Swarbrick’s Ghost.
Have the Greens been haunted by Competition?

ISSUE 8 / POLITICS

Chlöe swarbrick, alleged champion of the political Left. Oh how glad leftists should be to have a comrade in parliament; co-leading the Greens, a “real” left-wing party. But parliament is an old place and many ghosts walk its halls. Neoliberalism has long possessed our politics. We should ask, has Swarbrick been haunted by the spectre of competition?

“CommieMart,” “Soviet-era economics,” and “unfair” are just some of the words the political right have mustered up to describe the Green Party’s new KiwiMart policy. The government parties have retreated to the well-trodden ground of red-scare politics. They have tried to resurrect another spirit, accusing Swarbrick and the Greens of being not just communists, but dangerous communists. However, under examination, they ought to find Swarbrick and the KiwiMart policy are ideologically closer to themselves than they make out. 

The Duopoly and KiwiMart

It is entirely uncontroversial to describe the current supermarket landscape as a duopoly. Almost all political parties and governments in recent years agree supermarkets are not operating in a competitive environment. Woolworths and Foodstuffs having a combined 82% market share dominate and block potential competitors, either domestic or foreign, from entering the market. You need only read the myriad articles in the media Commerce Commission reports to understand there is consensus on this.

The current and previous governments have attempted, at various times, to overcome the uncompetitive nature of the supermarkets. In particular they have offered special regulatory settings and incentives to, especially foreign, supermarket chains in the hope they will make the investment to compete here. This has turned out to be a basic failure. No new chains have meaningfully entered the market and the duopolistic position of Woolworths and Foodstuffs remains untouched.

On the 6th of September the Greens’ food affordability policy was announced. It includes a ban on excessive pricing as well as increases to spending for school lunches and community-led food security and food grants. The headline policy, however, is the nationalisation of “at least 120 stores and distribution centre capacity” to the tune of $2.8 billion. This would, according to the Greens, make KiwiMart a “commercially viable competitor.” Being a competitor, supposedly, will bring prices down across supermarkets because of market competition. 

Swarbrick claims this is the solution we have all agreed on: 

“Everyone agrees we need competition in the grocery sector to drive down prices.”

Do we? Certainly the other parties do. Labour, ACT, NZ First, and National all agree that the cultivation of competition is the solution. They intend to do it other ways, of course. Labour through a vertical separation of wholesale and retail branches. ACT through deregulation and policy settings. NZ First and National through a horizontal breakup of both or one of the duopoly supermarkets. But fundamentally the economic logic behind the policy choices are the same: competition will bring prices down and keep them reasonable.

KiwiMart is also implied to be a State Owned Enterprise (SOE) similar to the likes of KiwiBank, NZ Post, and KiwiRail. This is slightly confused by the insistence that the line of supermarkets would have “the mandate to prioritise affordability.” Prioritise over what, profit? Which comes first, commercial viability or affordability? Given the record of SOEs over the past three decades we might suspect its commercial viability. This would certainly be the case if ownership was ever opened to private investment. The Greens think a distinction can be drawn. That a socially-minded competition focussed SOE can exist. I remain skeptical.

The “Experts”

It is a staple of the Greens to claim their policy is “evidence-based” and expert supported. That we must just follow the evidence and listen to experts to rectify the mismanagement and poor policy of the government. So it is with KiwiMart:

“We're not short of supermarkets, we're short of competition. As experts have noted, divestment - that is, buying already existing stores - is key to breaking up the duopoly.”

The Greens’ policy, therefore, is merely inline with the expert opinion. I am not interested in whether that is technically the case or not, but that they rely on reference to non-political, non-party expertise to make their case. Who are experts? Swarbrick helps tease out answers in her response to questions about whether KiwiMart would provide cheaper groceries:

“Politicians are not economists. We leave monetary policy to the Reserve Bank. I think when it comes to defining excess profits, that is best left to the independent experts at the Commerce Commission.”

This is an explicit renunciation of political confidence and direction in the economy. Politicians are not economists? Who are we to leave economic analysis to? Whose analysis must necessarily map out what actions and policies are seen as reasonable and possible. 

Economics is by no means neutral. It is in fact a very neoliberal idea that there exists some neutral economics. This was entrenched in the ‘80s with the likes of the Reserve Bank and Public Finance Acts which removed political control of monetary policy and entrenched book-balancing austerity. Governments since have relied on the separation of economics into the institutions to allow them to skirt responsibility for the massive damage that neoliberalism has done.

No self-respecting Left should cede economics to experts and institutions that are predisposed to a continuation of the system. Experts that will never instruct us to contend with private property and capitalist relations themselves.

Progress?

Perhaps the adoption of this policy is still progressive? Given the Greens other, much more immanently implementable, policies I believe it reasonable to suggest that if Labour, the Greens and Opportunity are given the chance to form a government this election, KiwiMart will not get off the ground. Labour and Opportunity both seem disposed against such a spend when Labour has promised to earmark its modest tax increases to health and jobs spending first, and Opportunity has an unclear relationship to nationalisation.

I would be surprised if Chloë Swarbrick and Marama Davidson went into coalition negotiations with this as a red line. To shoot down a left-of-centre coalition over what is a fairly half-baked policy, in terms of implementation details at least, goes against the common goal of replacing the government. Labour and the Greens will be able to get together on anti-price gouging policy and I suspect the leadership knows this and will settle for that.

A lot is being said in the media, traditional and social, about the viability one way or the other of KiwiMart. Given the unlikelihood of its implementation, I challenge us to resume a broader view and examine what this policy adoption does ideologically and politically. 

Absent KiwiMart coming to pass next term, what has the Greens adoption of this policy done for the political Left? The rhetoric and arguments that the Greens have used for and around this policy make no meaningful progress on ideological ground; they remain solidly in the status quo. They have not moved away from advocating for competitive markets as a solution, thus nor have they broken with the orthodox economics. 

Haunted by Neoliberalism

Even when proposing nationalisation within an industry not once nationalised, the existing Left has fallen to the ideas and justifications of the neoliberals. Why has this happened? Mark Fisher pioneers in his book Capitalist Realism (recommend all read) a framework for understanding the seemingly inescapable ideas and logic of capitalism and neoliberalism. For Fisher, capitalist realism describes the sense that capitalism is inescapable and that imagining an alternative seems impossible. 

So it is with Swarbrick. For her, KiwiMart can seemingly only be argued for in the same ways the explicitly capitalist parties argue for things. It relies on the raising of market competition to the ideal arrangement of our society. That, with intervention in the KiwiMart case, markets dominated by private capital can be coaxed into keeping prices down. That is all that has to be done. In this way, KiwiMart suffers capitalist realism in its justification and therefore does not actually pose an ideological threat. 

I admit, I let Swarbrick and KiwiMart stand in for the Left more broadly. I believe there are few politicians that the more radical Left respects as much as her. Certainly the current Labour and TPM policies are much the same. They likewise fail to break out of the ideological malaise. They too are haunted by the idea of competition. But this is not much of a surprise, I hope.

We have made dogma the institutional rationality of the Reserve Bank, Treasury and Commerce Commission. Policy creativity is firmly bound to the idealisation of the competitive market. The radical Left ought to unify on a recognition of this basic ideological agreement amongst the existing parties.

I hold that the transition to a socialist economic system ought to be the paramount task for the Left. We must recognise the true causes of economic and class misery, namely social relations under capitalism. In terms of the supermarkets, we should ask whether or not a capitalist market is the best we can do? Or for that matter, are they the best we can do for the gentailers, petrol stations, or insurers? For socialists, the answer should be clear: no. 

So how might we exorcise ourselves and the Left of this phantom of competition? This is a difficult task and I will not pretend there is some simple formula, but allow me to suggest some things we might keep in mind to steel ourselves:

1. It falls upon the Left to forge new ideological and policy ground. We must be able to and we should work towards providing alternative models.

2. The form of argument and type of rhetoric used by our allies on the Left should be examined closely. We should be careful not to let ourselves be caught defending the supposed sanctity of competitive markets.

3. And, we should study, and take part where possible, in the struggles the organised working-class makes against hegemonic ideology in practice. For instance, here in Ōtautahi the task of privatisation was never completed and the organised port workers, MUNZ and RMTU, continue to agitate against the effective or full privatisation of the port and the bureaucratisation of decision making.

None of this is to say those on the Left might not still find it strategic to vote for parties like the Greens, Labour, or TPM. We may still find their policies progressive or materially beneficial for the working-classes. But if we do, independently, or as party members, support them, their policies, or their leaders we should be most careful not to be possessed by the spectre of competition ourselves.

Luke Thompson is a contributing essayist. He is the President of the UC Socialist Society (@socsoc_uc).

The Canterbury Memo is unaffiliated with SocSoc or any adjacent clubs and societies at UC.