, because the man is a vanity project in himself.

Johnson gave way to Liz Truss (third female Prime Minister) whose fatal mistake was not in her intentions, but in her and her Chancellor’s inability to judge the markets’ reaction to massive tax cuts that aren’t accompanied by spending cuts.  That sheer stupidity was naïve, and has set back the cause of free market liberalism in the UK for many years. She was inept as a leader, and had to go, but having Rishi Sunak as PM (first PM of Indian descent) was a step back to the days of David Cameron and the wets. Sunak has raised taxes, promised compulsory national service and although has a handful of Ministers with much promise (notably Kemi Badenoch, who carries the mantle for serious free market liberalism), it’s just a long line of disappointment.

So the Conservatives need to go, they are not entitled to rule, and those who join them because they want to tell others what to do, need to be purged.  The only shining light of the Conservative Government is in education, where free schools have opened up enormous opportunities for tens of thousands of school students to have education that their parents wanted, rather than what local authorities wanted. It will be very difficult to Labour to curtail that, except by stopping further expansion.  However, beyond that, and leaving the EU, there is little to be proud of.

Labour is on the frontline of Critical Constructivism, or what too many call “wokism”. So there is absolutely no hope of any progress under Starmer. The much more revolting Liberal Democrats, who are essentially middle class curtain twitching Greens, are even worse. There’s nothing liberal about them, they are NIMBYs on steroids who hate free markets and love the bureaucratic collectivism of the EU.  

What about Nigel Farage and Reform? There is some inherent appeal in a party that does appear to have some semblance of a belief in less government, and resisting critical constructivism, but Farage is a spiv. Until recently he was taking money for hire for people wanting a short video of him wishing a relative or friend Happy Birthday or any other sort of greeting. He’s now embracing being chief vandal of the Conservative Party, but it is difficult to determine what, if any, principles this media star embraces. It does seem like he is likely to actually win a seat in Parliament after his 8th try.  We will see what Reform contributes to the House of Commons.

Regardless of the outcome, it is obvious that nothing will be done in the UK to address the biggest problems facing the country.

Health policy is almost impossible to efficiently address because the NHS is a national religion. No other developed country lionises a bureaucracy like the UK does for one of the world’s largest civilian bureaucratic employers. To criticise “our NHS” is almost like questioning Islam in Tehran, and makes politicians on left and right blubber and foam at the mouth, before uttering incoherent bile that “we don’t want to be like America”, as if the world has two health systems to choose from. Labour will pour more money down the maw that is the health-professional dominated and run NHS, and in five years’ time people will still be complaining about it, and still will resist a real alternative – like a European style universal health insurance scheme (which Nigel Farage has surprisingly endorsed). Spending on the NHS has risen as a proportion of GDP from 7.5% to 8.2% in the last 14 years, but of course it is never enough.

Likewise, housing is impossible to address because of the Town and Country Planning Act which nationalised decisions on the use of land to local authorities, all of which are dominated by NIMBYs from across the spectrum.  Whether it be building up or out, most councils don’t like housing being built, unless they get to specify it, and impose conditions like “40% affordable”, which makes it difficult to built housing for a mid-market that wont pay to cross-subsidise below cost building, or banning car parks (because cars are bad as they create congestion, but only two councils have ever implemented congestion pricing because none of them actually want to make driving easier).  Labour wont fix housing because it wont take housing out of the hands of NIMBY councils.

Similarly, electricity prices in particular are a concern, but Labour’s answer is to create a state-owned retailer, rather than address the real issue which is the lack of generation built in the past twenty years. This follows a single-minded obsession with lowering emissions to atone for the industrial revolution, whilst (similar to housing) the UK makes it impossible to build substantial new power stations, such as nuclear (notwithstanding the corporatist hand-out from taxpayers to the French state owned power company EDF and Chinese state owned power company CGN to build the massively overpriced Hinkley Point C nuclear plant).  Gordon Brown, then David Cameron continued to wage war on emissions without being honest about the impact it would have on consumers’ energy bills, and Keir Starmer is placating his far-left wing by claiming it’s all just capitalism ripping people off (so a bit of state socialism would fix it).

Many Brits are concerned about illegal migration, with the large numbers of small boats, mostly young men who pay people smugglers to take them from Africa, the Middle East and Asia, seeking employment, housing and to access the generosity of the welfare state.  Few are genuine refugees, and besides they are travelling by boat from safe countries such as France and Belgium, precisely because they see fewer opportunities for employment and see the UK as more generous than the largely contributory based welfare states on the continent. While a few Brits are racist and opposed to immigration per se, most are simply concerned about people entering en masse with relatively little control over the numbers or what happens to them (as those caught are detained at taxpayer expense for months whilst they are processed).  The Rwanda solution (flying those deemed not refugees to Rwanda) has proven unworkable, as the UK Government seeks to avoid breaking international law around the treatment of refugees. The fundamental problem is that the law did not anticipate a whole industry of economic migrants seeking to enter welfare states.  

The Conservatives could either have spent a fortune on border protection, to turn back boats, detain economic migrants and process them, or converted the UK’s welfare state, including health, education and housing into a contributory system like much of the continent. However, neither were done nor will be done. The UK will continue to attract tens of thousands of young undocumented economic migrants eager to work on low wages at best, or engage in organised crime at worst.  

However, most of all the UK will do nothing to address its productivity sclerosis.  Whether it be energy, or airport runways, or roads (virtually all local authorities are averse to reducing traffic congestion), or regulations on land use, or taxation, or reducing barriers to competition, there is no real interest in the major political parties in doing anything about this (except for a rump in the Conservatives). No one will deal with the PONZI scheme of the state pension, no one will make the welfare and education system more supportive of incentivising training and work, rather than dependency and low value “degrees” from “universities” that are little more than glorified former polytechs. In the meantime, the Starmer Government wont confront at all the seething anti-semitism and Islamism that has been seen most clearly in the protests supporting Hamas in Gaza, but also has been bubbling for many years seen in pockets of terrorism from time to time.  Critical constructivism has no time for installing a sense of being “British” as something to bring people together, even though the outgoing Conservatives have exemplified a country that embraces migrants and women as leaders, noting that the next likely leader of the Conservatives is Kemi Badenoch, a woman of Nigerian ancestry who completely reject critical constructivism and socialism. That is how far the UK has come. 

It's fundamentally tragic, and of course the First Past the Post system magnifies victories and losses when they are so overwhelming. The only hope I have for the UK is that the Conservatives are the party of Opposition, and not superseded by the Illiberal Demagogues in sheer numbers. For all of that, the people who should hold their heads in shame for the loss of the Conservatives are Cameron, May, Johnson, Truss, Sunak and their many colleagues who thought that being in government was about managing the status quo, and fiddling, rather than using mandates to transform the country.  

I’m glad I’m out, but I'm sad that so much has been squandered by people who didn't deserve power.

Diversity, Equity, Inclusion is a fundamentally low-grade, Orwellian anti-liberal project

Sunday Telegraph editor, and vehement classical liberal, Allister Heath, writes about the "DEI" movement, which has spread like a cancer around US universities and corporates, in scathing terms:

DEI is only interested in racial or gender diversity. It doesn’t really care about poverty, class or geography. It loathes diversity of thought; it preaches an imbecilic groupthink that can never be questioned. It denies the scientific method. Its more extreme North American proponents occasionally even reject the idea that 2+2=4, claiming it implies “covert white supremacy”, the sort of lunacy that would have made even the Soviet pseudo-agronomist Trofim Lysenko blush.... 

The woke demand performative adherence to dogma, even when it is evidently contrary to reality, hence “Gays for Palestine” chanting pro‑Hamas and pro-Houthi slogans, even though both terror organisations are brutally homophobic, whereas Tel Aviv celebrates gay pride. Eliminating objective reality is every tyrant’s dream: citizens can no longer judge the validity of what they are being told. 

That's it, it's the latest part of the 20th century post-modernist excrescence that denies evidence, reason and genuine diversity between individuals.  Indeed it is a movement of neo-Maoist Cultural Revolution, with staggering parallels with that most murderous period in China's history.

...DEI advocates group “justice” that is at once unjust and inequitable, based on confiscation and redistribution. People don’t matter, only aggregate statistics. Individual merit counts for nought: DEI judges people solely on their membership of a tribe based on racial or sexual characteristics. This is a reversal of centuries of Western progress towards individual dignity, a rejection of Enlightenment ideals and a readoption of pre-modern group politics....

DEI is horrifically exclusionary, seeking to cancel anybody who fails to pretend to agree: it embraces the permanent inquisition, the auto-da-fé, excommunication and (metaphorically) burning heretics at the stake. Staff are “encouraged” to take the knee, to wear special lanyards, to share pronouns. Employees are divided into “allies” and “adversaries”, with the “good” in-group pitted against the “bad” out-group. “Micro-aggressors” are denounced.

This toxic philosophy is as destructive to individual freedom as Marxism-Leninism, Nazism, Islamism and all other forms of mystical authoritarianism, because it is mystical. It is entirely based on the feelings of the proponent, it is inherently inconsistent and immune to evidence. It is a social movement that has life because of well-meaning people who take the claims of the philosophy on face value, but is catalysed by generals of sociopathic misanthropists who lead armies of dimwitted malcontents and grifting inadequates, keen to shame, cancel and scream at those they deem "the enemy".

Diversity movements, activists, units and managers are about the exact opposite. No business should have a bar of it, and should purge its marketing and human resources departments (especially the latter, which is an administrative overhead all businesses should minimise). 

Government should purge it as well, eliminate it from all government agencies and make all staff who exist to promote the concept within government redundant.  I wont be holding my breath though.

Wellington is in a funk

The general election has knocked Wellington for six and has put a great deal of public servants and more than a few in the consultancy-industrial complex in a funk, because philosophically and culturally, the change in government has shown up the gulf between them and the government. It has also demonstrated two major issues:

• The dearth of strategic and intellectual grunt in much of the public sector;

• The ideological chasm between many of the (largely young and relatively new) public servants, and the Government they have vowed to serve.

I moved back to Wellington last year after a considerable absence, and I noticed quite a few changes, and there have been a lot more since the election. Not in the sense of the urban form (that hasn’t changed dramatically), nor infrastructure (setting aside the leaks everywhere), but rather in the culture and capability of the public service, and those who provide some degree of heft in fundamental public policy analysis are in short supply.

I spent ten years in the Wellington public service before leaving it (and the country) to be a consultant.  When I first joined it was clear there was a significant cohort of senior and leadership talent in parts of the public service in particular that were formidable in their intellectual capability, commitment to ideological neutrality and interest in an evidence based approached to public policy. Sure there were differences, but overwhelmingly there was one key factor, a deep understanding of what they did and did not know, and what they could not know.  I saw this in The Treasury and the economic sector-based departments, such as what was then the Ministry of Commerce (since morphed into MBIE) and Ministry of Transport.  There was a bit less in the Department of Internal Affairs, but it was still there.  The more social policy-oriented agencies were somewhat different. Health, Education and Environment had less experience of structural reform, and still believed they could be the repositories of all that is best practice in their sectors.  The departments responsible for oversight and regulation of business and the productive sectors knew differently.  

They all knew that, by and large, they had no idea how much of the economy worked in any detail.  These were people who looked at the likes of the telecommunications sector and wouldn’t even pretend to know the details of the technology being used, because it mostly didn’t matter (unless it was related to something the government had to do, like auction radio spectrum for mobile phone use). Nor did they pretend they knew what the cost or price of inputs were, if markets were competitive or not falling between the cracks of the role of the Commerce Commission.  After all, history is replete with examples of how neither bureaucrats nor most politicians have the faintest idea about what changes in technology or markets will come next.  There were bureaucrats who knew that.  I recall sitting in a meeting room in 1997 with a manager at the Ministry of Commerce, who got the IT Department to set up a demonstration of a free application called Real Audio which was streaming radio programmes from across the world.  He said at that moment “this is the future and it will disrupt everything we do in broadcasting, it’s a matter of time”, this was when politicians were mainly fretting about the use of dial-up internet to access pornography.  That manager was right of course, but at the time the Ministry of Commerce was responsible for broadcasting policy, alongside telecommunications, IT and energy policy. Broadcasting is now within the purview of the Ministry of Culture, Heritage and the Arts, which is not an organisation with a primary culture of business and innovation. 

The beginning of change in that culture happened under the Clark Government, which was much more pro-active and wanted to “do more”.  However, that Government did get plenty of advice around the limitation of the public service to actually know what was best for particular sectors (except of course the social sectors, which acted much more as intermediaries between the strong professional producer sector interests and the government, especially since more than a few people in the social public sector would switch employments with the professional producer lobby). While the Key Government paused that change, the Ardern/Hipkins Government put it into overdrive, and the Luxon Government will be seeing the signs of it.

The election of Tamatha Paul as MP of Wellington Central and Julie Anne Genter as MP for Rongotai provides a sign of what has happened to the Wellington public service in that time.  It's a far cry from Richard Prebble being elected in Wellington Central in 1996, and the time when it was seen as a marginal seat between National and Labour. No more.  The public sector has seen retirement of many men and women who were part of both the Muldoon era of extraordinary central planning, and the Lange/Palmer/Moore/Bolger era of dismantling central planning and instituting more direct accountability in the public sector for results, and in taking political and bureaucratic decision making away from trading enterprises, ranging from the Post Office to the Railways and Electricity Department.  Those people have retired, moved away or passed away. Some remain from the 90s, but are increasingly pushed aside by the well-meaning, but shallow culture around promoting “new perspectives” around “diversity”, which does not include depth or breadth or critical thinking (not in the post-modernist sense) in public policy.  The Wellington public service grew enormously in the past six years, drawing upon enthusiastic graduates, predominantly coming with support for the Government of the day, bringing with them a leftwing ideological framework, which are not just the traditional enthusiasm for state-intervention and suspicion and cynicism about private enterprise, but rather the wholesale cultural revolution in how they think about the state, society and stratification of the country into people categorised as oppressive, oppressed or allies of the oppressed. MP Debbie Ngarewa-Packer characterised it as being Tangata Whenua, Tangata Tiriti and everyone else (the racists). So a combination of left-wing enthusiasm for state intervention, regulation, spending and taxation, with an suspicion around the interests and the views of significant portions of the public, including those of more senior civil servants, because of identity factors (e.g. race, sex, gender).  None of that would matter one iota if they could put that to one side and be highly competent public policy analysts, but that competence is wanting, and it’s clear from plenty of people engaging with the well-meaning, but lacking historical knowledge and being weak on analytical capability.

As a result the mood today in many government departments, particularly the more social and environmental policy oriented ones, is one of fear and depression, as a workforce of relatively young public servants, most of whom did not vote for this government, struggle to cope with being asked to implement policies they don’t agree with. Some act professionally, and it is to the credit of some that they seem to have delivered the Government’s “First 100 day” plan. Few are obstructive, clearly one or two are choosing to leak, but many of them are moping about, worrying about becoming unemployed and are openly, to their like-minded colleagues, unhappy about the choice of voters.

When I was a public servant I was generally not happy with any government that was elected, on a lot of issues, but when it came to the sectors I worked in (and there were a few), I put it all to one side. People knew what my politics was, but I also knew what high quality public policy was as well.  You serve Ministers, you seek to achieve their policy objectives, you analyse alternatives and you implement what Ministers want.  You give free and frank advice, and they either take it, or they continue to do what they want to do, and you can simply say they were told, if the consequences don’t turn out how they wanted. That’s not the mood in Wellington now.

Of course it will change. Although there is significant scope to scale down the numbers of people doing policy in government in Wellington, the scope to scale down the depth and breadth is small, because there is a distinct lack of talented, capable and clever people, who put aside their personal political biases in favour of evidence-based policy advice.  Most importantly, there are few who will admit to Ministers “we don’t really know how to do that” or “we don’t know how that part of the economy works” or “we don’t have the knowledge or experience on that issue Minister”.

I’ll take one example in a field I know something about. “The Aotearoa New Zealand Freight and Supply Chain Strategy”. I’m frankly gobsmacked that a lot of people clearly pulled together something which smacks of the sort of central planning NZ had done away with in the 1980s. The idea that MoT is steward of the freight and supply chain system is so laughable as to be a joke.  There is no remote hope that the Chief Executive of MoT, let alone almost any of the staff, would know how to arrange the consignment of freight from any producer to customers or outlets.  There is relatively little about productivity and competition, yet 62 pages has been dedicated to a “strategy” which has as its main challenge not labour shortages (which have been a major issue), but climate change. Nine immediate actions are proposed, all of which are either about more planning or lowering emissions. It’s a manifesto for central planners.  Nobody was willing to tell Ministers that “we don’t know much about any of this, and we have no visibility into how businesses and transport firms arrange and price their services, or invest in capital”, or if they did the response was “find out, collect data”!

Where does this lead a public service that ought to be focused on delivering on an agenda that many of its staff disagree with?  It's not easy, particularly as getting talent to work in Wellington is tough nowadays.  However the government appears willing to lean down the state sector (albeit not enough), which should provide ample opportunities to send blinkered ideologues with mediocre intellectual grunt to a new life not serving a government they hate. 

There are three strategies that might help as well:

1. Cull activities in Ministries and Departments to enable competent people to focus on the priorities of the new Government. This has already started, but the competent people need to be placed on high-profile, high-risk projects of reform and delivery. This require line-by-line scrutiny of the work programmes of each Ministry, Department and agency, to strike out what isn’t needed. Then offer redundancies to those no longer needed.

2. Don’t be afraid to restructure. Who would trust the Ministry of Education to implement Charter Schools any more than you would have trusted the Post Office to implement a competing mobile phone network or the Railways Department to implement a competing trucking firm? Treasury likes consolidation, but smaller, nimbler agencies can be more responsive, and incentivised to be focused.

3. Push for cultural change in the public service. This means focusing once again on accountability, transparency, delivery and efficiency, and recognising the limits of knowledge and capability. Hayek’s “Fatal Conceit” concept would be a helpful one to promote.  Encouraging understanding of concepts around markets, competition and the "law of unintended consequences" and to be concerned about capture by interests, whether they be business, producer unions or lobbyists, even those with purportedly "altruistic" motives.

4.      Better link the public/consumers to the supply of the services provided by the state to them.  Give them incentives to perform.  This used to be done by setting up SOEs, but the scope for that is largely spent.