From the edge of the world, an idea or two

New Zealand a think tank? We’re 4.4 million at the bottom of the world specialising in exporting much of our best talent to more interesting, challenging and rewarding places.

We’re inventive. But our inventors mostly sell out to live the triple-B life plus offshore comforts. Governments have kept research funding below the OECD government average, thinking that they mustn’t pick winners (except for Sir Peter Jackson), that the point is early commercial wins, that this country is too small and that voters want the money spent on other things.

So we do cows and R&R. The wages aren’t great but it’s a great place to bring up kids (then export them to where the wages are great).

Apply this thinking to eighteenth-century Scotland, backward, poor, small, on the outer fringe of Europe, dominated by next-door England — and home to David Hume, described by the Stanford Encyclopaedia of Philosophy as “the most important philosopher ever to write in English”, and Adam Smith, founder of modern economics, who between them created a better version of the Enlightenment than the populous, continental French. Try small fifth-century BC Athens where Socrates, Plato and Aristotle revolutionised philosophy and Thucydides wrote the first serious history.

Now note today’s big global shift: the transformational combination of digital technology and globalisation, with nanotechnology and genetics starting to open wide new opportunities; the over-reach and collapse of much of the rich world’s finance sectors; the success (so far) of Chinese state-led capitalism and its growing military and political power; the pressure on water, food, oil and mineral resources; the looming end to the “population bonus” which part-fuelled the past six decades’ spectacular global economic growth.

Only with innovative analyses, theories and policy prescriptions will we make sense of and manage the resultant, very different, “new normal”.

There is a nascent library of books and articles on those points. None yet matches Smith or Lord Keynes or even Milton Friedman in economics or Hume and Karl Marx in politics as creators of new thinking for new times.

Can some 35-year-old do that from this outermost edge of humanity? We can invent things. Why not ideas?

In science we have. Two New Zealanders made arguably the twentieth century’s greatest game-changing leaps: Lord Rutherford, the atom-splitter, and Maurice Wilkins, co-discoverer of DNA. But in economics and politics we have no Hume/Smith parallels, though we have generated next-level world-class thinkers, among them historians John Pocock and James Belich.

New Zealand has nevertheless, in bursts, invented and applied ground-breaking policy technologies: state-paid pensions and workplace conciliation and arbitration in the 1890s; social security in the 1930s; inflation targeting, long-range budgeting and state sector “managerialism” in the 1980s; and biculturalism in the 1990s.

The challenge is to do that again: to find “what works” — John Key’s lodestar — in the “new normal”. It won’t be 1930s-70s mixed-economy Keynesianism, reheated as some writers want, or the 1980s-90s neoliberal/neoclassical small state or the directionless 1990s-2000s “third way” of lost social democrats.

The traditional way this country has generated big policy innovations is to take ideas from abroad, mix in some local thinking and fit it to local conditions. Conservative National is (for now at least) unlikely to be inventive enough. The Greens would say they have been waiting for us on the far side of the paradigmatic boundary. Young Labourites are beginning to see the point and opportunity.

If policymakers here are to replicate our past game-changing policy innovations they will need help. Where from? No academics are yet visibly above the safe-thinking peer-review parapet. Of the few, very variable, future-thinking “tanks”, the most pragmatically adventurous so far is the New Zealand Institute but it has a way to go.

So can this country do an 1890s or 1930s or 1980s or 1990s again? Still better, is there a Hume or a Smith gestating a new paradigm. Come back in 2020 for the answer.