The news out of Wellington is being treated by international commentators with the customary breathless horror reserved for political stalemates: after a tight national election, New Zealand has produced no clear winner. Pundits are forecasting weeks of fraught coalition bargaining, agonizing backroom compromises, and institutional paralysis. To which any sensible observer of the leviathan state can only offer a hearty, heartfelt congratulations to the people of New Zealand. For the next month, the state has effectively been locked out of the workshop, and the citizens might actually get some peace.
Under New Zealand’s mixed-member proportional system, the electorate declined to grant an outright majority to either major faction, forcing the political class into a frantic round of speed dating. The Beehive, as Wellington’s appropriately hive-minded executive building is known, will now host endless closed-door meetings where minor parties with inflated self-regard trade their votes for ministerial limousines and bespoke regulatory favors. It is a spectacle not unlike watching estranged relatives brawl in the driveway over who inherits the lawnmower, except that in this case, the lawnmower belongs to the taxpayer, and whichever cousin wins intends to run it over the flowerbeds.
Naturally, the commentariat views a hung parliament as a terrifying vacuum. We are told that the country lacks direction, that policy cannot move forward, that the gears of governance have ground to an unconscionable halt. What these critics call a constitutional crisis, I prefer to call a regulatory ceasefire. Every day that politicians spend haggling over who gets the associate minister portfolio for regional development is a day they are not passing a 400-page omnibus bill inventing fresh licensing requirements for dairy farmers or mandating ergonomic standards for home offices.
F.A. Hayek famously observed in The Fatal Conceit that the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. A hung parliament is that rare political accident where the conceit is briefly checked—not by sudden intellectual humility, heaven forbid, but by mutual exhaustion. When no single party possesses the raw numerical muscle to impose its central plans upon the nation, the public enjoys a brief, accidental interlude of liberty. The state’s ambition is throttled by its own arithmetic.
The financial press inevitably frets about the dreadful specter of political uncertainty. Markets, we are warned, crave stability above all else. But true stability does not come from a parliamentary majority enthusiastically rewriting the tax code every three years to satisfy its ideological donors. True stability comes from the rule of law, predictable property rights, and the quiet, spontaneous order of voluntary commerce. An idling legislature provides far more genuine stability than an hyperactive one. While the party leaders are busy drafting memoranda of understanding, the farmers continue to milk cows, software developers continue to write code, and maritime shippers continue to move freight, entirely unbothered by the absence of a designated Cabinet.
The real danger, of course, lies at the end of the coalition negotiations. Politicians are pathologically incapable of sitting on their hands indefinitely, and the currency of coalition building is always public money and regulatory privilege. To secure the votes of minor nationalist or fringe factions, the eventual prime minister will inevitably surrender chunks of the treasury, promise protectionist carve-outs, or establish some gleaming new bureaucratic entity with an expansive budget and an incomprehensible mission statement. The resulting compromise will be hailed as a triumph of mature democracy, which is the polite term for a cartel dividing up the spoils.
Until that dreary deal is struck, however, the Kiwis should savor the quiet. For a few shining weeks, the machinery of administrative coercion is jammed on a technicality. The civil servants in Wellington will continue to shuffle paper from one in-tray to another, but they cannot invent new burdens without political masters to sign off on them. Let the party chiefs take their time. Let them bicker until Christmas over who gets the corner offices. The longer the politicians are trapped inside a boardroom trying to figure out how to rule, the longer the rest of the country can simply live.