Hell, for a minute there ... Actually, for five hellish days there I was in despair at the possibility a vengeful old man in the twilight of his career could destroy 33 years of this country's economic health.

Having positioned himself to choose our next government, he had been daring enough to defy our political conventions and put the election loser into power. Who or what could stop him closing the trade borders, ditching the floating currency, emasculating the Reserve Bank Act, the Fiscal Responsibility Act and all the elements of the economy?

Novices in the negotiations had not stopped him I feared, after watching his command performance on television that terrible Thursday night. Announcing his chosen government without visible enthusiasm, he had predicted hard times ahead, ominously anticipating the blame for it, and even took a swipe at capitalism no less.

Some New Zealanders did not regard it as their friend and they were not all wrong. It needed "a human face", his own presumably.

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What a relief then, on Tuesday, to see the terms of the coalition agreement. For all the talk of transformational change it contained nothing worse than a billion dollar regional development fund. It looks to be a government of the liberal left and the illiberal, interventionist branch of the right.

Like the last time Labour got in, any left-turn in economic policy is likely to be rhetorical rather than real, and Winston will continue to invoke the old Tory trope of "capitalism with a human face".

Capitalism has teeming millions of human faces, all of them satisfied customers. Marketplaces are brimming with happy human life everywhere you find them, from third world bazaars to suburban shopping malls.

Capitalism is a system of law and limited liability that encourages people to pool wealth to provide goods and services, entertainment and opportunities people will enjoy. Those who reap its rewards need a good sense of human nature to ensure they provide what people really want, need or will like.

The lesson I learned firsthand, visiting or living in some of last century's socialist experiments, is that the human faces of capitalism became visibly less satisfied the more their government decided it knew better than they did what they should want, need and enjoy.

Most of those governments were left-leaning but not all. In some ways the conservative right was worse, because in addition to its "human face" it had business confidence.

Conservatives accustomed to investing their own money believed themselves just as capable of investing public money in commercial ventures. They still do. Liberals, of the left and right, have realised it is practically impossible for anyone to invest public money with the same care they bring to personal investments. Public spending does not carry the same (or usually any) personal risk.

Winston Peters would not invest his own money in any of the schemes he is going to seed in the regions with $1 billion from taxpayers, nor probably would anyone looking for an economic return. But in politics you can call uneconomic things infrastructure if you want, and assume all sorts of spin-off benefits with speculative monetary values on them. Taxpayers don't really care, it's not like their own money.

That's how countries get overburdened with poor public investment that is not just costly in itself but draws resources from potential economic investments.

Still, a billion dollars should not do too much harm. We're unlikely to see anything on the scale of an aluminium smelter with secretly priced power, or Norman Kirk's shipping line. More likely Jim Anderton's luxury yacht building cluster at Hobsonville.

It's encouraging that Shane Jones will run the regional slush fund, Jones was an economic liberal on the left, I think. He might attempt to ensure all projects are done in partnership with private investors who face real financial risk. Liberals on the left have been better at applying that test than those on the right.

Peters meanwhile, will be giving most of his attention to the diplomatic circuit and the races. He has got Labour to agree to restore all the favours he previously brought to an industry that evidently cannot stand on its own four legs. It would pay to watch the diplomatic allocations in coming budgets too. Last time he was Foreign Minister the ministry was said to be embarrassed by its enrichment.

And of course every time Peters has had to be accommodated by a government he has got an irreversible benefit for superannuitants. In 1996 he killed the surtax, in 2005 he got the GoldCard. This time it's a free medical check on the card. The economy has got off lightly.

Considering how hell-bent he sounded all the while he kept us waiting, it could have been so much worse.