Don't worry this isn't another column about Jacinda Ardern.

Well mostly not.

It is a column about the tension between market economics and socialism.

Or, to put it another way, a column about the conflict between our belief in two seemingly contradictory values - human equality and personal freedom.


Ardern's appointment just happens to offer a great case study.

Labour has struggled with this tension since the global financial crisis.

The system broke down in 2008 and it isn't fixed yet.

Capitalism is still hooked on artificially low interest rates which are creating asset bubbles while depressing inflation.

Throw in historic phenomenon like baby boomer demographics and the rapid pace of technological change and we have a world low where low unemployment isn't enough to lift the living standards of those who don't have any capital.

Across the spectrum, economists agree that some serious thinking is required right now.

But before we start reaching for Das Kapital, we need to acknowledge Karl Marx's failure to pick the rise of the middle-class.

You can celebrate Jeremy Corbyn all you like, but Labour didn't win in the UK.


In New Zealand polls show a majority of New Zealanders are still comfortable with the underlying system.

People might be sleeping in the streets but they aren't marching in them.

Figures published in the Herald this week, stretching back nearly four decades, show the number of holidays overseas has grown nearly five times from 247,000 a year to 1.1 million.

That's working people - Labour's old base - taking their kids to Disneyland and Fiji.

So do you advocate for tinkering and risk being under-cut by a National Party prepared to do the same? Or an overhaul, and risk alienating middle New Zealand?

The subtlety of Labour policy messages has required a level of charisma that has been lacking.

Which is where Jacinda Ardern comes in.

Her first media outings have been impressive and I don't doubt she can give Labour a lift in the polls.

But RNZ's Guyon Espiner did catch her out with some of toughest questions she faced last week.

"Do you believe in market economics?" he asked.

She dodged it at first, deferring to Labour's emphasis on economic credibility.

When asked directly a second time we got a very quick and quiet: "yeah".

Ardern moved very quickly to talk about challenging the current parameters of market economics. Good save.

The subtlety of Labour policy messages has required a level of charisma that has been lacking. Which is where Jacinda Ardern comes in.

But Espiner came back. Was she still a socialist?

"I'm a democratic socialist," she said.

What does that term mean, he asked. Probably not much to New Zealanders, she conceded.

"So why did you use it then?"

It was a short, good-natured exchange, but it was Labour's challenge in a nutshell.

Though Ardern stumbled, she did better than Andrew Little who was never able to resolve his deeper ideological beliefs with the demands of appealing to a majority of New Zealanders.

And, yes she was less than 24 hours into the job.

I put the same question to Labour Finance Spokesman Grant Robertson last month.

"I believe there are things we can do to create social justice within that broader framework of capitalism," he said.

It's significant that it was Labour which led the economic reforms in the 1980s. They represent a key moment in our history.

Robertson was honest about the conflict he stills feels around the economic revolution begun by the fourth Labour Government.

The changes were needed but they went too far, he said.

The solutions to poverty and inequality are complex. Tub thumping about a return to the pre-1984 values is meaningless nostalgia.

You can't go back.

It's worth remembering too that socialism as much as capitalism still underpins New Zealand society.

National has never advocated doing away with socialism in education, health and welfare. They have just been tighter with the chequebook.

Even Act takes a suspiciously socialist approach to law and order.

It proposes that central government should fund higher rates of incarceration for burglars (with its three strikes policy). That's infringing on my personal freedom to nick your wide screen TV if I have the skills and motivation to break into your house.

If you're too lazy to install proper locks and alarms then why should hard working taxpayers fork out to incarcerate those who take advantage of you?

Seriously though, there are contradictions everywhere in politics. And that's fine.

I'd argue that the more concrete the beliefs, the more likely a politician is to be divorced from reality.

Striving to uphold values of human equality and individual freedom isn't easy because they often conflict.

But modern democracy has been built on the tension of those contradictions.

It is dynamic, a force for positive and necessary changes - in both directions.

The tension is best resolved issue by issue. Right now the one in play is housing.

After decades moving away from government intervention, times have changed.

National and Labour have different approaches but their policies suggest a grudging consensus that the market is failing for many people and exacerbating inequality.

Both parties know that with intervention comes the risk of creating new and unforeseen problems.

Ardern's arrival is promising because she is appealing and articulate. She should lift the quality of the debate in this election.

Win or lose this time, a strong Labour Party is good for New Zealand.