1913 General Strike, Cuba Street Wellington
We are facing a global economic crisis where the future of capitalism is up for grabs. Either we accept the ruling class has the right to make us pay for their crisis, or we organise as an exploited and oppressed working class to overthrow capitalism. In NZ this choice means we suffer another term of the NACTs rip, shit and bust anti-worker politics, or we remove them and their class from power. This means putting a government in power that will overcome the problems of Aotearoa/NZ’s neo-colonial dependence on Australian, US and Chinese imperialism. The best hope to achieve a first step in that direction is to put a left coalition of Labour, Greens and Mana into office. This will prove that no capitalist government however ‘left’ is capable of meeting the needs of the working majority and that capitalism has outlived its time and must be replaced by a Workers’ Government and a socialist plan.
Origins of a Liberal-Labour Party
It is no accident that the internal fight inside the Labour Party has broken out since the so-called Global Financial Crisis of 2008. This represents a major structural crisis of capital that persists today and will lead to the destruction of capitalism unless it can make the workers pay for its crisis by forfeiting all the gains of past generations of struggles.
NZ history is one of successive crises with intervening periods of growth. These were the normal periodic crises of capitalism that affects all countries. They are caused by falling profits overcome only by extracting more surplus-value from the working class. During the crises the working class organised and fought to defend their wages and conditions. The first major depression in NZ was the Long Depression of the 1880s. This was part of a global depression that hit NZ hard. The unemployed and landless rioted and demanded the vote and the right to form unions to improve their share of the national income.
The Liberal Government was elected in 1891 on the votes of workers and the landless following the massive Australasian Maritime Strike of 1890 which disrupted the NZ economy. The task of the Liberal government was to use the state to create the conditions for capitalist development. The state borrowed heavily to invest in infrastructure, grabbed millions of acres of Maori land, and broke up the large estates to create 1000s of family farms. It sought to regulate labour relations between workers and employers and passed the IC and A Act in 1894, establishing the Arbitration Court to settle disputes over wages and conditions.
Unions saw their wages and conditions improve until around 1908 when the Court claimed an economic downturn could not justify a wage increase. The result was that most of the large industrial unions (Miners, Railways, Watersiders, Seamen etc) viewed the Court as a 'leg iron' and left to form a new United Federation of Labour – the Red Fed. A period of rising labour unrest followed culminating in the Waihi Miners Strike of 1912 and the General Strike of 1913.
Though these strikes were defeated and working class opposition to the Great War was repressed, the NZ ruling class feared revolution. War requires the arming of workers to fight against other workers but it also encourages their opposition to war which can turn into armed uprisings against their own ruling classes. Thus revolutions broke out in Russia and quickly spread to Europe. In NZ despite the climate of militarism there was opposition to the war in the unions and in the Waikato Iwi. The state came down heavily on objectors and deserters, shooting or jailing them. In the midst of this upheaval, the patriotic non-socialist unions formed the Labour Party in 1916 in an attempt to stem the tide of revolution. The Labour Party would continue the work of the Liberal government in harnessing the working class together with the farmers and national capitalists in the task of building the national economy.
The significance of such Labour Parties became clear when the Russian Revolution of 1917 sparked off other revolutions in particular the German Revolution of 1919. They and the reformist social democratic parties acted as barriers to revolution by tying workers to bourgeois democracy. So the workers had to be won from the reformist parties before revolutions were possible. In Russia the Bolsheviks succeeded and won the majority of the Soviets to take power. In the European countries the revolutionaries failed. The armed soldiers and workers were capable of taking power but failed to organise an insurrection. The social democratic parties isolated and smashed the armed workers uprisings, steering them into bourgeois republics.
In Britain, Australia and New Zealand social democratic parties took the form of Labour Parties. Lenin writing in 1920 characterised these British-type Labour parties as bourgeois-workers parties because while they had working class members they had bourgeois programs. Recognising that such parties were deluding workers into supporting capitalism, the Communist International devised tactics to win workers from them to the communist parties. The main tactic was that of ‘critical support’. This required voting for Labour Parties to get them elected so as to expose their true role as capitalist parties that would inevitably betray the interests of the working class. Lenin likened this support to the 'rope that supports a hanged man'.
The usefulness of this tactic depends on its success and this has been debated ever since. Whether or not it would succeed would depend on the conditions allowing its anti-worker program to be exposed. In NZ in a semi-colonial setting this posed a problem. Lenin commented in 1913 that the Labour Parties of Australia (and NZ) were of a special type of bourgeois-workers’ party. They were actually ‘liberal-labour’ parties reflecting the underdeveloped economies where the migrant workers formed an alliance with the settler capitalists to create a new nation out of a colony. The would-be national capitalist class wanted tariffs to protect the economy from cheap imports so that domestic manufacturing could survive and develop. Their interests clashed with the land-owning and banking capitalists who ran the economy and were only interested in making profits from exporting farm products and importing manufactured goods from Britain.
In Australia and NZ the Liberal-Labour Parties arose to complete the process of developing settler colonies into independent nations. So the NZ Labour Party served to unite workers and local manufacturers to break NZ’s colonial dependence on Britain and create the conditions for domestic manufacturing. Typically the working class migrants wanted to escape wage labour into self-employment, and then by means of tariff protection from cheaper imports, set up as small capitalists with the ambition of becoming a big capitalist.
The Savage and Kirk Myths
The first Labour Government elected in 1935 was a depression Government. It took its cue from the failure of the Reform Government to get the economy out depression because of the resistance of farmers and the Bank of England to state intervention. Labour’s task was to continue the role of the Liberal Party; to use the state to regulate and protect the economy from the competitive forces of global capitalism.
The myth of the Savage Labour Party was that it reformed the economy to realise the goal of social equality. In reality it intervened to stabilise the colonial capitalist economy. It applied a local version of Keynesian policy pioneered by Bill Sutch to insulate the economy and establish a state-managed capitalism in NZ. Rather than ‘socialism’ Savage characterised Labour's program as "applied Christianity". So when Labour’s stabilisation policies were challenged by workers themselves fighting for ‘equality’, Labour put bosses' profits before the equality of workers. The 'Christianity' was selective in is application. Labour used its wartime powers to jail striking workers, proving that during the war its first priority was to ensure that NZ played its role in protecting the interests of capitalism globally, and nationally, it's priority was to break the hold of the British bankers, to support the emergence of a class of domestic manufacturers, and to discipline the working class.
Labour was thrown out of office in 1949 when the more radical unions got tired of its strike-breaking regulations. At the same time the National Party rallied the farmers and bankers against Labour as part of the communist ‘red menace’ spreading ‘down-under’. Labour's contribution to the post-war stabilisation was then to try to referee the class war so it refused to take sides during the 1951 Lockout.
The Nordmeyer (‘57-‘60) and Kirk (‘72-‘75) Labour Governments lasted one term each and failed to defend the class alliance Liberal-Labour had created. Nor did a growing working class rise up out of the boom to demand a ‘socialist’ Labour Party out of the ashes of old Labour. The Liberal-Labour task was over but the ‘socialist’ task was dead on arrival. The Stalinist ‘socialists’ in the union bureaucracy were embedded in the state and doing deals with both Labour and National (and hence both main fractions of the ruling class). So Nordmeyer put an end to the Sutch-Keynesian intervention with his ‘black budget’ attacking the wages of the workers.
The Kirk Government was also a one term government. Kirk attempted to use the state to aid industry and stabilise wages and conditions. But the end of the post-war boom meant that these policies had little effect. Far from a weak attempt at reviving state 'socialism', the Kirk goverenment was an early warning that economic nationalist polices had reached their limit; a reality that was finally driven home by Muldoon's futile attempt to insulate the economy from the growing storm of the worsening global depression in the years from 1975 to 1984.
By 1984 the NZ economy was beset with an acute crisis. Desperately Muldoon had tried to hold off the restructuring of the NZ economy by trying to insulate the economy with more protectionist measures. He could only have done that by enlisting the support of the unions. Instead he imposed wage and price control that drove down living standards yet failed to stop stagflation. The irony of a National Party leader representing farmers and bankers, stealing old Labour’s protectionist policies to deal with a debt crisis, was not lost on the Rogernomes. The international banks threatened to bankrupt the economy and the Muldoon government collapsed. It was left to the incoming Labour Government to complete its historic mission, now reversing its role as a party that united workers and manufacturers in an insulated national economy, to become a party that acted in the interests of Australian, US and increasingly, Chinese imperialism to open up and deregulate the national economy.
The Fourth Labour Government
Labour took power and the Lange Government restructured and deregulated the economy relying on the union bureaucracy to suppress working class opposition. This worked as the unions led by the Socialist Unity Party members closed down strikes to avoid Labour being smeared as Moscow agents. The Party that had used the state to promote economic nationalism now became its executioner.
It is the character of the NZ Labour Party as a bourgeois-workers party that explains its switch from defending national capital to defending international capital. The switch resulted from the need for capital to expand beyond the nation. To profit means to grow beyond the national borders and compete internationally. Labour now backed the dominant international capital so its program reflected the interests of that fraction. But that required the slashing of state subsidies and an attack on wages and conditions to achieve international competitiveness. Inevitably the the contradiction between the working class and the now 'neo-liberal' bourgeois program began to explode the historic Liberal-Labour class alliance.
This caused a split in the Labour Party which grew from 1984 and culminated in the formation of New Labour in 1989. But the split was premature since no mass support for a ‘socialist’ Labour Party (in Lenin's sense) existed outside Labour, let alone a mass Communist Party. Instead of staying in the party to fight for a ‘socialist’ program, New Labour went into the wilderness blocking with tiny petty bourgeois groups including the Greens. The result was a defeat for the working class. The National Government (1990-1999) resumed its lead role as the party of farmers, international bankers and free traders, and the Clark Labour Government (1999-2008) oversaw the progressive re-colonisation of NZ by international capital over the next 18 years without any major working class resistance.
The world is now 5 years into a long recession that is more like a long depression. Since 2008 the Key National Government has resorted to a ‘rip, shit and bust’ strategy of asset stripping and its regime has become increasingly authoritarian. The Labour Party is being pressured by its members to break with ‘neo-liberalism’ and return to its reformist origins as a Savage Labour Party. We have argued that the Savage Government should be understood as a special form of social democracy characterised a 'Liberal-Labour'. So can a Savage Party be revived today?
Today, a ‘socialist’ Labour Government would have to return to the liberal task of defending and extending NZ’s capitalist independence when there is no national capitalist class. Unlike the 1930s, there can be no domestically protected manufacturing fraction of national capitalism. NZ manufacturing has to compete internationally and is largely owned by international monopoly capital. A bourgeois-workers party can only function by defending the program of international finance capital. And this defence of international capital cannot be reconciled with the interests of the working class. The only way for the NZ to escape its neo-colonial status is to activate the class contradiction in the Labour party, split workers from the bourgeois program and go forward to a Socialist Workers Labour Party!
A Labour/Green/Mana Government?
If Labour is elected under its new leader David Cunliffe in 2014 and forms a coalition with Greens and/or Mana it will attempt to return to a more interventionist Keynesian policy to revive the class alliance where the state stands in for the virtually non-existent national capital, that is state capitalism. But this will prove impossible as the NZ state has little sovereignty over Australian, US and Chinese imperialists control of the economy. The Labour Party will not be able to perform the historic task of a bourgeois-workers party, of locking the working class into a class alliance with capitalism.
So the question then, is: how can revolutionaries activate the contradiction inside the Labour Party to break workers from its bourgeois program and form a revolutionary working class party? That task concerns not only Labour but also the parties it is in coalition with. On the right will be the Greens and on the left will be Mana. Depending on their electoral support, both parties will add weight to each side of the contradiction.
The Greens are avowedly not socialists, as they are committed to a Green capitalism. Greens are a radical petty bourgeois party so they are on the bourgeois side of the divide. Mana is a small newly emerging left social democratic party with its roots in the Maori working class but which has yet to go beyond Maori nationalism and unite with a significant section of the non-Maori working class apart from the Unite union. But it is on the Labour side of the divide. Each would enter a Coalition with Labour with its own program, but it is Labour which has the historic links to the unions and it will be the organised labour movement that will drive the wedge between bourgeois program and working class supporters. How to do this?
The answer is to prove to workers that even a 'far left' social democracy cannot solve the crisis of capitalism by reforming capitalism with some form of parliamentary socialism. What we have to prove is that capitalist inequality cannot be overcome by state redistribution such as the current proposal of the ‘pre-distribution’ of wealth. The debate about ‘pre-distribution’ will prove in practice that the capitalist state exists to defend capitalist property; which means it will not ‘predistribute’ the wealth that already exists as the result of the pre-distribution of the ownership of the means of production as explained by Karl Marx in Grundrisse.
David Cunliffe wants to break with neo-liberalism and ‘crony capitalism’. Yet he says he is not a socialist, defined as the (capitalist) state owning (i.e. nationalising) all the means of production. This is the fundamental limitation of social democracy. It will not seriously embark on nationalisation of the means of production because that would threaten the private ownership of the means of production the root cause of capitalist inequality. So now we have this question out in the open again after half a century. The contradiction is laid bare. Either the bourgeois program of defending capitalist social relations, or the socialist program of the social ownership of the means of production!
This no accident since the global capitalist crisis has forced much ‘rethinking’, even if much of this is recycling the old Fabian socialist debates of the 1800s and 1900s, and Keynes vs Marx as the way out of the crisis. But the crisis this time, the worst since the 1930s because it fuses economic decline with global warming, and the revival of socialist ideas that now confront it, will not only pose all the right questions about going beyond capitalism, it will prove that we have no alternative but capitalist barbarism or socialism.
The Labour party is now firmly in the camp of international finance capital. It can do nothing to stop the ongoing ‘pre-distribution’ i.e. the ‘accumulation’ of capital created by workers flowing into the hands of the ruling class. It can do nothing to stop the global meltdown of climate change. The only thing it can do to workers is try to block the road to revolution. We need to break workers from historic Labourism and build a Socialist Workers’ Labour Party committed to fight for a Marxist program that can mobilise workers internationally to overthrow capitalism and join the fight to build a new socialist world society.