What’s it like running for elected office in New Zealand on a free market, limited government platform? How did the economic liberalization of New Zealand in the 1980s happen? What are the contemporary political issues of the day in New Zealand?
Trevor Burrus: Welcome to Free Thoughts from Libertarianism.org and the Cato Institute. I’m Trevor Burrus.
Matthew Feeney: I’m Matthew Feeney.
Tom Clougherty: And I’m Tom Clougherty and we’re joined today by Jamie Whyte, a friend of mine from London but most recently the leader of the ACT Party in New Zealand, a free market, almost libertarian party. He led them through their general election of 2014. It didn’t go entirely to plan and that’s part of what he’s going to talk to us about today, about being a libertarian in politics.
But Jamie has had a pretty interesting career up until this point. He was a philosophy lecturer at the University of Cambridge. He was a columnist with the Times of London. He was a management consultant, a currency trader.
Trevor Burrus: And his column was called Free Thoughts, correct?
Tom Clougherty: Well, not the one in the Times. That one was in City AM. But this isn’t his first rodeo when it comes to radio either. He works with BBC Radio 4 on their analysis program, producing such hits as Yo Hayek! and The Rule of Man versus the Rule of Law.
Trevor Burrus: Now is that the kind of thing that could only actually come out of state‐funded radio, like Yo Hayek!? I mean is that an equal time kind of thing? Is that what happened? That’s a good first question, right?
Jamie Whyte: Well, the BBC is quite scrupulous about trying to do that balance thing. It’s part of their charter and they go wrong not out of intent but because most of them are such leftists, that you think they’re being balanced even when they’re not. But the woman who commissioned me to do this work isn’t really a typical BBC person. She was almost sympathetic to our kind of ideas than most people in BBC, which may explain how I came to have the job.
Trevor Burrus: What were those? Were those like an overview of Hayek [Indiscernible] and life …
Jamie Whyte: Well, this program is called “analysis”. It’s I think a half hour show that looks at kind of ideas that are behind the news and the Yo Hayek! one was done just after the financial crash and it was looking at the argument between the Keynesian response and the Hayekian response. We thought it was an opportunity to just introduce people to Hayek’s ideas because they always hear the Keynesian ideas. Most people have no idea that there are people who disagree.
For example another show I did was on riots. Why were we doing a program on riots? Well, there had just been one in London and I was – we were asking the question, “How come people are generally law‐abiding? Why aren’t there riots all the time?” When you think about it, it’s an interesting question. So that’s the kind of program it is.
Trevor Burrus: So Jamie, tell me a little bit about running as a libertarian politician or maybe running libertarian politics in New Zealand.
Jamie Whyte: Well, I should be clear that the party that I became a leader of in 20 – the beginning of 2014 and the elections near the end isn’t strictly a libertarian party. It’s as close as you’re going to get in a democracy. But there are elements of the party who oppose to legalizing drugs. There are elements to the party who sometimes wanted kind of restraints on property rights that they thought might suit them and it’s an impure party.
But as I say, it’s as libertarian as you’re likely to get. The main problem that I had was not really connected with being libertarian. It was connected with being a novice in politics. So I made the mistake of often answering questions honestly when that was clearly the wrong thing to do.
The most obvious case of a mistake was when I was asked if the government ought to interfere in consensual adult sex between brothers and sisters.
Trevor Burrus: I have been asked this question before too. Not on the air, thank God. At a bar …
Jamie Whyte: I said that the government shouldn’t – well, since I generally thought the government shouldn’t have anything to do with consensual acts between adults. You extend that principle out and you get the answer. But they knew the answer I was obliged to give and this is one of the problems with being a libertarian or being a person with any clear philosophical position which is that you cannot predict what they ought to believe.
Of course a lot of what is entailed by principles is contrary to common opinion. Most people aren’t willing to take their – take ideas to their logical limit and they find people who do. Not to be impressive. Isn’t it wonderful how consistent he is? They think you’re nuts. They think you’re an extremist an ideolog – and somebody to be frightened of.
I actually do have some sympathy with that idea even because I think humans are rather fallible and if you – you can lose a grip on – you shouldn’t overrate your principles. If they start producing nonsense, then you’ve got reason to step back. But actually I should just tell you something I didn’t earlier. After this gaffe, a chap rang up the party …
Trevor Burrus: So you did say – your answer was yes, I guess …
Jamie Whyte: No, I said, yeah, I guess they shouldn’t interfere. But I said …
Trevor Burrus: And that’s the number one position of the ACT Party.
Jamie Whyte: I said, no, this is not party policy. It’s not an issue we care about. Let’s just forget it, right? This is a non‐issue. It turns out it isn’t quite as much of a non‐issue as I had thought because some chap rang up the party. I didn’t get the calls. Somebody else took it. He wanted to speak to me about an organization that he runs that helps brothers and sisters who accidentally got married.
You may think, “How do brothers and sisters accidentally get married?” Well, I will tell you how. In New Zealand, up until quite recently – well, up until the benefits for single mothers, adoption was very, very common in New Zealand. So imagine a town and there’s the local loose teenage girl.
Trevor Burrus: I think the word you’re looking for is “strumpet”.
Jamie Whyte: Local strumpet and she’s churning out the babies. They’re going for adoption and they’ve been adopted in that area. Then you might bump into a girl. You’ve been adopted. She has been adopted. You meet at school. You’re strangely drawn to each other and they end up getting married and they don’t discover until much later that they are actually brother and sister.
There’s so much of this. There was actually an organization devoted to helping them out. So it’s amazing what you learn by being …
Matthew Feeney: That reminds me of a – I read about an app that you can get in Iceland that will tell you if you’re on a date with your – related to your date. I mean Iceland is a much smaller country.
Trevor Burrus: A hundred thousand people or something.
Matthew Feeney: So I suppose the question – I mean why do you think it’s that, that you – I mean perhaps your principles and that you have these weird libertarian views. But is there another reason why you were asked this question in particular and why it wasn’t put to perhaps the prime minster or any other candidate?
Jamie Whyte: Well, partly because I was a novice and they thought of some chance that I would answer honestly. The other – I have been a professional philosopher, an academic philosopher and I’ve written a lot for the public. That means that I’ve laid out a lot of positions. So they can kind of fish for them.
Then they can put them to me. This happened on many occasions and then they can put me in a position where I either have to admit that I believe something that is contrary to popular opinion or I have to wriggle out and then I will look corrupt.
It’s very, very difficult not to be a politician – as I said, not just when you’re a libertarian. But when you’re committed professionally to intellectual honesty as you are as a philosopher, whether you are wrong or right, you ought to have a kind of commitment to intellectual honesty.
They knew that I came with all this. So I was obviously vulnerable in a way that real politicians aren’t. I had a good adviser and he – after this. And he told me. He said the way to answer these questions is to say I’m no longer a philosopher. I am now the leader of a political party and I’m speaking as the leader of a political party, but you’re asking me questions as a philosopher. I’m not going to answer philosophical questions. I’m going to answer as a leader of a political party.
Now that probably was about all I could have plausibly done. But I do advise anybody who wants to go into politics not to publish anything interesting.
Tom Clougherty: Well Jamie, now you’re not the leader of a political party anymore. I hope I can put a philosophical question to you. It’s really about the roots or the basis of your libertarianism. I kind of know roughly what your answer is going to be. You’re really much more of a utilitarian libertarian. Don’t really have a lot of time for the – I guess the natural rights tradition. So if you can talk about that a little, but also maybe putting context, British libertarians, New Zealand, Australian libertarians versus those in the United States. I think that there’s a clear difference between the movements and I’ve always wondered whether it does come down to that philosophical basis.
Jamie Whyte: Well, let me begin by kicking the Australians out of bounds.
Trevor Burrus: You do not do that as a citizenship test.
Jamie Whyte: Yeah. I don’t engage with anything Australian, Australian issues. I resent your question.
Trevor Burrus: And Matthew who is half‐Kiwi is onboard with us too.
Jamie Whyte: And also I just don’t know. Anyway, let me – I will do the first bit first. I am indeed a libertarian who’s – my commitment to liberal policies arises out of utilitarianism and certain ideas about what utility is. If you’re a – roughly speaking, if you’re a sort of preferenced utilitarian, that’s to say if you think that what’s good for somebody is a function of their preferences, then you naturally end up – if you think we should broadly [Indiscernible] maximize utility, the problems around measuring that and some, but just broadly speaking. If you also preference utilitarian, you’re naturally led to a laissez‐faire policy because you can know what your preferences are. You can know what your circumstances are too. They’re also vitally important and strangers can’t.
So this is rather – it’s kind of Hayekian in that it’s about – it’s a problem of information, trying to – it’s not just about economic planning. Hayek talks about economic planning, the problem of the information, but it’s across the board. Social policy, these issues about personal morality and so on.
That information‐based argument works for all of them and as I say, it rises out of being a utilitarian and a preferenced utilitarian. So that’s the kind of libertarian I am. I don’t believe that rights have to be created by law. I don’t follow Bentham in this view. But I think they have to arise out of something. That is to say some kind of a convention. It may be a – it may arise organically amongst people. They never agreed it. It just turns out that this is the way we do things around here.
So there’s what you might call a law, a convention, a conventional behavior. It wasn’t legislated. It wasn’t created by politicians but it’s real and it’s the foundation of the rights. If there was no such thing, there wouldn’t be any right. So I think for example the – there’s one of these declarations of human rights and nonsense.
In a place like Somalia, let’s say, there are no rights. There are no rights because there are no legal conventions or quasi‐legal conventions. There are no customary ways of behaving that if you break the rules you get punished and there are remedies and there’s none of that. So there are no rights.
More broadly philosophically, if you step back from political philosophy, I’m what have come to be known as a naturalist. So I think that all facts arise out of natural facts about the world broadly described by physical science. I don’t believe in magical entities such as rights that exist no matter what else exists. No matter what the word is like, there are these rights there. To me, that’s just kind of crazy talk. So that’s the kind of libertarian I am.
That’s a standard tradition. That’s Hayek. That’s David Friedman. He’s the same. That’s where I stand. Now, how do things vary? In Britain, which I probably know best oddly – better than – of them all, I think most utilitarian – most libertarians are like me. I would say if I’m thinking about the ones I know, the IEA, the Adam Smith Institute, not too many natural rights theorists.
I think there are plenty of people who are kind of Randian or Nozickian. But they’re not part of the – they’re not prominent in the libertarian movement. I think that’s right. I don’t know if you agree. In New Zealand, there are Randians blowing around.
In fact, a chap that I’m quite close to for my party – a good man, a leading barrister in New Zealand sent me a book about Rand’s philosophy. I can’t remember who had written it. I tried to read it in the bath but it’s just so turgid. Dreadful stuff. I’m all going bonkers. There was all this kind of non‐naturalistic stuff.
So there are more of them in New Zealand but the other thing that I will say, New Zealand does not have – it’s a small country. It’s only 4.5 million people. It doesn’t really have libertarian organizations. It has got a think tank that’s based on the capital Wellington called the New Zealand Initiative. I think they would resent being called libertarians. They’re a very [Indiscernible] market. Some of the people who work there are libertarians but you couldn’t call it a libertarian organization.
Just like my party, the ACT Party, is not a libertarian organization. It’s just the best home for somebody who is a libertarian. You’re not going to find anywhere better.
I would say it’s not right that there’s – there’s no libertarian movement in New Zealand.
Trevor Burrus: Do you think that this sort of tendency to utilitarianism as you mentioned in UK, in New Zealand, maybe that might explain the difference on gun rights for example, that you might see between – I see even in Britain a lot of people who consider themselves libertarians who are not very prone to believing in gun rights, Tom notwithstanding. I’m looking at Tom. When I get over there and – yeah, it’s – because there’s more of a deontological claim.
Jamie Whyte: I think that’s – yeah, I think you may be on to something. I think that may be one of the reasons. But I think there’s also a historic reason. The history of America is one of people coming here to get away from states, that they found in various ways oppressive. The view of the state as something – a potential enemy, something potentially hostile against which you need to defend yourself. That’s an American – common American idea.
The right to bear arms is associated with that idea. In New Zealand, the general view is that the state is benign. The state is a mechanism through which you express yourself, through which you – the community expresses kind of collective sentiments and is there to help you out and it’s not something you need to defend yourself against. The United Kingdom is somewhere in between I would say because it has had a history of kings.
Jamie Whyte: Yeah, except that they now believe that democracy makes all that irrelevant. There’s a common view. I ran up against it all the time when I was in [Indiscernible] in the UK that all of my ideas about the need to limit the state were wrong because the state just is you, right? Through democracy, you’ve – that’s like saying you need to limit yourself. That idea is very prominent in the UK and New Zealand, not so much in America I find.
Tom Clougherty: Well, some people listening might be thinking it’s interesting having this conversation with New Zealand because New Zealand seems to always rank very highly on freedom indexes and I’ve heard New Zealand described as a country designed by Hayekians but populated by progressives, which might be a very American way of looking at it. But what is that for New Zealand – for libertarians in New Zealand to do, given that it’s supposed to be some very liberal free place?
Jamie Whyte: Well, before I answer your practical question, I want to make a broad distinction. I think that what New Zealand as a – it’s not liberals in the political sense. That’s to say they don’t believe that the state should be strictly limited and that people should be free to make their own decisions about things that affect any of them.
What they are is liberal in the moral sense, which is to say they’re permissive. They think that the state ought to only allow you to do the things that they approve of, but they approve of almost everything. So it’s not that they’re politically liberals. It’s that they’re – what I called in an article once. They’re broad‐minded fascists.
Trevor Burrus: That’s really good.
Jamie Whyte: This is what the political left tends to be. They don’t mind lesbians. They don’t mind transsexuals. They don’t mind drug‐taking maybe. Maybe they do. But it’s – the reason they’re willing to have these things legal is not out of any political principle about the role of the state. It’s just because all those things are fine with them and if those things weren’t fine with them, well then they should be illegal. That’s what New Zealand is all like.
We are a very, very kind of laidback, permissive place. But the view is that if something is harmful to people, they shouldn’t be allowed to do it, even if it’s harmful only to them. So the drug laws, people defend the drug laws by pointing out that drugs are harmful. Everything is harmful. I mean eating is harmful, right? You can choke. You can get fat. But it has also got benefits and that’s why we tolerate it. Drug taking has got benefits.
Trevor Burrus: Every Pink Floyd album.
Jamie Whyte: Feels great, feels great to be high. But they don’t judge those to be worthwhile benefits. That doesn’t count. They don’t count. The leftists decide what counts and what doesn’t count. In New Zealand, there was about – there’s a rule in New Zealand that you got to wear a helmet when you ride a bike. If you don’t, they fine you $200. Why, right? How do you threaten other people by not wearing a – you threaten yourself and it’s the government’s job to look after you.
Everybody just agrees with that. So I wouldn’t say New Zealand is a Hayekian country. That’s a crazy idea. What was the rest of your question?
Tom Clougherty: Well, I think what – given the – what’s there to do?
Jamie Whyte: Well, there’s an awful lot to do. Drug liberalization is one. Again, this is typical New Zealand. The only reason people aren’t that uptight about it is that New Zealand unlike America doesn’t really enforce the law that strictly. The prisons aren’t filled with people involved in drugs. But it is illegal and occasionally, they don’t enforce it. Recently, there was a dreadful case of a woman getting a two‐year prison sentence of being found to be in possession of marijuana. She was really a kind of community leader in the area where she lived, very respectable woman. She just happened to have a dope‐smoking habit and she has had her life ruined. Two years in prison, she will never recover her social position.
So they do occasionally do it. So there are drugs. That’s one thing. The laws concerning the – restricting the use of your property, of your land for – to fit in with the government’s plans. So planning laws as they called it. I don’t know what you call them here in America.
Trevor Burrus: Land use restrictions.
Jamie Whyte: Yeah, all that stuff. That’s out of control in New Zealand. The ownership rights you have of your property are highly attenuated, extraordinarily attenuated. If I want to chop down a tree in my own land, and it’s over 17 feet tall, I have to have permission from the local government.
The effect of this is everybody chops their trees down when they reach 16 feet. But that – you can’t change the look of your house if you live in certain areas. It’s all very, very controlled and it’s having real effects particularly on the price of residential property.
The New Zealand dollar is currently worth about 65 American cents. The average house price in my hometown of Auckland just hit $900,000. This is the …
Trevor Burrus: At San Francisco …
Jamie Whyte: This is the average. The price of property last year went up 25 percent in Auckland in just one year. That has been going on. But you can’t – there is almost no new housing being built because of these restrictions. So that’s another thing.
More generally, the current government which has been in power for about eight years, is returning to industrial policy. The reforms of the 1980s right through the 90s, the government rejected the idea of industrial policy. The government should direct the economy because there had been calamities in New Zealand. But people always forget and there are people who lobby the government for favors for this and that. The idea that the government can play an important role in directing investment has returned even under a [Indiscernible] and that’s just a trend that’s going completely the wrong direction.
Another thing that has gone in the wrong direction is they’ve bought under pressure from people complaining about property prices going up. The government has just started to be more restrictive in allowing foreign buying. They’ve always had the power to do it, but they haven’t used it. Now there’s kind of ad hoc and arbitrary interventions in sales and the government just says, “No, you’re not allowed to sell your land to that person because he’s Chinese.” Things are far from perfect.
Trevor Burrus: I wanted to go back to – you mentioned this and my favorite libertarian thing out of New Zealand is what you mentioned in the 80s with the reforms, the free market reforms called Rogernomics in many circles. It’s one of these big examples of ambassador reform, a deregulation done that I think we don’t study enough because the actual – how you actually deregulate an economy is something that hasn’t happened. A lot happened in New Zealand in the 80s.
We did it in the late 70s with the interstate shipping and the airlines and home brewing and these were both done by the left interestingly enough. Can you talk a little bit about like what happened? What was it like before? The figure – Roger Douglas, the figure behind it and what changed?
Jamie Whyte: The New Zealand economy is leading up to these reforms [Indiscernible] 1984 was the most state‐controlled economy outside of the communist world. You wouldn’t believe some of the rules. You couldn’t buy margarine without a doctor’s certificate. The reason was to protect the dairy industry.
Trevor Burrus: That law has existed here. It used to be illegal to buy it – I think in Canada still. It’s illegal to dye margarine in some – so you have to just – it looks like clear fat just to protect the dairy industry.
Jamie Whyte: You couldn’t ship any goods or use a truck. You can transport them on a truck more than 50 miles because they’re protecting the railway. So you had to ship things and move things around on railways. You couldn’t import anything without a license. You can bring anything into the country. The government dispensed licenses to its political friends.
You couldn’t get foreign currency to go on foreign trips. There was no – television radio where – there was one television station that was state‐controlled. There were two but – that were state‐controlled. They’ve got two by then.
They started – TV started at 2 o’clock in the afternoon and finished at midnight. It was – you wouldn’t believe what it was like and it was …
Trevor Burrus: The best band was Crowded House.
Jamie Whyte: That was much later.
Trevor Burrus: Oh, that was …
Jamie Whyte: And New Zealand is getting poorer and poorer and poorer. I mean the history of the downturn was effectively – New Zealand had basically been a big farm for Britain. It would sell all its agricultural projects to Britain and it was reasonably affluent. It had very low levels of unemployment but it was very barren. You couldn’t get foreign stuff and there are no entertainment goods. There was virtually none of it. You couldn’t drink wine in restaurants. My parents always told me a story on one of their first dates having to drink wine out of a teapot because the restaurant wasn’t allowed to provide you with wine. So they drink it out of a teapot.
Trevor Burrus: Everyone just accepted this as just …
Jamie Whyte: Yeah, that was the kind of place it was. You just wouldn’t believe it. Anyway, after – Britain joined the European Union I believe in ’72 and this meant that they became part of the trading block and mainly out of pressure from the French. There were great barriers to imports and New Zealand suddenly was taken off the [Indiscernible] of Great Britain.
The government responded just by trying to take more and more control of the economy, trying to – they had that model and there was literally no economic growth between 1972 and 1984 and there was a crisis by ’84. A new government came in and they made radical reforms.
They removed all the exchange rate and capital controls. They got rid of all agricultural tariffs. They deregulated transportation and all the things we’ve been talking about. They just went to a completely free economy more or less except in one regard, the labor market. They still had compulsory unionism. In New Zealand, you had to join the union. Even when I was a student going to – as an undergraduate, I was required by law to join the student union. I wasn’t allowed to go to the university without joining it.
The labor party made a lot of these liberal reforms partly out of economic necessity but they didn’t have – they couldn’t make the labor market reforms because the labor unions were still their power base.
In 1990, a new government, the national government came in. They had meanwhile – they had been converted to free market ideas and they liberalized the labor market. So by the mid‐1990s, New Zealand was a model free economy.
You can start a business in no time for little money. The government was almost uninvolved. Since 1996, there has been backpedaling. Partly it was because of an electoral reform. We moved from [Indiscernible] to a proportional representation system and this meant that lots of smaller parties emerged and they got representation and it became difficult to form a government from a single party and this meant that it was much harder to drive through reform. Everybody was trying to stop it.
So that system had an effect. Then we got a labor‐led coalition government in coalition with Greens and all sorts of dreadful people. They started reversing things and reintroduced labor laws that made it hard to fire people. They renationalized some previously privatized industries such as railways and New Zealand is actually government …
Just they haven’t gone all the way back. Just a bit and the general tone – there’s no keenness anymore for liberal reform. I can’t remember the last time there was any liberalization of anything. It’s the other way around.
Tom Clougherty: So I want to go back to the Rogernomics, the liberalization of the 1980s, and my impression is that this was a big bang, liberalization. They hadn’t campaigned on it. They hadn’t commissioned studies and all that. They just kind of suddenly thought we have to do this and they did it and they got rid of all the agricultural subsidies overnight. What were the dynamics then if you can speak to that?
I mean were they just terrified of what was happening and they – it was necessity that drove them to these measures or was there someone somewhere there who was secretly a liberal underneath and had been hiding the whole time?
Jamie Whyte: The official story is that it was more a matter of necessity, so that they – I’m not going to remember this exactly. They had one change forced on them. I don’t remember what it was. It was just basically to make some kind of payment. Then they realized that that – they had to compensate for that with something else and something else and it was a cascade effect. They ended up liberalizing all these things.
This can be found – there’s actually a book where you can find this. It’s called I’ve Been Thinking by Richard Prebble. He was a prominent figure in this government, working under Roger Douglas.
Roger Douglas by the way was not the prime minister. He was a minister of finance. The prime minister was a man called David Lange. However, another element which I’ve only recently discovered is that the treasury which is the – what you might call the Ministry of Finance. It’s the – where the top bureaucrats around economic matters reside and they had prepared a report for the incoming government, describing the situation, recommending a whole lot of liberalization policies and it was really the treasury that had been infiltrated so to speak by free market guys.
They had a program ready and waiting and I think that if you really – the main contribution of Roger Douglas wasn’t that he was a visionary. It was the ballsiness with which he went about doing it. He just – it was – as you say, it hadn’t been announced. The population did not know what they were getting when they voted for the labor. But the labor party was going to walk in because there was a crisis.
They would walk in. So they kept their mouth shut. They refused to publish a manifesto. They had no policies before the – they just refused to say and – because they knew they were going to win and every time they got asked a question, “What will you do if you get elected?” they said, “Well, we really just don’t know what state the government’s finances are in. So you’re going to have to wait. Trust us.”
Trevor Burrus: That’s amazing. They had no platform.
Jamie Whyte: No, they had no platform at all. They knew what they were going to do but they wouldn’t – they couldn’t announce it because it would have cost them votes. So they always said, “We will get in to power. We will have a look at the books,” as if the books weren’t actually publicly available. But we will have a look at the books and then we will work out what we have to do.
They had no mandate for it. However, they did it immediately. We have a three‐year electoral term. So they had to face election again in 1987 and they won even though they had – the country going through the pain of rapid reform. But I think the people sensed two things. One was that it was necessary. The other was that they were so free. I mean you cannot believe how the country changed and I don’t just mean the economic results. I mean the mood.
Imagine living in a country where you can’t get the normal stuff that was common in America where you can’t travel without applying to the government for foreign currency, where every element of the economy is controlled by the government. You have to get permission to do things, where there are no decent restaurants.
When they came in and liberalized that, the explosion of pent‐up energy was amazing and people’s lives were transformed for the better. I mean even if you weren’t richer, you were so much better off. Nobody wanted to go back. We haven’t been back. New Zealand is now a modern, free country, part of the normal world.
Tom Clougherty: I mean it’s probably going to be fairly clear from what you’ve said to our listeners that New Zealand has a somewhat different political culture from the United States. I just remembered a story you told me about your father once ringing up the treasury to complain. I wonder if you could just share that.
Jamie Whyte: Well, he rang up Robert Muldoon, who was the prime minister before this reform, right? He was the guy who was doing such a bad job. My father rang him up. When they got his number, phone number …
Trevor Burrus: Your dad, was he a bigwig?
Jamie Whyte: No, no. My father was an ordinary kind of entrepreneur but he never made that much money. He was – the prime minister certainly wouldn’t have known who he was. So he looks up the prime minister’s number in the phonebook. I’m not joking. He looks up his number in the phonebook, rings him up at home and he answers the phone. I think his wife may have answered the phone. Oh, I will just go and get him.
Then my dad and he spoke on the phone for about an hour and a half. I recall very well because I was coming back from the kitchen. My father was still there on the phone with this guy.
I will tell you another story. The prime minister of this reforming government, David Lange, he had been a lawyer who worked for – in a poor area. He was a member of parliament representing a very poor part of Auckland. Out of genuine [Indiscernible] I don’t want the prime minister’s residence in Wellington when I am there. I’m just – so he rented a bedsit and …
Trevor Burrus: What was that word?
Jamie Whyte: A bed …
Jamie Whyte: He rented a studio flat and after his work at parliament, he would go back on his own to the studio flat. He was a very fat man actually and he – one night he would go there and – well, the police found the fire brigade were called because they found smoke coming out from under the door of the bedsit.
What had happened is that he had put a tin of baked beans on the stove to cook and he had gone to lie down on his bed and he had fallen asleep because he was so tired. It boiled over and there was trouble. But this is the prime minister. There’s no security. He has got no staff of any kind. He’s cooking his own baked beans on a pot.
It retains elements of it. I used to go to a gym in Auckland and the prime minister Helen Clark who was prime minister up until 2008, I would often bump into her on the stairs. She was running up the back to do some kind of work at class. No security. She would just give you a smile and should be in the class. No one would bother her.
New Zealand is a very – because it’s a small country. People tend to – if you meet anybody, you’ve probably got a connection. You say to them, “Well, where are you from? I’ve got a cousin down that way too.” Yeah, yeah, yeah. I know.
That mood permeates interactions and it permeates politics too. Politics is conducted in a much more – even if you disagree with each other, you might be quite rude in the disagreement, there’s no sense of genuine hatred. There’s no culture war. There’s no idea that you come from one part of the world and I come from another and we’re really on conflict with each other.
The worst – the most likely case you would have gotten for that would have been – my party is considered the most extreme kind of money‐grabbing, dreadful, that kind of thing and cruel and we have – we want to serve corporate interests. You can imagine the rhetoric.
Trevor Burrus: It sounds a little familiar.
Jamie Whyte: And then you’ve got the Maori Party representing Maori people and – but not – they don’t in a way – there were many very successful Maori. The head of the Bank of New Zealand, he went – no, the ASB, it’s a big bank. He went on to be the head of – in New Zealand and went to Australia and ran one of the big banks there. He’s Maori but Maori played – I’m thinking about guys like him that are thinking about the kind of poor rural ones.
So you might think that we are the most in conflict but after debates, I got on very well with the leader of the Maori party. He’s a nice chap and in general, when I was with others, there’s – there is some animosity – sometimes it’s just individuals. It’s just these people. There’s no sense of a class warfare, ideological warfare.
Trevor Burrus: Do you think that’s because of the relative homogeneity? I mean that’s – here we have people who write books called What’s the Matter with Kansas. People from the East Coast who maybe have never been to Kansas accept to write that book and to talk about how bad these people are because we have such cultural differences. Is homogeneity a big part of that? Is there a Kansas of New Zealand?
Jamie Whyte: Is it all Kansas?
Trevor Burrus: Or is it all Kansas?
Jamie Whyte: This is a little complicated. Compared to London, Auckland which is where I live is a very divided city. In London you will get a councilor state. You know what I mean by that …
Trevor Burrus: Thank you Tom. The translation is very important.
Jamie Whyte: You will get a housing project slapped in the middle of one of a – a really wealthy neighborhood, the Kensington or something. When I was living in Hampstead which is an expensive part of London, there was – I was renting a house. It was costing me – it was a cramped little three‐bedroom thing and it was costing me 900 pounds a week or something insane like that. Just across the way and the kids going to the same school, they counciled houses.
They’re free, right? So they’re inhabitants and then the kids go to the same school. Now this isn’t what goes on in Auckland. In Auckland, you’ve got really the clear neighborhood distinctions and as I understand the States, a similar result, which is that the schools in the wealthy neighborhoods are good schools and the schools in the poor neighborhoods are bad schools.
So that looks similar to America. But the thing that it doesn’t generate, the kind of conflicts or resentments there, and it is interesting why. I think that one reason is that so far at least, New Zealanders do not believe that the successful people have gotten there out of some kind of unfair privilege. They believe that if they’re successful, there’s probably some reason to do with them.
There’s no sense of a class‐ruling set. There may actually be one. I don’t think there is but there’s no sense of it. I feel that this is – this is a rather wonderful thing about New Zealand. It’s probably what makes living in New Zealand pleasant and often there’s – snobbery is considered the greatest vice. Probably the worst thing you could ever come across as is a snob.
But I suspect it is changing. It’s changing partly for the reasons that are being discussed globally which is that education now confers so much advantage and the kids of the rich get the better education. It’s a self‐perpetuating thing going on and also now that women – this whole stuff, you know. The doctor used to marry a nurse. Now he marries another doctor. That’s all happening in New Zealand and you are seeing …
Trevor Burrus: Static.
Jamie Whyte: Yeah. Maybe it’s not as mobile. Again, some of the stuff is exaggerated but it hasn’t yet caused trouble. The left of course politically wants to stir up resentments because they benefit from them. We’ve got all this nonsense going on now about poverty. I mean if you – anybody can define statistically. So apparently 20 percent of New Zealand children grow up in poverty and you can tell because they’re overweight. No, honestly. They reason like this. You’re in poverty if you’re earning under – less than half of the media income.
Trevor Burrus: Which is half the people.
Jamie Whyte: No, no, half the median.
Trevor Burrus: OK, OK.
Jamie Whyte: And then you say, well, OK, now here we’ve defined this group. Now let’s have a look at this group. What characteristics do they have? Well, their kids are overweight. They spend a lot of their income on smoking and so on and so forth. So you can get to the preposterous position where you define poverty by excessive spending on certain things. Then you say look at the – that poor person forced to smoke by their poverty.
Trevor Burrus: And drink soda …
Jamie Whyte: And then of course we’ve got to patronize them. We’ve got to try and control their behavior because they’re hurting themselves and they don’t do it because they want to. They do it because they’re victims of social injustice.
Tom Clougherty: It sounds like notwithstanding New Zealand’s impressive rankings in human freedom indexes, economic freedom indexes, that there’s a fair amount of paternalism going on. You’ve talked a little bit about some of the land use restrictions which seem pretty severe and yet there’s also something in New Zealand that is perhaps awkward for libertarians to admit, which is that the state seems to be fairly benign and efficient.
Jamie Whyte: Yes, which it is. It is efficient. They’re a joy to deal with.
Trevor Burrus: You said that at the lunch. There was a lunch before this recording and my head is spinning on this sentence.
Jamie Whyte: Yeah. I will tell you a funny little story. I was living in Belgium with my now wife. We live together and we had had a child and we didn’t necessarily want to get married. But I got a job in Singapore and we needed to get married because in those days, you bring your woman in with you – you should be married to her. Now they do.
So we had to get married and we had to get married pretty quickly. So we decided since we’re living in Belgium, let’s get married in Belgium. We go down to the town hall to get our license and then someone is going to interview me about all this. They can’t just give me a license. During the interview, I have a British passport and so they’re very – she’s saying, “But is it a bona fide relationship?” I said, “Look, it doesn’t matter because I can live in Belgium anywhere. I’m entitled to live here with my British passport.”
She goes like this – I’m getting on her nerves. Anyway, she says, “We have to come around to your house and interview you there to prove that you got a bona fide relationship.” I said to her, “You know, some people think it’s immoral to live together before your marriage. I’m surprised that the Belgian government requires it.”
Anyway, she wasn’t liking me and I said – we finally – I said, “OK, whatever. When can you do it?” Oh, January next year. Oh, never mind. So the other thing – I’ve got an alternative. We can get married in England where we’ve been living just before. So I ring up the English authorities in – it was my local – you got to go to the local council you’re living in. I said, “I want to get married.” He said OK. So you come to the office to get a license on a Wednesday morning. You can only do it on Wednesday mornings and it’s only open for three hours and there are normally very long queues. So I suggest that you arrive at 8:00 in the morning.
He said, “I must warn you. You probably won’t get to the end of the queue.” I said, “So you’re telling me that I should fly from Belgium to London every Wednesday and stand in the queue to get …” Then I find I’m getting really frustrated. So I think New Zealand is our last resort.
I ring up someone in New Zealand and I – I’m explaining the situation and the appropriate government department. The man I [Indiscernible]. OK. So what’s your name? I give him my name. OK. And this woman you want to marry, what’s her name? I give the name. And I said, “OK. Now what do I need to do?” He says, “Oh, it’s done.” I said, “What?” [Indiscernible] and when you’re in New Zealand, you can pick up the certificate. He just took the information over the phone and that’s what it’s like.
Taxes, those taxes are really simple and very easy. You don’t need a tax accountant. It’s getting a little worse but after this reforming government, the tax was so simple. They’re actually – one of the reasons they broke up, they were going to introduce the flat tax. Roger Douglas was going to have a 25 percent flat income tax – no, 23 and Lange, the prime minister just couldn’t take it. This was too much.
Jamie Whyte: No, having a flat tax. He needed progressive taxation for his socialist principles. But – because remember, this was the labor party and the government fell apart over that. Roger Douglas quit and everything unraveled. But – sorry, anyway, to answer your question, how come – well, I think it’s because New Zealand is small. It’s – you will bump into these guys at the airport and they’re going to look you in the eye. It’s very difficult to be – I mean take it down to the limit case.
Suppose that I say – there are just two people in the country and I say I want some redistribution of wealth. That means it’s you. It has got to be you. You’re the only other one. I’ve got to be able to look you in the eye and say that was fair enough. So because we all know each other – I’m exaggerating. But you know what I mean. It limits the predatory nature of politics a little.
It also I think – it also explains some of the socialistic tendencies in New Zealand because we don’t have other vehicles for much of this stuff partly because the state has always been big in New Zealand. These other vehicles hadn’t grown up. There’s a feeling that we’re all in it together because it’s small enough. That is – this is why I’m very much in favor of small governments and I don’t mean limited government. I mean literally governments that cover small areas because then, they got to look you in the eye.
Trevor Burrus: What lessons do you think we can learn? Other than the one you just stated but also with the Rogernomics, with the sinusoidal element here because we had a massive disappointment and massive deregulation to the point – I mean you mentioned earlier that – before we started recording that the farmers are killing themselves and huge problems and then a huge change in society and now it’s creeping back. So what can we learn about the progress of government and those opinions?
Jamie Whyte: Well, let me first draw another interesting distinction between New Zealand and America. It’s not just size. The government of New Zealand has a three‐year dictatorship. Their ability to do what they did is – they can just do it. If they got a majority of – there’s no upper house. There’s no president. We have one layer of government in that sense and because the executive will have a majority in the parliament, there’s no limit to what they can do.
So I think even if you had a president let’s say who had such an agenda, he would find it extremely difficult to get done. But doing it fast is really important. As Roger Douglas said, he said the reason he did – some people are saying to him, “Why did you do it all at once?” Why won’t you just a little bit more – steady as you go? He said because – he said you might as well have a general strike for eight reforms as for one, right? That’s the logic. His view was that if he did it slowly, the forces of resistance would have time to gather. So he did all in one go and I suspect that is the right way to go.
Then why has he been backpedaling? Well, it’s I think because he never had a mandate. He did get reelected in ’87 but that – as I said, there was a sense of liberation and a great energy overtaking the country. But what never happened in the UK either – or New Zealand was that the population understood the connection between free market ideas and the benefits that they were experiencing. They just didn’t get that connection.
That’s where the backpedaling can work. Politicians can come along and promote ideas that sound kind of commonsensical. The government should fix this and fix that. The people aren’t mentally trained so to speak to go, no, no, no, that’s – we don’t like that approach. So they like the results of the liberalization. But they don’t understand where they come from and so eventually it gets eroded.
I think this is a kind of natural cycle, depressing kind of natural cycle and I wish democracy were more constrained so that it was – the population was more limited in their ability to impose their will on matters that don’t affect them. I mean they shouldn’t have any say in – they all agree they shouldn’t have any say in my shoes. But they think they should have a say in all sorts of other things that affect me. There’s no principal basis for it.
So I would like to see – since I don’t trust them, I would like to see some constraints on their ability to indulge those ideas. But again, how do you do it? Because look at America. You’ve got a constitution which is supposed to have some of those effects. All constitutions have to have courts that – enforcement of the courts can’t be trusted. You get erosion. So I have no idea how to get – how to protect liberty against populism. I guess we’re all in the business of trying to shift the Popular Movement. That’s what we’re trying to do. If we can get everyone to agree with us, it would be fine. Oh, it’s going to be easy now.