Wednesday, 16 May 2007

Where is NZ Labour going?

From Social Democracy to Social Liberalism


Over the past century, socialists worldwide have often called for a "class vote" for social democratic and Labour parties. That's because these mass reformist parties, while elitist and pro-capitalist, were profoundly influenced by the union hierarchy and did in a distorted way embody workers' hopes for a better world.

Some socialists in this country still hold this view of NZ Labour, which they call "the mass party of the working class".

According to others, the very opposite is true. NZ Labour, they insist, is a capitalist party in exactly the same mould as National.

These two viewpoints, we believe, represent a false choice. There's another viewpoint which we put forward in this article.

NZ Labour is no longer a traditional reformist party, giving voice to some working class interests, although always within the narrow limits allowed by capitalism.

But neither has it become a carbon copy of National, a neo-liberal party of business for business.

Increasingly, NZ Labour is a party not of unions or of business, but of lawyers, administrators, "creatives" and others from the new middle class. The party's new rulers support social reforms dear to their heart, but embrace neo-liberal economics which kicks the working class in the guts. This fusion of social reforms and neo-liberal economics gives us a label for NZ Labour today: social-liberal.

While this transformation isn't yet complete, since union leaders retain some influence in Labour on some issues, it is so well advanced that only a political earthquake could reverse it.

The 'liberal' part

In the six decades between the First World War and the 1970s, the world's social democratic parties ditched even the rhetoric of class struggle and made their terms with capitalism. During the long boom of 1945-75, big business bought social peace and economic stability by allowing reformist governments to siphon off a portion of their record profits into the welfare state.

But as Grant Morgan noted in the last UNITY:

When global capitalism's profit crisis struck in the mid-1970's, social democratic politicians everywhere were faced with a stark choice. They could cut social welfare, bankroll the markets and attack workers' rights. Or they could organise a mass fightback against capitalism's rulers.

David Lange's Labour government, elected in 1984, chose the path of market extremism. These Rogernomes hammered the working class. They engineered the biggest transfer of wealth from the poor to the rich in New Zealand's history.

Global capitalism demanded that its crisis be paid for by the working class. And social democratic parties were too wedded to co-managing capitalism to even think of fighting back.

Centre-left governments in New Zealand, Australia, France, Spain and elsewhere downsized the welfare state, privatised state industries, deregulated currency speculation, axed tariff barriers, backed corporate globalisation and handcuffed the unions. Elsewhere, this neo-liberal strategy was driven forward by arch-conservatives like Ronald Reagan in America and Margaret Thatcher in Britain.

The 'social' part

Today's Labour Party is dominated by lawyers, administrators, academics, professionals, artists, designers, researchers and others from the new middle class. They play an important role in late capitalism's information technology and global production. The new middle class aren't direct exploiters of workers, nor do they have a boss breathing down their neck all day. They form a layer between capital and labour, often mediating between these two main classes.

They flooded into Labour from the 1960s as changes in capitalist production hugely inflated their numbers to upwards of 15% of the population. (Whereas there was a percentage decline of shopkeepers, tradespeople, farmers and others in the old middle class.)

During the 1980s, as the ruling Rogernomes steamrollered over the union movement, the new middle class began to take control of Labour.

They sponsored the extension of gay, Maori and women's rights and other social reforms that expanded their social influence and fitted with their notions of individual justice.

Since the social privileges of the new middle class hinge on their usefulness to capitalism, most of them embraced corporate globalisation. So their social reforms came at the price of seriously worsening the collective position of the working class.

In reaction, Maori settlements and civil unions are now widely seen as Labour giving rights to special groups while workers are ignored or worse. National's sneers about Labour's "political correctness" tap into this pool of resentment.

It would all be different if these social reforms went hand-in-hand with Labour giving workers more pay and more say. But such a challenge to capitalist profits and power could only come from a party embedded in jobsites and unions which drew on the militant traditions of workers. And NZ Labour simply isn't that party.

Two class party

NZ Labour was formed in 1916 by unionists and socialists as a parliamentary opposition to capitalism.

Harry Holland, who became the party's first leader, told a by-election meeting in 1918 that he accepted the label "Bolshevik" since Lenin's socialist party had "stood true to working class principles". Holland's words didn't stop him being voted into parliament for the first time. In the general election a year later Labour won a quarter of the total vote, bolstered by a wave of strikes and the birth of the Alliance of Labour, a union federation that talked tough.

In 1925, however, Communists were banned from holding dual membership in NZ Labour. This split marked the party's shift from democratic socialism to social democracy, which pledged to limit working class ambitions to what capitalism could live with.

From that point on, NZ Labour was clearly a two class party. The union leaders who dominated the party pushed for practical measures to improve the position of workers, but in return pledged that Labour would be a "responsible" manager of capitalism.

Over the past 20 years, New Zealand's union movement has been ravaged by waves of attacks from government and business. A weakened union hierarchy has been shoved well into the background of the Labour Party by the new middle class. This process is now so well advanced that UNITY's survey of union activists found that two-thirds believe unions have either little influence in Labour (48%) or clearly not enough (18%).

The largely-completed transfer of power within Labour from union leaders to the new middle class marks the party's shift from social democracy to social liberalism.

Labour remains a two class party, committed to marrying neo-liberal economics with social reforms wanted by the new middle class. It's just a different type of two class party than it was from at least 1925 to fairly recent times.

Implications for workers

According to Marxists, the working class comprises three-quarters or more of New Zealand society. These are both "blue" and "white" collar workers in factories, hospitals, restaurants, schools, transport, banks, shops and elsewhere who labour under the direction of capitalism's bosses and bureaucrats, plus non-working family members.

But social liberalism, reflecting the viewpoint of the new middle class, denies there is any such thing as the working class.

Therefore the union movement is seen by social liberals as just one more minority group with the right to put its case, but certainly no right to speak or act on behalf of the vast majority of society.

So the shift of power within Labour has major implications for workers. The sidelining of union influence within the party, coupled with the external pressures of corporate globalisation, mean the limited reforms once offered by Labour governments to workers are now largely a thing of the past.

It's true that, to get returned to government in 1999, Labour had to promise workers some concessions, but they were extremely limited. For instance, repeal of the Employment Contracts Act gave union officials the right of entry to workplaces, but all except one of National's harsh bans on strikes were retained.

Moreover, promises made in 1999 often sounded much better than what actually happened. While accident compensation was re-nationalised, for example, ACC is now run as a tight-fisted, profit-making corporation little different in practice to private insurers.

And some policies which Helen Clark claimed credit for were actually the result of Alliance pressure inside her coalition government coupled with union campaigns outside. Paid parental leave and an extra week's holiday fall into this category.

Since enacting its 1999 promises, Labour has done many nasty things to workers. A couple of current examples: Labour won't lift the minimum wage to $12, saying low-paid workers must wait until 2008 and then cabinet will see if the bosses can afford it. And Labour is negotiating a free trade agreement with China which, warns the Council of Trade Unions, could have "devastating effects" on hundreds of thousands of NZ workers.

Even Labour's "Working for Families" package, while putting some state cash in workers' pockets, takes pressure off bosses to lift lousy pay rates. It's another tool for Helen Clark's government to consolidate a low-wage economy while reaching out for working class votes. But such political deceptions are hard to maintain for long.

What about the future?

Labour cannot be changed by working quietly, or even noisily, on "the inside" of the party. Many leftists have tried that strategy since Rogernomics, and all have failed.

But could the growth of workers' struggles strengthen union influence inside Labour once again and turn the party away from social liberalism?

While that's possible, it's more likely that a workers' revolt would create a damaging split inside Labour which fed into a powerful challenge by another party. That was certainly the experience of the Alliance days, when workers' hatred of Rogernomics fueled a left-wing splitaway which seriously challenged Labour for several years.

The Greens and Maori Party oppose large parts of Labour's neo-liberal economics. They do so, however, not as elected representatives of the union movement, but from the standpoint of Green ecology and Maori nationalism.

Right now, the working class is left without a political voice in parliament.

What's needed is a new political movement based in jobsites and unions, whose activists are solidly of and for the working class and whose objective is to replace corporate power with a grassroots alternative.

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