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Reclaiming the Future

Reclaiming the Future: New Zealand and the Global Economy

Copyright Date: 1999
Pages: 448
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  • Book Info
    Reclaiming the Future
    Book Description:

    Globalization is not inevitable, invincible or intrinsically good. Kelsey explores the impact of globalization on New Zealand, where a deregulated global economy has proved highly unstable.

    eISBN: 978-1-4426-7905-4
    Subjects: Economics

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-vii)
  3. List of Abbreviations
    (pp. viii-viii)
  4. Preface to Second Edition
    (pp. ix-xii)
    Jane Kelsey
  5. Preface to First Edition
    (pp. xiii-xiv)
    Jane Kelsey
  6. Introduction
    (pp. 1-25)

    ‘Globalisation’ has been the buzz-word of the 1990s. Some commentators eagerly predicted the advent of a ‘borderless world’.¹ US sociologist Frank Fukuyama talked of ‘the end of history’ as we know it. The global integration of technology and production was opening the door to a limitless accumulation of wealth and the satisfaction of people’s ever-expanding desires – and to the embrace of liberal democracy throughout the world. ‘This process guarantees an increasing homogenisation of all human societies, regardless of their historical origins of cultural heritages.’²

    Others, such as David Korten, warned that the voracious expansion of global capital would see...

  7. 1 Putting Globalisation in Perspective
    (pp. 26-55)

    The architects of New Zealand’s free market experiment set out to ensure that the changes they made were difficult, preferably impossible, to undo. This chapter examines the way in which the radical transformation from a welfare state to a society organised around markets has been consolidated through an apparent consensus of New Zealand’s political, economic and social élite. It challenges the underlying premise that, in the era of globalisation, New Zealand has no choice but to continue down this path. It then explores the tensions between globalisation and the central notions around which nation-states are organised – state sovereignty and...

  8. 2 Constructing Orthodoxy
    (pp. 56-89)

    The mythology of globalisation is enormously powerful. It allows governments to abdicate responsibility for the consequences of their own policies, laws and practices; it justifies a refusal to consider alternative policies that might cause less harm to people, communities, and their environment.

    The New Zealand model of structural adjustment has attracted attention internationally because of its audacity in attempting to convert global free market ideology into economic reality. However, its curiosity value has been backed by a sufficient degree of international policy consensus for New Zealand to be taken seriously. New Zealand’s image as being part of a global orthodoxy,...

  9. 3 Leading the World
    (pp. 90-120)

    In January 1998, Minister of International Trade Lockwood Smith told the Orewa Rotary Club: ‘When I travel overseas they know about the All Blacks, sheep, Anchor brand and they know of the success of New Zealand’s economic reforms.’¹ An enormous effort has gone into selling the New Zealand model offshore. While a lot of ego is involved, and often lucrative consultancies, there is also a missionary zeal. The sales pitch is selective in its evidence, sometimes seems disingenuous, and always carries a favourable spin. It almost never mentions the downside – the huge increase in inequality and poverty, a deteriorating...

  10. 4 ‘Free’ Investment
    (pp. 121-160)

    The goal of a global free market is to create a self-regulating system where goods, capital and ideas – but only selected people – move freely around the world. A ‘free’ investment regime means that owners of money have the right to move it as, when and where they please. In practice, most countries still actively regulate foreign investment. Not so New Zealand. Successive governments since 1984 have committed themselves to establishing an unfettered foreign direct investment (FDI) regime, deregulated the financial markets, lifted exchange controls and floated the currency. This regime was founded on a belief that unrestricted movements...

  11. 5 Transnational Enterprise
    (pp. 161-199)

    The major beneficiaries of ‘free’ investment are the transnational enterprises (TNEs) that currently dominate world markets in every strategic activity – electronics, telecommunications, banking and insurance, food production, textiles, media and entertainment, mining, chemicals, armaments and many others. According to the United Nations Conference on Trade and Development (UNCTAD), the 100 largest transnational corporations in 1995 (ranked on the size of foreign assets) owned US$1.7 trillion worth of assets in their overseas companies – around one-fifth of the world’s foreign-owned assets. They had foreign sales of US$2 trillion and employed close to 6 million people in their offshore operations.¹ Some...

  12. 6 ‘Free’ Trade
    (pp. 200-238)

    The companion to free investment is the unfettered movement of goods and services across all national boundaries known as ‘free trade’. Most governments and trade theorists treat this as an ideal to be advanced through reciprocal negotiations, where each country agrees to make the playing-field more level over time. In New Zealand since 1984, Labour and National governments have set out to dismantle all barriers to trade ahead of other countries, believing the others would see the benefits and follow suit. In 1998 National’s Trade Minister Lockwood Smith proclaimed: ‘we will gain nothing from being behind the trade liberalisation race,...

  13. 7 The World Trade Organisation
    (pp. 239-278)

    The primary vehicle for insulating free trade from social pressures and locking in commitments to trade liberalisation is the World Trade Organisation (WTO). The WTO had its origins in the General Agreement on Tariffs and Trade (GATT), which was negotiated in 1947 against the backdrop of an International Conference on Trade and Employment. The Agreement reflected the post-war compromise between a rules-based system to lower international trade barriers and the need to protect member nations’ balance of payments and domestic social objectives.¹ Although the US sought to limit these domestic elements, the preamble of the Agreement included a commitment to...

  14. 8 Asia Pacific Economic Cooperation
    (pp. 279-314)

    APEC – Asia Pacific Economic Cooperation – has been aptly described as ‘four adjectives in search of a noun’.¹ It is avowedly not a defensive trade bloc. Operating under the rubric of ‘open regionalism’, APEC aims to advance the process of economic integration throughout the world, particularly within the World Trade Organisation. Its mission is to serve the needs of the market. One Canadian official described APEC as ‘a product of the new era of globalisation, an era in which business does business in an increasingly borderless world’.² A senior US official explained in 1995 that: ‘APEC is not for...

  15. 9 The Multilateral Agreement on Investment
    (pp. 315-352)

    The World Trade Organisation was established as the vehicle for pursuing ‘free trade’. Attempts to include negotiations on ‘free investment’ in its mandate proved too controversial. So work on a Multilateral Agreement on Investment (MAI) took place at the OECD in Paris instead. Formal negotiations started in May 1995 and were due to be completed in May 1997. The agreement had three main objectives: first, to make it easier for foreign investors to establish, operate and divest in countries that had signed the agreement; second, to protect those investments against government decisions that affected their operations and profitability; and third,...

  16. 10 Reclaiming the Future
    (pp. 353-385)

    For fifteen years, the twin images of prosperity in a global free market and of New Zealand leading the world went largely unchallenged. Globalisation was represented as linear, evolutionary and irreversible. Even if the results were disappointing or unfair, there was no alternative. At the cusp of the millennium, such claims are not tenable and New Zealanders from diverse walks of life are saying so.

    This book has revealed the beginnings of a backlash against New Zealand’s free market revolution. Moves to eliminate tariffs on clothing and textiles brought together local mayors, unions and small manufacturers in 1998 to defend...

  17. Appendix: Figures 1–6
    (pp. 386-388)
  18. References
    (pp. 389-416)
  19. Select Bibliography
    (pp. 417-424)
  20. Glossary
    (pp. 425-428)
  21. Index
    (pp. 429-434)