Science Express: 2 August, 2012; Te Papa Tongarewa.

I am writing a history of New Zealand from an economic perspective. It’s about two thirds complete – up to the 1970s, with 250,000 words of text – that is already about three conventionally sized books. Tonight I am going to talk about one aspect of the book – the way that the environment is an integral part of New Zealand’s history.

This is not the same thing as a history of the environment. What I am arguing this evening is that a conventional history which neglects the impact of the environment omits a critical dimension of the story of New Zealand, just as – and this is the main theme of the book – a neglect of the economy gives a limited and distorted account of our development.

You may ask why an economist should be paying attention to the environment. Economics, if you understand it in any depth, is founded on the laws of thermodynamics; there is a sense in which economic history is equally dependent on the environment. Tonight I am going to illustrate the dependency with – mainly – nineteenth century examples. So I am not particularly focused  in the book or tonight, on the future. We have numerous expert and confident futurologists, for it is easier to make predictions than it is to understand the past. (Although making correct predictions may be harder – few futurologists get it right in retrospect, as history shows.)

The book starts off 600 million years ago, before New Zealand existed in any form. (Our oldest rocks are 510 million years old.) New Zealand – or more precisely the continent Zealandia, most of which is under the sea – is the erosion from the Gondwanaland craton which sedimented off the east coast of Australia. About 85 million years ago it unzipped and began drifting east, opening up the Tasman. Because the crust was being stretched, the continent began spreading out and sinking. It could have ended up under the sea for ever, but about 23 million years ago the Pacific tectonic plate began expanding, smashed into the Austro-Indian plate, driving up the land we know as New Zealand. Being on the plate boundary explains why the country is a long straggly one, why we have rough mountain chains and why we have earthquakes. Big shocks can be a bloody nuisance, but it well to remember that were there not the forces that create them, there would be no New Zealand at all.

A consequence of our geology is that, aside from coal and hydrocarbons, New Zealand has few commercially interesting minerals. Generally its soils are also poor quality and thin (thanks to the ravages of the ice ages and volcanic eruptions), lacking the nutritive minerals and the physical properties which make them good for farming. When our European forefathers first arrived, they saw lush bush and assumed that meant fertile soils, not realising that over the millennia the vegetation had evolved to cope with the soil deficiencies.

It often took many times the cost of the land purchase to make it suitable for farming. This is nicely illustrated in the early part of the twentieth century when there was no growth in farm productivity. A farmer opening up new land would get a reasonable crop for up to four years, exhaust the soils and then struggle on, although he might not notice because those first years involved the hard grind of establishing the farm. It is not until the mid-1920s when farmers began spreading phosphates, that farm productivity took off. When they stopped using fertilizer – in the 1930s because they were broke, in the war years when the phosphates were diverted to explosives – productivity fell.

Exhausting the soils and mining phosphates – even overseas – are  ultimately unsustainable activities. Political economists call it “the quarry”. New Zealand histories tend to play down the significance of quarrying activity which dominated the  economic activity of the first Europeans; instead they give the impression that the European settlement was sustained by farming from the beginning.

However the first Europeans quarried seals, whales, fish, timber, kauri gum and gold. The initial prosperity of Wellington depended upon the whales that came through the Strait; within a decade of settlement they became almost extinct. Fortunately the whaling sustained the settlement until the wool cheques came in from the Wairarapa.

Other towns were sustained by gold, – Dunedin, Auckland, even Christchurch which prospered from supplying the Victorian gold fields (as did Wellington). Another unsustainable activity was warfare. There is much about the battles and the politics in our conventional histories, but few observe that Wellington in the 1840s and Auckland in the 1860s were military camps. Local farmers supplied the quartermasters as they had the goldfields.

After the quarrying phase the economies of the southern towns became based on wool. Auckland’s was not. In the nineteenth century, the top half of the North Island suffered the consequences of events 1650 years earlier in 233CE or so, when the Taupo volcano had its last major super volcanic eruption. The ash which spread to the north and west was deficient in trace minerals, especially cobalt and selenium. Stock which grazed on it wasted from bush sickness. Eventually scientists identified the soil deficiencies and today the missing minerals are added to livestock’s diets.

After the volcanic explosion there was a great lake in the Waikato river basin where the water broke out of the caldera – Lake Taupo – and found its way to the sea. The swamp meant footrot for sheep. It was not until the Waikato railways were established in the early twentieth century that dairying could take off. Cows are not prone to footrot but their produce – butter and cheese – needs heavy transport.

The consequence for the city of Auckland was it remained a port servicing quarrying activities – gold, timber, kauri gum – until a generation after the southern towns. Moreover Coromandel gold was in hard rock, not alluvial which can be panned by individual miners. Hardrock gold requires substantial investment in underground mines and rock-crushing batteries. The risky capital to fund the enterprises led to the development of an Auckland business community built round a share market. Other centre had smaller ones,  but without the same need to raise capital they were neither as vigorous nor as vulgar as Auckland’s. Thus was laid the foundations of today’s Auckland’s business predominance.

Not only did the Taupo volcano cleave the settler economy in two – south and north of the lake – but it also had a major impact on Maori economic development. In a period when the nation’s economic thrust was growing wool, the majority of Maori lived in the sheepless areas. North of Taupo there were 7 percent of the sheep and 60 percent of the Maori (compared to 20 percent of the settlers). It is true Maori had lost a lot of land, but they retained much – on some measures more per capita than the settlers – enough to develop a viable sheep industry. We know this because Maori sheep flocks south of Taupo were comparable – relative to their population – with settler flocks.

So Maori economic development was located in the wrong places. By the time economic activity moved north to dairying early in the twentieth century Maori were too impoverished to go into dairy farming which required greater investment than sheep farming.

The book gives considerable attention to the Maori economy. It argues that when the proto-Maori first arrived they quarried the environment just like the Europeans did. We cannot be sure what led to the extinction of the moa, but I would hazard Maori hunting was important. Archaeologists know from the middens that early Maori fished out some species, and we know the seal line – where the seals were – steadily retreated south during their first  five centuries.

It is broadly true that Maori were living in a sustainable balance with the environment just before the Europeans arrived. For the politically correct it is inconceivable that their actions could have led to the extinction of species. What they forgot is that the proto-Maori, who arrived 700 hundred plus years ago came from a tropical environment and would have made environmental blunders because of their ignorance too. But there were fewer of them; their environmental destruction was not as great.

But in their first five hundred years they developed a sustainable lifestyle. We shall have to learn from that example although it is much harder in a globalised economy – and we have less time to do it.