Labour’s populist deficit and the future of work

Arrogance bred intransigence last Thursday. The contest spilled into Waitangi weekend. What’s going on? Where is Labour in this?

The government’s secretive conduct of the Trans-Pacific Partnership negotiations, coupled with John Key’s dismissal of opponents as hater-and-wrecker ideologues or know-nothings who don’t know what is good for them, elicited exactly the response you would expect in a modern participatory democracy.

Foreign affairs and trade is a vestigial remnant of ministers’ royal prerogative. Parliament can vote on only the limited enabling legislation. The people must wait for an election — or protest.

But this is 2016, not 1816 or even 1916. Democracy is not just elections by a privileged few. It is a diverse range of mechanisms including elections by all over 18. People can participate in multiple ways and want governments to respond.

The Key government is right that in numerous trade deals and other treaties in the past three decades we have already conceded much of our sovereignty — the sovereignty some see Waitangi Day as symbolising.

The loss-of-sovereignty objection to TPP, which Labour and Thursday’s marchers and Waitangi protestors make, is therefore valid only if TPP crosses some new boundary.

Whether that is so is a matter of perspective.

But what is undeniable is that the intrusive globalisation of finance, production, consumption, information and people in the past three decades has intensified in this decade as digital technology radically recasts communications, production, products and much else.

These forces are eroding national governments’ capacity to exercise untrammelled sovereignty. Growing numbers of people, feeling powerless or anxious that their elites are not hearing or protecting them, are backing anti-establishment populist movements in northern rich countries. Last week’s protests here could be said to be in that vein.

One of the fears and angers fuelling the protests is that global corporations, especially financial ones, have too much power.

John Kay, Oxford economics fellow and Financial Times columnist (thus, not of the wistful left), who is in Wellington and Auckland this week to talk to the Treasury and others, has dissected the global finance sector (whence John Key hails) in a new book, “Other people’s money”.

It is not pretty reading. Kay found the sector’s “profitability is overstated, the value of its output is poorly reported in economic statistics and much of what it does contributes little, if anything, to the betterment of lives and the efficiency of business.

“Much of the growth of the finance sector represents not the creation of new wealth but the sector’s appropriation of wealth created elsewhere in the economy, mostly for the benefit of some of the people who work in the sector.” That amounts to an “economic rent” we pay those people.

Attempts to regulate the sector have so far largely failed. Kay suggests a new approach to strip out much of the “gambling” he sees as the essence of most of what it does.

Gambling is a recipe for recurrent crises. Long-term, this is not sustainable. Economically, it stokes debt. Politically, it will provoke public unrest and reaction.

It doesn’t help that, as the pro-trade Economist wrote on Friday, while trade increases welfare overall, it has costs as well as benefits and those on whom the costs fall, often over long periods, feel left out. “Generous trade-adjustment assistance” is “essential”.

The losers get angry or depressed. Populists feed on that. It is an “against”, not a “for”, phenomenon.

Here stress, and so populism, is still relatively contained. And blokey Key soaks up some — at a wild guess maybe 5 per cent of total votes. (Winston Peters harbours the rest.)

Andrew Little can’t match Key, though his stance on TPP and other policies might pick up some “against” votes.

What he and Labour can do is argue that the paradigm of the past 30 years is fraying and that National is wedded to it and so can at most tweak it.

That is the point of Labour’s “future of work” focus in economic and social policy. “Work” and income from it are changing rapidly, excitingly and scarily.

The OECD has picked up the theme. Grant Robertson went to a conference it ran last month. No Key minister was at the ministerial day. German labour minister Andrea Nahles has issued a 90-page green paper on “Re-imagining work”.

Robertson is running a conference next month in Auckland on the topic. He promises some policy by end-2016.

That policy will not define the new paradigm. No one can yet define it. We will know in maybe 10 or 20 years. The transition we appear to be in may be as big as the shift from pre-industrial to industrial society, which created “work” as we know it.

Labour at its strongest is a “progressive” party, pointing to a future. “Against-ism” mourns a past. If the transition to the next paradigm is long and big, so will Labour’s “progressive” task be. But it can meantime write a signpost or two.