A year of transitions in a transitional decade

This year has been one of transitions, in the world economy and energy options, in the orthodoxies by which the rules are made and, here at home, in politics, policies and preferences.

A new decade has been dawning. To talk of a “twenty-first-century” this or that is behind the play. The 2010s are not the 2000s.

The 2000s were the decade of a global financial asset bubble and its bursting. That stripped the veneer from weaknesses in the Atlantic economies and cut into United States median household economic and psychological security and tousled its politics.

The United States is in transition from dominant power to something nearer first-among-equals. That is part-driving its interest in the Trans-Pacific Partnership (TPP), in talks this week in Auckland.

The United States’ primary TPP interest is intellectual property, which it patents and copyrights with an abandon other countries cannot accept. In any case the 2010s internet is ripping up copyright. Kim Dotcom brought this transition into sharp relief this year. Others will follow. Publishers are adapting with e-books.

Actually, the TPP and the many other trade talks are an institutional catchup with the rapid organic change from separate national economies to a global economy, going faster this decade. Even the United States is under strain.

There was another United States transition this year: from importing petroleum to a production boom at home using recent technologies such as fracking. Parts of Europe are set to follow. At home fracking has multiplied the potential of Taranaki’s reserves. This was the year “peak oil” was postponed.

A reverse transition was the one in global climate change talks from a promising deal at Durban to a near stall at Doha (matching the frozen world trade talks known as the Doha round).

Economically stressed populations have made climate action politically less attractive this year. John Key’s transition out of the Kyoto Protocol and indefinite postponement of more action through the emissions trading scheme is therefore no surprise.

That retreat mirrored another cabinet transition: from Bill English to Steven Joyce, that is, from getting regulatory and fiscal settings right as the key to economic rebalancing to making GDP-growth the No 1 objective, commanding priority over environmental and social issues.

That underlies, for example, the reforms of local councils. Legislation this year and next imposes a much tighter ministerial grip on councils’ spending and decisions.

It also underlies Resource Management Act changes. An amending bill last week and another due next year are pro-GDP growth. Last week’s bill requires quantitative cost-benefit assessment, including of economic benefit and opportunity cost, a big transition from the original act’s environmental effects basis.

That reflects green-sceptic Joyce’s ascendancy. This year he was made lead minister of the ministerial natural resources cluster. The focus (now legislation on the exclusive economic zone is through and exploration and exploitation regulations nearly finalised) is on more agriculture, petroleum and minerals.

The GDP-growth fixation almost certainly has wide voter backing. When households have less financial leeway, they have less leeway for social and environmental nice-to-haves.

A recent Australian poll found even young people far more focused on economic welfare and less environmentalist than in the recent past.

So are Key, English, Joyce and Co a transitional cabinet to harder-nosed politics?

Ironically, the Treasury has been in transition the other way: widening its purview in its long-term fiscal projections (under discussion at a conference yesterday and today) to examine factors beyond GDP growth.

And the next government of the other side is likely to reverse many of the GDP-above-all changes. The Key-English-Joyce cabinet is less a transition to a new era than the last phase of baby-boomer domination and that generation’s policy orthodoxies.

That generational transition came into focus at Labour’s conference when the generation-X Grant Robertson/generation-Y Jacinda Ardern leadership-in-waiting firmed its ascendancy in the leadership standoff.

Gen-Y in particular thinks differently from baby-boomers about social structure, individual freedoms and choice (National is closer to Gen-Y than Labour on this), the place of Maori (the Maori party’s transition this year has been to opposition-in-all-but-formality), the internet and (despite the Australian poll) the environment/economy relativity.

Also, Gen-X and Gen-Y in Labour this year have been searching for replacements for the current ruling orthodoxies. But, while there is a ferment of international questioning of the old orthodoxies, there are not yet settled substitutes. Labour’s conference looked back more than ahead. The Greens, too, sound more 1980s than 2010s.

So the transition between orthodoxies has a way to go. But it has begun. Hang on tight. The 2020s are coming.