Economic Fundamentalism

In 1984 the New Zealand Labour government, previously respected for its social democratic system, became the first developed Western economy to make a systematic attempt at structural adjustment. This volte face has had devastating consequences. An obsession with low inflation resulted in rampant unemployment, soaring interest rates and chronic economic instability. Labour market regulations forced workers onto individual contracts and removed any reference to unions in the law. State activities were privatized or subjected to market forces. Restrictions on foreign investment were abandoned, domestic industry was sacrificed to free trade, and the universal welfare state reduced to a wholly inadequate safety net.