Chlöe Swarbrick and Green economics - the lost Monopoly lessons: Simon Wilson

Greens co-leader Chlöe Swarbrick during her Budget 2025 speech at Parliament. Photo / Mark Mitchell

THE FACTS

• The Green Party has released a “fiscal strategy”.
• The strategy supports its other plans released this year, including a Green Budget, emissions reduction plan and industrial strategy.
• The International Monetary Fund says Government policies are holding productivity back.

One of the things about being human is that we’re very good at holding two contradictory ideas in our head at the same time.

We all know the institutions of liberal democracy are failing us. Yet polls suggest most of us believe the solution is to keep on with the economic and political policies that have caused, contributed to and allowed this to happen.

Some of us, including about half of all Americans, have rejected this and now support a tyrant. They forgive his faults, because he’s got his eye on a bigger goal: tearing down the establishment that caused the mess we’re in. Or so they believe.

Even while we lose trust in institutions. Even as we recognise that the mainstream policies we have relied on for so long cannot solve the health crisis or the infrastructure deficit and cannot protect us from the climate catastrophe or the AI revolution. Even as our media ecosystem relies ever more strongly on algorithms designed to destroy society.

Margaret Thatcher said it, most famously: “There is no such thing as society.” If it hasn’t always been obvious what she meant, it should be now. We’re not supposed to think and act communally, for the greater good. We’re not supposed to notice what’s not working and, more pointedly, to do anything about it.

We’re not citizens, we’re consumers. What we’re supposed to do is go shopping.

But if the great establishment of liberal democracy has betrayed us, it doesn’t follow that Donald Trump is the inevitable answer. We don’t have to believe those who sow misery and discord in the world for their own advantage. We don’t have to accept the demonisation of indigenous people, immigrants, trans people, feminists, by those who tell voters it’s the “others who are not us” who are causing our problems.

Nor do we have to accept the marginalisation of scientists, academics, unionists, community leaders and journalists.

We’re told all the time that the left has no answers, but that isn’t true. Kate Raworth invented Doughnut Economics, as a guide to learning how to live within planetary boundaries. Thomas Piketty has shown incisively how billionaires, as a class, don’t liberate wealth and drive economic development, but instead suck wealth out of the economy.

British economist Kate Raworth: How do we solve the intolerable dilemma? Photo / Getty Images

Mariana Mazzucato has championed the risk-taking potential of the public sector in innovation: it was governments that funded the internet, touchscreens, voice-activation and GPS, before the private sector turned all that into smartphones. They, along with Jason Hickel, Adam Tooze, Janis Varoufakis and many others have produced bracing critiques of the failures of status-quo economics, otherwise known as neoliberalism.

And in the real world, the Nordic countries regularly remind us that economic wellbeing, strong welfare and widespread social satisfaction are all possible, especially when society agrees not to be obsessed with lowering taxes.

In this country, a month before the Government’s Budget, the NZ Council of Trade Unions (NZCTU) released Aotearoa Reimagined, a proposal for a different framework for economic and social progress. Largely ignored.

The Green Party has a Green Budget, featuring a wealth tax designed to make free healthcare and early childhood education both realistic possibilities. It also proposes a Ministry of Green Works, to speed the creation of infrastructure that will serve the country resiliently and efficiently through the rest of the century.

The party’s emissions reduction plan sets out a programme the party says will allow us to decarbonise energy generation and consumption while improving public options for warmer homes, better transport and lower power bills. And the Greens also have an $8 billion industrial strategy, which includes a green jobs guarantee for at least 40,000 new jobs.

None of this is fantastical. In fact, much of it draws on the same technologies, such as residential solar, the Government also supports. It’s just that the Greens want to do it at scale and speed, without also indulging the fantasies of fossil-fuel industrialists who believe there is a future for their industries. Also, the Greens want a focus on poorer and more vulnerable communities.

But if there’s one thing guaranteed to generate some frothing at the mouth, it’s Green economics. Prime Minister Christopher Luxon said the party’s alternative budget was “absolute madness. And kookiness.”

Finance Minister Nicola Willis called it “ludicrous la-la land”, while Winston Peters started referring to “Chloe Marx and Marama Engels”. Such deep thinking.

On Tuesday the Greens released a Fiscal Strategy: a heavyweight piece of economic analysis that builds on the party’s budget plans. At the strategy launch in Wellington, party co-leader Chlöe Swarbrick said that “no field is treated with more mysticism than economics”, and yet many economists and the politicians who follow them “have nothing to say about why we have a society in which homeless people sleep on the pavement outside luxury stores”.

“We don’t live in a game of Monopoly,” she added. Monopoly, she explained, was invented in the 19th century “to teach children about the pitfalls of an economy based on land speculation and luck.”

Land barons got a Get Out of Jail Free card. “Somehow,” she said, “the purpose has been lost.”

Worth a try.

Indeed it has. The Herald on Sunday published an editorial calling the Greens’ budget “delusional”.

But isn’t what we’re doing now delusional? The Government just took expected wage rises worth $17 billion over four years away from low-paid women workers, so it could cut $14b worth of tax paid by the country’s wealthiest people.

That’s delusional twice over. Once, in the belief that it’s socially acceptable. Twice, in the belief that it will help the economy. See Piketty, above.

Swarbrick said her party’s spending plan is “entirely credible” and “will be recognised as such by international debt markets”.

Yes, you’d expect her to say that. But she also pointed out that the list of critics of the Government’s economic strategy includes “such well-known Marxists as the IMF, the OECD and Standard & Poor’s”.

The IMF’s critique, released last week, points to more delusion in what we’re doing now. It says we don’t lack “entrepreneurial energy”, but capital is rewarded for investing in low-productivity sectors. This translates into less investment in machines and technology and makes local investment half as efficient as in Australia and Finland and 60% less than in Denmark. Those Nordic countries again.

This shouldn’t be news, but somehow it needs to keep being said: As long as the rational thing to do with money in this country is to buy property, our productivity will keep falling.

There’s a very big thing going on in this critique. The IMF isn’t full of Marxists. It isn’t even the Green Party. And it isn’t even arguing for radical change, compared with the economies of many comparable countries. It’s no standard bearer for a sustainable circular economy or the elimination of poverty.

It’s just saying that conventional economic growth has been held back by the very governments that keep wringing their hands and blaming someone else. Often, it’s unions.

As for the OECD, it has long told us that we have all the headroom we need to take on more debt, so we can build the infrastructure, healthcare and other services we need. And that will help build prosperity.

At that fiscal strategy launch on Tuesday, economists Ganesh Nana and Susan St John both rejected the idea that debt is merely a way to burden future generations. “We’re burdening future generations by not investing in the future,” said St John.

Swarbrick noted that according to Treasury, the Government’s books are in trouble if it has not allowed for “two Covid pandemics happening at the same time, or 23 Cyclone Gabrielles”. A fraction too much caution.

She also said, “The Greens don’t pretend we have all the answers. This is an iterative process.” Just as it was in the 1980s, she added, when what is now the neoliberal orthodoxy took hold. They didn’t have all the answers then, either.

“People had some vibes, some ideology and some ideas.”

Meanwhile, instead of reforming the tax system and genuinely boosting productivity, the Government continues to attack unions and their members.

There’s a really simple way to look at the value of unions. They fight for higher wages, and to the extent that they win, everyone is that little bit wealthier and therefore more able to participate in the economy.

They help forge a sense of community; they make society healthier and wealthier. This is not delusional. The proof is Australia.