Economic xenophobes. Welcome to the wonderful world of New Zealand populist politics. Actually, it's a bit worse than that. We are economic racist xenophobes. How cute to see the Green party revealing its anti-Chinese prejudice on the matter. This from Kiwiblog:
When Bill English is over in Australia talking about how more and more Australian companies want to invest in New Zealand, and no politician says a word. But then you have a Chinese leader visit and promote investment from China, and the Greens rush out a press release. It is absolutely playing to xenophobia. Not all opposition is xenophobic, but much of it is – and politicians play to it.But, there is an argument on the other side to be made. The Prime Minister, John Key has said that he does not want a New Zealand where citizens are serfs in their own country. That is a powerfully visceral line. It raises a spectre that is not unrealistic at all.
Imagine a country where most productive assets were owned by one company and the vast majority of citizens were employed by that company. Such an arrangement would leave that company with far too much control over the destinies of citizens. We would be a bit like feudal serfs.
Assume that the analogy changes from one dominant company to a cluster of international conglomerates or companies that were to own most of the productive assets in New Zealand. A similar parlous situation begins to emerge: we would have lost control of the economic destiny of our own country. Being a mere speck of dust on a global scale, if that situation were to develop it would be virtually impossible to get out of it, short of wholesale state nationalisation of the productive economy--which, of course, carries another set of devastatingly negative effects.
There is no free lunch. Doubtless this is offensive to most citizens of this country, who have been taught from their mother's (sorry, caregiver's) knee that there is such a thing as a free lunch. It is called "other people's money". Being a nation of socialists we have been conditioned to thinking that life would be just dandy if we were to extract more money from others via government taxation and handouts. Long ago, domestic capital for investment and economic development ran out in New Zealand. It was sucked into the maw of state health, education, and welfare--never to return. This ugly trinity consumes sixty-seven percent of government expenditures. It is a voracious beast which eats up exponentially more capital and wealth every year. Now we have run out of money and the beast's relentless appetite can now only be funded by government debt. Other people's money--only this time the "other people" are those not yet alive. We are merrily mortgaging our grandchildren to pay for our lusts and pleasures.
It's what the people want. But the consequence is that progressively we are becoming serfs in our own country. Now we cannot develop our country economically without relying on international investment. We don't have sufficient capital left. It's all been spent. Capital from overseas must of course generate a return, which is repatriated overseas. Consequently, New Zealand's balance of payments has been in deficit for as long as human memory serves. We are a recidivist, long term debtor nation. It ain't going to change--until the whole house of cards comes crashing down--and we get to be owned by other nations.
Meanwhile the vicious circles bites ever more bitterly. Those kiwis with gumption, get up and go--literally. Long ago they left our shores to pursue their own economic aspirations overseas. Every year they have thousands of "fast followers". This makes our labour force less productive than otherwise. The demand for increased capital investment rises to compensate for the skilled labour drain. Still more earnings repatriated overseas is the outcome; even less capital is available for reinvestment. And so on.
Those who complain about New Zealand losing its economic sovereignty are right. But we lost it a long time ago when the decision was taken to embrace what historian Michael Bassett has called "socialism without doctrines". Once that fateful move was taken, it was only a matter of time. The end game is rapidly approaching. Now we have no other options, remotely palatable. It is overseas investment in New Zealand or the progressive "Nauruising" of our economy and nation. No choice really. Does not the borrower become the lender's slave? Serfs in our own country is our inevitable future. As long as we are willing to feed the three headed hydra of government health, education and welfare with other people's money there is no other option.
But to sneer at Chinese investment as if it were tainted, whereas "wasp" investment from the UK, Germany, Australia and the US is not, is truly xenophobic--racist xenophobia, and despicable for it. As for those raising the siren of New Zealanders not becoming serfs in their own country--sorry, that decision was made decades and generations ago. For goodness sake, let's get our heads out of the sand and face reality.
Over time there are only two things that could turn the Titanic around. Firstly, families lowering their living standards, denying themselves, paying off their debt, and saving relentlessly for themselves and their children and grandchildren.
Secondly, wisely investing their saved capital in productive enterprises for the long term--both here and offshore.
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