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Never forget.

Von „Luise.lottaa“ auf Instagram

New Zealand, 1984. A country where the government fixed the price of your bread, subsidized your sheep, and set the interest rate on your mortgage by decree. Prime Minister Robert Muldoon had spent nine years running the place like a Soviet planning ministry with a Commonwealth accent. He froze wages and prices in 1982. He ran budget deficits north of 9 percent of GDP. Foreign debt ballooned. When farmers overproduced lamb nobody wanted, the state bought it anyway and let it rot in freezers. You cannot invent a better parody of central planning. Then the money ran out, as it always does. The 1984 currency crisis forced Muldoon from office, and the incoming Labour finance minister Roger Douglas did something no textbook predicted from a supposed left-wing party. He deregulated. Fast. Douglas floated the New Zealand dollar in March 1985. He abolished agricultural subsidies outright, which the farming lobby swore would end civilization. It did not. New Zealand farmers, stripped of their handouts, became among the most efficient on earth precisely because they now faced real prices and real losses. Subsidies breed dependence. Remove them and you remove the excuse for stagnation. He slashed the top income tax rate from 66 percent to 33 percent. He removed import licensing and tariffs that had protected lazy domestic manufacturers for decades. He gave the Reserve Bank a single mandate, price stability, through the 1989 Reserve Bank Act, and told it to stop monetizing the deficits of politicians. The state sold Telecom, the railways, and the airline. Departments that had employed thousands to shuffle paper simply vanished. The results embarrassed every planner who predicted collapse. Inflation, which hit 15 percent in the early 1980s, fell to low single digits. The economy that had grown slower than nearly every OECD peer began compounding. New Zealand climbed to the top of international rankings for economic freedom and ease of doing business, where it still sits, although it appears they have forgotten their past. The lesson costs you nothing to learn and everything to ignore. Prosperity comes from prices telling the truth and from letting people keep what they earn. Muldoon fixed prices. Douglas freed them. One left a basket case. The other created a country that worked.