A Rogernomic strategy

Roger Douglas brought economic reality to New Zealand by tackling all interests together instead of consecutively, so their chorus of complaints would drown each other out.

His logic was straightforward game theory. If you tackle industries one at a time, then each affected interest group can mobilize its full concentrated resistance against a government with only one fight on its hands. Tackle everything simultaneously and no single lobby commands the government's whole attention.

The sheer number of changes exceeds any interest group's capacity to organize against them all, and by the time farmers, unions, manufacturers and civil servants have each worked out what has happened to them, the reforms are largely irreversible. Diffuse beneficiaries such as consumers and taxpayers never need to organize at all, since the changes happen regardless of their support.

There is a real case for this at the start of a British Parliament. A new government has more political capital in its first year than at any later point. Its majority is intact, its backbenchers have not yet been ground down by unpopular votes, opposition parties are still reorganising after defeat, and the media narrative has not hardened against it.

An omnibus deregulation bill covering planning, occupational licensing, employment law and business rates together, introduced in the first King's Speech, would spread the pain of change across many interests at once rather than letting each one be fought to exhaustion in turn.

But the British case differs from Douglas's New Zealand in ways that matter.

New Zealand in 1984 had an almost uniquely permissive constitution for this kind of manoeuvre. First-past-the-post produced a strong majority, Cabinet government faced no upper house, no codified constitution, no supranational courts, and a small legislature that could not easily obstruct. Douglas also had the advantage of surprise because a Labour government implementing free-market reform wrong-footed the opposition, who had no ready script for attacking their own side's economic liberalism.

Britain today has more veto points. Judicial review, a revising House of Lords, devolved administrations, a more assertive backbench culture, and a civil service with its own institutional inertia all give opponents more places to make a stand. A government moving on many fronts simultaneously risks generating not many separate, manageable rows but one unified row, as every affected interest recognises a common enemy and coalesces against the whole programme rather than fighting its own corner alone.

There is also a home-grown counter-example worth weighing against Douglas's. Thatcher's government did the opposite deliberately. Having watched Heath try to confront the miners directly in 1972 and 1974 and lose, her ministers picked off weaker unions first, built up stocks of coal, and left the miners until 1984, by which point the government's position was much stronger and the union movement's solidarity had already been tested and found wanting. Sequencing, not simultaneity, was the tactic, and it worked. The lesson there is that a government sometimes gains more by choosing which interest to fight first and building strength for the harder fights later than by taking on everyone at once.

Douglas's own experience also shows the strategy's cost. The reforms are now widely credited with restoring New Zealand's economic performance, but the political price was severe. Voters did not feel the benefits before the next election, the coalition of interests damaged by the reforms found common cause, and Labour was ejected from office in 1990, with Douglas himself sacked from Cabinet before that.

A government adopting this approach in Britain should expect the same trade-off with a real prospect of durable economic gain matched by a real prospect of being punished for it at the polls before that gain becomes visible.

The conclusion must be that a scaled-back version of the Douglas approach could work in Britain, but only under specific conditions. These would include a large and disciplined majority, a first-year window before by-election losses and rebellions erode that majority, careful use of framework legislation and sunset clauses to move fast without endless separate bills, and a willingness to sacrifice short-term popularity for reforms whose benefits will not be politically claimable until well into the following Parliament, if at all by the government that enacted them. Possible, then, but unlikely.

Madsen Pirie

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