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Introduction

Social democrats are once more in government in New Zealand. The intervening years have seen successive liberal governments implementing fifteen years of neo-liberal policies that pursued a free market imperative. The Fourth Labour government began what would become known as the 'New Zealand experiment' in 1984. That election, the Lange led Labour government won on a socialist vote but then immediately began a process of restructuring resembling that of the right more than it did socialism. In 1999 The Fifth Labour government achieved political office. Now that social democracy is once again in power is the political topography that is being mapped out by a reconstituted Labour Party one that is aligned with the Left or the Right of the political spectrum? Is this direction consistent with socialist reform or is it continuing the neo-liberal direction begun in 1984?

The Fifth Labour Government

Social democracy has found a new acceptance in the industrialised nations of the west. In Europe, some of its leading proponents have ascended to political office in a global era. Social democrats themselves claim this new dominance is because socialism has been renewed. Anthony Giddens suggests that this is because, for the left, centrist politics is grounded in compromise (Giddens 1999:44) not the old polemics of ideological opposites. The new polity that is emerging from the amalgamation of global capitalism and technological networks have inevitabily overrun classical social democracy leaving it behind like a relic of the cold war.

So it was that socialism needed to re-examine the raison d'etre of its function in a globalised postmodern world. The collectivisation, that is the heart of socialism, needed to be realigned with the individualism that is at the centre of liberalism and more recently neo-liberalism that has dominated modern politics for a decade and a half. The privileging of the collective over individual pursuit are diverse propositions to rationalise. It cuts to the very essence of what it is to be socialist. And in the end it cost the Fourth Labour government an election.

The Rise Of Socialism

Socialism emerged from the processes that created such a fertile environment for capitalism to flourish in. One of the first recorded usages of the word socialism was in 1832 by Pierre Leroux in the French journal La Globe (Cleaver in the Development Dictionary 1997:238). Leroux was an adherent of the French socio-capitalist Count Claude-Henri de Saint-Simon. Considered to be the founder of French socialism, Count Claude-Henri de Saint-Simon thought that society should be organised along industrial lines with scientists and leaders of industry in a kind of theological union of producers. In England, the first use of socialism can be traced back to Robert Owen. Both Saint-Simon and Owen rejected the egoistically derived individualism of Adam Smith and Hobbes (Cleaver in the Development Dictionary 1997:238). Socialism of course has been most influenced by Karl Marx, who saw in the revolutionary proletariat the possibility that in society, '…we shall have an association, in which the free development of each is the condition for the free development of all' (Marx 1971:105). Karl Marx, inspired by the revolutionary characteristic of Jacobin insurgency, that lay at the heart of the French Revolution (Cleaver in the Development Dictionary 1997:239), drew these strands together in to a radical socialism.

Marx believed that once workers were able to grasp the reality of their situation, as an exploited social force oppressed by the moneyed classes, they would take control of production themselves and cease to be exploited and alienated from that which they strove to produce. This would in turn lead to a release from the encumbrance of social conflict. In 1864, the First International, in London, was an attempt to do exactly that; socialists hoped that by organising workers and socialists they would consolidate their influence. They were led by Marx himself. It is interesting to note that this was also the point, historically speaking, that the split between Marxist socialists and Anarco-socialists occurred. The second attempt at organising and formulating a cohesive socialism was the Second International, in 1889. By the time of the this event, socialists had realized that their best hope, for the realisation of a socialist state, was through electoral politics and gradual social reform (Cleaver in the Development Dictionary 1997:242). This together with a strong drive toward international law prefigured contemporary social democracy and more specifically the Third Way. At that time the German Social Democratic Party dominated the political landscape of Europe just as they dominate contemporary European politics (Cleaver in the Development Dictionary 1997:241). One of the earliest key figures in socialism was Jean Jaures from France, who was an ardent advocate of international law and who is now considered to be an early architect of the Third Way. The Third International, in Russia, in 1919, sought the same goals as the First and Second Internationals but also attempted to implement a unified bulwark against Fascist encroachment.

In 1917, the Russian Revolution seemed to offer the best possibility for the advent of state socialism . However, as the passage of time has passed this was not to be, and the potential of this revolutionary action was subverted by the Bolsheviks who gradually took control (Cleaver in the Development Dictionary 1997:243). Thus Russia became what Max Horkheimer termed an 'authoritarian state', one which while it resulted in less class conflict than the monarchy that it deposed it, it still nevertheless, had its own class antagonisms (Cleaver in the Development Dictionary 1997:243).

In the end, Russia became the antithesis of capitalism. Collectivisation, central planning, and increased industrialisation were fundamental to a state backed by the military. The dichotomous relationship of Russian state communism to Western capitalism reached its zenith with the Cold War. Then finally, Russia was beaten not by Nato but economics and its own internal tensions.

Harry Cleaver suggests that the poplar Russian uprising in 1991 was not to depose socialism per se, but its Leninist, authoritarian, incarnation (Cleaver in the Development Dictionary 1997:246). Cleaver's argument frees socialism from the worst excesses of the authoritarian state, effectively cutting adrift the basic tenets of socialism such as, egalitarianism, social justice, and collectivisation, from what has been dubbed the 'Russian experiment'. This made the potential for a renewal of social democracy possible. As Tony Blair and Gerhard Schröder's Third Way manifesto shows, modern social democracy has eschewed the authoritarian, anti-democratic, aspects of socialism in favour of the more egalitarian aspects of its ethos.

Socialism In New Zealand

In New Zealand, social democracy evolved by way of the New Zealand Labour party which was formed in 1916. It had emerged out of the Social Democratic Party that had been formed 3 years earlier; and which itself was formed 16 years after the formation of the British Labour party. The first Social Democrat government in New Zealand was that of the Michael Joseph Savage who took office after the Depression. This First Labour government is considered to have been the architect of the New Zealand welfare state. They held power for 13 years from 1936 to 1949. The second Labour government held office for considerably less time and was under the prime minister-ship of Walter Nash from 1957 to 1960. Norman Kirk led the third Labour government, which held office for another 3 year term from 1972 to 1975.

In the end, the internal tensions, which permeated the Lange government, forced a split between the left and right wings of the party. This culminated with long-standing member Jim Anderton, leaving to form his own left wing party The Alliance. In his memoirs, written after the 1984 general election, Robert Muldoon situates the current leader, and Prime Minister, Helen Clark, as being, along with Jim Anderton, on the then Labour party's extreme left wing. Saying that, 'When the Labour Caucus selected its Cabinet Members, Jim Anderton and Helen Clark, the member of Mt Albert who was his close collaborator and who was seen to occupy the extreme left of the Caucus, both narrowly missed selection' (Muldoon 1986:177).

It is said that the Prime Minister favours the Swedish model of social democracy that emerged out of the post-war reorganisation of Europe. Essentially this is 'open capitalist economy…modified and effectively "managed" by the state in conjunction with representatives of labour and capital (the "social partners")' (Eichbaum in Chatterjee et al 1999: 36).

That we have a new kind of society is a given. New Zealand has been small and remote for 150 years, situated closer to the southern pack ice than Europe or America. But with the ascendancy of political economy, and the collapse of the eastern bloc, together with the speed of new technological expansion, Aotearoa has become 'hard wired' into global financial and communication networks. These networks turn over vast sums of money everyday with just as much traded again in information. So too, the nature of civil society itself has changed, with the advent of a more culturally 'open' attitude that seems to have developed in tandem with technological change and the opening up of the markets. The 1980s saw the most significant changes in terms of the political topography of New Zealand. As a result, the global market coupled with an unruly stock market, which was plagued by speculative finance, was let lose on the New Zealand economy and public by the neo-liberal policies of the Fourth Labour government. So unequivocal was the change in ideological direction that it would, in the end, cost them their office and years in the political wilderness muted in opposition. The Labour Party would not come to power again until November 1999, when the networked geography of the world and its politics had changed yet again.

It is a time when public interest in politics is in decline and voter turnout is decreasing along with it. To the public, the business of government has become homogeneous and routine. The nature of the party machine itself has changed, with a movement away from the traditional focus of the party, shifting it to the party leaders so as to focus more on political branding. Add to this the fact that many voters feel betrayed by political parties, which like the Fourth Labour government, are voted into power on one platform and immediately implement another. Or worse still, contain members who defect from one party taking their parliamentary vote with them to another party altogether. In a speech to the Labour Party in 1999, Lianne Dalziel laid the blame for voter disenchantment squarely at the feet of politicians themselves. 'There is considerable public antipathy towards politics right now; no doubt assisted by political parties not matching their pre-election words with post-election deeds' (scoop.co.nz Dalziel 1999).

Depoliticisation

Depoliticisation (Depoliticisation 1) is occurring in most of the industrialised nations just as it is happening in New Zealand. Voters are becoming less interested in politics (Giddens 42); and the constantly shifting political boundaries make old party allegiances no longer as binding as they once were. 'The rise of individualism, the values of the 1960s, television, economic change and a host of other factors are blamed for fostering an atomised world in which people feel less social connection and less interest in common issues or collective solutions' (Depoliticisation 1).

Bruce Jesson relates the atomisation in New Zealand to being directly attributable to a decade and a half of liberal policy making, which manifested itself in the financial colonisation that occurred in the public and private sectors (Jesson 1999:211) during the 1980s - 1990s. 'Society has lost much of its cohesion and continuity in the course of the transformation. Industries have closed, communities have withered, people have moved in and out of employment, change has been so constant that many people are completely disorientated. People wander through life relating to no social group wider than the family, and often not even that' (Jesson 1999:211). Adding to this fragmentation is the constant restructuring of the economy and business, at both the local, and international, levels which is also coupled with 'changing individual values and the erosion of ideological frameworks [which] have weakened the traditional class basis of organised politics' (Depoliticisation 3). This only seems to add to the general feeling of powerlessness. In New Zealand, this is reflected in a decrease in voter turnout by 18 percent - second only to Switzerland, which is at 24 percent (Depoliticisation 10).

Political Inequity

The gap between New Zealanders who posses and control capital and those that do not has been getting wider. Tony Giddens warns of the consequences of inequality in The Third Way: The Renewal of Social Democracy, saying that 'a democratic society that generates large-scale inequality is likely to produce widespread disaffection and conflict' (Giddens 1999:42). Where the interests of capital lie outside of the social, the social infrastructure itself has been left to decay. The ideological abstraction of the free market, and the liberal policies that enshrine it, have been the impetus behind the devolution and disintegration of New Zealand's social structures.

In the end, the Shipley government would be voted out by a public tired of the emptying of public space and alienated from democracy itself (one only needs to remember the National government's placation of China's president Jiang Zemin at the expense of New Zealanders' democratic right to protest against China's international conduct - a pivotal moment in the Shipley administration and a pivotal moment for democracy in New Zealand). The ascendancy of social democrats, both in the Whitehouse and Downing Street, seemed to almost foreshadow a similar change in New Zealand.

A Change Of Direction

Bruce Jesson, with unerring accuracy, extrapolated the possible political geography that a social democrat party would have to traverse in his book Only Their Purpose Is Mad. 'If a reforming government came to power, say a Labour/Alliance coalition, it would have immense difficulty implementing the measures that might be expected of it. It wouldn't have the constituency…. the committed constituency that Labour used to have in the unions, the public service and in professions such as teaching. It speaks, agitates, writes, proselytises and contributes to the general political mood. If a constituency of this sort exists these days, it is on the Right' (Jesson 1999:210). Jesson emphasises the systematic dismantling of the state, by a succession of neo-liberal policies, as being the main reason for this. Pointing to the penetration of free market discourse into too many spheres of civil society, Jesson says 'Those that survive have been colonised by the finance culture. Unions no longer have a culture of solidarity, but are bargaining agents and business organisations. Universities, similarly, are losing any concept of learning being valuable for its own sake, and exist to sell vocational qualifications to their customers. The net result of developments like these is that we lose the alternative points of view needed to sustain an alternative political programme' (Jesson 211). In other words, the monetarist hegemony of neo-liberalism was now complete. The Social Democrats must not only roll back the result of the policies of the last 15 years, but also do so in a climate that is openly belligerent and hostile to change.

A reformist government would have to guide the economy away from its pure focus on the country's exchange rate and work toward increasing production (Jesson 1999:207). 'At least since Adam Smith's analysis in The Wealth of Nations (published in 1776) economists have recognised that specialised production is the major source of rising labour productivity and living standards. As individual workers become more skilled in particular types of work, and as new capital becomes better adapted to new tasks, the amount of output produced per worker can increase dramatically, especially in the manufacturing sector' (Dalziel in Chatterjee et al1999:68). The Labour Party's manifesto puts 'stronger export led growth' at the top of the list of economic measures it would introduce. That is an entirely pragmatic strategy in a global economy but there is no mention of the nation's own market which should also be a part of recuperative measures. This would have a positive effect on the economy if a percentage of production were geared toward the local market to keep capital circulating. In an open market it pays to think global but act local. New Zealand's problem has always been that it spends more than it makes. This would in turn encourage growth in local industry with a flow on to employment and savings.

Democratic Processes

The culture of neo-liberalism has permeated so deeply, become so firmly rooted in everyday life, that the left has few allies. If the constant editorialising of the media and the protestations of business do not persuade the voters to vote conservatively next election the social democrats will require a second term at least to implement their policies effectively. In the mean time, the millennial discourse of consensus and dynamism seems to be more discursive than to actually constitute a political position. In the end, it was overwhelmed by a culture of finance like everything else. The impact this has had on democratic processes is that, at times, it seems as if political choice is reduced to little more than choosing between the personalities of the parties' respective leaders.

The Lange government bought with it a rate of change that has been radical, swift, and imposed from the top down. Labour began the wholesale sell off of the country's capital assets with no regard for the democratic process. 'There wasn't in fact any compelling need to sell anything at all. The programme of corporatisation had worked in financial terms. The State-Owned Enterprises were trading profitably. They were paying their interest bills, plus dividends and taxes to the state. The situation could have continued indefinitely - as, in the cases of a small number of SOEs like Electricorp it has' (Jesson 1999: 162). As Bruce Jesson points out, the Fourth Labour government went further than was necessary in the circumstances. Not content to stop at deregulation, a fire sale of state owned enterprises ensued. Much of what went under the hammer was integral to New Zealand's sovereignty, such as the telecommunications and rail network. As any tactical strategist knows, just as it was patently clear in the popular Russian revolution of 1991, that the first step in the successful occupation of a nation is to secure the internal lines of communication and supply.

During subsequent years of liberal governance there has continued to be little or no consensus while the state continued to sell off state assets in a thoroughly undemocratic manner. Bruce Jesson expressed the view that '… the most serious effect of this purely economic approach was the way it marginalized the democratic process' (Jesson 1999:157). Interestingly, on his last evening in this country, Simon Carr, who was then, in 1978, the associate editor of the neo-liberal newspaper The National Business Review, described New Zealand 'as a great place where anyone with an idea and a few mates in the right places could change the entire country'. And that is exactly what happened. As Jesson also pointed out, 'The fundamental problem that New Zealand faces in this respect is that the financially-driven Treasury approach has deprived us of a rational political process' (Jesson 1999: 159). Roger Douglas himself, through the whole question of democracy and consensus into disrepute when he said, 'Once the programme begins to be implemented, don't stop until you have completed it. The fire of opponents is much less accurate if they have to shoot at a rapidly moving target' (Jesson 1999: 106).

Social Democracy

Social democracy entails 'a greater number of policy instruments and somewhat broader economic policy goals…it is as much about how policies are developed, implemented and evaluated…' (Eichbaum in Chatterjee et al 1999: 34). In April the Listener's political writer Jane Clifton described, social democracy as '…different from what it was when the first MPs and academics started tossing it around. The term was coined earlier last century to distinguish - depending on which authority you consult - the centre-left from the socialists, or the socialists from the communists. Either way it carried a pragmatic connotation. Unlike the socialist/communist view, social democrats believed that there should be a "mixed" economy - one in which the state allowed a vigorous free(ish) market, and kept control of enough of the economy to redistribute some of the capitalist wealth' (Listener April 1st 2000 p16). Social democracy appears to have been modernised and pushed, by political evolution, toward the centre-left. To this end, many social democrats eschew the bi-polar terms of left and right and talk of consensus and inclusion and equity. So that one wonders if socialism has evolved in to something quite different, something that tends more toward neo-liberalism; or if it still has a socialistic heart. In other words, does renewal constitute a dialectical synthesis of both these political philosophies?

In the United Kingdom, commentary suggests the Labour Party are attempting to inaugurate the very kinds of restructuring that has gone on in New Zealand under neo-liberals. In fact, Jane Clifton decided that according to her earlier definition 'Robert Muldoon was as much an SD as Norm Kirk...'(Listener 1st April 2000 p16). 'But overtime, the definition has had to change, partly because a "mixed" economy isn't what it used to be. Globalisation has meant that governments can do less and less, unless they fortress a country off from the rest of the world entirely, so the capitalist part of the mix has grown, and the state bit shrunk. It's what can be done out of the shrunken state bit that social democrat governments are all about' (Listener 1st April 2000 p16).

The Third Way

Third Way is a more difficult term to apply to a New Zealand context, 'the Keynesian mixed economy was such a durable part of the New Zealand landscape that in a local context it is perhaps the "first way", and the liberal market monetarism of Douglas and Richardson the interloping "second"' (Eichbaum in Chatterjee et al 1999: 37). More specifically the '…"first way" is found in laissez faire capitalism - private ownership of capital, the profit motive, goods and services exchanged in competitive markets. The "second way" is the socialist system - public ownership, production for the public good rather than private profit, and statist control or regulation of the economy. The "third way", …is everything found between those poles of economic and social organisation' (Eichbaum in Chatterjee et al 1999:35).

The Fifth Labour government's alignment with the Third Way can be seen in a speech by the Prime Minister to the Chamber of Commerce in June 2000, The Prime Minister, explicates the Labour Party policy positions within the context of the Third Way. 'We are also committed to increasing our national investment in education and skills, in economic development, in quality public services and infrastructure, and in nurturing both the natural environment and our unique arts, culture, and heritage. This makes ours a classic Third Way government - committed to a market economy, but not to a market society. New Zealand is, after all, a nation, not just an economy. And advanced nations must address broader hopes and aspirations for inclusion, participation, empowerment, fairness, opportunity, security, and identity - as we are doing'(Labour.org.nz economy.htm).

Anthony Giddens states that 'the overall aim of Third Way politics should be to help citizens pilot their way through the major revolutions of our time: Globalisation, transformation in personal life' (Giddens 1999: 59). So the effects of the state are mitigated by 'A healthy civil society [which] protects the individual from overwhelming state power' (Giddens 1999: 85). The Third Way's most public proponents, aside from sociologist Anthony Giddens, are Tony Blair and Gerhard Schröder, with Bill Clinton somewhere in behind them. On the surface, what the English Labour Party appears to be espousing is more neo-liberal, more discursive, and a more plutocratic form of polity than that practised by New Zealand social democrats. Both Tony Blair, and Bill Clinton, and possibly George W. Bush, if he is successful in his bid for the Republican Presidency, will encourage the implementation of 'Washington Consensus' style government. This emphasizes a more market driven approach within the state mechanism and society itself. While at the same time the influence of the government withers away from the public sphere. Blair and Schröder's Third Way Manifesto morphs socialism in to a kind of populist plutocracy.

In Britain, Tony Blair's government maybe more neo-liberal in their Third Way than social democrat; indeed, a common humorous acronym of the Prime Minister's name that is circulating is 'Tory Plan B'. Voters see Blair's talk of welfare reform having the sound of devolution. To many it sounds more like the dismantling of the welfare state than renewal. Socialism's foundation is collectivisation, or inclusion, that is why the welfare state plays such a key role in the socialist state. The threat of dismantling this apparatus is a classic liberal strategy. At times it seems as if situating a party within the political centre offers it a kind of discursive flexibility that was not available in bi-polar politics

In New Zealand, Labour replaced the Employment Contracts Act with the Employment Relations Bill, effectively releasing the powerful grip employers had maintained on the Labour force since the mid 1980s. Both the Employers Federation and the Business Roundtable reacted more like political rivals (see Jesson 1999:15) of the government than special interest groups, or lobbyists, as they are also known, prior to the bill's actual passing. A matter of a few weeks later and the commotion that had preceded the bill died away to nothing.

In her speech, Helen Clark situated the New Zealand Labour party within the Third Way, but if so, it is a Third Way that leans further left than the larger Third Way body in Europe, the United Kingdom, and America. The Third Way for social democrats in the Fifth Labour government is less about liberal politics and more about equity as a reaffirmed basis for rebuilding social democracy. 'Clark's policies retreat from the relentless pursuit of economic efficiency. She wants to redistribute income more fairly, and shield New Zealand from the vagaries of the international economy. Tariff rates have been frozen, the labour market is being re-regulated, accident insurance nationalized, and taxes on the wealthy raised' (The Listener May 8 2000).

As has become patently clear, the construct of the 'free' market is just that, an abstraction that has become sanctified by the state/corporate nexus. One that cannot comprehend one of the most fundamental and important aspects of economics and that is the social element of which it is constituted. To this end, Paul Dalziel makes the point that it is employment, which is central to any kind of successful strategy for renewal. 'Above all, Third Way economics must aim to include as many people as possible in high-productivity employment for lengthy periods of their working life' (Dalziel in Chatterjee 1999:69). Critical to this, of course, is education, tax claw backs are all good and well but the cost of creating a 'high skills, high income, high employment economy' is cheaper education. In the current climate, universities are not only reduced to supplying clients with vocational qualifications but are having to cut away at those aspects of tertiary learning which sit out side of the market rational. Better funding for tertiary institutions would also help keep a lid on fees making education available for more than just those that can afford it - while making a constructive move toward a high employment economy.

A point of singular importance from which all other policies should stem is also a point of divergence for New Zealand and European social democrats. According to Blair and Schröder, central government needs to be 'devolved to the lowest possible level' (Blair & Schröder 4), which expresses one of the most powerful classical liberal sentiments. And was in fact, the impetus in the restructuring of the 'New Zealand experiment'. Contrast, the approach of New Zealand social democrats, whose manifesto quite plainly states, that they wish to be 'more actively involved in economic management' (Labour.org.nz economy.htm). This also points to a lack of common ground on which Third Way politicians would have been expected to have met. Anthony Giddens, whom Blair expresses admiration for, sees a resurgent nation (Giddens 1999:129), surely embodied in the state, as being the most formidable bulwark to stave off the worst excesses of the global economy. 'A reassertion of the role of the nation is important as a stabilizing force, a counter to endless fragmentation' (Giddens 1999:129). Peter Conway agrees, "…fundamentally there has to be a paradigm shift. The ideology of hands off has to be replaced with a partnership approach" (Conway in Chatterjee et al 1999:177)

A participating state would be unusual for New Zealand where governments who adhere to the 'Washington consensus' are the norm. It is a form of politics, which has been allowed to become so reified that alternatives are no longer considered rational. So entrenched is this culture that 'It is assumed that politicians will always bring an irrational influence to bear on events because they come from outside the marketplace' (Jesson 1999:155). That is because by in large the political sphere is the social sphere not the abstracted sphere of economics (Jesson 1999:158).

Labour In Government

With the leaking of the Bill English memo the National Party has had a major setback in its role as opposition. Its own predictions for both the Labour Party and the next quarter must be good news for the government going into the Labour Party Conference. However, the resignation of Labour stalwart Ruth Dyson would not have made the job of being government any easier. Helen Clark both criticised Apec for not doing enough, and signed the Closer Economic Partnership agreement with Singapore; in lieu of the stalled WTO talks in Seattle, and the subsequent failure of the Australian talks. The Prime Minister signed the agreement saying of Apec, 'It has really become more of a discussion group before World Trade Organisation meetings. That is valuable in itself but the question is "could it do more"' (The Evening Post Nov 14). National's leader Jenny Shipley on the other hand is critical of Clark's disparagement of Apec saying the Prime Minister '…will serve New Zealand well if she cautiously but enthusiastically embraces the opportunity Apec provides' (The Evening Post Nov 14). But there are those both in the government and outside of it who see Apec and the Closer Economic Partnership agreement as threatening the jobs of New Zealand workers and the livelihood of business.

Perhaps the biggest change the social democrats have made to date is to employment, through the revocation of the Employment Contracts act and the legislation of the Employment Relations bill. The Employment Contracts act was passed in 1991. Its purpose was touted as freeing employees from compulsory unionism, freeing up collective bargaining, and to reduce the power of the unions. What it did was create a disposable pool of labour with workers' rights being reduced to virtually nothing. Workers were made to feel that there was always someone down the road who could do their job much cheaper and so were hindered in seeking better working conditions. In the end, it worked in favour of the employer and against those who had nothing to sell but their labour. On this the Labour alliance shares common ground with the social democrats in Europe.
"Our countries have different traditions in dealings between state, industry, trade unions and social groups, but we share a conviction that traditional conflicts at the work place must be overcome. This, above all, means rekindling a spirit of community and solidarity, strengthening partnership and dialogue between all groups in society and developing a new consensus for change and reform" (Blair & Schröder 5).

The Employment Relations bill, perhaps more than any other initiative defines social democracy in New Zealand. It deals with areas that are outside the understanding of the market and in this way has an almost symbolic quality about it. Margaret Wilson, in a speech to the NZ Engineering, Printing & Manufacturing Union Biennial Conference - one of the few unions who continued to oppose liberal policies and who also launched a sustained attack on the Employment Contracts Act - described the bill as being, '…based on the understanding that employment is a human relationship involving issues of mutual trust, confidence and fair dealing, and is not simply a contractual, economic exchange. This basis requires specific recognition in any regulation of the relationship - something not satisfactorily achieved by general contract law' (Labour.org.nz /Speeches/000728.html). Of course the entrenched culture of finance saw the introduction of the ERB as apocalyptic and mounted an all out media offensive against the bill. It is, however, a far more democratic method for regulating the employment market than its predecessor and the government were given the voters' mandate to make the changes.

Leadership

Time Magazine called Helen Clark 'Tolerant, trusted and authoritarian…' saying, 'New Zealand's P.M. has a secure grip on power' Time May 8 2000 p12). Clark acted quickly and decisively in both the Dover Samuels allegations and the Ruth Dyson resignation. Unlike Jenny Shipley, who seemed to freeze for weeks, during the worst of the Asian crises. Shipley also seemed reluctant to apportion blame where blame was clearly due with the failed INCIS computer deal being but one example. Linda Clark said, on her Face The Nation television programme, that Helen Clark was seen as quick to punish opposed to the previous National government who carried their wounded with them, the cave creek Minister being another example. To the presenter's criticism that she was 'too Presbyterian too sever', the Prime Minister replied, in typical Clark style, 'you have to be single minded'. Time magazine compared Helen Clark's Prime Ministerial style with that of Robert Muldoon's, saying, 'Clark believes-and is more able than any recent New Zealand leaders to insist-that governments are good at regulating social and economic outcomes' (Time May 8 2000 p12). 6 months later and the Labour Party's web site is describing how 'Prime Minister Helen Clark today welcomed a double dose of good economic news, with unemployment falling to a 12-year low and telecommunications giant Ericsson announcing a major New Zealand business venture' (http://www.labour.org.nz/MediaCentre1/ThisWeek/index.html#5).

E-government

Part of the progressive discourse of politics is grounded in the language of technology. In Britain, Tony Blair's Labour Party is hopeful that technology will be a panacea for poverty and unemployment as well as boosting the economy through increased e-commerce. In New Zealand, Labour's Paul Swain, told the government's e-commerce summit in Auckland, that, 'Our e-commerce vision is for New Zealand to be world class in embracing electronic commerce for competitive advantage'. The phrase e-government has become the catch phrase of open democratic government and the common refrain of the Third Way in search of new global markets. 'The prize of this new age is to engage our country fully in the ambition and opportunity which the digital revolution offers. That prize is there for the taking. We must stretch out our hands and grasp it' (http://www.number10.gov.uk/file.asp?FileID=911).

In New Zealand, a thriving e-conomy has not been possible because of the dominance, in the telecommunications market, of Telecom since it was sold by the Fourth Labour government to American concerns. In the rush to sell of state assets the then government chose to bundle the network of telephones lines and sell it along with the highly profitable Telecom as a single purchase. Telecom's monopoly was then assured, as it effectively became the gatekeeper to New Zealand's telephones. National's Maurice Williamson seemed reluctant to do anything about it let alone acknowledge there was a problem. It wasn't until Telecom's price rise for some local traffic, which was contrary to the kiwi share agreement, and the imposition of a network tax on Internet access, that the question of unbundling the local loop to end the company's dominance arose again. When the social democrats came into office Paul Swain, initiated the Telecommunications Inquiry to resolve the matter. But the minister seems reticent about heavy-handed intervention and has opted instead for a softer approach seeking to better define the terms of the kiwi share and establish a 'regulatory body'. He said, 'Finally we are working to get the regulatory environment right. It's a complex job but steps like the Telecommunications Inquiry, the development of an e-commerce code for consumer protection and the Electronic Transactions Bill, which was introduced into Parliament yesterday - are all starts' (http://www.labour.org.nz/MediaCentre1/ThisWeek/index.html#2).

The question of individual privacy also becomes a concern when both the Labour and National governments continue to turn a blind eye to the surveillance installations, known globally as 'Echelon', and which are managed by the western allies to intercept all domestic and international communications traffic. Both parties, while in government, have been more than accommodating of this infringement on New Zealanders' privacy and sovereignty.

Each political party's attitude to the proliferation of information technology also underscores their attitude to wider issues. For example, National while it was in office focussed purely on the purely profitable aspects of IT in its emphasis on rewarding the research and development side of information technology. While Labour, on the other hand, emphasised the benefits for democracy, for 'open government', of the spread of new technologies. While in England, Blair's Third Way Labour Party, like New Zealand's National Party, are focussed on the potential for profit that exists in IT and the Internet in particular.

Conclusion

One of the fundamental differences between liberalism and socialism is that liberalism's prime motivation is to (as with Mills) free the individual from social influence, whereas socialism pursues the completely antithetical approach of emphasising social influence, especially in the context of collectivisation. Thus the prominence of 'inclusive' policies can be seen to be a reaffirmation of this defining difference and the socialist identity. Labour's 'closing the gaps' policy is a good example of this. This difference also extends to how each views economics itself. As Jesson shows liberalism views economics as somehow outside of society, as a natural occurring phenomenon, whereas socialism views it implicitly as socially constructed and defined (Marx 1969:97). The elite that emerge in a political economy, and that encourage and are encouraged by liberal governments, are unified by capital alone in an alliance founded less on social development than satisfying their own immediate needs. This becomes a relationship of exclusivity, in which one aspect of the relationship is privileged above another. In the global market, just as in New Zealand's domestic market, capitalism has come to mean little more than last man standing. The Fifth Labour Government is a social democrat government but not in the same mould as European Third Way governments, at least not in the same mould as Blair, or Schröder's parties. Labour are social democrats that have for all intents and purposes found a renewal through expunging the neo-liberal strands it found within itself. It is democratic, in that it does not have a myopic monetarist focus, settling for political expedience over broader more consensual and inclusive issues. This is because of the collective spirit of socialism. This is the most obvious defining quality of modern social democracy in New Zealand. And in this it resembles old style Labour - before Rogernomics. Fighting that old Labour battle of too little money and too many problems.

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