Atlas Network would like you to know that you've misunderstood them and you're hurting their feelings

A couple new opinion pieces seem to be working hard to convince the New Zealand public of the noble intentions and economic legitimacy of the corporate think tank NZ Initiative

“Pay no attention to that man behind the curtain.” Image: getyarn.io

Last week I covered the flurry of op-eds coming out of the libertarian/corporate sector in response to a growing public backlash against the proposed Regulatory Standards Bill. The writers of these pieces were trying desperately to convince us that the bill would not, in fact, be a libertarian attempt to enshrine free-market values and principles into the Government’s regulatory framework, but was instead about sensible measures and increased transparency.

As I documented in that piece, these op-eds cannot really be taken seriously, but are evidence of a corporate PR campaign that desperately wants to turn the public focus away from the corporate backing and motivations behind the bill and the substantial gains that businesses and corporations stand to achieve if this bill is passed.

It appears that the NZ Initiative, the business-funded think tank with ties to international shadow corporate lobbying group the Atlas Network, is particularly feeling a bit of pressure to reassert their legitimacy. They’ve got a couple pieces in Newsroom this week.¹

The first one is by the NZ Initiative’s chief economist Eric Crampton, who we last saw in the comments section of Dame Anne Salmond’s piece “Hayak’s bastards” chastising Salmond for not really understanding the noble beginnings and intentions of the Mont Pelerin Society.

Crampton’s piece seems like kind of a boring economic analysis at first. It’s basically an argument against the government’s (so-far unspecified) plan to tackle the lack of competition in New Zealand.

Crampton argues that rather than target big corporations who have cornered a huge share of the market, the solution is to make it easier for other businesses to enter the marketplace.

As I’ve said before, I’m not against looking at regulations and seeing if they are doing what they are intended to do and modifying appropriately. And I don’t understand all of the economic theories and sources that Crampton cites at the beginning of his piece after his pithy Simpsons example that turns on the different understanding of the word recycle. Crampton uses it as a way to argue that governments and economists are talking past one another when they refer to competition, and that government interference in the market to ensure competition is a bad idea.

What we should be focusing on instead, Crampton says, is “openness.”

Something about this piece just feels off to me. It could be the frontloading of esoteric economic theories which feels like a move to say “look, I’m an economist, you can trust me because I’m smarter than you.” Maybe we can trust him, but I certainly am skeptical based on where he works.

That, and despite reading this thing several times, I’m still not sure what he’s talking about half the time, although I can understand the broad themes. For example, in trying to emphasise the difference between open vs competitive markets, Crampton says

At the heart of the difference – while trying to avoid the boring bits – is how we understand the term competition. Is a competitive market one where there is some ‘right’ number of companies, of the ‘right’ sizes relative to each other? Or is a competitive market one in which no special permissions are needed to set up shop and every firm always needs to be looking over its shoulder?

Sometimes, the two amount to the same thing.

I’m sorry, what? I think what he is saying here is that a truly competitive market is one which orders itself, without any special government regulation, such that it magically produces the right amount of large and small companies.

Crampton then uses an example of a town with barbershops to illustrate the idea of an open market

Every decent-sized town has numerous barbershops, under separate ownership, of varying sizes. If it isn’t quite a textbook example of competition, on a numbers-counting basis, it’s workably close to it.

You’ll also see new barbershops spring up and other ones close. Places that have been barbershops come under new management; places that hadn’t been barbershops become new ones; other places shift from being barbershops to being other things. It’s an open market – despite a few strange regulatory requirements. You don’t need government permission to start cutting hair, or much permission to set up a shop cutting hair. You certainly don’t need to beg your competitors to allow you to open. Entry is straightforward.

But not all competitive markets, by the one definition, are open by the other. And not all open markets are ‘competitive’, if we measure things by counting companies. Openness matters more – both when thinking about customers’ experiences, and about government policy.

Again, this seems like a convoluted way of saying that an open market is a place where there are no pesky government regulations to get in the way of business entry and natural competition.

Crampton argues that rather than targeting existing corporations with (maybe, because nothing has been announced yet) essentially anti-trust laws and regulations, government should be ensuring more “openness” for new competitors to enter the market by targeting regulations.

The issue here is that unless big businesses are specifically regulated, they will all but ensure that new businesses fail by, for example, driving down their prices until they put their competitors out of business, then jacking them up again. Small businesses cannot withstand this type of assault from more established businesses with vastly greater amounts of capital.

People like Crampton argue that regulations are the problem for entry for new businesses, and they always give examples of regulatory hurdles, as he does for the majority of his piece here. But the market power of large businesses and corporations is far more damaging to new businesses than regulations. It’s the tendency towards consolidation of the market in a few businesses or monopoly that hurts small business. Not lack of “openness” due to too many regulations.

To get back to Crampton’s barbershop metaphor: what you end up with is a barbershop monopoly in which one barbershop owns all of the barbershops in town, even though they might have different names. Without regulation, no new barbershops can open or be solvent.

Is this the openness that Crampton is advocating for? To be honest, I’m not even sure. But it feels like just another way of calling for deregulation.

My overall issue with the piece is that it feels like a bait and switch, a tactic that seems to be regularly deployed by these business lobbyists. Crampton cautions the government against going after big companies (presumably such as the grocery duopoly) and says that they should instead focus on measures that help other businesses get into the marketplace, because doing so will naturally lead to a more competitive marketplace.

It just seems strange that the government has not even said what it plans to do, but Crampton’s piece criticizes them and immediately advocates deregulation of the business sector. It’s hard for me to understand what exactly he is cautioning against, but it sure looks like he is just pushing for further deregulation, a move that obviously benefits larger corporate interests.

As much as I question Crampton’s piece, it is not as blatantly propagandistic as one that came out earlier today. This piece is by James Kierstead, a research fellow at the NZ Initiative and was until recently a Senior Lecturer in Classics at Victoria University of Wellington.

Kierstead’s piece, entitled “Hayak’s Real Bastards” is a direct rebuttal to Dame Anne Salmond’s piece from last week. He uses his entire piece to argue that Salmond is mistaken and confused about the real purpose of the Regulatory Standards Bill, the true history of the neoliberal movement, and the noble goals and aspirations of the Mont Pelerin Society and the NZ Initiative.

Kierstead’s gloves are off immediately

In Hayek’s Bastards, the distinguished historian Dame Anne Salmond takes issue with Act’s Regulatory Standards Bill, which she sees as the attempt of a fringe party to impose its ideologies and which she thinks would “elevate individual rights and private property above all other considerations in law-making” and thus undermine democracy.

Salmond presents the bill as a result, not of the normal processes of democracy, but of a global conspiracy of ‘neoliberal’ think tanks tracing their lineage to 20^th-Century thinkers such as Friedrich von Hayek. She also implicates the New Zealand Initiative, the organisation where I have worked since 2022.

The picture painted in Salmond’s article is one in which Act is seeking to strip ordinary New Zealanders of their human rights, and in which my Initiative colleagues play a supporting role as purveyors of an ideology which is fundamentally illiberal, anti-democratic, and even racist.

Ironically, though, it is Salmond’s piece which is narrow and prejudiced. And the intellectual history she draws on – which supposedly lays bare the extremism lurking behind centrist liberalism – itself represents an extreme and partial reading of classical liberal thought over the past century.

Right away Kierstead employs a bit of character assassination on Salmond, arguing that rather than there being truth to what she is arguing as a dangerous ideological basis for the bill, it is actually her that is the ideologue.

He then employs another trick I wrote about last week in my review of the first round of corporate apologetics, which is to try to refute a larger argument on technicalities.

Let’s start with the comments on the Regulatory Standards Bill. For Salmond, Act is seeking “to impose its ideologies on Parliament”. But it is simply not possible, of course, for a minority party to impose its policies on Parliament without winning a regular vote. And this is what Act is seeking to do – it remains to be seen with what success.

Honestly Kierstead is just being obtuse or willfully ignorant here. It is a verified fact that ACT has set the policy agenda for the first year. As described by Gordon Campbell due either to Luxon’s political naivety, incompetence, or simply the fact that he is on board with ACT’s agenda (I favour the last option), ACT has had a hugely disproportionate impact on the coalition’s policy agenda

The coalition deals were done post-election, and they merely spell out how ACT, National and New Zealand First agreed among themselves to divvy up the policy spoils of power. While those agreements were being negotiated, Luxon was unable to rein in his junior partners, or just dis-interested in doing so. So, here we are. Parties with minimal support (ACT 8.6%, New Zealand First 6.08%) are setting the pace of change and dictating the lion’s share of the policy content of a government being led in name only by Christopher Luxon.

Add it up. ACT has dictated the new policy settings in social welfare, justice and sentencing, taxation, gun control, the resources to be diverted from state education into charter schools, and the future funding/operational methods of Pharmac. ACT has led the attacks on the public service and cheered on the job cuts. While everything else is being trimmed or dumped, ACT has won funding for its own new bureaucracy designed to strip away the few remaining regulatory protections for consumers and communities.

ACT itself has acknowledged in several press releases the disproportionate influence it has had on the government agenda this year, with party leader David Seymour himself indicating

After just one year in Government, we can report that Kiwis who trusted ACT with their vote have had an outsized impact in changing the direction of our country. We’ve put values of freedom, personal responsibility, and equal rights into action.

If you think Seymour is just blowing smoke, compare his list of ACT accomplishments with the list of government policy changes in the first year

Below is a non-exhaustive list of 70 actions ACT has taken in the first year of Government:

THE ECONOMY:

• Cut wasteful Government spending to get inflation under control.

• Delivered tax cuts to ease the cost of living.

• Restored the Reserve Bank's focus on tackling inflation.

• Restored the option of 90-day trials for all businesses.

• Established the Ministry for Regulation to cut red tape to make doing business simpler.

• Opened a Red Tape Tipline.

• Commenced two regulatory reviews for early childhood education and agricultural products.

• Repealed the Auckland Fuel Tax.

• Repealed the Ute Tax.

• Repealed “Fair Pay” Agreements

• Repealed Labour's resource management regime.

• Agreed on core features for a replacement of the Resource Management Act centred on property rights.

• Sped up timeframes for overseas investment applications.

• Reduced hikes to the Fire and Emergency levy.

• Increased the use of sanctions for beneficiaries who can work but refuse to take steps to find a job.

• Eased restrictions to accessing credit under the Credit Contracts and Consumer Finance Act.

• Scrapped EECA's "decarbonising industry" (GIDI) fund.

• Scrapped Auckland Light Rail, the Lake Onslow hydro scheme, and funding for Let's Get Wellington Moving.

• Started phasing back in interest deductibility.

• Suspended the requirement for new Significant Natural Areas.

• Unveiled a new contracting gateway test to provide certainty to workers and businesses.

• Began delivering regulatory relief for businesses dealing with anti-money laundering rules.

• Delivered regulatory relief for earthquake-prone buildings.

• Kept agriculture out of the Emissions Trading Scheme.

• Launched consultation to improve the Holidays Act.

• Launched a nationwide roadshow to inform improvements to health and safety law.

• Launched a framework for Regional Deals between central and local government to deliver infrastructure.

• Launched a refreshed framework for Public Private Partnerships.

• Stopped blanket speed limit reductions and enabled faster speed limits on our safest roads.

• Introduced legislation to reverse the oil and gas ban and promote the use of Crown minerals.

• Introduced tenancy legislation to enable Pet Bonds, restore 90-day 'no cause' terminations, and restore tenants’ and landlords’ notice periods to 21 and 42 days.

• Introduced legislation to improve access to building products available overseas.

• Introduced a member's bill to liberalise Easter Trading.

LAW AND ORDER:

• Increased funding for Corrections to lift prison capacity.

• Abolished Labour's prisoner reduction target.

• Defunded Section 27 “cultural reports”.

• Commenced a review of the Firearms Registry.

• Strengthened consequences for Kāinga Ora tenants who engage in repeated antisocial behaviour.

• Strengthened Firearms Prohibition Orders.

• Made gang membership an aggravating factor at sentencing.

• Enabled greater use of remote participation by victims in court proceedings.

• Piloted military-style academies for young offenders.

• Introduced legislation to reinstate Three Strikes.

• Introduced a member's bill to make rehabilitation or education a condition of parole.

• Introduced legislation to toughen sentences for attacks on workers and give weight to the victim's circumstances at sentencing.

• Introduced legislation to unlock tougher measures for young serious offenders.

• Introduced legislation to amend Part 6 of the Arms Act affecting clubs and ranges.

• Successfully campaigned to overturned race-based prosecution guidelines.

DEMOCRACY:

• Directed the public service to deliver services based on need, not race, and end "progressive procurement" quotas.

• Abolished the Māori Health Authority.

• Advanced the Treaty Principles Bill to select committee.

• Restored local referendums on Māori Wards.

• Scrapped Labour's law to give 16-year-olds votes in local elections.

• Broadened the scope of the Covid inquiry with a second phase.

• Defunded the Christchurch Call.

• Halted work on hate speech laws.

• Introduced legislation to remove Section 7AA of the Oranga Tamariki Act.

• Seen Otago University adopt a free speech policy in response to ACT's coalition agreement.

• Allowed charity-run lotteries to operate online permanently.

• Achieved a select committee recommendation to end taxpayer-funded election broadcasts.

EDUCATION:

• Restored charter schools, now with the option of state school conversion, with the first schools to open next year.

• Streamlined early childhood education regulations.

• Delivered an action plan to improve school attendance and started publishing attendance data weekly.

• Improved the school lunch programme to feed more kids for less money.

• Switched fees-free university from first year to third.

HEALTH:

• Delivered Pharmac its largest-ever budget, which has now funded life-saving medicines.

• Restored the sale of medicine containing pseudoephedrine.

• Streamlined medicine approval and funding processes.

• Introduced legislation to repeal the Therapeutic Products Act.

• Successfully campaigned to end discriminatory access to GP services in Hawke’s Bay.

There is substantial evidence that ACT is driving the coalition government’s agenda, notwithstanding Kierstead’s dissembling.

Kierstead then pooh poohs Salmond’s insinuation that “Act is committed to imposing its will “in perpetuity, and to set themselves up as the ‘mind police’ to enforce this imposition” and claim that the bill “would strip away the rights of all those New Zealanders who wish to live in a country in which collective and environmental rights are also respected” by reminding her and us that the bill can be overturned by Parliament at any time and that any of the recommendations given by Seymour’s hand-picked Regulatory Standards Board are not binding (as his colleague Bryce Wilkinson reminded us last week).

Calm down people. Kierstead wants you to just calm down, please. He wants to reassure you, that despite the fact that the history of the bill has been that it has been initially workshopped, drafted, and supported in several iterations by business interests, its goal is not in fact to benefit those interests. Because as those same business interests have made clear time and time again, it’s about responsible regulation and transparency. Any worries about this bill can now be put to rest

All of this makes Salmond’s claim that the bill “would strip away the rights of all those New Zealanders who wish to live in a country in which collective and environmental rights are also respected” seem somewhat exaggerated. It would not, of course, strip away any of our rights, and social and environmental concerns would continue to be debated in the public sphere and in Parliament as they are now.

Silly people. You’ve misunderstood. Thanks for this opportunity to set the record straight.

Kierstead then gets to the real focus of his piece. Now that he’s debunked Salmond’s and the rest of our concerns about the Regulatory Standards Bill, he’s got a bigger fish to fry. And that fish is to try to debunk the sources and history that Salmond relies on to reconstruct the shady corporate history behind both groups (the NZ Initiative/Atlas Network and the Mont Pelerin Society) that Kierstead aligns himself with.

He starts by belittling her and questioning her historical acumen

In an effort “to work out what’s going on”, Salmond looked at three books – Globalists, Crack-up Capitalism and Hayek’s Bastards – by the Canadian intellectual historian Quinn Slobodian.

According to Salmond, these books produced a sudden flash of insight:

“As I read, lights began to flash. For the founders of neoliberal thought, freedom is for capital and investors, not ordinary people. If the freedom of people works against the freedom of capital, that’s a problem, in their view.”

Flashes of insight based on secondary literature are all very well, but my own historical training made me wonder whether it might not be worth checking the primary sources as well.

Silly Anne. You’re clearly not a serious historian because you’ve relied on these secondary sources. I, as a serious historian, thought maybe I should consult the primary sources.

It’s worth noting here that both of Slobodian’s books, especially the history of neoliberalism Globalists: The End of Empire and the Birth of Neoliberalism, have extensive citations of primary sources. But Kierstead tries to use the fact that his book is itself not a primary source to cast doubt on Salmond’s analysis.

Kierstead then commits a bit of a self-own, although it’s unclear if he understands what he’s done

I would have found it surprising had Hayek, the main focus of Salmond’s ire, put property rights (let alone the property rights of the rich) above individual freedom. After all, many of Hayek’s books, most obviously perhaps The Constitution of Liberty, are first and foremost about freedom in general, not property.

In The Road to Serfdom, though, Hayek makes absolutely clear that “the system of private property is the most important guarantee of freedom”, not the other way round, and he specifies that this is the case “not only for those who own property, but scarcely less for those who do not”.

You see what you did there? You just verified Salmond’s criticism of Hayak’s focus. He himself said that property rights were the only guarantee of freedom, which is the point that Salmon and other critics of libertarian/neoliberal thought make. Libertarians equate the idea of freedom with economic freedom, and then they equate economic freedom with individual freedom and any government involvement in economics with a totalitarian state. There’s no in between, either you have a fully free market or you have Stalinist Russia.

It’s telling that Kierstead accuses Salmond of using a “hazy mysticism that placed a vague ideal above the back and forth of democratic deliberation” in characterizing the goal of neoliberal policy as being to encase the global flow of capital from democratic inferences. Indeed, the same critique of using a “hazy mysticism” could be leveled at any of Kierstead’s free market saints, especially Hayak and Friedman. All of them spoke of freedom in the haziest terms and conflated economic with personal freedom in bizarre ways that were uninterested in or directly contradicted by historical data.

Kierstead ends the piece by asserting that Hayak’s true orientation and that of libertarian/neoliberal thinkers was that they were against authoritarianism “either of the left or right”. She (and apparently respected historian Quinn Slobodian) have simply misunderstood them. It could happen to the best of us. Despite Salmond’s contention that

a direct genealogy can be traced from the Austrian Chamber of Commerce in the 1920s to the Mont Pelerin Society in 1947, the Atlas Foundation” and the New Zealand Initiative… even cursory research would have revealed that all these organisations share the same fundamentally anti-authoritarian orientation as Hayek and Popper. The Atlas Network’s public website boasts of projects with names like ‘Promoting Free Societies’ and ‘Protecting Civil Rights’ (since “only by protecting the civil rights of all can the institutions of liberal democracy truly flourish”.)

This also applies to the New Zealand Initiative, of course, with our executive director Oliver Hartwich recently penning only the latest of his many warnings against the threat that the European far-right poses to democracy.

Aside from the staggering naivety of taking Atlas’ stated mission from their website at face value, what this rebuttal gets wrong is that yes, Hayak and others were against authoritarianism, but only authoritarianism that threatened the global flow of capital. They were completely fine with authoritarianism in the name of the free market, as shown by Friedman and Hayak’s support of Augusto Pinochet’s brutal authoritarian regime in Chile.

Furthermore, they conflated economic freedom with freedom from authoritarianism. And as Slobodian and Jessica Whyte document, the Mont Pelerin Society met in 1947 to figure out what to do about the seeming collapse of the Western global order which was underpinned by a global flow of goods and capital. Their concerns about authoritarianism were not about individual freedoms, but the impact that sovereign states would have on the global capitalist economy if they exercised their right to limit the flow of goods and capital and corporate influence. Most of their ire was directed towards postcolonial states that wanted to dictate the terms on which they would engage with the international capitalist market. Many of these countries looked to restrain and regulate the exploitation and expropriation of their resources by corporations.

Not to mention that these “classical liberal” groups who were supposedly only interested in free societies and individuals were verifiably funded and supported by US business interests in an effort to give their corporate agenda a legitimate intellectual cover.

So what you have is a group of “liberal” thinkers and think tanks funded by US corporate interests promoting their vision of freedom and democracy in ways that, not surprisingly, privilege the wealthy and corporate interests. And no amount of Kierstead belittling Salmond or accusing Slobodian of misunderstanding, or trying to reframe the terms of the debate can change that fact.

Casting aspersions at Hayak’s “real bastards”, the authoritarian demagogues of the world and the tech bros, while claiming an intellectual inheritance from classical liberal thinkers that has been shown to have been fabricated after the fact by those in the employ of corporate funders does nothing to strengthen your case against the fact that your organization is funded and founded by business interests. Nor does appealing to engage in a good-faith dialogue with “thinkers of all stripes who share our fundamental commitment to the open society”.

Writing op-eds that advocate less regulation for corporations seems suspect economics. And accusing people who have read the history and followed the money of putting “words in other people’s mouths” rather than taking at face value what those in the employ of corporations say about their motives comes across as disingenuous to say the least.

In fact, it makes you look like you’re running scared.

We’ll see if the public buys into this propaganda this year. We can expect a lot more.

Thankfully, at least from the first comment on Kierstead’s piece, they don’t seem to be

1. I wonder why Newsroom is giving a platform to the NZ Initiative. It is good that they have indicated that it is a business funded think tank at the end of each piece, but this coupled with the fact that I was recently informed that they wouldn’t take any more op-eds on politics from me since I’m a psychologist makes me wonder if they are getting some pressure to not be so hard on corporate interests.