Modern 'western' governments are known as 'liberal democracies'. While each political party in a liberal democracy has a
'policy agenda' which it would like to implement, only single-party governments have a realistic opportunity to fully implement their agenda; and they typically need multiple terms of single party (or near single party) government to do
this. Such agendas – commonly, solutions looking for problems – are implemented when it is politically possible, and not
as a timely response to a critical problem.
The dominant agendas we became used to were 'globalisation', associated with the 'centre-right', and 'social democracy'
associated with the 'centre-left'. Social democracy emphasised the necessity to address 'market failure', while never
questioning the property right assumptions of economic liberalism. Both agendas, as we have come to know them, are
'neoliberal', and are underpinned by shared assumptions that are best described as liberal mercantilist
In the twentyfirst century, as liberal globalisation collapses, we have seen the re-emergence of another agenda, which
is a form of political nationalism. New Zealand, with its first single-party government in 25 years, is at the vanguard
of this 'neonationalism'; of neonationalist politics. The agenda in New Zealand is to implement the 1840 Treaty of
Waitangi in terms of bicultural nationalism. It represents a significant shift away from the neoliberal globalisation
agenda for which a former New Zealand single-party government, in the 1980s, was also forging an ideological path which
some other countries' governments consciously followed.
Neonationalism represents both an extension of and a narrowing of the politics of diversity. The extension typically
focusses on domestic ancestry and gender identities. The narrowing represents a de-emphasis on attention to
socio-economic diversity, and an accentuation of the differences in rights between 'citizens' (commonly inclusive of
'permanent residents') and foreigners; in neonationalist polities, 'foreign' denizens represent an important component
of neonational workforces.
While some liberal democratic governments are dogmatic, and others (especially coalitions) are pragmatic, three
principles dominate the day-to-day governance in the liberal democracies. I call these the three 'O's: order, optics,
All governments – liberal democracies or otherwise – require an orderly and predictable environment, so will act to
suppress disorder. Their inclination is to transfer disorder, and risk, to private sector minorities; eg households with
particular health or housing needs, small business sectors, and the denizen labour force.
I will give four examples, here, of global crises for which national governments have emphasised the maintenance of
domestic order over attempts to address the underlying issues.
In 2008, the Global Financial Crisis (GFC) hit the western world – with apparent suddenness – as a grey rhino
event. For a few weeks there was panic in the halls of western power, and governments took swift decisions – in this
case, for unorthodox financial policies – which allow the maintenance of order in emergencies but not in normal times.
(In normal times, such unorthodox financial policies disrupt the domestic balance of power.) As soon as the GFC panic
was over, these policies were withdrawn in indecent haste. Except in emergencies, it was the orthodox fiscal and
monetary policies which suppressed the opportunities for market-led challenges to the existing state of order.
The Covid19 pandemic represented an event which had the potential to spark an outbreak of global disorder; or, from a
neonational point of view, simultaneous disorder in most domestic polities. Initially largely ignored in 'the west' – ie
treated as a mainly Chinese problem that would soon go away – suddenly in March 2020, after eventually realising that
one in a thousand of the population dying could represent over 50,000 people in each of the world's largest western
nations, there was an awareness that an unpredictable panic could take place. Countries' hospital systems could be
overwhelmed by a 'spike' of coronavirus-infected people. Hence quite draconian policies were pursued, to protect already
overextended public hospital-systems; the call was to 'flatten the curve', so that Covid19 victims could gain medical
attention in a more orderly sequence. Raised death tolls can be politically managed if they do not all happen in a
compressed time period.
We also note that, in this kind of pandemic, international travel itself represented an 'excessive risk' for disorder.
Nations became fortresses.
Thirdly, in 2022, we have a renewed 'cost of living' panic; comparable with the global panic of 1973/74. As in 1973,
this is a panic triggered by a war. In the present case, it is also a panic exacerbated by a predictable – but not
well-predicted – consequence of the Covid19 pandemic; the present barely suppressed disorder in China directly caused by
the China government's suppression of disorder two years ago. 'Inflation' – as any event of rising prices is called in
the media – is a trigger point for widespread and unacceptable (to governments) levels of disorder. Governments will not
allow their conservative or progressive policy agendas to be disturbed by panics over prices. Indeed, it was through the
playing of this 'inflation card' that the neoliberal policy extremists were able to justify and get away, in the 1980s,
with their rulership policy agenda.
Finally, the climate crisis. Governments pay lip-service to this, while taking fright at, for example, rising fuel
prices. Rising petrol prices – the marketplace in action doing what it should be doing to resolve the problem – are one
of those 'lightning rod' issues that are seen to threaten public order and thereby understood to threaten extant
governments. Their security takes precedence over ours; the security of the rulers inevitably takes precedence over the
security of the ruled.Optics
While all governments rely on optics – the art of managing perceptions through narrative – the 'opticisation' of
politics is especially important for governments seeking to maintain their liberal credentials.
Framed narratives are required as the first (and preferably) only line against disorder; and second, to promote the
policy agenda. Narratives help to define 'the enemy'; they help governments to appear to be doing something about a
widely accepted problem – such as housing – while in reality they are only addressing that problem through the optics of
bureaucratic budgets. Taskforces and their like are important for sugar-coating what may otherwise be a divisive policy
agenda; they represent the politics of delay.
It is widely understood that democratic governments should be responsive to people's current concerns; in reality
governments are really most interested in implementing their policy agendas. Optics generated from on high – effective
'spin' and framing, including the diversion of attention to stories which are media-friendly but ultimately unimportant
– are widely used to pacify the people. Such stories claim that lots of money has been allocated to a problem of concern
to the people, and they distract the 'free' media. 'Enemies' form useful distractions, be they covid variants, gangs and
other miscreants, or geopolitical enemies committing violence on some of their own or their neighbours' peoples. If
there are not enough real enemies, then it can be useful to manufacture one or two.
Another technique is repetition, as in pushing the line that rising interest rates must follow a bout of rising prices,
as surely as night follows day. A further technique is the 'escalating counterfactual' – widely used by Roger Douglas in
New Zealand in the 1980s – to present the principal alternative to his failing policy as being the greater evil; the
alternative reality becomes more evil the more the actual reality disappoints. We had that with Covid19 too, as an
over-the-top quarantine system was justified through escalating rhetoric about what would have happened in New Zealand
had that 'sledgehammer' policy not been in place. (The Swedish counterfactual was quietly ignored.)
(The better approach to a pandemic is a set of smart and proportional restrictions, not a dumb sledgehammer;
restrictions with a proper scientific evaluation of which restrictions work best, and in which contexts. And which
restrictions are unnecessary 'extra layer of protection' add-ons. And, a clear understanding that, as time passes, the
benefits of emergency measures wane whereas the costs of such measures wax. The predilection of governments for order at
any cost – or at least the appearance of order – means that they are risk-averse, like a football team that is more
interested in preventing its 'enemy' from scoring goals than it is in itself scoring goals.)
Political optics include 'virtue-signalling', like labelling bureaucratic Budgets as 'Well-being Budgets'. And, in the
pandemic we saw optics around being "kind" and protecting the old and vulnerable; protecting our collective
"grandparents". The reality is that the wider pandemic response saw the New Zealand government adopt policies of labour
scarcity around aged-care facilities – and under-resourcing of chronic health care – which adversely target the very
people we were meant to be protecting. When the government itself that feels vulnerable, it likes to delegate risk to
individual households and businesses; especially the most vulnerable as long as they each vulnerable group can be
contained as a minority. This year the aged-care industry is imploding due to lack of staff. It will not be long before
we hear similar stories about palliative care – hospice care of the terminally ill – which relies far too much on
community charity. Dental care also largely by-passes the most vulnerable. Management of these issues through optical
strategies is becoming increasingly untenable.Oeconomy
Here I am using the old-fashioned spelling of the word 'economy' to harken back to its original Greek meaning:
'housekeeping'. In our context, then, oeconomy
means 'public finance' rather than 'the economy'. (We may note that the conventionally understood meaning of 'the
economy' is a neonationalist expression, in the sense that it is most usually applied to individual 'nation-states'
rather than to either the global or the local. Indeed, it is very common in the neonationalist world of neoclassical
economics to refer to nation-states as 'economies'; international economics becomes a set of mainly-market interactions
between economies, as distinct from the usual market interactions between households and businesses.)
In liberal political economy, it is a given that governments should command as little as possible of 'the economy'; it
is also given that, for centre-left governments, 'as little as possible' is a bigger share of the economy than it is for
centre-right governments. It is also accepted in liberal economics, at least since the 1930s, that governments should
command bigger shares of the economy in national emergencies – including during a global emergency, which is understood
as a simultaneous collection of national emergencies.
Nevertheless the liberal presumption is that, as soon as possible after the emergency, governments should get their
oeconomic houses back into financial order. That means things like 'balanced budgets', or preferably fiscal surpluses as
governments 'pay back' their financial debts.
This is treating a macro issue as if it's a micro issue. Debt is the classic case because, at the macro (global) level,
there is no net debt. Some parties are in debt to other parties, who are in credit; while its seen as a problem for the
debtor parties, it's rarely seen as a problem for the creditor parties. Because creditors like being creditors. Debtor
balances can only be reduced if creditor balances are also reduced.
Individual neonational governments choose to see their debtor balances as huge problems. And while they also see private
debtor balances as being problems, such private balances are by definition non-governmental problems.
In general, any problem where the action of one party if replicated by all others causes an existential crisis may be
called a macro problem. The burning of fossil fuels represents such a problem in a global economy the size of ours. (The
existential crisis is also known as 'the bottom', as in the expression 'race to the bottom'.) At the micro level, it
makes sense to steal from your neighbours, and to kill people – or countries – who are in your way. At the macro level
these actions are clearly indefensible – they are criminal – and require moral/legal codes to ensure that crimes are not
Modern global capitalism requires the global public sector to be a substantial net debtor, contrary to the widely disseminated narrative.
Debts can only be eliminated – paid back – by reducing the global financial balance sheet to zero on both sides. That's
tantamount to the non-existence of human civilisation. Yet we continue to talk about government debt as a great evil
(albeit 'a necessary evil' in some circumstances); and liberal-democratic governments perpetuate that perception, that
public debt is a problem that must be prioritised over the many real, chronic, and growing problems faced by the ruled
classes. Oeconomy – public oeconomy, debt minimisation – is the third 'O' of liberal democratic politics; it's an excuse
for public inaction, except for when faced with those acute problems which threaten public disorder. This preponderant
public debt narrative is the 'Achilles heel' which will eventually prove to be the downfall of liberal nationalism – of
neonationalism – and of its centre-left variant 'social neonationalism'.Neonationalism
In an important sense, liberal-democratic governments have always been neonationalist. (Orthodox 'neoclassical'
economics has always used a neonationalist language, whereby nation-states are anthropomorphised as economic or military
agents; as in 'Russia does this', or 'Australia does that'.) Neonationalism – like neoclassical economics and
neoliberalism – is not all that new. But we are now seeing a new social neonationalism, which is much more than the old
hat liberal nationalism of economics textbooks.
Social neonationalism is about focussing on constitutional change to create a national society – a neo-nation – that
sees itself as distinctly separate from, and exceptional to, the other neo-nations of the world. The relationship with
the rest of the world becomes essentially one of economic exchange; that is the liberal exchange of goods and services
rather than of labour and capital. But it's also a relationship in which certain other liberally democratic nation
states are identified, from the point of view of any one such state, as being 'like us'. (New Zealand, and other western
liberal democracies, have recently – and suddenly – discovered that Ukraine is 'like us'!)
While neonationalism creates clear divisions between countries, especially 'unlike countries', it also creates divisions
within countries. Most obviously, it creates division between a country's citizens and its resident denizens (refer Two-tier visa system a 'kick in the guts'
, RNZ, 12 May 2022, for New Zealand's latest episode in separating new citizens from new denizens); people without political
rights who perform much of the country's essential labour. Such denizens are being treated essentially as 'foreign
labour', with minimal economic rights in the neo-nation, typically a liberal democracy, within which they are labouring.
Under neonationalism, such denizens are officially treated as temporary expedients. But, as we have seen in the Gulf
States and Singapore, migrant labour becomes integral to a form of nationalism whereby labourers represent accounting
costs, and citizens are entitled beneficiaries.
Neonationalism may also create divisions within the formal citizenry, especially if the neonational identity is derived
from historical documents which, over the centuries, morph into the centrepiece of a national mythology. This is most
obvious in the case of the United States – where the first modern liberal democracy was forged, with Greek classical
liberal democracy in mind – where the constitution was forged in an environment in which slavery was normal and not seen
as contrary to the principles of a property-owning liberal democracy. George Orwell said in Animal Farm, "all pigs are
equal, but some are more equal than others". In modern liberal democracies, not all people are 'pigs'; denizens are not
equal to citizens. Denizens aside, it is a widespread problem of nationalism that 'citizens' in nation-states have been
– and may continue to be – differentiated on the basis of their ancestry as well as their gender.Conclusion
The three 'O's – order, optics, oeconomy – represent the core principles of liberal neonational public administration.
Globalisation has gone. Governments have reasserted themselves as national rulers, governing by narrative.
The public – the ruled – however are made up of individuals and civil society groups seeking individual and collective
goods and services, and space/time to enjoy them. That's what we mean by living standards; by well-being. Rather than
oecomomising and obfuscating, liberal governments should facilitate and mediate, promoting equity and efficiency (which
are not opposites, as some economics textbooks claim). Democratic development is bottom up. Governments need to listen
and respond, and should deploy information and science without bias. Democratic governments – constitutionally – are
servants, not masters.
Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and
Statistics. He lives in Auckland, New Zealand.