THE RECORD
May 15, 2002

Fiat Lux

by Ed Deak

Like most ranchers around here, I've been using Allflex ear tags on my cattle for over twenty years. It is a very ingenious system of tagging that used to be made in New Zealand, but now the new ones are made in the USA, still under the Allflex name. Or perhaps in the cesspool of the Mexican Maquiladores, or some Asian slave labour camp and stamped Made in the USA.

The Allflex company, like thousands of others around the world, fell to the demands of globalization and the eagerness of successive New Zealand governments to become the most deregulated, open economy on Earth. Which meant the wholesale selling out of their industries and resources to multinationals and then boasting about what great guys they are.

I remember when an economist friend from New Zealand lamented over the closure of Allflex, with, I believe, the loss of 400 manufacturing jobs and the machinery and equipment moved out of the country. The same basic story we have and are experiencing here in Canada under NAFTA on the altar of globalized wealth creation.

The interesting thing about the neo classical economic theory, which in turn created the neo liberal ideology, including our New Era madness here in BC, is that in the 20 or so years since it's reign over the globe, it has been one of the biggest failures, even greater than Marxism. Of course, we don't have extermination camps and Gulags, we just let people starve to death and claim it as a victory of competitiveness.

Being taught at our universities as the religion of the Money God, it has created a few billionaires, huge global corporate oligopolies that control our lives and nothing but misery all over the world. The economists who are ramming it down our throats can not show a single case of societal success anywhere. Only environmental degradation, the disappearance of the working middle class, loss of incomes, businesses, democratic rights, and opportunities, and growing violence, family breakdowns and bullying.

There have been great attempts to describe and sell the New Zealand experience as a success and economic miracle, just as the Campbell gang is now describing the growing desperation around BC as the road to prosperity. All kinds of praises have been heaped on various New Zealand governments by all major economic institutions, books, magazines, the World Bank and the IMF, as the world leaders in the great globalization movement.
Then, there is then other side of the coin, the stark realities that can not be covered up with phony GDP figures and advertising rhetoric. The Campbell gang is closely following the footsteps of New Zealand's former Finance Minister Roger Douglas, whose policy was based on fast movements and so called "lightning strikes", to deregulate and sell off the country before the people woke up to what was going on. We have the same here in BC.

Now the public's attention is being diverted by hospital and school cuts, the next step on the agenda is the sell off of BC Hydro to some US multinational, before people notice it. Quoting from a paper on New Zealand's economics, Douglas wrote in 1983: "The fire of opponents is much less accurate if they have to shoot at a rapidly moving target." Ditto here in BC, where the government must have studied Douglas's book Unfinished Business and are following the same steps.

The publicly owned assets of New Zealand were sold off at rock bottom, garage sale prices to multinationals between 1988 and 1993. From a total of NZ $19. billion in assets $14.billion's worth were squandered, or about two thirds of the value of the country's top 200 companies. The resulting depression caused the highest unemployment since the Great Depression, with about 76,000 or 25% of all the manufacturing jobs lost and exported out of the country.

The official unemployment rate, which is usually about half of the real figure anywhere on Earth, rose from 4 percent in 1986 to 11 percent in 1992, then fell to 7 percent. Of course, employment figures mean very little, as we know that many employed people have low paying part time jobs, without any benefits, relying on food banks for survival, but by golly, this is what economic competition is about.

The poverty rate of the country rose 35 percent and by 1993 the food banks have given out NZ$25.million worth of food. By 1996 about 20 percent of the people and 33 percent of the children were living under the poverty line in a country that used to be one of the leaders in well being. Now it is being swept by TB, scurvy, and rickets that virtually didn't exist before.
The same scenario is repeated here under the Harris and Klein governments, where child poverty skyrocketed at the same time that the economists were reporting booming economies. Now its coming to BC.

In the same time, in spite of the so called "growth of foreign investment" because of plundering by the multinationals the economy shrank. By 1998 in a survey of 45 countries New Zealand was one of five that have lost market share. The poverty gap between rich and poor grew much faster than in any other industrialized country.

In 1991 the National Party cut NZ$1.3 billion from social welfare, while making NZ$1.4 billion tax cuts to the rich. Sound familiar? Campbell must be reading the right books. In a 1988 study economists Srikanta Chatterjee and Nripesh Podder reported that 80 percent of wage earners suffered income losses, while 10 percent of the earners increased their incomes by 15 percent. The financial, energy, retail, transport, media and communications industries are now in the hands of multinationals, who are making large profits while stripping the country bare. But then, this is what competitive equilibrium is about and the denizens of the Fraser Institute must be drooling over their desks with desire to see it coming to BC.

Foreign investment increased from NZ$9.7 billion in 1989 to $49.3 billion by last year. From 1995 to 1998 the multinationals made $10.6 billion in profits, but reinvested only 6 percent. The state owned forests were sold, resulting in more job losses and destruction of communities and families.

These figures have been taken from a paper by the New Zealand writer Aziz Choudry, who ends up with a quotation by the Maori writer and academic Leonie Pihama: "Colonization is colonization, whatever new name we may like to give it. Globalization, free market, neoliberalism, profitability, capitalism, it is fundamentally about colonization. The privatization agenda in this country did not start with the 1984 Labour government or the MAI or the GATT"

No indeed. It started at the economics departments of the Chicago School of Economics, eagerly adapted by Margaret Thatcher, Ronald Reagan and our dear free trader Brian Mulroney. It was forced on universities through corporate grants and caught on like a plague right around the globe, leaving poverty and destruction in it's wake.

Some people in BC are still awaiting the New Era economic miracle built on the same foundations. Like the great showman P.T. Barnum said it over a hundred years ago: "A fool is born every minute." With the population explosion since those days, we probably could increase this number to ten per minute.

Copyright (c) 2002, West's International