Dr Michael Bassett

Dr Michael Bassett

Newspaper Columns


Learning from History

16/01/2007

History should be more popular in schools and universities. Much depends on the teacher, of course, who can make it deathly dull, or excite. Knowing where we came from, and what causes success or failure politically is always instructive. It's a truism that those who know nothing about history repeat mistakes. The older I get, the more I study trends over time. When I was a student, I optimistically believed that governments could fix most problems with inspired leadership. Mickey Savage, Peter Fraser and Walter Nash had erected a social security system and given everyone a chance to enjoy an education. The prevailing feeling was that enlightened governments could make people's lives even better.

Over time, politicians created a regulated world; people were expected to work for the common good. Producers who wanted to truck goods to market had to send them by rail, otherwise our iconic railway system would collapse from want of patronage. It was hard to buy imported goods because restrictions and tariffs made them unavailable, or expensive. We believed that New Zealanders could make almost everything we needed. We had "Buy New Zealand" campaigns. Beaches and parks were close at hand, but alcohol was ringed about with restrictions. No pubs opened past 6pm. Yes, there was sly-grogging and under-age drinking. We didn't realise it, but New Zealand was a cosy, unimaginative little country, gradually slipping behind the world economically. A Sydney beauty visiting in 1959 was interviewed when she returned. What did she think of New Zealand? "I don't know", she answered, "it was closed". Everyone worked, weekdays anyway, and it was often said that the Minister of Labour knew most of the few hundred unemployed by name. We kept on believing that big government meant progress.

An understanding of trends over time helps us work out what went wrong. Busy governments squeezed the private sector, making it invest in public projects. High taxes soon discouraged extra work. During the 1970s the number of state beneficiaries rose steeply. Economic growth further slowed. For thirty years we ran an inflation rate higher than our trading partners'. They couldn't afford our goods anymore. Tariffs kept out imports, but locally assembled substitutes were three times more expensive. We'd developed a very high cost structure. Those Kiwis lucky enough to travel overseas haunted duty-free shops. Eventually higher inflation caused our dollar to drop, although not fast enough to ward off a currency crisis in 1984. New Zealand finally rejoined the world in the 1980s, adopting mainstream economics at last, pushing aside the romance of my childhood.

What intrigues me about the modern political left is that they are mired in "the world we have lost". Heads in the sand stuff. All the nostrums and nostalgia that caused collapse in the first place thrives in today's Labour Party. Nostalgically they believe the state can spend our money better than we can be trusted to do for ourselves. The huge historical evidence about the excessive costs of bureaucracy gets pushed aside by romantics arguing that politicians and social workers can "fix" child poverty, stop crime, restore Maori society from its current state of near collapse, and "close gaps", despite the huge and growing contrary evidence. Social engineers have usually made such matters worse. The romantics dismiss the evidence as mischievous or cynical.

Do politicians and most social commentators read history? Not by the look of it. The pious hopes of the 1970s still infuse their thoughts. They think that governments can improve everyone's life by spending more; guaranteeing better outcomes by closely regulating telecommunications and electricity; assisting Maori by separate development rather than integration into mainstream New Zealand; and raising the minimum wage by a big margin to "assist" the unskilled. The last always boosts inflation, and kills off new job creation, but they don't care. If the left understood history it would stop re-making such mistakes. The evidence tells us that to obtain good social outcomes, hopes need to be weighed carefully against the fresh problems governments always create.

History didn't stop in the 1960s or 70s, any more than it did for Muslims in medieval times once the Koran had been interpreted. Each generation has to keep moving intellectually, measuring successes and failures, learning from the evidence, and adapting policies to new realities. A good beginning is to acknowledge that we never inhabited paradise, nor can governments create one. With nudges here and there, civil societies grow. They can't be engineered.