thedailyblog--2020-08-13--A crisis of the system that no amount of spending can fix

The system of production currently dominating the globe is in crisis .
The UK economy is 20 % smaller than at the beginning of the year .
The US and the rest of Europe are 10 % smaller .
World trade and finance are freezing up .
This is a crisis of unprecedented proportions and threatens a new world depression .
How did this happen ?
What has changed in economic management and policy since the last world depression that has brought us to this point in history ?
Workers and their unions seemed to be on a path of @ @ @ @ @ @ @ Two world .
Advanced capitalist societies in Western Europe , North America , Australasia and Japan , seemed able to adapt enough to provide basic democratic and social rights , including elected governments and union recognition .
For at least three decades it seemed that rights and living standards broadly progressed each decade .
Gross inequalities appeared to be being muted not exacerbated .
Full-employment was the official goal of all governments .
Conservative and social-democratic governments had a broadly “ Keynesian ” economic approach .
The governments and their economic advisors were @ @ @ @ @ @ @ and downs of the business cycle , maintain full employment , and achieve uninterrupted growth .
In the mid-1980s in New Zealand , real wages reached their highest level and workers had an almost uninterrupted right to strike over any issue .
We exercised that right with increasing frequency whether it was over a workplace bullying or dismissals ; political strikes against the Vietnam war , nuclear warship visits or sports contacts with apartheid South Africa ; or solidarity with other workers in struggle in New Zealand – including general strikes if needed @ @ @ @ @ @ @ becoming more open-minded and progressive around issues of women ’ s rights , racism , and opposition to colonialism and apartheid .
Peace movements targeted nuclear weapons and imperialist wars with mass support .
But an inflationary economic crisis emerged in these same countries in the mid-1970s that provoked a political and social reaction against that progress .
Coming out of World War Two the US was the pre-eminent economic and military super-power .
The new world empire was based on the US dollar functioning as the world currency .
The dollar in @ @ @ @ @ @ @ good as gold ” by having a fixed exchange rate to gold .
However , financing the budget deficits needed to run their wars in Korea and Vietnam , saw US dollars being accumulated abroad and foreign holders starting to lose confidence that the US would be able to maintain price stability .
Some demanded gold in return for their dollars .
The first casualty of the weakening US dollar was its link to gold being severed .
The US and therefore the world went off the gold standard altogether during 1971-73 .
@ @ @ @ @ @ @ economists and their “ Monetarist ” critics around Milton Friedman and the Chicago School .
But the immediate effect was to feed the inflationary tendencies already besetting the US and its allied currencies around the world .
US inflation moved from 1-2 % a year in the 1950s and late 60s to over 5 % then over 10 % a year in the 1970s before hitting a high of over 13 % in 1980 .
In New Zealand , it was , if anything , even worse .
An economic recession hit the @ @ @ @ @ @ @ combination of stagnation and inflation dubbed stagflation .
Printing more dollars to combat the recession simply fed the inflationary beast .
The dollar price of gold soared as money traders started to dump dollars for gold .
Hyperinflation threatened which would have ended the US ’ s role as the economically dominant empire .
The US rulers were determined to protect their dominance at almost any price including doing whatever was needed to break the inflationary spiral and restore the stability of the dollar as the pre-eminent world currency .
The man given @ @ @ @ @ @ @ Paul Volker who was appointed to head the US Federal Reserve Bank in August 1979 .
Volker had also been involved in the earlier decision to go off the gold standard under former President Nixon .
What was dubbed the “ Volker Shock ” required pushing the official cash rate up to a peak of 20 % in 1981 .
Inevitably a deep recession ensued in 1981-82 pushing unemployment up to 10 % .
Saudi Arabia and other Gulf states also played a critical role by depositing their hundreds of billions of petro-dollars @ @ @ @ @ @ @ wanted to know the secret behind the “ unbreakable ” US-Saudi alliance that is it .
The dollar was restored , inflation was broken , dropping from 14.8 % in March 1980 to below 3 % by 1983 .
The era of financialisation and de-industrialisation also ensued over the following decades .
General Electric became GE Money because it was easier for capitalists to make money by being financial capitalists than it was by being industrial capitalists .
The deep recessions alongside shifting production in key industries to China and other Third World @ @ @ @ @ @ @ the insurgent labour movements in the advanced capitalist world .
A new ideology that glorified free markets , free trade , and declared the resultant wealth accumulation and inequality as necessary and beneficial to society .
Profit-seeking above all else was deemed the driver of capitalism and promoted productivity and efficiency because only the most efficient could win .
The fact it also created a small class of billionaires dominating global production through their vast monopolies was again just a necessary evil at worst and something to be glorified in reality .
“ @ @ @ @ @ @ @ mantra .
This system is ruthlessly efficient .
But is also a system that requires uninterrupted growth and maximum exploitation of labour and the environment .
It is also a system that requires an endless growth of debt of all sorts to keep the next few decades of growth from ending in a new deep recession or depression .
The 1980s was the decade of the election of US President Ronald Reagan and UK Prime Minister Margaret Thatcher .
Both were aggressive union-busters and promoted an ideological return to a reactionary promotion of @ @ @ @ @ @ @ society .
In fact , “ there is no such thing as society ” declared the pathological Thatcher .
Monetarists were put in charge of economic policy everywhere and they tended to discourage the accumulation of public debt but be rather indifferent to the expansion of private debt .
Right wing governments didn ’ t necessarily follow their prescriptions , however , especially when it came to budgets for war and tax cuts for the rich causing deficit spending and debt accumulation .
Reserve Banks were given “ independence ” from governement policy @ @ @ @ @ @ @ a low and regular inflation rate of 1-3 % by targetting a steady expansion of the “ money supply ” which they incorrectly conflate as including both government-issued token money and bank-created credit money .
They promised that such policies would eliminate recessions and allow for the uninterrupted expansion of capitalist production .
Stability was restored , but the next three decades saw three business cycles that were anaemic compared to capitalism ’ s glory days after World War Two .
And they seemed to require ever-larger doses of debt to keep expansions @ @ @ @ @ @ @ hitting .
Every form of debt has grown enormously over the three decades from 1980 to 2010 – government , household , corporate and yet we ended that period with the “ Great Recession ” of 2007-8 which was the deepest crash in the capitalist system since the 1930s Great Depression .
This has now been followed by what could be the “ Greater Depression ” of 2020 .
Getting out of the Great Recession required the application of monetary and fiscal measures that had not been ever applied on that scale before @ @ @ @ @ @ @ in the 1980s to protect against a new inflationary crisis as we saw in the 1970s to save the US dollar and world empire .
The US Treasury brought US government debt instruments directly to support the banks during the 2007-08 crisis and maintain liquidity in the system .
This is an electronic version of “ printing money.
” As the crisis continued to deepen the treasury began buying distressed debt instruments connected to the housing market from banks and other financial institutions as well .
In normal circumstances printing money on this @ @ @ @ @ @ @ the currency and an inflationary surge .
This did not happen this time because the crisis had advanced to the point where money markets had already gone on a flight to safety into the US dollar .
The 1 % were happy to hold onto cash or retire debt rather than spending it more broadly .
Inevitably this hoard did leak out into new financial bubbles in real estate and the sharemarket though .
But the US Fed had promised to stop the quantitative easing and begin to withdraw the extra dollars from @ @ @ @ @ @ @ restored .
A return to orthodoxy was considered inevitable .
But every time they moved in that direction the market reacted by deflating the stock market and threatening a new recession .
US President Trump also reacted by trying to browbeat the Fed to maintain an upturn through to his re-election in November this year .
The end result was the longest but weakest post-war recovery ever in a business cycle .
Industrial production at the end of the recovery was at 80 % of capacity which was the number associated with the @ @ @ @ @ @ @ peak of the boom , in the first three decades after World War Two .
This partial “ recovery ” had also needed the re-emergence of massive new levels of third-world debt , corporate debt , household debt .
Government debt had also radically expanded to finance the 2007-08 bailout in the US , Japan and across Europe .
Trump also doubled down by also providing new tax concessions to the super-rich in the US which drove up the ongoing deficit in government spending .
But before the corona-virus pandemic hit in March @ @ @ @ @ @ @ recession with durable sales like automobiles down significantly .
Then in September 2019 and March 2020 what is called the “ Repo market ” froze up .
This market is never meant to freeze .
Howver , it did in 2008 and twice more recently .
The Repo market is an overnight settling of accounts between banks , financial institutions , and major players that uses only the safest instruments like government bonds .
If this market freezes it is saying that no one trusts each other anymore – even for 24-hours .
@ @ @ @ @ @ @ transaction in these markets to ensure “ confidence ” was restored and the market didn ’ t collapse altogether and take down a whole series of debt-laden companies unable to refinance even short-term debt as needed .
Trillions of dollars were poured into markets in the US and extended in credit to central banks across the globe to do the same in their countries .
New Zealand soon followed suit with guarantees for government and city council bond purchases as our own form of quantitative easing .
This was not required in 2008 @ @ @ @ @ @ @ was less exposed to some of the financial chicanery perpetrated elsewhere and the recession less severe because of export support from China and Australia .
The Pandemic accelerated the impacts of the recession , required closedowns , blew up various bubbles ( at least temporarily ) , and threatened to bring the whole house of debt cards tumbling down .
This time the US bailout of the system required gargantuan sums of money for all sorts of markets .
Essentially any form of debt would be guaranteed by the US treasury .
Initially @ @ @ @ @ @ @ guaranteed and purchasing them undertaken by the Fed to keep interest rates low and drive them lower if possible .
This was followed by promising to buy almost any debt instrument , even private corporate debt .
Printing money is becoming privatised .
The 2020 crisis of capitalism has resulted in the socialisation of all risks for the capitalists .
Markets are not being allowed to “ work their magic ” in terms of allocating risk and rewards according to any economic rules .
There are laws that capitalism must obey .
The @ @ @ @ @ @ @ birth of this system were Adam Smith and David Ricardo .
They explained how the system worked .
Smith coined the term of the “ invisible hand ” that guided the system and made it so revolutionary .
As the pro-capitalist site Investopeadia explains : “ The invisible hand is a metaphor for the unseen forces that move the free market economy .
Through individual self-interest and freedom of production as well as consumption , the best interest of society , as a whole , are fulfilled .
The constant interplay of individual @ @ @ @ @ @ @ the natural movement of prices and the flow of trade.
” This invisible hand is based on the law of labour value that Smith and Ricardo both accepted and that Marx incorporated into his writings and took to their final most scientifically developed form .
Marx showed in Capital that prices ( exchange-values ) are the form that labour values take .
But as always there ’ s a contradiction between appearance and essence .
Aggregate market prices can diverge from aggregate labour values ( or at least what they would be if @ @ @ @ @ @ @ During a boom , prices drift above values .
Marx corrected the classical labour theory of value to show that a commodity ’ s price did not oscillate around a ‘ natural price ’ based upon actual labour time , but around a ‘ price of production ’ that took account of the ratio of labour and capital relative to the average , and the turnover time .
An individual commodity goes to the market to see what claim it can make on society ’ s finite amount of labour time .
In @ @ @ @ @ @ @ , however , the credit system divorces the act of purchase from the act of paying .
Lenders can lend more than they have – they leverage .
This pushes up aggregate market prices above their labour values .
Claims are being made on future labour time that may never be realised .
In a boom everything appears to be going swell , leverage continues to increase until the ‘ Minsky Moment ’ when some lenders start to panic they may not get their money back .
We then get credit crunch , @ @ @ @ @ @ @ of value acts .
Marx ’ s theory contrary to myth , fully integrates the market , as the value of a commodity can not be known until it comes to the market .
That is , it isn ’ t the actual amount of labour time inherent in the commodity that gives it value , rather the amount of society ’ s finite labour time it can claim in the marketplace .
Before fiat money , the capital devaluation was obvious in price deflation .
With fiat money , we get currency @ @ @ @ @ @ @ 2008 .
In both periods currency prices in gold rocketed .
In ‘ gold price ’ terms there was deflation .
And the reason gold still features in financial markets is it takes a certain amount of labour time to produce an ounce of it .
It is still a measure of value , as distorted as it may be due to speculation .
The point of capitalism ’ s recurrent crises is to bring aggregate market prices back into line with aggregate values .
Prices that have been inflated by leverage .
@ @ @ @ @ @ @ price deflation .
Since the decoupling with gold , currency prices can increase , but capital still gets devalued in terms of ‘ gold prices ’ as the currency itself depreciates .
The 2007/08 deleveraging was short-lived , as the ruling class bailed themselves out and passed austerity onto everyone else .
The debt bubble , and so the discrepancy between aggregate market prices and aggregate values remains .
Pro-capitalist economists can ’ t understand capitalism ’ s recurrent crises when they have the wrong , subjective , marginalist theory of value .
@ @ @ @ @ @ @ marginalist theory .
The operation of the law of value under capitalism leads to industrial cycles of boom and bust that ultimately produced a larger and more powerful system of production that conquered the globe .
The system would rebound more strongly during periods of recovery if the laws of motion governing that system are allowed to do their magic .
That continued to be true after World war Two for three decades because of the depth of the Great Depression and the suppressed demand for consumer goods as a consequence of the @ @ @ @ @ @ @ the Keynesians and the Monetarists have attempted to stop the law of value operating with full force by using fiscal or monetary policies to stop a deep recession happening that would clean out the least productive capitalists ( industrial or financial ) and reward the most efficient and productive capitalists .
The only results possible have been either an inflationary crisis or an explosion of debt that can never be repaid .
Protecting that debt from the operation of the market to reveal its true value , drags the entire system towards permanent @ @ @ @ @ @ @ of policies to combat the pandemic and associated economic crisis – which involves both a monetary and fiscal explosion – will sooner or later lead to an implosion of the entire credit and monetary system and along with it the system of capitalist production itself .
The alternative is not to let capitalism operate without any limits in terms of subjecting all labour and the planet to its uncontrolled passion to exploit all and everything for the private benefit of a tiny class of owners .
The planet can not survive another few @ @ @ @ @ @ @ Working people need to put forward solutions in the here and now that protect our class and the planet we live on in an immediate sense .
Those immediate demands can form part of a Green New Deal to transform the way we produce and live with each other .
But we should do so with our eyes open to the fact that this system can not accommodate what we need without generating new forms of crises .
We must be prepared to go beyond a system based on private greed towards one @ @ @ @ @ @ @ forward are being contested today .
A road towards nationalism , fascism , and war or a road towards peace , solidarity , and internationalism .
In the words of Rosa Luxemburg , it is “ Socialism or Barbarism ”

The system of production currently dominating the globe is in crisis. The UK economy is 20% smaller than at the beginning of the year. The US and the rest of Europe are 10% smaller. World trade and finance are freezing up. This is a crisis of unprecedented proportions and threatens a new world depression. How did this happen? What has changed in economic management and policy since the last world depression that has brought us to this point in history?
Workers and their unions seemed to be on a path of uninterrupted progression in the post World War Two world.
Advanced capitalist societies in Western Europe, North America, Australasia and Japan, seemed able to adapt enough to provide basic democratic and social rights, including elected governments and union recognition.
For at least three decades it seemed that rights and living standards broadly progressed each decade. Gross inequalities appeared to be being muted not exacerbated.
Full-employment was the official goal of all governments. Conservative and social-democratic governments had a broadly “Keynesian” economic approach. The governments and their economic advisors were confident they could smooth out the ups and downs of the business cycle, maintain full employment, and achieve uninterrupted growth.
In the mid-1980s in New Zealand, real wages reached their highest level and workers had an almost uninterrupted right to strike over any issue. We exercised that right with increasing frequency whether it was over a workplace bullying or dismissals; political strikes against the Vietnam war, nuclear warship visits or sports contacts with apartheid South Africa; or solidarity with other workers in struggle in New Zealand – including general strikes if needed.
It also appeared that society was becoming more open-minded and progressive around issues of women’s rights, racism, and opposition to colonialism and apartheid. Peace movements targeted nuclear weapons and imperialist wars with mass support.
But an inflationary economic crisis emerged in these same countries in the mid-1970s that provoked a political and social reaction against that progress.
TDB Recommends NewzEngine.com
Coming out of World War Two the US was the pre-eminent economic and military super-power. The new world empire was based on the US dollar functioning as the world currency. The dollar in turn was guaranteed to be “as good as gold” by having a fixed exchange rate to gold.
However, financing the budget deficits needed to run their wars in Korea and Vietnam, saw US dollars being accumulated abroad and foreign holders starting to lose confidence that the US would be able to maintain price stability. Some demanded gold in return for their dollars. The first casualty of the weakening US dollar was its link to gold being severed. The US and therefore the world went off the gold standard altogether during 1971-73.
This policy was applauded by both Keynesian economists and their “Monetarist” critics around Milton Friedman and the Chicago School. But the immediate effect was to feed the inflationary tendencies already besetting the US and its allied currencies around the world.
US inflation moved from 1-2% a year in the 1950s and late 60s to over 5% then over 10% a year in the 1970s before hitting a high of over 13% in 1980. In New Zealand, it was, if anything, even worse.
An economic recession hit the US in 1973-75 that turned into a combination of stagnation and inflation dubbed stagflation. Printing more dollars to combat the recession simply fed the inflationary beast. The dollar price of gold soared as money traders started to dump dollars for gold. Hyperinflation threatened which would have ended the US’s role as the economically dominant empire.
The US rulers were determined to protect their dominance at almost any price including doing whatever was needed to break the inflationary spiral and restore the stability of the dollar as the pre-eminent world currency.
The man given the job by US President Carter was Paul Volker who was appointed to head the US Federal Reserve Bank in August 1979. Volker had also been involved in the earlier decision to go off the gold standard under former President Nixon. What was dubbed the “Volker Shock” required pushing the official cash rate up to a peak of 20% in 1981. Inevitably a deep recession ensued in 1981-82 pushing unemployment up to 10%. Saudi Arabia and other Gulf states also played a critical role by depositing their hundreds of billions of petro-dollars into US banks directly. If you wanted to know the secret behind the “unbreakable” US-Saudi alliance that is it.
The dollar was restored, inflation was broken, dropping from 14.8% in March 1980 to below 3% by 1983. The era of financialisation and de-industrialisation also ensued over the following decades. General Electric became GE Money because it was easier for capitalists to make money by being financial capitalists than it was by being industrial capitalists.
The deep recessions alongside shifting production in key industries to China and other Third World countries also helped break the back of the insurgent labour movements in the advanced capitalist world.
A new ideology that glorified free markets, free trade, and declared the resultant wealth accumulation and inequality as necessary and beneficial to society. Profit-seeking above all else was deemed the driver of capitalism and promoted productivity and efficiency because only the most efficient could win.
The fact it also created a small class of billionaires dominating global production through their vast monopolies was again just a necessary evil at worst and something to be glorified in reality. “Greed is good” became the capitalist mantra.
This system is ruthlessly efficient. But is also a system that requires uninterrupted growth and maximum exploitation of labour and the environment.
It is also a system that requires an endless growth of debt of all sorts to keep the next few decades of growth from ending in a new deep recession or depression.
The 1980s was the decade of the election of US President Ronald Reagan and UK Prime Minister Margaret Thatcher. Both were aggressive union-busters and promoted an ideological return to a reactionary promotion of individual self-interest over the collective interests of society. In fact, “there is no such thing as society” declared the pathological Thatcher.
Monetarists were put in charge of economic policy everywhere and they tended to discourage the accumulation of public debt but be rather indifferent to the expansion of private debt. Right wing governments didn’t necessarily follow their prescriptions, however, especially when it came to budgets for war and tax cuts for the rich causing deficit spending and debt accumulation. Reserve Banks were given “independence” from governement policy control with a policy prescription to target a low and regular inflation rate of 1-3% by targetting a steady expansion of the “money supply” which they incorrectly conflate as including both government-issued token money and bank-created credit money.
They promised that such policies would eliminate recessions and allow for the uninterrupted expansion of capitalist production.
Stability was restored, but the next three decades saw three business cycles that were anaemic compared to capitalism’s glory days after World War Two. And they seemed to require ever-larger doses of debt to keep expansions going or prevent even deeper recessions from hitting.
Every form of debt has grown enormously over the three decades from 1980 to 2010 – government, household, corporate and yet we ended that period with the “Great Recession” of 2007-8 which was the deepest crash in the capitalist system since the 1930s Great Depression. This has now been followed by what could be the “Greater Depression” of 2020.
Getting out of the Great Recession required the application of monetary and fiscal measures that had not been ever applied on that scale before and the abandonment of monetary orthodoxies imposed in the 1980s to protect against a new inflationary crisis as we saw in the 1970s to save the US dollar and world empire.
The US Treasury brought US government debt instruments directly to support the banks during the 2007-08 crisis and maintain liquidity in the system. This is an electronic version of “printing money.” As the crisis continued to deepen the treasury began buying distressed debt instruments connected to the housing market from banks and other financial institutions as well.
In normal circumstances printing money on this scale would result in the devaluation of the currency and an inflationary surge. This did not happen this time because the crisis had advanced to the point where money markets had already gone on a flight to safety into the US dollar. The 1% were happy to hold onto cash or retire debt rather than spending it more broadly. Inevitably this hoard did leak out into new financial bubbles in real estate and the sharemarket though.
But the US Fed had promised to stop the quantitative easing and begin to withdraw the extra dollars from the system as soon as normality was restored. A return to orthodoxy was considered inevitable. But every time they moved in that direction the market reacted by deflating the stock market and threatening a new recession.
US President Trump also reacted by trying to browbeat the Fed to maintain an upturn through to his re-election in November this year.
The end result was the longest but weakest post-war recovery ever in a business cycle. Industrial production at the end of the recovery was at 80% of capacity which was the number associated with the bottom of the downturn, not the peak of the boom, in the first three decades after World War Two.
This partial “recovery” had also needed the re-emergence of massive new levels of third-world debt, corporate debt, household debt. Government debt had also radically expanded to finance the 2007-08 bailout in the US, Japan and across Europe. Trump also doubled down by also providing new tax concessions to the super-rich in the US which drove up the ongoing deficit in government spending.
But before the corona-virus pandemic hit in March the world was already entering a new recession with durable sales like automobiles down significantly. Then in September 2019 and March 2020 what is called the “Repo market” froze up. This market is never meant to freeze. Howver, it did in 2008 and twice more recently. The Repo market is an overnight settling of accounts between banks, financial institutions, and major players that uses only the safest instruments like government bonds. If this market freezes it is saying that no one trusts each other anymore – even for 24-hours.
So the US Fed simply guaranteed every transaction in these markets to ensure “confidence” was restored and the market didn’t collapse altogether and take down a whole series of debt-laden companies unable to refinance even short-term debt as needed.
Trillions of dollars were poured into markets in the US and extended in credit to central banks across the globe to do the same in their countries. New Zealand soon followed suit with guarantees for government and city council bond purchases as our own form of quantitative easing. This was not required in 2008 in New Zealand because the banking system was less exposed to some of the financial chicanery perpetrated elsewhere and the recession less severe because of export support from China and Australia.
The Pandemic accelerated the impacts of the recession, required closedowns, blew up various bubbles (at least temporarily), and threatened to bring the whole house of debt cards tumbling down.
This time the US bailout of the system required gargantuan sums of money for all sorts of markets. Essentially any form of debt would be guaranteed by the US treasury. Initially, all US government debt instruments were guaranteed and purchasing them undertaken by the Fed to keep interest rates low and drive them lower if possible. This was followed by promising to buy almost any debt instrument, even private corporate debt. Printing money is becoming privatised.
The 2020 crisis of capitalism has resulted in the socialisation of all risks for the capitalists. Markets are not being allowed to “work their magic” in terms of allocating risk and rewards according to any economic rules.
There are laws that capitalism must obey. The first great economic thinkers associated with the birth of this system were Adam Smith and David Ricardo. They explained how the system worked. Smith coined the term of the “invisible hand” that guided the system and made it so revolutionary. As the pro-capitalist site Investopeadia explains:
“The invisible hand is a metaphor for the unseen forces that move the free market economy. Through individual self-interest and freedom of production as well as consumption, the best interest of society, as a whole, are fulfilled. The constant interplay of individual pressures on market supply and demand causes the natural movement of prices and the flow of trade.”
This invisible hand is based on the law of labour value that Smith and Ricardo both accepted and that Marx incorporated into his writings and took to their final most scientifically developed form.
Marx showed in Capital that prices (exchange-values) are the form that labour values take. But as always there’s a contradiction between appearance and essence. Aggregate market prices can diverge from aggregate labour values (or at least what they would be if they accurately represented labour values). During a boom, prices drift above values.
Marx corrected the classical labour theory of value to show that a commodity’s price did not oscillate around a ‘natural price’ based upon actual labour time, but around a ‘price of production’ that took account of the ratio of labour and capital relative to the average, and the turnover time. An individual commodity goes to the market to see what claim it can make on society’s finite amount of labour time. In total aggregate values equal aggregate production prices, however, the credit system divorces the act of purchase from the act of paying.
Lenders can lend more than they have – they leverage. This pushes up aggregate market prices above their labour values. Claims are being made on future labour time that may never be realised. In a boom everything appears to be going swell, leverage continues to increase until the ‘Minsky Moment’ when some lenders start to panic they may not get their money back. We then get credit crunch, financial crisis and recession. The law of value acts.
Marx’s theory contrary to myth, fully integrates the market, as the value of a commodity cannot be known until it comes to the market. That is, it isn’t the actual amount of labour time inherent in the commodity that gives it value, rather the amount of society’s finite labour time it can claim in the marketplace.
Before fiat money, the capital devaluation was obvious in price deflation. With fiat money, we get currency devaluation, as in the 1970s and 2008. In both periods currency prices in gold rocketed. In ‘gold price’ terms there was deflation. And the reason gold still features in financial markets is it takes a certain amount of labour time to produce an ounce of it. It is still a measure of value, as distorted as it may be due to speculation.
The point of capitalism’s recurrent crises is to bring aggregate market prices back into line with aggregate values. Prices that have been inflated by leverage. Before 1971 crises took the form of price deflation. Since the decoupling with gold, currency prices can increase, but capital still gets devalued in terms of ‘gold prices’ as the currency itself depreciates. The 2007/08 deleveraging was short-lived, as the ruling class bailed themselves out and passed austerity onto everyone else. The debt bubble, and so the discrepancy between aggregate market prices and aggregate values remains.
Pro-capitalist economists can’t understand capitalism’s recurrent crises when they have the wrong, subjective, marginalist theory of value. Price and value are always equal in marginalist theory.
The operation of the law of value under capitalism leads to industrial cycles of boom and bust that ultimately produced a larger and more powerful system of production that conquered the globe. The system would rebound more strongly during periods of recovery if the laws of motion governing that system are allowed to do their magic.
That continued to be true after World war Two for three decades because of the depth of the Great Depression and the suppressed demand for consumer goods as a consequence of the War itself.
Since then, both the Keynesians and the Monetarists have attempted to stop the law of value operating with full force by using fiscal or monetary policies to stop a deep recession happening that would clean out the least productive capitalists (industrial or financial) and reward the most efficient and productive capitalists.
The only results possible have been either an inflationary crisis or an explosion of debt that can never be repaid. Protecting that debt from the operation of the market to reveal its true value, drags the entire system towards permanent stagnation and depression.
The current combination of policies to combat the pandemic and associated economic crisis – which involves both a monetary and fiscal explosion – will sooner or later lead to an implosion of the entire credit and monetary system and along with it the system of capitalist production itself.
The alternative is not to let capitalism operate without any limits in terms of subjecting all labour and the planet to its uncontrolled passion to exploit all and everything for the private benefit of a tiny class of owners. The planet cannot survive another few decades of the same old shit.
Working people need to put forward solutions in the here and now that protect our class and the planet we live on in an immediate sense. Those immediate demands can form part of a Green New Deal to transform the way we produce and live with each other. But we should do so with our eyes open to the fact that this system cannot accommodate what we need without generating new forms of crises. We must be prepared to go beyond a system based on private greed towards one based on human needs.
Two ways forward are being contested today. A road towards nationalism, fascism, and war or a road towards peace, solidarity, and internationalism.
In the words of Rosa Luxemburg, it is “Socialism or Barbarism”
I know my choice.


thedailyblog--2020-08-13--The future starts here!

The future starts here!

Below is the final report of the Alternative Aotearoa Seminar held in Wellington on 25 July 2020 It is rich in policy proposals to avoid the country going back to “ business as usual ” and bringing all our pre-Covid problems with us .
The report has been sent to National and Labour but we have not had responses yet from Act , New Zealand First or the Green Party .
On 25 July 2020 several hundred people attended a seminar at Pipitea Marae in Poneke/Wellington , and several thousand more joined the discussion online , in the wake of @ @ @ @ @ @ @ election to imagine an Alternative Aotearoa to that which political parties are offering the nation .
The focus of the seminar was what would be needed for the social , environmental and economic transformation of Aotearoa to avoid the deeply embedded problems from the pre-pandemic era .
The seminar was co-chaired by two marvellous New Zealanders , Justice Advocate Julia Whaipooti and 2020 New Zealander of the Year and President of Equity New Zealand Jennifer Te Atamira Ward-Lealand .
The organisations represented at the seminar included : Greenpeace , Better Futures Forum , @ @ @ @ @ @ @ , Child Poverty Action Group , State Housing Action Network , School Strike for Climate , Extinction Rebellion , Te Reo o Nga Tangata/The People Speak , Unite Union , Council of Trade Unions , Migrant Workers Association , Quality Public Education Coalition , Action Station , Generation Zero , 350 Aotearoa , Auckland Action Against Poverty , People Against Prisons Aotearoa and Te Ara Whatu .
This short report can not hope to capture the richness of that discussion from more than thirty contributors from our diverse communities , tangata whenua , @ @ @ @ @ @ @ and old , unionists and academics , local government and community activists .
However , it does capture the core themes and messages from the seminar and practical solutions to deep seated problems that confront our nation .
These are not new issues .
But Covid-19 has brought them to the fore in ways that we can no longer ignore .
We challenge your Party to commit to adopt these should you form part of a future government .
Vision , values and principles We seek an Aotearoa where everyone can flourish .
@ @ @ @ @ @ @ vision ?
We seek an Aotearoa without racism and where te Tiriti o Waitangi and the principles of whanaungatanga , manākitanga , kotahitanga and aroha unite us .
Again , surely no political party can reject that vision ?
We seek communities that are empowered from their roots to draw on their strengths and build their own solutions , supported by local and central government , but not beholden to them .
We seek dignity , security and respect for migrants ; secure livelihoods for those in paid work and for who don @ @ @ @ @ @ @ they are elderly , or survivors of abuse , or disabled by physical or mental health ; a fundamental right to safe warm housing ; and support that enables people to live the best lives possible .
We seek positive and aspirational goals that everyone , including the most vulnerable , can share in and achieve rather than a divisive and repressive agenda driven by fear which , through the use of state agencies of police , prisons , and immigration , perpetuates institutional racism .
We seek a tolerant process to navigate @ @ @ @ @ @ @ seek consensus or at least accommodations based on mutual understandings .
Confronting racism Aotearoa is a Tiriti-based nation .
Tino rangatiratanga is an inalienable right under Te Tiriti o Waitangi .
It is not a gift from Crown , it is an intrinsic right of hapū .
As the COVID checkpoints showed , its exercise works to the benefit of all .
Yet constitutional change has been resisted out of Pakeha fear and unwillingness to surrender privilege .
Matike Mai Aotearoa , the report on constitutional transformation , provides a framework to deliver @ @ @ @ @ @ @ He Whakaputanga o Nu Tireni and Te Tiriti o Waitangi in 1840 .
We need to let go that fear , empower tangata whenua , and embrace the Pacific and other diverse cultures that make up our 5 million .
The climate crisis , inequality , hate speech are not separate problems .
The mosque killing was an act of hate .
Diseases of colonisation and poverty kill people much more slowly .
These are not separate issues .
Poverty has a colour problem – poverty is racism .
Underlying the lovely notion @ @ @ @ @ @ @ ’ racism continued , towards the Chinese community , migrant workers , tangata whenua checkpoints .
There is not a quick fix .
Racist individuals do not exist as individuals in isolation .
As a nation we need to move out of our siloed communities and develop a strategy to have conversations where we come to understand the realities of those who are disabled , addicts , abused , exploited .
Whakapapa is the connector between the living world , the natural world and the spiritual world .
That web of relationships provides @ @ @ @ @ @ @ .
Everyone in their difference has something to contribute .
Silos are not enough .
We are collectively interdependent .
Everyone has a role in creating new futures .
• Establish a bicultural agency to promote community discussion of Matike Mai and directions for constitutional change A responsive , empowering and accountable state The state is not benign .
It has responsibilities to uphold the democratic will of the people and those in positions of leadership must be accountable to this goal .
Lessons have been learned during the Covid-19 outbreak which provide @ @ @ @ @ @ @ We have learned what can be done when people work together and there is political leadership to facilitate this .
The state will remain dominant in our lives for a long time to come and working together to solve social , environmental and economic problems points the way to the future .
Almost forty years after the neoliberal coup , the government must address the causes of systemic and repeated market failures and reform public policy to prioritise the wellbeing of people , not capital .
That requires fundamental redesign of laws on @ @ @ @ @ @ @ and state owned infrastructure and services .
New Zealand is a land of plenty which can easily provide a decent standard of living for all its citizens .
However our economic structures and taxation system has allowed a very small group to become fabulously wealthy at the expense of the rest of the community .
Poverty and inequality dominate at the expense of dignity and self-respect .
Taking into account income tax and GST , people on low incomes pay a higher proportion of what they earn in tax than the wealthiest New @ @ @ @ @ @ @ and salaries while the super wealthy can easily avoid tax on their massive unearned incomes .
Fundamental change is essential .
Our laws should be underpinned by our core values .
Our economy must serve these fundamental values , not undermine them .
The economy must serve the common good .
A long list of reports have been commissioned to examine and address the nation ’ s social , environmental , and economic crises , including the Tax Working Group , the Welfare Export Advisory Group , Our Freshwater 2020 , the Trade @ @ @ @ @ @ @ .
Yet most of their recommendations have been shelved in a pattern of inaction and neglect .
We don ’ t need rhetoric and empty promises .
We need action .
• Implement the recommendations of the reports of the Tax Working Group , the Welfare Expert Advisory Group , Our Freshwater 2020 , and the Trade for All Advisory Group • Commit to a community-wide discussion of “ tax fairness ” which includes information on the regressive nature of GST and the progressive nature of death duties , financial transactions , capital @ @ @ @ @ @ @ redistributive income and wealth taxes • Tax housing appropriately using the Risk-Free Rate Method that aggregates a person ’ s net equity in real estate and treats it as if it had earned interest at the bank • Make available government credit for community-based co-operatives providing local services for local communities Empowering youth Young people are the future of Aotearoa .
Yet they are a generation under immense pressure .
A recent ActionStation survey identifies mental health , education , body image , discrimination and stress , related to insecurity and inequality , @ @ @ @ @ @ @ The privatised , fragmented and colonised system of education , including early childhood education , creates conditions for social harm .
Diverse , bottom-up models of education that build human ability and maximise the potential of every person would unleash the human spirit in the country to envision and achieve a different future .
Young people need a sense of hope with real options for the future .
That requires real commitments to address the crises of climate and racism .
It requires safe community spaces .
It means empowering young people with @ @ @ @ @ @ @ protect themselves against exploitation .
Above all , they need to see themselves in the decision making processes that will shape their futures .
• Establish a youth assembly ( modelled on a citizens assembly ) to recommend policy directions for young New Zealanders into the future • Shift discussion from a “ climate emergency ” to a “ policy-change emergency ” to fight climate change rather than simply manage its negative impacts An ecosystem that allows us to survive A healthy ecosystem is the key to survival .
The COVID-19 pandemic exposed @ @ @ @ @ @ @ of the natural world .
That knowledge is foundational to Māori and Pacific worldviews , but ignored in our extractive , growth-driven mode of capitalism .
If we fail to heed the warning from COVID-19 pathogenic crises will become a systemic and catastrophic part of everyday life .
Everything flows from safe , healthy and sustainable communities and environment .
Investing in safe , healthy and sustainable communities also pay social and economic dividends .
That requires joined up thinking .
Sustainable transport , energy , land and water can not be relegated @ @ @ @ @ @ @ has let rip .
The climate crisis is not just happening offshore .
The legacy of land confiscation and exploitation and rejection of tikanga and indigenous science are evident as storms and floods devastate local communities , and force tāngata whenua to relocate marae and urupā .
Aotearoa is a Pacific nation .
That carries responsibilities for our collective survival .
We must value the knowledge and wisdom of peoples who have nurtured this place for millennia and hear messages of young Pacific activists who are making sacrifices now to preserve our future @ @ @ @ @ @ @ of no return .
Today ’ s young people are inheriting multiple crises not of their making .
The most existential is the survival of life on the planet itself .
We need to recognise when we have ‘ enough ’ .
Those who bear responsibility for the climate emergency need to take responsibility to act now to avoid a lethal legacy to their children .
• Set emission reduction targets that are consistent with keeping temperature increases to 1.5°C .
• Bring all agricultural emissions into the carbon trading scheme as a @ @ @ @ @ @ @ nitrogen fertiliser and support farms to transition from industrial to regenerative farming • Phase out fossil fuel infrastructure and invest in clean , locally-owned and Māori-owned energy , as well as accessible public/active/electric transport and warmer housing • Phase out all single use plastics and invest in a circular economy , including systems for refillable and reusable packaging • Establish a national and regional assemblies based on participatory democracy to based on Te Tiriti o Waitangi and include all aspects of the constitutional rights of tāngata whenua • Invest in rail for mass @ @ @ @ @ @ @ subsidies for trucks on roads with big increases in road user charges for heavy vehicles ( one single eight-tonne axle does the same road damage as 10,000 cars ) • Make public transport free across the country by prioritising public transport funding in the NZTA budget rather than new roads • Place cameras on all New Zealand ’ s 1100 commercial fishing boats and implement a zero ‘ by-catch ’ target • Insist that Fisheries New Zealand act on illegal fishing practices to stop rampant seabird and marine mammal by-catch • Lobby the @ @ @ @ @ @ @ to remove exemptions on fossil fuel use from aviation and shipping , and encourage other nations to do likewise • Provide better resourcing for the Department of Conservation and hapū and iwi partnerships so we can be more effective in protecting our natural heritage .
This includes trapping predators , removing weeds , restoring waterways and planting trees .
• Invest significantly in the restoration of nature , working alongside iwi and hapū to restore harbours , wetlands , riverbeds and forests Workers and Livelihoods There is a human right to life .
@ @ @ @ @ @ @ .
We pretend not to see the trauma of people when they can ’ t afford to live .
Decades of neoliberalism have left a legacy that has to be addressed .
This country has relied on poverty wages , precarious employment weighted by racism and age , and an exploited migrant workforce , to maintain essential services and sustain an economy that enriched an elite .
COVID 19 has redefined essential work .
Our society depends on our cleaners , our caregivers , our checkout operators .
CEOs need the workers , @ @ @ @ @ @ @ for these workers have provided short-term relief but leave the structures of inequality and exploitation intact .
Social investment and prioritising livelihoods and wellbeing pay dividends .
Government can and must create quality employment as a foundation for the future where the market has failed to do so .
We need strategies to create green jobs through a just transition for workers , especially those affected by climate mitigation strategies and digital technologies .
The state used to train people and employ people .
Social procurement policies that channel local and central government @ @ @ @ @ @ @ co-operatives that pay a living wage , especially from Māori and Pacific communities , can create real jobs and support small businesses that are the backbone of our economy .
Migrant workers are part of the ‘ 5 million ’ but have been excluded from our kindness and care for each other and are treated as political footballs .
Those who are here need to be allowed to stay and their visas delinked from employers .
Into the future , we must provide real protection for those who blow the whistle on slavery @ @ @ @ @ @ @ able to access benefits from agencies that have been purged of institutional racism and racial profiling and are driven by manaakitanga , whanaungatanga and humanity .
The legacy of the Employment Contracts Act needs to be confronted .
Workers and families need legislation to support unionisation and provide real protection for workers , and ensure workers having a voice at the table at both industry and government levels .
• Extend sick leave to 10 days per year which is able to be used from day one of employment so workers are not @ @ @ @ @ @ @ a pandemic situation • Progressively increase the minimum wage to the living wage • Implement law changes to move more employment from casual , insecure work to permanent part-time and permanent full-time work • Unshackle migrant worker visas from a single employer to reduce rampant exploitation of migrant workers • Insist migrant workers are employed directly by businesses rather than through labour contractors • Provision of union membership for new employees who can resign if they decide to • Provision of employer-allocated hours for union delegates to assist in building positive experiences for @ @ @ @ @ @ @ a legal minimum redundancy pay of 4 weeks for the first year worked and two weeks pay for each successive year worked .
These to be paid with no tax to allow a smoother transition to alternative employment • Provide Worksafe with sufficient resources and legal powers to investigate , prosecute and enforce health and safety protections for all workers .
• Criminalise wage theft as is being done in Victoria , Australia .
• Create a simplified mechanism for workers on self-employment contracts to be reclassified as employees at the direction of @ @ @ @ @ @ @ would be on the employer to then appeal the decision to the employment court ) • State provided employment and training to ensure quality jobs and a skilled workforce ( see proposed state house building agency ) • Use social procurement by local and central government to sustain local firms , local co-operatives , workers and communities Wellbeing Colonisation , institutional racism , neoliberalism , disinvestment and runaway anthropogenic climate change are conditions that deny wellbeing .
They were all created by deliberate actions .
Deliberate actions are needed to counteract them .
@ @ @ @ @ @ @ to define their own needs and drive the decision making process .
Again , COVID-19 showed how communities can care for each other .
Localised solutions , supported by public funding , saw the homeless homed and supported with flow-on gains for health and policing .
This can provide a blueprint for the future .
But investing in four lane expressways will not solve child poverty .
Nor will it build the homes we need to address the overwhelming housing crisis that continues to grow .
The money can be found ; it @ @ @ @ @ @ @ .
• Move to a system that provides citizens with public services that meet their basic human rights and needs built on constitutional reforms established through Matike Mai • Implement the findings of the Welfare Expert Advisory Group report on the welfare system • Government funding for the building of 10,000 state houses every year till we don ’ t need any more ( the state house waiting list is increasing at twice the rate the government is building state houses ) • Establish a government agency to design and build state homes @ @ @ @ @ @ @ train the next generation of apprentices • Introduce compulsory Te Reo in schools and prioritise the history of Aotearoa in the wider school curriculum • Invest in education to reduce class sizes – starting in schools in low-income communities • Initiate a plan for whole school reform to reduce bullying and violence and improve outcomes for Māori and Pacific students • Bring Early Childhood Education back into the state sector , make all teachers qualified and make it free to improve outcomes for all children .
• Remove , through state funding , @ @ @ @ @ @ @ on foreign fee-paying students .
Health Healthy lives require much more than a well funded , professional and pro-active health care system .
Despite the rhetoric about kindness and compassion during the COVID lockdown , we are far from ensuring a safe and caring society .
The business model that imposed managerialism , rationing , and market models on health care in the 1990s has utterly failed , but continues to dominate the health system .
More restructuring of the health bureaucracy will not address the underfunding , a failed competitive model , @ @ @ @ @ @ @ .
Promises of change are wearing thin .
Despite repeated inquiries and new funding the mental health system continues to destroy too many lives , especially of young people and their whānau .
Government has not grasped the need to empower and fund Tiriti-based Māori health initiatives .
The power and vested interests of corporations and lobby groups that defend big tobacco , alcohol , food , oil and energy must no longer be allowed to drown out the voices of those they harm , in particular children and young New Zealanders .
@ @ @ @ @ @ @ and wellbeing and guarantee safe , affordable and secure housing and decent food for all , especially our children .
Policy priorities need to focus on the social , economic and cultural determinants of good health and draw on the strengths and knowledge of Māori and Pacific communities , instead of the treatment of ill-health created by conditions of poverty and stress that result from flawed policies and priorities .
• Commit to increasing spending on health to cover for the decades of underinvestment • Develop a new investment model for all Health @ @ @ @ @ @ @ current unmet healthcare need – including all ethnic , cultural and other socioeconomic deprivation factors ; • changing population demographics and future service developments .
( The Proportionate Universalism Model is recommended for starting to address the socioeconomic deprivation factors ) • Work with iwi and hapū to establish a national Maori health agency with the resources to end the shameful disparity in health outcomes ( The Māori Health Authority proposed by the Simpson review lacks the power and resources to create change .
The alternative plan for the Māori Health Authority proposed @ @ @ @ @ @ @ review and by the majority of the panel is what should be implemented ) • Work with community groups to redesign mental health and addiction services so they meet the needs of individuals and their families • The Ministry of Health undertake a comprehensive national population survey to assess the quantity and nature of unmet secondary elective healthcare need every three years .
( This should be incorporated in the New Zealand Health Survey ) • End the culture of managerialism whereby decision-making is centralised in senior management and clinicians are side lined @ @ @ @ @ @ @ decision-making processes • Empower the entire health workforce employed by DHBs , including through comprehensive distributed clinical leadership and recognise that what makes good clinical sense also makes good financial sense • Devolve , implement and embed a wide range of preventative health strategies and services at all levels in communities with local leadership along with the resources to do it • Promote “ joined-up ” policymaking that is pro-health , pro-environment and pro-equity .
( The challenges we are facing in each area are linked , and so are the solutions ) @ @ @ @ @ @ @ , in particular : warm , dry , affordable homes , adequate income and freedom from violence and discrimination .
( The shocking disparity in health outcomes will persist until everyone has these basics for a healthy life ) • Embed health equity across all our social and economic goals so health investment moves from the bottom to well back from the top of the cliff .
Health should be a priority for all sectors of governments ( DHBs and health workforces structures etc are tools to achieve this but the foundations/priorities are @ @ @ @ @ @ @ ( particularly children ) from purveyors of unhealthy commodities e.g .
stronger marketing/retail restrictions on alcohol , tobacco , vapes , gambling and junk food Justice Black Lives Matter .
Aotearoa has the highest imprisonment rate of indigenous women among rich countries and the second highest overall to the US .
Most prisoners are those being held on remand .
The criminal justice system misidentifies the root cause of anti-social behavior and seeks only to remove individuals while leaving the causes unresolved : the legacy of colonisation , an ideology of individualism and @ @ @ @ @ @ @ .
People need to experience consequences of their actions , but locking people up and armed response teams are not the solution .
• Reduce the prison population substantially by repealing the Bail Amendment Act 2013 , and invest in social programming outside of the criminal justice system ( as detailed elsewhere in this report ) to prevent poverty-driven crime • Establish a cross-party working group to investigate the Finnish model of prison reform ( which has reduced the prison population by two-thirds ) with a view to adapting it to Aotearoa to @ @ @ @ @ @ @ • Decolonise our justice system at all levels through a bi-cultural engagement with Maori which is driven by Maori values

Below is the final report of the Alternative Aotearoa Seminar held in Wellington on 25 July 2020
It is rich in policy proposals to avoid the country going back to “business as usual” and bringing all our pre-Covid problems with us.
The report has been sent to National and Labour but we have not had responses yet from Act, New Zealand First or the Green Party.
Report to Political Parties from Alternative Aotearoa Seminar
August 2020
On 25 July 2020 several hundred people attended a seminar at Pipitea Marae in Poneke/Wellington, and several thousand more joined the discussion online, in the wake of Covid-19 and the lead-up to the general election to imagine an Alternative Aotearoa to that which political parties are offering the nation.
The focus of the seminar was what would be needed for the social, environmental and economic transformation of Aotearoa to avoid the deeply embedded problems from the pre-pandemic era.
The seminar was co-chaired by two marvellous New Zealanders, Justice Advocate Julia Whaipooti and 2020 New Zealander of the Year and President of Equity New Zealand Jennifer Te Atamira Ward-Lealand.
TDB Recommends NewzEngine.com
The organisations represented at the seminar included: Greenpeace, Better Futures Forum, Pacific Climate Warriors, Forest and Bird, Child Poverty Action Group, State Housing Action Network, School Strike for Climate, Extinction Rebellion, Te Reo o Nga Tangata/The People Speak, Unite Union, Council of Trade Unions, Migrant Workers Association, Quality Public Education Coalition, Action Station, Generation Zero, 350 Aotearoa, Auckland Action Against Poverty, People Against Prisons Aotearoa and Te Ara Whatu.
(The agenda for the seminar along with video and transcripts of the presentations can be seen at https://chchpn.blogspot.com/)
This short report cannot hope to capture the richness of that discussion from more than thirty contributors from our diverse communities, tangata whenua, Pasifika, migrant and Pākehā, young and old, unionists and academics, local government and community activists. However, it does capture the core themes and messages from the seminar and practical solutions to deep seated problems that confront our nation.
These are not new issues. But Covid-19 has brought them to the fore in ways that we can no longer ignore. We challenge your Party to commit to adopt these should you form part of a future government.
Vision, values and principles
We seek an Aotearoa where everyone can flourish. Surely no political party can reject that vision?
We seek an Aotearoa without racism and where te Tiriti o Waitangi and the principles of whanaungatanga, manākitanga, kotahitanga and aroha unite us. Again, surely no political party can reject that vision?
We seek communities that are empowered from their roots to draw on their strengths and build their own solutions, supported by local and central government, but not beholden to them.
We seek dignity, security and respect for migrants; secure livelihoods for those in paid work and for who don’t have that option, whether they are elderly, or survivors of abuse, or disabled by physical or mental health; a fundamental right to safe warm housing; and support that enables people to live the best lives possible.
We seek positive and aspirational goals that everyone, including the most vulnerable, can share in and achieve rather than a divisive and repressive agenda driven by fear which, through the use of state agencies of police, prisons, and immigration, perpetuates institutional racism.
We seek a tolerant process to navigate differences and embrace diverse cultural practices to seek consensus or at least accommodations based on mutual understandings.
Confronting racism
Aotearoa is a Tiriti-based nation. Tino rangatiratanga is an inalienable right under Te Tiriti o Waitangi. It is not a gift from Crown, it is an intrinsic right of hapū. As the COVID checkpoints showed, its exercise works to the benefit of all. Yet constitutional change has been resisted out of Pakeha fear and unwillingness to surrender privilege. Matike Mai Aotearoa, the report on constitutional transformation, provides a framework to deliver on the promises made in 1835 in He Whakaputanga o Nu Tireni and Te Tiriti o Waitangi in 1840. We need to let go that fear, empower tangata whenua, and embrace the Pacific and other diverse cultures that make up our 5 million.
The climate crisis, inequality, hate speech are not separate problems. The mosque killing was an act of hate. Diseases of colonisation and poverty kill people much more slowly. These are not separate issues. Poverty has a colour problem – poverty is racism. Underlying the lovely notion of the ‘team of 5 million’ racism continued, towards the Chinese community, migrant workers, tangata whenua checkpoints. There is not a quick fix. Racist individuals do not exist as individuals in isolation. As a nation we need to move out of our siloed communities and develop a strategy to have conversations where we come to understand the realities of those who are disabled, addicts, abused, exploited.
Whakapapa is the connector between the living world, the natural world and the spiritual world. That web of relationships provides a blueprint for how to achieve change. Everyone in their difference has something to contribute. Silos are not enough. We are collectively interdependent. Everyone has a role in creating new futures.
Policy solutions
Establish a bicultural agency to promote community discussion of Matike Mai and directions for constitutional change
A responsive, empowering and accountable state
The state is not benign. It has responsibilities to uphold the democratic will of the people and those in positions of leadership must be accountable to this goal.
Lessons have been learned during the Covid-19 outbreak which provide a model for the longer term. We have learned what can be done when people work together and there is political leadership to facilitate this.
The state will remain dominant in our lives for a long time to come and working together to solve social, environmental and economic problems points the way to the future.
Almost forty years after the neoliberal coup, the government must address the causes of systemic and repeated market failures and reform public policy to prioritise the wellbeing of people, not capital. That requires fundamental redesign of laws on public finance and market-driven regulation to taxation and state owned infrastructure and services.
New Zealand is a land of plenty which can easily provide a decent standard of living for all its citizens. However our economic structures and taxation system has allowed a very small group to become fabulously wealthy at the expense of the rest of the community. Poverty and inequality dominate at the expense of dignity and self-respect.
Taking into account income tax and GST, people on low incomes pay a higher proportion of what they earn in tax than the wealthiest New Zealanders. Taxation is highest on wages and salaries while the super wealthy can easily avoid tax on their massive unearned incomes. Fundamental change is essential.
Our laws should be underpinned by our core values. Our economy must serve these fundamental values, not undermine them. The economy must serve the common good.
A long list of reports have been commissioned to examine and address the nation’s social, environmental, and economic crises, including the Tax Working Group, the Welfare Export Advisory Group, Our Freshwater 2020, the Trade for All Advisory Group, among others. Yet most of their recommendations have been shelved in a pattern of inaction and neglect. We don’t need rhetoric and empty promises. We need action.
Policy solutions
Implement the recommendations of the reports of the Tax Working Group, the Welfare Expert Advisory Group, Our Freshwater 2020, and the Trade for All Advisory Group
Commit to a community-wide discussion of “tax fairness” which includes information on the regressive nature of GST and the progressive nature of death duties, financial transactions, capital gains (or net equity), redistributive income and wealth taxes
Tax housing appropriately using the Risk-Free Rate Method that aggregates a person’s net equity in real estate and treats it as if it had earned interest at the bank
Make available government credit for community-based co-operatives providing local services for local communities
Empowering youth
Young people are the future of Aotearoa. Yet they are a generation under immense pressure. A recent ActionStation survey identifies mental health, education, body image, discrimination and stress, related to insecurity and inequality, as among their most pressing problems.
The privatised, fragmented and colonised system of education, including early childhood education, creates conditions for social harm. Diverse, bottom-up models of education that build human ability and maximise the potential of every person would unleash the human spirit in the country to envision and achieve a different future.
Young people need a sense of hope with real options for the future. That requires real commitments to address the crises of climate and racism. It requires safe community spaces. It means empowering young people with knowledge of their rights and ways to protect themselves against exploitation. Above all, they need to see themselves in the decision making processes that will shape their futures.
Policy solutions
Establish a youth assembly (modelled on a citizens assembly) to recommend policy directions for young New Zealanders into the future
Shift discussion from a “climate emergency” to a “policy-change emergency” to fight climate change rather than simply manage its negative impacts
An ecosystem that allows us to survive
A healthy ecosystem is the key to survival. The COVID-19 pandemic exposed the inter-dependence of humankind with all elements of the natural world. That knowledge is foundational to Māori and Pacific worldviews, but ignored in our extractive, growth-driven mode of capitalism. If we fail to heed the warning from COVID-19 pathogenic crises will become a systemic and catastrophic part of everyday life.
Everything flows from safe, healthy and sustainable communities and environment. Investing in safe, healthy and sustainable communities also pay social and economic dividends. That requires joined up thinking. Sustainable transport, energy, land and water cannot be relegated to remedial piecemeal efforts once the market has let rip.
The climate crisis is not just happening offshore. The legacy of land confiscation and exploitation and rejection of tikanga and indigenous science are evident as storms and floods devastate local communities, and force tāngata whenua to relocate marae and urupā.
Aotearoa is a Pacific nation. That carries responsibilities for our collective survival. We must value the knowledge and wisdom of peoples who have nurtured this place for millennia and hear messages of young Pacific activists who are making sacrifices now to preserve our future.
Aotearoa is already approaching the point of no return. Today’s young people are inheriting multiple crises not of their making. The most existential is the survival of life on the planet itself. We need to recognise when we have ‘enough’. Those who bear responsibility for the climate emergency need to take responsibility to act now to avoid a lethal legacy to their children.
Policy solutions
Set emission reduction targets that are consistent with keeping temperature increases to 1.5°C.
Bring all agricultural emissions into the carbon trading scheme as a matter of urgency
Phase out synthetic nitrogen fertiliser and support farms to transition from industrial to regenerative farming
Phase out fossil fuel infrastructure and invest in clean, locally-owned and Māori-owned energy, as well as accessible public/active/electric transport and warmer housing
Phase out all single use plastics and invest in a circular economy, including systems for refillable and reusable packaging
Establish a national and regional assemblies based on participatory democracy to based on Te Tiriti o Waitangi and include all aspects of the constitutional rights of tāngata whenua
Invest in rail for mass transportation of goods and people
End subsidies for trucks on roads with big increases in road user charges for heavy vehicles (one single eight-tonne axle does the same road damage as 10,000 cars)
Make public transport free across the country by prioritising public transport funding in the NZTA budget rather than new roads
Place cameras on all New Zealand’s 1100 commercial fishing boats and implement a zero ‘by-catch’ target
Insist that Fisheries New Zealand act on illegal fishing practices to stop rampant seabird and marine mammal by-catch
Lobby the United Nations Framework Convention on Climate Change to remove exemptions on fossil fuel use from aviation and shipping, and encourage other nations to do likewise
Restore nature:
Provide better resourcing for the Department of Conservation and hapū and iwi partnerships so we can be more effective in protecting our natural heritage. This includes trapping predators, removing weeds, restoring waterways and planting trees.
Implement tougher rules to protect our fresh water
Phase out environmentally damaging irrigation schemes
Invest significantly in the restoration of nature, working alongside iwi and hapū to restore harbours, wetlands, riverbeds and forests
Workers and Livelihoods
There is a human right to life. People need access to money for life. We pretend not to see the trauma of people when they can’t afford to live. Decades of neoliberalism have left a legacy that has to be addressed. This country has relied on poverty wages, precarious employment weighted by racism and age, and an exploited migrant workforce, to maintain essential services and sustain an economy that enriched an elite.
COVID 19 has redefined essential work. Our society depends on our cleaners, our caregivers, our checkout operators. CEOs need the workers, not the reverse. The emergency measures for these workers have provided short-term relief but leave the structures of inequality and exploitation intact.
Social investment and prioritising livelihoods and wellbeing pay dividends. Government can and must create quality employment as a foundation for the future where the market has failed to do so. We need strategies to create green jobs through a just transition for workers, especially those affected by climate mitigation strategies and digital technologies.
The state used to train people and employ people. Social procurement policies that channel local and central government contracts to sustainable New Zealand firms and co-operatives that pay a living wage, especially from Māori and Pacific communities, can create real jobs and support small businesses that are the backbone of our economy.
Migrant workers are part of the ‘5 million’ but have been excluded from our kindness and care for each other and are treated as political footballs. Those who are here need to be allowed to stay and their visas delinked from employers. Into the future, we must provide real protection for those who blow the whistle on slavery and exploitation.
Everyone needs to be able to access benefits from agencies that have been purged of institutional racism and racial profiling and are driven by manaakitanga, whanaungatanga and humanity.
The legacy of the Employment Contracts Act needs to be confronted. Workers and families need legislation to support unionisation and provide real protection for workers, and ensure workers having a voice at the table at both industry and government levels.
Policy Solutions:
Provide a government guarantee of full employment
Extend sick leave to 10 days per year which is able to be used from day one of employment so workers are not having to go to work unwell in a pandemic situation
Progressively increase the minimum wage to the living wage
Implement law changes to move more employment from casual, insecure work to permanent part-time and permanent full-time work
Unshackle migrant worker visas from a single employer to reduce rampant exploitation of migrant workers
Insist migrant workers are employed directly by businesses rather than through labour contractors
Provision of union membership for new employees who can resign if they decide to
Provision of employer-allocated hours for union delegates to assist in building positive experiences for employees and stronger employment relationships
Provide a legal minimum redundancy pay of 4 weeks for the first year worked and two weeks pay for each successive year worked. These to be paid with no tax to allow a smoother transition to alternative employment
Provide Worksafe with sufficient resources and legal powers to investigate, prosecute and enforce health and safety protections for all workers.
Criminalise wage theft as is being done in Victoria, Australia.
Create a simplified mechanism for workers on self-employment contracts to be reclassified as employees at the direction of a labour inspector. (The onus would be on the employer to then appeal the decision to the employment court)
Provide Income protection for precarious workers with early retirement options
State provided employment and training to ensure quality jobs and a skilled workforce (see proposed state house building agency)
Use social procurement by local and central government to sustain local firms, local co-operatives, workers and communities
Wellbeing
Colonisation, institutional racism, neoliberalism, disinvestment and runaway anthropogenic climate change are conditions that deny wellbeing. They were all created by deliberate actions. Deliberate actions are needed to counteract them.
Whanau and communities need to be empowered to define their own needs and drive the decision making process. Again, COVID-19 showed how communities can care for each other. Localised solutions, supported by public funding, saw the homeless homed and supported with flow-on gains for health and policing. This can provide a blueprint for the future. But investing in four lane expressways will not solve child poverty. Nor will it build the homes we need to address the overwhelming housing crisis that continues to grow. The money can be found; it depends on how we order our priorities.
Policy Solutions:
Move to a system that provides citizens with public services that meet their basic human rights and needs built on constitutional reforms established through Matike Mai
Implement the findings of the Welfare Expert Advisory Group report on the welfare system
Government funding for the building of 10,000 state houses every year till we don’t need any more (the state house waiting list is increasing at twice the rate the government is building state houses)
Establish a government agency to design and build state homes and use this agency to employ and train the next generation of apprentices
Fund community solidarity initiatives to fight racism, prejudice and supremacist views
Introduce compulsory Te Reo in schools and prioritise the history of Aotearoa in the wider school curriculum
Invest in education to reduce class sizes – starting in schools in low-income communities
Initiate a plan for whole school reform to reduce bullying and violence and improve outcomes for Māori and Pacific students
Bring Early Childhood Education back into the state sector, make all teachers qualified and make it free to improve outcomes for all children.
Remove, through state funding, the dependence of the public education sector on foreign fee-paying students.
Health
Healthy lives require much more than a well funded, professional and pro-active health care system. Despite the rhetoric about kindness and compassion during the COVID lockdown, we are far from ensuring a safe and caring society. The business model that imposed managerialism, rationing, and market models on health care in the 1990s has utterly failed, but continues to dominate the health system. More restructuring of the health bureaucracy will not address the underfunding, a failed competitive model, lack of leadership and a managerialist culture.
Promises of change are wearing thin. Despite repeated inquiries and new funding the mental health system continues to destroy too many lives, especially of young people and their whānau. Government has not grasped the need to empower and fund Tiriti-based Māori health initiatives.
The power and vested interests of corporations and lobby groups that defend big tobacco, alcohol, food, oil and energy must no longer be allowed to drown out the voices of those they harm, in particular children and young New Zealanders.
A holistic approach needs to reimagine health and wellbeing and guarantee safe, affordable and secure housing and decent food for all, especially our children. Policy priorities need to focus on the social, economic and cultural determinants of good health and draw on the strengths and knowledge of Māori and Pacific communities, instead of the treatment of ill-health created by conditions of poverty and stress that result from flawed policies and priorities.
Policy Solutions
Commit to increasing spending on health to cover for the decades of underinvestment
Develop a new investment model for all Health funding that takes account of: the backdated funding shortfall; current unmet healthcare need – including all ethnic, cultural and other socioeconomic deprivation factors; changing population demographics and future service developments. (The Proportionate Universalism Model is recommended for starting to address the socioeconomic deprivation factors)
Work with iwi and hapū to establish a national Maori health agency with the resources to end the shameful disparity in health outcomes (The Māori Health Authority proposed by the Simpson review lacks the power and resources to create change. The alternative plan for the Māori Health Authority proposed by the Māori advisory group to the review and by the majority of the panel is what should be implemented)
Work with community groups to redesign mental health and addiction services so they meet the needs of individuals and their families
The Ministry of Health undertake a comprehensive national population survey to assess the quantity and nature of unmet secondary elective healthcare need every three years. (This should be incorporated in the New Zealand Health Survey)
End the culture of managerialism whereby decision-making is centralised in senior management and clinicians are side lined through the use of democratic and participatory decision-making processes
Empower the entire health workforce employed by DHBs, including through comprehensive distributed clinical leadership and recognise that what makes good clinical sense also makes good financial sense
Devolve, implement and embed a wide range of preventative health strategies and services at all levels in communities with local leadership along with the resources to do it
More widely:
Promote “joined-up” policymaking that is pro-health, pro-environment and pro-equity. (The challenges we are facing in each area are linked, and so are the solutions)
Prioritise the wider determinants of health, in particular: warm, dry, affordable homes, adequate income and freedom from violence and discrimination. (The shocking disparity in health outcomes will persist until everyone has these basics for a healthy life)
Embed health equity across all our social and economic goals so health investment moves from the bottom to well back from the top of the cliff. Health should be a priority for all sectors of governments (DHBs and health workforces structures etc are tools to achieve this but the foundations/priorities are not right yet)
Protect consumers (particularly children) from purveyors of unhealthy commodities e.g. stronger marketing/retail restrictions on alcohol, tobacco, vapes, gambling and junk food
Justice
Black Lives Matter. Aotearoa has the highest imprisonment rate of indigenous women among rich countries and the second highest overall to the US. Most prisoners are those being held on remand. The criminal justice system misidentifies the root cause of anti-social behavior and seeks only to remove individuals while leaving the causes unresolved: the legacy of colonisation, an ideology of individualism and a reality of economic deprivation and alienation. People need to experience consequences of their actions, but locking people up and armed response teams are not the solution.
Policy solutions


thedailyblog--2020-08-14--Don’t condemn Covid conspiracy theorists – show some respect!

It ’ s very fashionable for the middle class to roll their eyes and shake their heads at the lunatic ideas out there about Covid 19 and the local expression of conspiracy theories about the virus through the New Zealand Public Party .
The party leader Bill Te Hakika is gaining a significant following with claims we are being brainwashed to accept totalitarian government through a communist takeover .
He seems to believe the end of our freedoms is being planned by power-crazed politicians using a fake virus to create community panic and have us agree to sign over our @ @ @ @ @ @ @ ( Inexplicably Deputy National Party leader Gerry Brownlee fuelled the fire with outrageous comments suggesting the government had colluded with health officials to withhold information about the latest outbreak for political advantage .
Enough said ) Most of the people drawn into the New Zealand Public Party and its conspiracy theories see little reason to believe in a “ team of five million ” .
Many have spent their lives without being treated with dignity or respect by politicians or government agencies .
They have seen their living standards go backwards for decades @ @ @ @ @ @ @ talk about better times ahead under this or that party .
Betrayal is their experience of politics .
( If you don ’ t understand those last three sentences , then you haven ’ t been paying attention and you are part of the problem ) They have been reviled by National-led governments as an irredeemable “ underclass ” and either ignored or patronised by Labour-led governments .
Either way nothing gets better .
These are people who in the UK voted for Brexit and in the US voted for Trump .
They @ @ @ @ @ @ @ would they ? )
or health officials because they have experienced the harsh realities of living with poverty and gross inequality in a land of plenty .
I don ’ t blame them for being angry or susceptible to bullshit ideas and it ’ s hardly surprising they are prepared to listen to anyone who blames politicians and the political system for the constraints on their freedoms they are told they must accept because of Covid 19 .
( It could be many of them feel quite keenly that “ Freedom ’ s @ @ @ @ @ @ @ lose ” ) So condemn the bullshit ideas but start treating all people with dignity and respect .
There ’ s no better way to do this than read through the final report of the Alternative Aotearoa seminar and start making demands of our corporate-funded politicians .

It’s very fashionable for the middle class to roll their eyes and shake their heads at the lunatic ideas out there about Covid 19 and the local expression of conspiracy theories about the virus through the New Zealand Public Party.
The party leader Bill Te Hakika is gaining a significant following with claims we are being brainwashed to accept totalitarian government through a communist takeover. He seems to believe the end of our freedoms is being planned by power-crazed politicians using a fake virus to create community panic and have us agree to sign over our democracy to billionaires and corrupt politicians. (Inexplicably Deputy National Party leader Gerry Brownlee fuelled the fire with outrageous comments suggesting the government had colluded with health officials to withhold information about the latest outbreak for political advantage. Enough said)
Most of the people drawn into the New Zealand Public Party and its conspiracy theories see little reason to believe in a “team of five million”. Many have spent their lives without being treated with dignity or respect by politicians or government agencies. They have seen their living standards go backwards for decades and are no longer listening when politicians talk about better times ahead under this or that party. Betrayal is their experience of politics. (If you don’t understand those last three sentences, then you haven’t been paying attention and you are part of the problem)
They have been reviled by National-led governments as an irredeemable “underclass” and either ignored or patronised by Labour-led governments. Either way nothing gets better.
These are people who in the UK voted for Brexit and in the US voted for Trump. They don’t respect politicians (why would they?) or health officials because they have experienced the harsh realities of living with poverty and gross inequality in a land of plenty.
I don’t blame them for being angry or susceptible to bullshit ideas and it’s hardly surprising they are prepared to listen to anyone who blames politicians and the political system for the constraints on their freedoms they are told they must accept because of Covid 19. (It could be many of them feel quite keenly that “Freedom’s just another word for nothing left to lose”)
So condemn the bullshit ideas but start treating all people with dignity and respect.
There’s no better way to do this than read through the final report of the Alternative Aotearoa seminar and start making demands of our corporate-funded politicians.