Quezi

David Lange graffiti in Symonds Street Auckland (photo by Robyn Gallagher - CC-BY)

The economic liberalization of the 1980s took place under the Labour government of David Lange (pronounced “Longie”) together with Finance Minister Roger Douglas. One by one they dismantled the cruft of government, under the general notion that the government’s job was basically to produce a “level playing field” that would allow people to achieve their best.

To a large extent they achieved that, and in addition were economically prudent. They brought inflation, interest rates and unemployment under control, and prosperity increased. They also worked hard on social issues revolving around racial and gender equality, and nuclear non-proliferation.

Remarkably, with the move towards the “level playing field” there was no longer any role for lobbyists in Wellington (the capital city and seat of New Zealand government), and prosperity started to come to those who earned it rather than those who had connections in high places. I was living there at the time, and I quite enjoyed watching the lobbying firms going out of business.

The enthusiasm of David Lange and Roger Douglas was not quite matched by that of the electorate, and their reforms ground to a halt when they took it one step too far by announcing that the country would implement a 20% Flat Tax as a replacement for progressive income tax. Political considerations forced them to backtrack and that was the end of the liberalization policy.

The Labour Party lost the next election. As he graciously conceded defeat, David Lange opined that “history won’t judge us as harshly as the electorate has tonight”, and I think that turned out to be correct.

It didn’t take long after that for the lobbyists to start up again, and for the government officials to resume their empire building.