Wednesday, 15 February 2017

Don’t do it America! New Zealand has already tried it.


Don’t do it America! New Zealand has already tried it. Feisty, Protectionist Populism, that is, and as Tyler Cowen tells Bloomberg, it ended really badly.

We’re talking about a chap called Robert Muldoon, prime minister of New Zealand from 1975 to 1984 --

a  Western democratic leader who was populist, obsessed with the balance of trade, especially effective on television, feisty and combative with the press, and able to take over his country’s right-wing party and swing it in a more interventionist direction.

Cowen wants his reader to compare him to You Know Who.

Some of the similarities are striking. Muldoon often made rude or unusually frank comments about foreign leaders (including U.S. President Jimmy Carter and the Australian prime minister), and his diplomats worked hard to undo them.

Mind you, he wasn’t always wrong. He once told an assembled audience of Commonwealth leaders that Robert Mugabe should be ignored because he was only famous for running around the jungle shooting people.

His most significant initiative was called “Think Big,” and, yes, it was designed to make New Zealand great again. It was based on a lot of infrastructure and fossil fuels investment, including natural gas, and it was intended to stimulate the country’s exports and remedy the trade deficit. Because New Zealand’s parliamentary system of government has fewer checks and balances than the American system, Muldoon got more done than Trump likely will.
    Yet this bout of industrial policy worsened the already precarious fiscal position of the government, and Muldoon’s public-sector investments did not impress. Muldoon’s
biographer, Barry Gustafson, noted that the prime minister ended up being criticized for his “apparently dogmatic arrogance of executive power”; Gustafson also tells us Muldoon “was often reluctant to take expert advice.”
    Like Trump, Muldoon was at first skeptical about his country’s NAFTA deal -- yes, it was called exactly that, the
New Zealand Australia Free Trade Agreement. Muldoon did renegotiate the treaty, although his ministers persuaded him to accept a free-trade-friendly update, called CER (Closer Economic Relations). Trump may or may not follow through with the second part of that parallel.
    Australia aside, Muldoon preferred protectionism and had little patience for the academic arguments against it. He was no friend of free-market thinking, and when Milton and Rose Friedman visited New Zealand, the prime minister refused to meet with them.

He was undoubtedly scared of what he might be told.

Like Trump, Muldoon faced some controversial race issues. The all-white South African rugby team was scheduled to tour New Zealand in 1981, and even after extensive protests Muldoon refused to ban the team. Muldoon’s critics called him a racist, and charged that his intentions in the matter were not entirely benign. Muldoon also continued his predecessor’s policy of arresting and deporting Pacific Islanders who had overstayed their visas.
    It was his philosophy not to bother to appeal to his opponents. The more critics he generated, the more his supporters -- known as “Rob’s Mob” -- loved him…
    Arguably, Muldoon was not as outrageous as Trump. Still, he once punched demonstrators, and stripped naked at a cocktail party. Twitter remained beyond his grasp.

Which would have been no less entertaining.   

Anyway, if you don’t know how the story ends, you can guess. Import quotas and double-digit price inflation, licensing, regulation and taxes on everything from home boat-building to needing a doctor’s prescription for butter, bans on trucks taking goods more than 100 miles – this was an economy that functioned less like an economic system and more like a Polish shipyard under the Soviets, until finally a wage and price freeze put a bullet in the economy’s head and Muldoon was thrown out for something much better: which at the time was the left-wing Labour Party.

Cowen concludes with “one lesson from the comparison:

that a leader like Muldoon can be fairly popular, as he stayed in power from 1975 to 1984, winning three terms despite mistakes, antagonisms and policy failures. He was a plain-speaker who related well to many Kiwi voters, and he was masterful at defusing or rechanneling opposition within his own party.
    After Muldoon was voted out of office, he started a popular radio talk show, ‘Lilies and Other Things,’ which dealt with gardening, politics and the economy, all the while maintaining his fiery tone. He also played a vampire -- Count Robula -- on a late-night TV horror show, and he narrated ‘The Rocky Horror Show.’ Not exactly ‘The Apprentice,’ but with this we have come full circle.



  1. I wonder how long it will be before there will be calls to bring back protectionism here.? After all, Corporate welfare is alive and well here.

  2. Liberals can come to grips with Patriotism, Nationhood, and looking after one's countrymen just as soon as you can. There is an entire generation of our side on the upswing, in the ascendancy you know, dominating the social meme. Think of it this way. Your brother has paid work. see/? . Doctrine means nothing .

  3. Ye gods, just imagine the hilarity that Muldoon on Twitter would provide. Mind you, if he was still in power we would probably have to get internet licenses and there would be a waiting list for buying a new smartphone.


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