Bryan Bruce's faith in a kinder and gentler capitalism is misplaced.

One of the strengths of Bryan Bruce's documentary on economic inequality in New Zealand (Thursday, 29 Sept, TV3) was that it put faces to the statistics about the growing level of poverty in this country.

In the first twenty minutes of Mind The Gap we were introduced to Christchurch woman who was sleeping with her three children in a couple of small tents in the back garden of a friend's house.

Then there were the families who could barely make ends meet on the abysmally low wages that were coming into the household. One family saw 90 percent of the father's wages go out on rent each week. It was only the additional amount they received from working With Families that allowed them to scrape by.

These were not exceptional cases but rather the results of wage levels continuing to decline and benefits being squeezed. Meanwhile, the rich have continued to get richer.

These are the people - decent people - that are routinely bashed by the wealthy politicians and their equally wealthy media cheerleaders as being feckless, irresponsible, unable to budget. And they have too many children. And they spend all their cash on the pokies, ciggies and booze.

Rather than blame the victims of poverty, Bruce points the finger of blame at the ideology and policies of neoliberalism that has dominated this country for three very, very long decades.

Bruce also made the point that the failed policies of neoliberalism have lingered on even after the financial meltdown of 2008 because they remain of benefit to the rich and the powerful. This is sometimes referred to as Zombie Economics and the zombies are still stalking our fair land. Just recently one of the contenders for the Labour leadership, Grant Robertson, declared that Labour had no intention of upsetting the 'free market' applecart. This is something both the other two contenders for the Labour leadership, David Cunliffe and Shane Jones, basically agree with.

While Bruce's criticism of neoliberalism is fine as far as it goes, the fundamental flaw in this analysis was exposed when he asked the pertinent question: What is an economy for?

My answer is that it depends.

If you are talking about a capitalist economy, which Bruce was, then it is about generating profit for the owners of the means of production - which you might recall from Political Science 101.

But Bruce, who has often referred to the more 'egalitarian' era of post war Keynesian New Zealand, thinks a more socially orientated capitalist economy can be created and he outlined some of the polices he would like implemented . They ranged from a financial transaction tax to businesses prioritising social goals before short term profit.

Bruce draws much of his inspiration from the work of Robert Wade who is a professor of political development at the London School Of Economics. He belongs to the school of 'New Keynesianism' which opposes free market fundamentalism and advocates government intervention, regulation and spending in various areas of the economy. (I'm having a certain sense of deja vu here). In other words, the crisis of capitalism is merely a technical difficulty that can 'repaired' with 'better' policies.

The views of the Keynesians however,as noted economist Michael Roberts has pointed out, do not recognise that the underlying cause of the crisis in the first place is to be found in the failure of capitalist production to generate enough profit. Keynesians though would have you believe that the crisis has been the result of an over reliance on finance capital.

The socialist answer is to end the capitalist mode of production and replace it with a democratically controlled, planned social production. Bryan Bruce isn't advocating this. His analysis, in the end, is faulty and that leads to wrong conclusions.

I agree with Michael Roberts who has commented that 'it is a serious deficiency for those fighting for labour against capital, and needing to find the right policies, to rely on Keynesian theory and policy.'


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