The State's Contradictory Role

The present emphasis on restructuring by economists, politicians, businessmen and others in the media and in official propaganda reflects the pressures on profitability which built up on an international scale in the course of the post-World War II boom (mainly rising costs of production and overproduction of goods and services in relation to effective demand). Three decades of essentially expansionary 'Keynesian' policies, intended to prevent a return of economic crisis on a 1930's scale, succeeded not only in fostering entrenched inflation but also in preventing the profit-restoring mechanisms of depressions (restructuring of capital and of labour processes) from coming fully into play. The overall interests of private capital accumulation now require restructuring to take place and this is reflected in the changing nature of state intervention (to be discussed below).

However, in New Zealand as in many other countries, working class resistance and struggle is sufficiently strong to prevent any consistent pursuit of restructuring objectives. Western capitalist classes are facing an unavoidable dilemma: "On the one hand, since crisis is a necessary interruption to the process of accumulation, the state must tolerate and, at times, facilitate crisis; on the other hand, economic crisis must be moderated by the state to prevent its spilling over into a general crisis which threatens the very existence of capital" (Ben Fine & Laurence Harris).

In New Zealand, government efforts to "moderate" crisis (for example, election year deficit spending) have led to charges that, so far, restructuring has not got beyond the stage of rhetoric. Yet as the pressures on government leaders to "facilitate" crisis intensify, we can expect renewed attacks on working people and the weaker "expendable" sections of private capital.