Three major economic influences occurring simultaneously, food prices, oil prices and the U.S sub-prime collapse of domestic housing – the economic equivalent of the almost “perfect storm” have the capacity to cause world wide social and political upheaval. There will be changes in governments and the closing gap between rich and poor will again be widened. When the poor of the world are left with nothing else but despair, their natural instinct to survive at any cost will come to the fore. In countries like New Zealand, this despair may see the routing of the present Labour led government, as the country’s expression of protest.
If we see again a stock market collapse and world wide recession, then we will have the “perfect storm” with catastrophic consequences. The 1 trillion U.S bale out and effective ‘nationalization’ of the mortgage industry will only delay the inevitable. Economic and political neo-liberalism is based on the doctrine of the free market and the ideological right. It includes the notion that markets are self correcting and hence should be self regulating, that competition will serve the public interest well, that privatization is desirable and the role of central banks is to focus almost exclusively on inflation, all without any government intervention.

In the New Zealand context we have seen the government having to renationalize the railway system after 20 years of asset stripping by overseas owners and of Air New Zealand because of poor management. (Oddly, the champions of the free market became loud proponents of government intervention to save their investment). The Reserve Bank’s fixation with inflation has been to the detriment of a social dividend to the New Zealand society in the form of significant tax cuts.

The markets did not anticipate or prepare us for soaring oil and food prices. Indeed, futures market speculation on oil prices has been a significant contributor to oil price rises. With every oil company reporting an increase in profits the concept of competition versus cartels needs to be examined. Free trade agreements are another example of neo liberal economics. They are almost invariably at the expense of the smaller country, particularly in agriculture where government support and investment in agriculture stops, while U.S and EU subsidies for agriculture continues. The market has also encouraged poor countries to divert agricultural production to bio fuels, directly leading to the world wide price increase in sugar, palm oil, maize etc and food shortages which have the double whammy effect of further increases in food prices. Indeed, not just the neo liberals but also the green movement world wide have been discredited by the whole bio fuel debacle but they don’t have to worry about malpractice insurance – the costs will be borne by developing nations, especially the poor.

Neo liberal market philosophies have always been a political doctrine with political outcomes. It failed spectacularly in New Zealand in the 1990’s and will do so again. It’s social partner in crime has been the doctrine of political correctness. Loosely defined, political correctness means that legislation and political culture, ensures that no-one is offended. While governments have refused to legislate for economic intervention, social engineering type legislation has been prolific. The problem with political correctness legislation is that while protecting the rights of a minority, it can often be at the expense of the majority or the mainstream. It becomes both a political and moral knife edge, exacerbated in New Zealand by the MMP system of government.

What is the problem with political correctness? Morally, we would all agree that the rights of all citizens should be protected. Few would argue that racial or religious discriminations should be allowed or that women should be paid less than men in the same job. When is enough, enough? Is it right for certain councils for instance to insist that only New Zealand native trees should be planted? Is it right that in terms of politically correct tolerance we should condone physical child abuse or indeed genital mutilation on the basis of culture. If people say we shouldn’t allow immigration of Somali people to New Zealand because of difficulties previous immigrants from Somalia have had in terms of assimilation and employment opportunities, should they be labeled as racist bigots. If you injure a burglar you catch red handed in the act, is it right that you’re the one who gets charged by the police? Some schools don’t celebrate Easter or Christmas because it may offend non Christians. Some tertiary courses are altered to accommodate political correctness, the most glaring being the Christchurch School of Nursing who taught that Abel Tasman didn’t discover New Zealand but was instead lost at sea and found by a Maori canoe and guided ashore. Is it any wonder that Phillip Atkinson describes political correctness as “an evil tyranny” and Augustin Blazquez as “the scourge of our times.”

What is wrong with political correctness? In simple terms it allows the atypical to become typical. The rights of the mainstream and of the vast majority become subservient to the rights of a few. It drives politics and social development. It can take away the rights and freedoms of individuals. It inhibits social cohesion and indeed economic development and national prosperity. It has become a movement that has depowered leadership and diverted drive and vision. James Taranto summarizes the debate quite well “political correctness entails intolerance for some prejudices but impunity for others.” Too often by protecting the rights of a few, you take away the rights of the many.

Both neo-liberal economic theory and political correctness has caused major disengagement of the public with both economic and social cohesiveness and both concepts have caused enormous problems for our societies, in all contexts.