2008 changed everything.
The intellectual foundation of the policy framework we have used for thirty years was cut to pieces. The excuses and evasions of those in power across the West delivering stagnant wages, limiting opportunities, allowing asset price bubbles to explode and fertilising the soil that grew the Global Financial Crisis were at an end.
The lesson since is about how hard it is to change to a new approach even when you know the old one is a zombie, a dead thing pretending to live but unmistakeably past it.
If neo-liberal economy is bankrupt and a new thing needs to replace it, where are the points of attack?
One is global trade. What passes for a 'trade' framework has been frozen for over a decade in the 'Doha round' of WTO talks. It isn't a bad framework, and it has a functional institutional structure to drive it -- but it is too liberal to survive unchanged post 2008 and with the rise of developing country power in the international community.
In this case by liberal, I mean stacked in favour of the rich white core economies, and against poor developing ones. The rich export tariff free. The poor face steep market access barriers. This dynamic is what has jammed the WTO: the poor have said "enough is enough" — and for the first time, we have to listen. The same dynamic breaks climate change talks.
New Zealand is on both sides. Quite rich and quite white, we suffer from agricultural trade rules stacked against us. The rich erect barriers and soak farmers with subsidies. The poor suffer the consequences.
So in the face of this freeze at the WTO, the wealthy and powerful are trying to side step it, in part with agreements like the Trans Pacific Partnership Agreement, a cross-Pacific agreement being negotiated as I write. The next round is in Auckland in December.
This deal goes beyond trade. It seeks to limit policy choices in a wide range of areas, to rules that lock the zombie ideas of the 80s into the driving seat for all time (or until unravelled). SoE rules? Investor state disputes? Challenges to public services rights? Threats to environmental control? Copyright term extensions? A licence for Hollywood to tax Google?
It's all in there with more, aside from what you and I would recognise as more normal trade policy.
Countries like NZ face a choice.
Resuscitate the zombie?
Or let it die?
My preference is that we work in the WTO framework to serve our interests and fairness all at once: undoing the bias against primary production, and in favour of rich subsidisers.
Agreements like the TPPA might offer short term gains. But the costs are already apparent. As a small example, look how Australia got gypped in its 2004 deal with the USA. The gains are hard to see, especially with some parts of the US establishment now starting to position TPPA as a China containment strategy.
We don't know how things will change in future. Open trade is almost always for the better, where there is a true level playing field.
NZ ought to focus on that aim through the WTO framework. Not be helping dead ideas march on into a future that leaves Labour ideals - decent jobs, strong public services, democratic government, good environmental stewardship - harder to achieve.
I will be watching the NZ debate with interest...