Would New Zealand be a different and better country today if the Labour Party had followed the advice of economist J.K. Galbraith in 1983?

IN SEPTEMBER 1983 the Keynesian economist J.K. Galbraith was scheduled to give the keynote address at the Labour Party conference. However, because of illness, he was unable to attend.

The speech he intended to give was titled 'The Economic Policy of the Social Left'. It is essentially a restatement and reaffirmation of the social democratic welfare state and the central role the state should continue to play in the capitalist economy. Galbraith called for a humanised and compassionate capitalism. Copies of the speech were circulated on the floor of the conference.

Writes Galbraith:

"The traditional social and economic concerns of the social left remain valid, compassionate and essential. They derive from the fact that capitalism in its original and pristine form had major manifestations of social cruelty and major areas of economic failure."

Galbraith emphasises the need for a strong welfare state because capitalism is  "..notably indifferent to the social and economic need of the young, the old, the ill and the handicapped, the unemployable and the unemployed."

Galbraith goes on to say that the state has a fundamental role to play in the economy because "..in all countries capitalism has proved incapable of performing certain industrial tasks, the most notable being the provision of lower-cost housing, urban transportation, rail transportation, hospital and health care."

With the emergence of what became known as neoliberalism in other western countries, most notably the United States and Britain, Galbraith was at pains to tell the Labour Party that, as a social democratic party, it was its duty to defend the gains that had been made in the post war era. Although Galbraith, the Harvard professor of economics, was not a person you were likely to meet on the barricades, his was a rallying call for social democracy to stand firm against the barbarians massing on the border.

"There must be no tendency on the social left to retreat on the services and functions that give this position its name. Nor should it fail to identify the motives of those who oppose.."

Galbraith, who rejected socialism, even suggests that conservatives should defend the welfare state because, in ‘blunting' the 'sharp edges' of capitalism, the welfare state had prevented revolution. In a grossly inaccurate depiction of revolutionary socialism Galbraith says that "Revolutionists going back to Marx have correctly identified the menace of "reform.".

But it  was the 'reforms' being contemplated within the Labour Party that Galbraith should of been really worried about. Sitting in the Labour Party conference was Roger Douglas and his merry band of supporters. They would not of looked kindly on Galbraith's comment that "We reject, as experience now manifestly requires, the painfully false promise of monetarism."

Labour's 1984 election victory ushered in the thirty years of neoliberalism that the country has been forced to endure. In 2016 the views of J.K. Galbraith are both alien and heretical to a Labour Party that long ago raised the white flag of surrender and allowed the barbarians to run amok. Indeed the present leader of the Labour Party, Andrew Little, once described the Galbraithnesque polices of the Alliance as 'extreme'. 

I doubt that J.K. Galbraith, who died in 2006, could find it in himself to support this Labour Party now.


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