Argument for NZ’S liberal democracy remains strong

It seldom ceases to surprise many on the Left when they see just how flagrantly capitalist countries like Sweden, Norway and Denmark really are.

Despite occasional appearances to the contrary, we enjoy something of a consensus about our political arrangements in New Zealand.

There is really no dispute that we should have a representative democracy, the rule of law and a market economy coupled with a welfare state. There is unlikely to be a single member of Parliament who would disagree with any of that.

There is debate within those broad parameters, of course. We argue about how generous welfare should be and how it should be operated. National tends to be concerned about ensuring the system is not a drag on the productivity sustaining it. Labour tends to want the system to be as generous as possible. That debate is heated at times. However, there is really no fundamental disagreement on the question of what kind of society we want to be.

At the end of the Cold War, some thinkers advanced the theory that all countries would come to see this as the optimal form of government. The succeeding years have shown this has yet to occur, however, and it might be that it is not suited for all national sensibilities and temperaments.

Nevertheless, the argument for liberal democracy remains strong. Certainly, the case for it can only be strengthened in light of the man-made disaster that has devastated one Latin American country in the past few years.

Once a middle-income country, Venezuela rejected the market economy consensus when it elected as president a flamboyant socialist named Hugo Chavez in 1999. Rejecting the idea of a ‘‘third way’’ between Left and Right, Chavez spent more than a decade breathing new life into the old ideas of state socialism before dying of cancer in 2013.

His successors have stayed true to his vision of re-founding the country on socialist ideals. It is useful here to consider what is meant by ‘‘socialism’’ in this context. As a matter of shorthand, critics of the Left tend to apply this label without a lot of care. Strictly speaking, however, a lot of what gets called ‘‘socialism’’ in this country should instead be called ’’welfarism’’. The welfare state redistributes some resources from rich to poor to boost the consumption of those who need help – such as those unable to work because of age, disability or bad luck.

This is entirely compatible with the idea of a market economy and so it should be no surprise that many of the countries with advanced welfare states also have high levels of free enterprise. Nevertheless, it seldom ceases to surprise many on the Left when they see just how flagrantly capitalist countries like Sweden, Norway and Denmark really are. The socialist state, on the other hand, actually assumes control of the productive parts of the economy.

For obvious reasons, this form of government is generally not compatible with the existence of private enterprise. Where a welfare state might respond to rising food prices by increasing benefits (and taxation), the socialist response would be to take control of the nation’s farms and supermarkets. There is a world of difference between the two modes of government.

The petroleum industry is to Venezuela as food production is to New Zealand. That is to say it is the star around which the rest of the economy orbits. On taking power, Venezuela’s socialist government essentially politicised the entire energy sector.

A result of this is that the industry is no longer run competently. But incompetence could be forgiven at a time of skyhigh oil prices. With swollen revenues, the governmentfinanced state-owned grocery outlets to sell food at a fraction of its market price. It also embarked on an ambitious programme of nationalisations and price controls to prevent ‘‘speculators’’ from profiting at the expense of the people.

Unfortunately, Venezuela’s bold experiment in socialism has turned out no differently than previous attempts did in the Soviet Union, the pre-reform People’s Republic of China or neighbouring Cuba. In other words, shortages, hunger and general decay are now the order of the day. The government has even decreed that, in order to ward off famine, citizens will be forced to report to the fields to grow food for the state – essentially adding the reintroduction of agricultural slavery to the woes of the poor, benighted country.

One thing we seem to have no shortage of is activists who claim Labour and National have devastated our country with successive ‘‘neoliberal’’ governments in the past 30 years. But the alternative to neoliberalism isn’t Norway, Denmark or Sweden. It’s Cuba, Zimbabwe and Venezuela. I know where I would rather live.