Why Len Brown shows Labour its future

A week or so before the last general election I had a rather strained encounter with Carmel Sepuloni on the deck of a cafe in Ranui.

Carmel was campaigning for the Labour Party in the seat of Waitakere, and when I encountered her at Ranui she was giving my partner an election broadcast. In between sips from a blueberry smoothie, she condemned the way that Key's government had made workers and the poor pay for the global recession, by cutting state services and public sector jobs. She pointed out that, by cutting the spending power of ordinary Kiwis, National was perpetuating the recession. As Kiwis spent less and less, more and more workers in the retail and manufacturing sectors were laid off, and the economy grew weaker.

I agreed completely with Sepuloni's criticisms of National, but I worried that a Labour government might walk a similar path. After all, the last time New Zealand faced a profound economic crisis, the Labour government of David Lange and Roger Douglas responded by implementing the most radically right-wing set of policies ever seen in this country.

And, since the global recession began in late 2008, it has been governments led by Labour-style social democratic parties which have made some of the worst attacks on trade unions and the poor. In Greece, for instance, it has been the Panhellenic Socialist Movement, an organisation affiliated to the Labour parties of New Zealand, Australia, and Britain, which has been doing the bidding of bankers and the International Monetary Fund by cutting hundreds of thousands of public sector jobs, slashing the minimum wage, and flogging off state assets at bargain basement prices. In Spain the social democratic Zapatero government became hugely unpopular for implementing similar policies.

In New Zealand some of Carmel's fellow Labour MPs had used ominously right-wing rhetoric on the election trail. On the stump in the high-profile seat of Epsom, Labour's David Parker had condemned his opponent John Banks for failing to 'balance the budget' during his time as Auckland's mayor, and had argued that Labour, not National or Act, was New Zealand's 'party of fiscal responsibility'.

It would be fair to say that Carmel Sepuloni was unimpressed with my fears about the response a Labour government might make to the recession. As the transcript of our conversation shows, she repeatedly lamented the fact that she couldn't enjoy a blueberry smoothie at her local cafe without having to listen to the irrational criticisms and ridiculous prophecies of a sectarian ultra-leftist.

Because Labour lost last November's election, it might seem that the argument I made to Carmel has yet to be tested by events. But while Labour has failed to win the Treasury benches from John Key, it does control the government of New Zealand's largest city. Labour's Len Brown was elected mayor of Auckland in 2010, after a campaign spearheaded by trade unionists, and has majority support on the city's council. Over the last week, though, Brown has outraged many of the people who voted for him, by backing the attempt of Ports of Auckland Limited bosses to smash the Maritime Union of New Zealand. After POAL, which is owned by Auckland city council, announced that it was making all three hundred workers on Auckland's docks redundant, Brown took to the airwaves to justify their move. POAL and Brown insist that Auckland's wharfies deserve to lose their jobs, because the wharfies have refused to abandon their collective contract and become casual labourers. During his election campaign a couple of years ago Brown presented himself as the voice of Auckland's trade union movement, but now he is endorsing the most egregious attack on a group of workers in New Zealand's recent history.

Over the past week Len Brown has been booed at public appearances, denounced by trade union leaders, and mocked on left-leaning blogs. Political commentators have written off his chances of re-election. For many Labour supporters, Brown is a traitor to the party's ideals. Dark rumours about the reasons for his apostasy have circulated at internet discussion fora. Some of the disenchanted say that Brown has been bought by Auckland's business elite; others say he is being blackmailed by right-wing members of the city council.

But we don't need conspiracy theories to explain Brown's decision to turn on Auckland's union movement. His political trajectory closely resembles the journeys taken by social democratic governments in places like Greece and Spain over recent years.

Brown campaigned for mayor promising a number of left-wing policies which appealed to voters in Auckland's south and west. His call for a major upgrade of Auckland's public transport system was particularly popular. As soon as he sat down in the mayoral office, though, Brown was made aware that the Tory government in Wellington was not keen on paying for a social democratic policy programme in Auckland. John Key was determined to cut rather than expand spending by local governments.

There were two ways in which Brown could have responded to National's attempt to stymie his agenda. He had the option of condemning Key's intransigence, and launching a campaign for more funding from Wellington for Auckland's problems, or accepting the fiscal restraints imposed by the Tories, and trying to deal with funding shortfalls by squeezing his own administration and constituents. Brown chose the second option when he decided to try to fund his policy programme by increasing the revenue from city-owned assets. Brown was soon demanding that POAL double the profits it made annually from Auckland's port. Brown hoped to plough the extra cash from the port into projects like the construction of a light rail network round central Auckland. Charged with boosting profits, the port bosses decided that they must slash their labour costs. A clash with the wharfies became inevitable.

Brown's decision to accept the fiscal straitjacket imposed by a larger and more powerful institution reminds us of the recent decisions of social democratic governments in nations like Greece and Spain to accept the dictates of foreign financial markets, the European Union, and the International Monetary Fund. Faced with big debts caused by the global financial crisis of 2008, the Greek social democrats had the option of confronting the foreign banks and European bureaucrats which had helped create that crisis, or acceding to the demands of the bankers and bureaucrats. They chose, of course, the second path, and are now set, like Brown, for political oblivion.

The sad stories of Brown and of the Greek government offer us a lesson about the essential nature of social democracy. Social democratic parties like Labour have traditionally tried to use taxation and state regulation to civilise capitalism and make sure that some of the wealth of society is redistributed from big business to workers. During periods of fast economic growth, a social democratic government often finds it relatively easily to channel an increased share of wealth, in the form of wage rises and increased spending on services like education and health, towards its working class supporters.

But capitalism is an unstable system, prone to cycles of boom and bust. When the system is in crisis, the economic basis for social democracy's civilising mission disappears. Classes are polarised, as wage and tax demands cut deeply into bosses' profit margins. Industrial relations become a zero-sum game. Social democratic governments that come to power during economic crises cannot balance the interests of classes, but have to choose one class over another. Not every social democratic government elected in a period of crisis has been as supine as the Greek regime, or the wretched Len Brown.

New Zealand's first Labour government took office in 1935, in the middle of the Great Depression, after promising an impoverished population jobs and a proper welfare state. The new government came under great pressure from local capitalists and British banks, but left-wing Labourites like John A Lee were determined to stare down these enemies. After the British threatened to call in the loans they had made to New Zealand, Lee and his allies called for Labour to thumb its nose at foreign financiers by defaulting on the country's debts. When right-wing newspapers launched a propaganda campaign against the Labour government, accusing it of wanting to impose a communist dictatorship on New Zealand, Labour responded by setting up a national radio network and using the airwaves to defend policies like its state housing programme. The achievements of the first Labour government came through confrontation with the political right and the capitalist classes of New Zealand and Britain.

In the twenty-first century, the governments of Hugo Chavez in Venezuela and Evo Morales in Bolivia have both faced down capitalist revolts and implemented left-wing policy programmes. After his country's wealthy elite and the CIA organised a coup, a lockout, and a programme of assassinations against his supporters, Chavez encouraged Venezuelan workers and peasants to occupy and run by themselves factories, farms, and oil refineries. The balance of power in the country changed. Many grassroots members of Labour are calling for Brown's expulsion from their party, in the wake of his endorsement of the attack on Auckland's wharfies. But purging Brown will change nothing, because his political cowardice and opportunism is shared by the rest of Labour's establishment. Party leader David Shearer has repeatedly refused to take sides in the conflict on Auckland's waterfront, and some of his key advisers have criticised the city's wharfies. Josie Pagani, for example, used a recent appearance on Wellington's ZB radio station to condemn the union for not realising that 'flexibility' and 'casual labour' are 'the future', and have to be embraced. Shearer and Pagani are chips from the same rotten block as Brown. A Shearer-led Labour government would cave to the demands of big business and the right just as quickly and completely as Len Brown.

Instead of trying to expel Brown, Labour's grassroots members should remove themselves from the party. At the Ranui Cafe back in November I suggested to Carmel that she would be happier in the Mana Party than in what David Parker so proudly calls the 'party of fiscal responsibility'. The contrast this week between the cowardice of Brown and Shearer and Mana's gutsy challenge to foreign investors looking to rip off Kiwis once again shows which organisation has inherited the fighting spirit of John A Lee and his comrades.

[Posted by Maps/Scott]