Free Societies

Trailblazers: the New Zealand story

Photo credit: Harmeet Basur

The economic liberalization of New Zealand in the 1980s and 1990s under Finance Ministers Roger Douglas and Ruth Richardson remains an inspiring case study of fostering economic growth through rolling back government subsidies and protectionist import controls. Free to Choose Network (FTCN) – an Atlas Network partner whose mission is “to use accessible and entertaining media to build popular support for personal, economic, and political freedom” as a means to advance human well-being – recently produced a documentary, Trailblazers: The New Zealand Story, exploring how the “Rogernomics” reforms of the New Zealand government has enabled the country’s emergence as a world leader in economic freedom.

“Free to Choose Network strives to tell real-life stories that celebrate success while improving human well-being,” said Rob Chatfield, president and CEO of FTCN. “Then, we create cogent, video-based teaching units based on our full-length productions and provide these video lessons for free to any teacher. Too often, students – our next generation of leaders – hear a message that someone’s gain surely must come from someone else’s loss. Trailblazers: The New Zealand Story provides several examples of people working together to create a better situation for all.”

Speaking of notable reforms highlighted in the film that ought to be replicated elsewhere, Chatfield said: “… New Zealand reformed private and public sectors at roughly the same time, and these policies were implemented successively by two different political parties. New Zealand was essentially able to disintermediate lobbyists from the policy making process … New Zealand’s agricultural industry is stronger today than when farmers relied on subsidies. Many individual farmers were put out of business, but results from this country clearly show subsidies just lead to an unsustainable situation.”

New Zealand’s economy in the 1970s and early 1980s was permeated with government controls. In Trailblazers, Atlas Network Executive Vice President for International Programs Dr. Tom G. Palmer describes the situation: “New Zealand had followed a model in the past that the government should promote certain industries and jigger the rules so those industries would be selected as winners, and so the government had to subsidize and create all kinds of manufacturing for automobiles and television sets, and so on.”

One such example was a business that imported television sets and VCRs, led by Alan Gibbs. New Zealand regulations had required that all television sets be assembled in New Zealand, which resulted in Gibbs instructing the Japanese importer to disassemble the television sets in Japan before sending them and then have his company reassemble them in New Zealand in order to legally sell them. “The Japanese thought that they were completely nuts, and of course it was completely nuts,” said Debbi Gibbs, Alan’s daughter and a music industry manager.

The process of introducing reforms was not without controversy and not without a financial toll on many farmers and others who previously relied on government subsidies to function; however, tales of those who lost their farms but went on to even greater prosperity abound, like Roger Beattie, whose story is told in the film. Beattie had to sell his share of the farm he worked for a price far below market value.

“I mean it was tough – losing a farm and my childhood dreams of owning a farm were dashed,” Beattie tells viewers. “But, … in hindsight it was the best thing that ever happened to me. I was in my early twenties so I could adapt and go do other things.” Beattie went on to launch several businesses in a newly liberalized oceanic industry, harvesting abalone for pearls and selling seaweed and Valere Kelp Pepper.

In Trailblazers: The New Zealand Story, Roger Beattie explains how New Zealand’s open economy allowed him to innovate the technique for harvesting abalone, not only for consumption, but for their rare and valuable pearls. Photo credit: Harmeet Basur

“New Zealand has fundamentally changed,” Beattie continued. “If you went out to farmers before the reforms of ’84 and said, ‘Would you do away with subsidies and exports incentives?’ Most of them would say, ‘[Heck] no!’ If you asked them now, they would say ‘Why would we want to have subsidies?’ Because the beauty of our current system, of no subsidies, is if there’s a world change in thinking or the marketplace … New Zealanders change overnight, so we’re adaptable, and why would you want to go back to a system that just protects old, dying industries.” After Beattie’s many maritime enterprises took off, he and his wife bought a farm on the coastline – realizing his long-held dream.

Bill Cashmore, a fifth generation farmer whose farm was severely impacted by the economy and the New Zealand’s government’s reorganization efforts, shares similar views as Beattie: “There’s no way I’d ever go back to anything that’s got government involvement in it,” said Cashmore. “One thing I’ve learned is that individuals, given the right incentives and the right signals from the politicians, will deliver, so let people make their own individual choices. Let them work hard. Let them make those sacrifices to achieve the things they want for themselves, for their family, and for their communities. That’s what delivers. You try and spread the benefits out everywhere, you get a very thin smear that doesn’t achieve much.”

Trailblazers: The New Zealand Story highlights how father and son Bill and Robert Cashmore struggled to keep their farm after New Zealand eliminated government subsidies, but are now reaping the benefits of producing a product that is competitive in the worldwide market. Photo credit: Harmeet Basur

“In some ways, the pace of change forced some radical changes in farm management, radical changes in how we marketed and did things. But the pain was over and we moved forward – relatively quickly – in hindsight,” Cashmore concluded. “At the time it wasn’t too much fun, but we got through it. Now we’re strong.”

Beattie and Cashmore are just two examples of the many New Zealanders who are thriving now because their government had the audacity to reform its broken system and to empower, rather than hamstring, its citizens in their efforts to improve their own lives. Their stories, along with several others featured in the film, communicate the benefits of economic freedom in an easily accessible medium, which explains the educational potential it presents.

Trailblazers was also developed into a video teaching unit for use in the classroom via, the educational division of FTCN. “Sustainable Oceans and Seas explains New Zealand’s Quota Management System,” said Marjory L. Hawkins, FTCN’s director of marketing and public relations. “The 20-minute video is part of a larger library of video teaching units, which offer teaching guides, discussion questions, online quizzes and more. According to a recent independent study, izzit products are in 44 percent of all high schools and 43 percent of middle schools in the United States. Anyone can sign up and stream the teaching videos."

Watch the full documentary.