KiwiBuild has been widely recognised as a high-profile failure. According to the goals set by Labour when its policy was sold to voters, we should have 1000 homes built by the end of the month. At the time of writing, there are still almost 900 to go.
But although the programme may be a failure for the Government delivering on promises, it can still be a success as a lesson in the difficulties of economic planning. That is to say, it is a useful illustration of the problems with socialism.
There’s a word that gets thrown around rather loosely these days. In the minds of some, it has almost become a synonym for the idea of a social safety net, which overlooks the fact that in the modern era all serious political parties are broadly supportive of this to some level.
Although there is no conclusive definition of “socialism” as a concept, collective ownership of the means of production and distribution is at the heart of the idea.
For a policy to properly be called a socialist one then, according to one definition, two things really need to be present.
First, it needs to involve the state supplying goods or services otherwise or usually expected to be supplied through the private sector. What this means is when the state lays down roads, sets up street lighting and maintains a national defence force, it’s not engaging in socialism because those are things that can’t easily be provided through private business.
Secondly, for a policy to be considered socialist, it needs to involve an element of central planning. In a market economy, outcomes are the result of hundreds of thousands of daily transactions that balance people’s personal wants and needs against each other. Nobody is really in control, which is kind of the point. Socialism, on the other hand, is much more focused on controlled outcomes, which pre-supposes a controlling entity – usually the state.
Although it is a mild example, KiwiBuild fits the description.
We can add it to the other 8,179 examples of socialism not working.