Radical Reform

New Zealand's Path to 21st Century Prosperity | Mitchell W. Palmer


New Zealand’s politics were once said to be “socialism with no doctrine” (Métin, 1901). This was undoubtedly more accurate than not for a very long time. New Zealand governments constantly intervened in favour of this industry or that[1]. In 1984, however, a Labour government tore down the socialist monolith which the New Zealand economy had become. Encouraged by a severe crisis in the public finances, David Lange and Sir Roger Douglas orchestrated a plan of radical reform, which tore down a staid state-controlled society and replaced it with a vibrant, metropolitan, and free-trading economy. Ours was the first transition economy, successfully copied in much of the former Soviet Bloc.

Unfortunately, despite this courageous effort and the success of the next National government – Ruth Richardson, in particular – in extending these reforms to the inefficient and malfunctioning labour market, our nation remains shackled to inefficient and burdensome government policies. We are the 3rd freest economy in the world (Heritage Foundation, 2018), but it is our most vital (for the future) industries which are dominated by government – for example, housing, education, retirement savings, and healthcare. This is behind our substandard productivity growth and the problems we face, as a nation: child poverty, expanding inequality, unsustainable entitlement programmes.

This book represents my effort to identify the root causes and ideal reforms for these problems.

Of course, as you may have sensed from the previous paragraphs, I do not come at these issues from a place of political neutrality. I am unabashedly a liberal – in the European sense. I believe, generally, in J.S. Mill’s conception of government as an agent for protection against others, not against oneself (Mill, 1859). I subscribe to F. A. Hayek’s view of the market as the best coordinator of our disperse resources and knowledge (Hayek, 1945). I share the innate liberal distrust of centralized power and belief in the primacy of the individual over the collective. These philosophical priors do indeed influence my choice of policy proposals, but they should not disqualify my analysis or solutions proposed from consideration by others, be they social democrats or conservatives, because the ideas have identities separate from their author.

Before the main body of the text begins, I should mention that many of the reforms proposed here are far from politically ‘practical’, in the current context. As the title suggests, these are radical propositions. In this book, I step away from the incrementalism favoured by New Zealand’s major political parties and ignore the search for the views of the median voter. Instead, I search for real solutions. Of course, I would prefer that these solutions be adopted in their entirety, but even incremental movement towards their fundamental tenets would be desirable.

What follows is a dissection of each of the policy areas I see significant reforms as needed. My approach to each policy area may differ depending on the depth of treatment it requires. Generally, however, I shall outline the flaws and benefits of the status quo, including their effects on the wider problems New Zealand faces, and then, when appropriate, consider alternative policies, drawing from international experience and academic evidence. For each policy area, I shall conclude by outlining my ideal reform.

I should also follow the example of Lord Bingham in his excellent book The Rule of Law (2011) and offer my apologies at the beginning for my habit of using the masculine singular pronouns (he/his/him) to refer to singular people of indeterminate gender. This, in my view, avoids the ungrammaticality of the ‘they/them/their’ construction and the inelegance of ‘he or she’. The male pronoun should, unless context otherwise requires, be taken to include the female.

I should also note that parts of this publication have been adapted from previous work of mine. In particular, research and writing I produced for my abortive attempt at starting a thinktank has been used. So too have speeches and blogposts I have written. Significant research and some content from my essay written for the Mont Pelerin Society’s Hayek Fellowship essay competition has also been adopted. Where previously written and currently published work has been directly adapted, this will be noted in a footnote. My thanks must go to those who assisted in my research and drafting for those pieces.

I hope you enjoy this book, but most of all I hope it compels greater discussion of the underlying issues behind New Zealand’s woes. These issues are going to affect my generation for our entire lifetimes and they (and we) deserve solutions.


Mitchell Palmer


[1] For an excellent and indispensable discussion of this “socialism without doctrines” and New Zealand’s political economy from colonization to liberalization, see Dr Michael Bassett’s The State in New Zealand: 1840-1984 (1998).