Be careful what you wish for
Supporters of social democratic and labour parties have had plenty of experience of seeing their parties in office. Despite some substantial achievements there has been plenty of disillusionment, particularly in the case of coalition governments with centrist or liberal parties. Time after time, the promise of radical transformation has faded to hard slog for modest reforms or even (particularly in times of crisis) capitulation to the demands of capitalist orthodoxy.
By contrast, explicitly libertarian parties have hardly ever scored enough votes to elect candidates, let alone form governments. But now, thanks to New Zealand’s multi-member proportional system, a new government, led by the National Party, has been formed in which the ACT (Association of Consumers and Taxpayers) party (with a bit over 3 per cent of the vote) holds a couple of ministries. ACT was the subject of some enthusiastic commentary in open threads here, and an op-ed piece by John Roskam of IPA in the Fin (paywalled, maybe someone can find a link). They combine libertarian economic policies with the now standard accompaniments of climate change delusionism and coded law-and-order rhetoric.
Unsurprisingly, given the circumstances, the first announcement of the new government was that the longstanding requirement under the Public Finance Act for budget surpluses over the cycle was to be abandoned. At this stage, declining tax revenues are the main factor, but large-scale Keynesian stimulus is going to be needed, and soon.
Labour’s guarantee of bank deposits looks certain to be retained, and there’s every likelihood that more intervention, maybe even nationalisation, will be needed before the financial crisis is resolved.
As far as I can tell, ACT has had to settle for a review of public expenditure (plus the ministers’ jobs) as its price for participation in a government which seems likely to be forced in the direction of interventionism. It will be interesting to see how long they last.