Economic restructuring in New Zealand: A classical account
Introduction
The premise of the neoliberal reform period in New Zealand from the mid 1980s was the need for economic restructuring. Yet economic assessment of the period has largely overlooked structural change for a concentration instead on microeconomic efficiency, growth and employment performance, and income distribution. Discussion of structural change has been limited to observation of the growth of services and changes to the export commodity structure, a result of the export-led growth assumptions of many commentators.
In this paper, I argue that the limited attention paid to structural change in New Zealand arises from limitations in the System of National Accounts conventionally used to categorise economic activity. This is quite understandable because the focus of neoclassical economics underpinning this categorisation is on marginal advantage rather than on the conditions of production and exchange per se. The latter tends to be dismissed as a quaint preoccupation of classical economics.
To adjust the prevailing focus, following a brief review of conventional accounts of the period of neoliberal reform, I present a method for categorising economic activity in classical economic terms at the industry level. This is an extension of Shaikh and Tonak's (1994) derivation of classical value categories from conventional national accounts data at an aggregate level. I demonstrate how this extension allows analysis of changes to the production and appropriation of value in different industries to be identified and contrast this with conventional accounts. The analysis of value flows then underpins a Gramscian interpretation of political changes during the period.
Section snippets
The New Zealand experiment
In November 1984 the New Zealand Labour Party won a majority in a parliamentary election that had been hastily called by a disintegrating government unable to cope with a growing economic crisis. The new government rapidly embarked on a wide-ranging neoliberal programme of regulatory change and austere economic management. The programme was aimed to force a restructuring of government, business, and social activity to forge an internationally competitive economy (see Douglas and Callen, 1987
Conventional accounts of the restructuring
Consideration of New Zealand's economic performance following the neoliberal experiment from 1984 gives little attention to structural change at a macroeconomic level, in favour of broad accounts of macroeconomic performance (Dalziel, 2002, Easton, 2002, Hazledine and Quiggin, 2006). The few studies that do provide an account of restructuring, tend to dwell narrowly on changes to the export commodity structure, a result of the export-led growth assumptions of many commentators. The New Zealand
A classical approach to national accounting
In recent years various techniques have been developed to derive quantitative measures of classical economic categories from contemporary national accounts data (see Shaikh and Tonak, 1994 for an extensive review). In contrast to orthodox systems of national accounting, the use of classical economic categories has shed light on some persistent questions concerning unproductive economic activity, profit rate trends, and productivity.
The derivation of quantitative measures classical economic
Classical economic estimates at an industry level
The recent derivations of classical national accounts have been restricted to the aggregate national level. But the process of mapping from conventional to classical categories involves the aggregation of industry level-data. In the case of the NZSNA, national accounts are presented in 25 distinct industry groupings, mostly at the two-digit level. Input–output data is also published variously at two- and three-digit levels. So the process of deriving aggregate national level data itself
A classical account of New Zealand restructuring 1972–1995
The derivation of estimates of classical economic categories at the industry level provides the means for more detailed examination of intra and inter-industry trends from a classical perspective. Using such data, the restructuring of the New Zealand economy during the 1972–1995 period will be considered in these terms.
As discussed earlier, at an aggregate level, three phases are identifiable during the 1972–1995 period. The New Zealand economy experienced falling general profitability through
Conclusion
The extension of methodology to derive classical economic categories at an industry level provides powerful tools to examine the dynamics of economic restructuring. The distinction between the creation and appropriation of surplus value and between the rate of surplus value and the value composition of capital provide a perspective on inter-industry relationships not considered from the neo-classical viewpoint.
The rise in GDP shares of finance and resources highlighted by the few conventional
References (26)
- Black M, Guy M, McLelland N. Productivity in New Zealand 1988–2002. Working Paper 03/6. Wellington, NZ: Treasury;...
New Zealand: economic reforms 1984–1991
(1992)- et al.
Public management: the New Zealand model
(1996) - Chapple S. Searching for the heffalump: an exploration into sectoral productivity growth. Working Paper 94/10....
- Claus I, Li K. New Zealand's production structure: an international comparison. Working Paper 03/16. Wellington, NZ:...
Productive and unproductive capital: a mapping of the New Zealand system of national accounts to classical economic categories, 1972–1995
Review of Political Economy
(2001)The falling rate of profit: recasting the Marxian debate
(1990)New Zealand's economic reforms: an assessment
Review of Political Economy
(2002)- Duménil G, Lévy D. In: Jeffers (trans.), Capital resurgent: roots of the neoliberal revolution. Cambridge, MA: Harvard...
- et al.
Towards prosperity: people and politics in the 1980s: a personal view
(1987)
New Zealand's post-war economic growth performance: comparison with the OECD
Remaking New Zealand and Australian economic policy: ideas, institutions and policy communities
Cited by (4)
A case study of critique: Critical perspectives on critical accounting
2017, Critical Perspectives on AccountingCitation Excerpt :The percentage of articles associated with this general theme and the subcategories are presented in Fig. 2. The articles addressing neoliberalism more generally identify and present a critique of the underlying ideology and investigate the effects of, for instance, capitalism (Bourguignon, 2005; Bryer, 1993; Cronin, 2008; Neu & Taylor, 1996; Spence & Carter, 2011), globalization (Lehman, 2005; Oguri, 2005; Otusanya, 2011), colonialism (Alawattage and Wickramasinghe, 2008; Bakre, 2008; Dixon & Gaffikin, 2014) and financialization (Gleadle & Cornelius, 2008; see also Special Issue in 2014, Vol. 25, issue 1). Within this category, we include studies that critique mainstream neoliberal hegemony in the accounting academy (Lee & Williams, 1999; Schwarz, Williams, & Williams, 2005).
Financialisation and the Conceptual Framework
2014, Critical Perspectives on AccountingCitation Excerpt :However, the relationship between accounting and the broader political economy has been inadequately addressed by the accounting literature since the 1990s (Arnold, 2009a). The majority of studies that examine the relationship between accounting and neoliberalism have only emerged recently (Andersson et al., 2010; Andrew, 2007; Andrew et al., 2010; Arnold, 2009a, 2009b; Cooper et al., 2010; Cronin, 2008; Haslam, 2010; Ishikawa, 2005; Mennicken, 2010; Zhang et al., 2012). Commenting on the current GFC, Arnold reminds us that:
Economic outcomes in New Zealand: a varieties of capitalism lens
2018, Australian Journal of Political SciencePrison privatization: The (Ir)relevance of accounting
2010, Accounting and the Public Interest