A Brief History of the Māori Economy: How Things Change

Presentation to a Statistics New Zealand Seminar, 23 February, 2021.

Māori involvement in the economy has been an integral part of New Zealand’s story, even if we ignore the first 500 years when there was only a Māori economy. Unlike many of our histories, Not in Narrow Seas does not. There are about 40,000 words on the topic – a book in its own right – beginning with the societies that our first Polynesians came from. My book does the same for the British and Pasifika immigrants, because each migrant wave brought its cultural baggage; for instance, the first proto-Māori shelters were modelled on their island equivalents.

The book calls them ‘proto-Māori’ because the first arrivals were not Māori but evolved into what today we call ‘Māori’. The answer to where Māori came from is ‘Aotearoa-New Zealand’. Their ancestors came from East-central Polynesia – say near Tahiti – and can be traced back to near Xi’an in inland China. No, they were not Chinese, but a different people who worked their way to the coast about 5000 years ago, learned how to sail and eventually explored most of the Pacific.

There is a lesson here central to the book. Māori proved to be a very adaptable people continually evolving as new opportunities and challenges arose. The European tradition recalls the Duke in the novel The Leopard, telling his nephew ‘If we want things to stay as they are, things will have to change.’ Māori have a parallel whakatauki ‘Me whati te tikanga, kia ora ai te tikanga’; there are times when tikanga (practices) needs to be broken for tikanga to survive.

Adapting means the present and future will be different from the past. We should not impose our current preoccupations onto the Māori past, a particularly tempting exercise where there is no written record.

The Origins of Māori

For instance, we do not know how the first arrivals 700 years ago, reacted for they came to a land mass far in excess of anything they were familiar with elsewhere in Polynesia. Yes, they ate moa but the evidence from the middens is they depended on fish, as had their Pacific Island ancestors, and continued to do so for the next 500 years.

In their sort of economy, about 80 percent of economic effort was devoted to feeding themselves – compared to, say, 10 percent today. Then the seas and shores were rich in fishes. The nutritional challenge was adequate energy – not protein. In the north it came from kumara, in the far south it came from seal blubber. That is why there were fewer Māori in the middle of the country.

There are many intricacies in their story – climate change has a role in at least two ways – but the basic economy was affluent; there was probably a lot of leisure time except in the peak season. Hapu were largely self-sufficient. There was trade among them but generally it was for what amounted to luxuries. Their life expectancy was lower than today, but similar to the most robust European societies,

The rules for this exchange were rather different from today’s commercial format which focuses on the value of the product being exchanged, not those involved in the exchange. In traditional gift exchange economies the focus was on those involved in the exchange rather than the product.

The First European Impacts

Yet when outsiders turned up, Māori proved adept at bartering. The very first exchange – between Cook’s Endeavour off the Hawkes Bay shore and the waka that came up to investigate them – is instructive. Māori at the time were neolithic – that is, they used stone tools and gardened – although, as I have indicated, they were a sophisticated society. They proved much less interested in the iron nails Cook’s officers offered for fish, and more in the tapa cloth that the seamen did. However, by the time Cook got ashore, Māori had got the hang of metals and the spikes had become very attractive. We’ve just seen two adaptations. First, from gift exchange to barter and second, the introduction of new technologies.

Exchange involves two sides – two perceptions. In the early exchanges between Māori and visitors, the differences were large, quite unlike the equilibrium market transactions of economic theory. For instance, ‘the natives [were] eager to exchange a 10lb fish for a ten penny nail’ in 1815. The report has a European perspective that Māori were exchanging something valuable for something cheap. But they would have seen the value imbalance the other way around: as a part of a normal day’s catching, the fish probably cost them minutes rather than hours of labour. A metal implement was far more efficient – labour saving – than a stone one.

One of the complications of trying to understand the Māori economy is the very rapid change following the European impact. For instance, the missionaries brought literacy for Bible reading; by the middle of the nineteenth century Māori were probably more literate than the Europeans. Europeans also bought diseases – dysentery, influenza, measles, STDs, whooping cough – to an immunologically virgin population. The resulting mortality and infertility seems to have resulted in a greater reduction of the Māori population than the fighting of the nineteenth century; certainly it had a greater impact than the 1918 influenza or today’s covid pandemics.

The impact of new technologies was also mixed. To focus on just one – the musket – to illustrate how we can misleadingly impose a contemporary frame on a historical event. The Musket Wars – from 1820 to 1835 – were devastating and caused considerable death and turbulence to Māori society. It is from them that the latter-day perception of Māori as warriors arises. But it is not obvious that, before the musket, the inter-hapu fighting was particularly vicious. The fighting would have been hand to hand and the weapons not too destructive; perhaps they were a bit like rugby matches, with similar injury rates and exaggerated memories of conflict.

The musket transformed the affray; it was a bit like arming one team in a rugby match with flick knives, although hand-to-hand fighting became less important. Eventually, both sides became armed and by the mid-1830s Māori were looking for ways to reduce the tensions – that was a role of James Busby, the first British resident.

So were Māori a warrior culture? Possibly not, unless you think rugby is about war. While I do not want to minimise their warrior contributions in the twentieth century, recall that it is said of all New Zealanders – brown and white – that they were slow to wrath but stern in battle. Does that make us a warrior nation?

For another example of how easy it is to impose the wrong framework, consider how early relations between wahine and European males have been described as ‘prostitution’. However, the contemporary reports – and indeed most subsequent comment – evaluate the exchange from a (typically judgmental) European perspective. Almost certainly, Māori had a different account. We have very few indications of what the women’s attitudes were but one wahine had tattooed on her arm the name of each seaman she stayed with, which is hardly what a conventional prostitute would do. Perhaps the notion of ‘seasonal wives’ may be a better place to begin.

So the two peoples struggled to come together often with misunderstandings. Perhaps the greatest one was over land. It is a long story and takes up some space in the book. To summarise, after a generation of Māori bartering food and other resources for their commodities, it might have seemed obvious to Europeans, coming from their commercial backgrounds, that Māori would treat the exchange of land rights in the same way. But for Māori, land was very different from fish or nails; it was a taonga. Cook regretted that he was unable to acquire other taonga, a greenstone mere. In return, Cook refused to give Māori guns.

Land belonged to this latter non-tradeable category. This may seem antiquated today; or does it? If someone wants to export – that is, exchange with a foreigner – food or manufactures, we applaud their enterprise. But if someone wants to exchange (sell) land to a foreigner, as likely as not they will require permission from the Overseas Investment Commission.

To summarise thus far the two salient lessons. First, Māori proved remarkably adaptable to the new circumstances although they did not always get it right at first. Second, we must be careful not to impose our understandings – and misunderstandings.

The Arrival of the Commercial Economy

Māori proved adept at getting involved in the commercial economy, supplying settlers and provedoring visiting ships. Initially they kept some Māori ways of doing so, working in community groups and distributing the proceeds according to customary practices, say the way they allocated fish from an expedition.

However, there were various economic problems in the early exchanges. One was that the new technologies could require management outside their experience. For instance, they were horticulturists and not agriculturists. So they failed to introduce new seeds each season and so over the years the grains they harvested became infested with weeds. A second was that they built up stocks to supply ships, but when the ships did not come because of a commercial downturn in Europe, they found themselves overstocked with no buyers.

More subtly, they became major suppliers of European settlements. But the Europeans were borrowing offshore to establish their settlements and fund purchases from the Māori. This was unsustainable and the settlements had to turn to supplying themselves, thus reducing the demand from Māori.

At a very early stage then, the New Zealand economy faced today’s problems – the vagaries of the global economy and the risks of depending on overseas borrowing. Welcome to the globalised world.

I skip through the New Zealand Wars, except to mention a major misunderstanding. I was taught that they, then called the ‘Māori Wars’, were a conflict between ‘them’ and ‘us’. In fact Māori fought on both sides. It is not helpful to describe those on the Crown side as ‘loyalists’. There were deep political divisions in Māoridom and sometimes that led to warfare in which the Crown was involved almost as an adjunct.

Even so, the wars are an uncomfortable period in New Zealand’s history. They are associated with the confiscation of land but the whole story is more complicated.

The settlers were hungry for land; recall Edward Gibbon Wakefield’s advice: ‘Possess yourself of the Soil and you are Secure.’ Before European arrival, Māori had possessed all the land but eventually most of that land came into European hands by fair means and by foul. Forgive me for skipping the details – the book does not – but as important as the change of ownership was, the mode of land tenure also changed; Māori and English land tenure regimes were quite different.

English common law on ownership of land is based on William the Conqueror’s feudal doctrine that the sovereign was the absolute owner of all land and all others held interests directly or indirectly from her or him. The Saxon regime before him had been allodial (absolute) ownership; those who owned the soil had no obligations to any higher authority. Māori ownership was closer to the Saxon doctrine. The British settlers, not understanding this, insisted on imposing the feudal regime which applies in today’s New Zealand.

Because land is integral to a society, the transfer of regimes – usually involving the individualisation of title – disrupted Māori society, changing it from a communal one to one which was more individualistic. Such a change may have happened anyway. The market economy is a ruthless individualiser, an issue with which Not in Narrow Seas is preoccupied.

The End of the Nineteenth Century

By the end of the nineteenth century, then, the typical Māori was on their own bit of land although they would have continued a rich social life based on whanau and marae. Little of their land was of high quality but, even more important, it was poorly connected to the market economy, since roading development was skewed towards linking up Pakeha farmers with ports.

Even more disastrously, the land was in the wrong places. We have to go into Pakeha economic development to explain this. Increasingly, from the middle of the nineteenth century the economy was founded on sheep – first wool and then, from 1882, frozen meat. (Dairy became important at the beginning of the twentieth century.)

The indications are that Māori could have become successful sheep farmers. However, the majority of them did not live on land where sheep prospered. In about 232CE – before there were any humans here – the Taupo super-volcano erupted. It was a huge one, the most violent known in the world in the last 5000 years. The caldera is Lake Taupo. Its ash, which fell mainly to the east and the north, lacked key trace elements needed for livestock to thrive, while the new course of the resulting Waikato River left swamps through the Waikato basin.

Because of bush sickness and footrot, sheep farming was not practical north of Taupo. It was incredibly bad luck that the majority of Māori lived in this area and so they were cut off from the sheep boom to the south. Thus they did not go though the economic transformation that Pakeha did.

For the early parts of the nineteenth century European small farms – excluding the great sheep stations which were almost feudal estates – were largely in a subsistence mode of production and consumption. They sold a little produce from the farm but largely consumed what they produced; often their cash flow came from the men labouring off the farm so it was the women who ran the farm assisted by their men doing the heavy lifting.

Refrigeration changed this. You can track it in farm diaries. As the opportunity of farming crossbred sheep arose, the men moved back to the farms, which became more productive and more commercial, fully joining the cash economy. Thus evolved the family farm which was at the core of New Zealand’s political economy for a century.

Where they were on land where sheep could not thrive, Māori farms did not have that transformational opportunity. Six decades after the advent of refrigeration, Apirana Ngata observed that

‘There are Māori communities which are satisfied to live on minimal reserves, where they grow the vegetables they require, from which they make seasonal excursions into the labour field to obtain the minimum resource for the purchase of clothes and food, and where they rusticate [live a country life] between periods of employment.’

That was in a book, The Māori People Today, which is both an invaluable description of the state of Māori in 1940, and yet fails to forecast their future. For while its contributors were some of the most informed people of the times, they included no demographer and so did not see that while Māori were then mainly a rural people, the land they were on could not sustain their burgeoning population, especially if Māori farm productivity rose to Pakeha levels. After the war, there would be the great Māori migration into the cities, which is described in Not in Narrow Seas, and also in my Heke Tangata.

Heke Tangata: Māori Urbanisation

There had been some movement of Māori to the cities in the interwar period but it was a trickle compared with the flood of urbanisation after the war. Māori were 71 percent rural in 1951.By 2013 only 15 percent of Māori lived in the countryside. Around 10 percent of Māori lived in the main cities in 1926; by 2013 this proportion had grown to 66 percent, not too different from the non-Māori figure of 75 percent, which had crossed the 50 percent threshold before 1926.

There was both a push and pull to the great migration. Māori were pushed by the lack of opportunities in the countryside and pulled by the opportunities in the cities. Typically, those urban opportunities involved low and general skills but as the economy evolved towards high and specific ones – a trend which seems to have accelerated from the mid 1960s – opportunities for Māori became less available.

Māori were ill-prepared for urban living. They had little wealth to bring with them and they lacked education. Rural education tends to be inferior to urban education, but The Māori People Today was adamant that Māori rural education was even worse. The required skills for countryside farming, fishing, hunting and labouring are not those which schools teach easily. Modern education arose because industrialisation and urbanisation required literacy and numeracy. (Interestingly, Māori women seem to have adjusted to the urban economy better than men – presumably reflecting different skill sets and demands for female labour.)

It was a vicious cycle. Because a critical element in educational attainment and employment prospects is the transmission between generations, underqualified and underemployed parents means underqualified children who as adults have lower incomes and poorer employment prospects. Society needs to make an enormous effort to break the economic cycle. New Zealand did not.

You see this in the unemployment statistics where, even today, Māori do worse. I report the inferior employment a little differently from the conventional approach which looks at the unemployment rate; an unemployed person is without a job but actively seeking one. That excludes the discouraged who are jobless but do not seek work because hard experience has shown that they are never successful. One of the ways of avoiding the psychological trauma is to give up looking.

To allow for such discouragements, my Heke Tangata looked at the employment participation rate: the proportion of those in a group who are in employment. Its complement provides a measure of all those who are not employed but might be, whether they are actively seeking work or not. (Various caveats and complications are reported in the book.)

Because of the different age structures of the various ethnic groups, it is better to compare the employment rates by cohort. Here is a tabulation: (Unfortunately there is no data by gender and age together.)

Employment Participation Rates by Age and Ethnicity (Percentage), 2013

Age Group                        All                   Māori

15–19 years                               33.7                 29.7

20–24 years                               65.0                 55.8

25–29 years                              73.6                 59.1

30–34 years                              75.2                 63.6

35–39 years                              77.3                 67.8

40–44 years                              80.2                 70.0

45–49 years                              81.7                 70.7

50–54 years                              81.1                 70.7

55–59 years                              77.4                 67.5

60–64 years                              67.8                 61.2

65 years and over                   22.1                 26.2

TOTAL                                      62.3                 56.5

(Source: 2013 Population Census)

The table shows that the employment rate for Māori is almost always lower than for everybody. In total it is about 10 percent lower – allow for age composition and it would be higher. This is a better indicator of the difference in relative unemployment rates between Māori and the population as a whole. The census reported rates were 10.4% for Māori and 4.8% for all, a difference of only 5.6 percentage points. However, if we allow for lower employment participation of Māori the difference is not quite double that. (The higher participation rate for Māori over 65 years old probably arises because they have lower levels of occupational superannuation and retirement savings, and Māori elderly are younger.)

The evidence is that there has been a very slow socioeconomic convergence between Māori and Pakeha. If the trend continues it will be decades before they will be close to equality.

The Meaning of Māori and Pakeha

However the meaning of Māori and Pakeha will be very different by then. Indeed, as a consequence of urbanisation, that is already happening. ‘Māori’ no longer has the meaning that it had when they were primarily a rural people.

This is nicely captured by a decision that Statistics New Zealand made in the early 1980s. Up to then, it had used what was jokingly called a ‘hydraulic’ definition: the proportion of Māori ‘blood’ (or descent) compared to proportion of non-Māori ‘blood’. This objective descent measure has been replaced with a subjective ethnicity measure of how an individual wishes to describe themselves. People often mix the two notions up but formally, data is usually collected on an ethnicity basis. (The Population Census asks a question about people’s ethnicities, although there is also a question about Māori descent – but for no other descent group. This is necessary for calculating the number of Māori electorates; subjective ethnicity would be impracticable for legal purposes.)

New Zealand artist, Peter Robinson, confronts us with the problem when his works displays ‘3.125%’ That is one thirty-second and referred to the fact that one of Peter’s thirty-two great-great-great-grandparents was Māori. At the time – he was in his late twenties – Peter was being provocative about racial issues, ethnicity and identity. Not wanting to be pigeon-holed as an identity artist he has moved on, but the figure leads one to muse about how he, or someone like him, might classify themselves.

Presumably Robinson ticks the ‘Māori descent’ box in the census, but what might he do to the ethnicity question: ‘Māori’? ‘Pakeha’? or both? About half of those who give a Māori ethnicity also give a second one. Let us call those who tick both boxes ‘Māori-Pakeha’ to distinguish them from sole Māori who tick only one. (A few tick other ethnicities such as Māori-Pasifika.) In which case those of Māori-Pakeha ethnicity would be our third largest ethnic group; they may be second largest in 2023.

A person of one thirty-second Māori descent may choose to register on the Māori electoral roll or he or she may not. Only about a half do.

Once we move outside the statistical data base, our knowledge is even murkier about what – and how – people classify themselves. Some may do so differently in different circumstances and their classification may change over time. For instance, the Health Inequalities Research Programme at the University of Otago’s Wellington School of Medicine found that the ethnicity on a death certificate did not always correspond to the census-reported ethnicity. The discrepancy was sufficiently large to modify some of their findings.

One further research finding which adds to the puzzle is from comparing socioeconomic status between those who report ‘sole Māori’ and those who report ‘Māori-Pakeha’. Here is an example using employment participation rates by ethnicity and gender. The female participation rates are just over 10 percentage points below the male ones for all ethnicities. The ethnic differences are much the same as in the earlier table although the data comes from a different source.

Employment Participation Rates by Ethnicity and Gender (Percentage), 2007/17

                                    Female             Male

Pakeha                            64.0                 75.1

Māori-Pakeha                65.7                 75.8

Sole-Māori                     57.9                 69.7

(Source: Household Labour Force Survey, average 2007Q4–2016Q2)

Strikingly, those who classify themselves as ‘Māori–Pakeha’ have employment responses similar to Pakeha. They may be slightly higher because of different age profiles. (The database does not allow us to explore this.) One is left with the uneasy feeling that subjective ethnicity may be influenced by objective socioeconomic characteristics.

What we cannot be sure of is how these definitional issues play out. But evidently there is a disconnect between the public perception, which is still too dependent upon the rural Māori of a century ago, and the reality of a socially and economic diverse urban population, as survey responses show.


This paper has travelled over some 700 years. It is a story of Māori economic development evolving; of tikanga being broken in order for tikanga to survive. Māori have adapted to new opportunities in difficult circumstances extremely well. But the urbanisation of the last half century has proved a challenge which has not been fully met, in part because it has happened so rapidly but also because the nation was so unprepared for it.

Too often we impose our uninformed prejudices on Māori; prejudices which are often based on historical misunderstandings and do not allow for Māori adaptation. Māori are not living fossils but, like Pakeha, evolving and adapting. We need to keep our thinking evolving and adapting too.

‘Me whati te tikanga, kia ora ai te tikanga’.