Listener 9 December, 2000

Keywords: Political Economy & History;

One of the rogernomic reviewers of Barry Gustafson’s His Way: A Biography of Robert Muldoon, Rod Deane, asked how could Muldoon be the leader of a ‘free enterprise party’. As it happens the National Party has not been primarily such a party, but a private enterprise one, advocating the state actively supported business. When the party was founded in 1936 the proposal to include in its constitution opposition to interference by the state in business was defeated.

National’s leader for around ninety percent of its history has been a ‘private enterpriser’. Even Jack Marshall, who would be placed in the free enterprise wing, imposed a wage and price freeze when he was Prime Minister. In the early 1950s, Syd Holland put government money into the Tasman pulp and paper plant. It was Muldoon who privatised Tasman in 1980 (and ironically, Deane has just presided over the sale to foreign interests).

National’s private enterprise vison was not surprising. In the previous century New Zealand had developed from a synergy between business and the state (and has done so since) – development by private enterprise supported by the state, not free enterprise without state involvement. In the last fifteen years the free enterprise wing may have been more dominant in caucus and cabinet than in the National Party, or among its voters, and of course at some time in the future the party could redefine itself as a free enterprise party. But historically Muldoon was not an anomaly – in this respect anyway.

He was anomalous in other ways. It is very unusual for a party leader to be so absolutely confident of knowing best. Indeed the greatest – Keith Holyoake and Jim Bolger (and, I add, Gordon Coates) – pretended to be simple souls who listened to the advice they were given and followed pragmatically what seemed best. Muldoon’s difficulties arose in part from his arrogance. It is said he died still thinking he knew more about the New Zealand economy than anyone else. Perhaps, but there were dozens of pairs of people who between them knew more than Muldoon did alone. Such were his economic times, many heads were needed.

Probably Muldoon was Minister of Finance in the most difficult period of the New Zealand economy – the agonising twisting as the economy adjusted to the collapse of its main export prices after 1966. The other candidate is the Great Depression of the 1930s, which was deeper but shorter, and which Coates handled magnificently. The difference was that Coates not only listened to his advisers, but he looked for progressive solutions, building new institutions for his day. Muldoon was much more backward looking, using policy instruments from the past to resolve new problems arising from the social and economic diversification. Muldoon was a social conservative, so he chose to align himself with the past rather than the future. Many of his social views, such as on royalty, now seem quaint, while the hero worshipping ‘Rob’s Mob’ is literally dying out. (This is not as true for all of Norm Kirk’s views, although on some matters – notably women – he was as antiquated as Muldoon.) This same nostalgia for the past, underpinned Muldoon’s economic policies.

That has left National with a problem. The economy has been achanging. The increasing complexity of the economy and business decisions requires new ways to support private enterprise (including sometimes not intervening and leaving things to the market). Muldoon grudgingly allowed some market liberalisation, but frequently it was almost over the dead bodies of forward looking ministers. Thus the party could never properly debate what was the appropriate support for private enterprise, and its minority of free enterprisers took the initiative by default. It was as late as a couple of years ago that Max Bradford and Bill English began to gingerly feel their way back to a contemporary version of private enterprise. Before they got there, the electorate foreclosed on their stewardship.

Perhaps they, and certainly many other thoughtful members of the National Party, will be reading His Way over Christmas, pondering on Muldoon’s backward looking version of private enterprise, and wondering what constitutes a progressive one.