Michael Reddell. ‘Not in Narrow Seas’, Croaking Cassandra, May 30, 2020.

Brian Fallow: ‘Progress of NZ Economy Has Been a Rocky Road’ Herald, 20 June 2020.

Joan Druett: ‘Not in Narrow Seas’, World of the Written Word. 21 June 2020.

Shamubeel Eaqub: ‘Brian Easton Will Now Harrumph’, Newsroom, July 2, 2020

Max Harris: ‘Book Review – Not in Narrow Seas’, Kathryn Ryan’s ‘Nine to Noon’, Radio New Zealand, 28 August 2020.

          May I correct an error? The review said that the 700 years of Maori is covered in only three chapters. In fact there are eight: 2, 3, 4, 5, 13, 30, 36, 57 while others have a significant Maori element including 8, 10, and 11.  Maori items in the  index take up almost two columns. Not in Narrow Seas is the most substantial analysis on the Maori economy since Raymond Firth’s Economics of the New Zealand Maori which is only about the pre-market economy. (My Heke Tangata covers only the postwar era.) For a Maori account of Maori history see Ranginui Walker’s Ka Whawhai Tonu Matou / Struggle Without End (1990) Second Edition (2004).

Gerald McGhie: ‘Review of ‘Not in Narrow Seas’, New Zealand Journal of International Affairs, November/December, Vol 46, No 6, p.28.

Giovanni Tiso: ‘Filling the Hollow Society’, Landfall 240 Summer 2020.

            Steve Braunias at Newsroom wrote that the best review of the years was ““Filling the hollow society” by Giovanni Tiso in Landfall. As you would expect, there were numerous really good reviews at New Zealand’s best books section; I think the best at ‘ReadingRoom’ this year were by Jesse Mulligan on the new Chelsea Winter cookbook, and Jenny Nicholls on Paul Spoonley’s demographic study The New New Zealand. Elsewhere, Nicholas Reid, writing for the Academy of New Zealand Literature, patiently and rigorously took apart Tom Scott’s biography of Charles Upham, and the always insightful Philip Matthews provided a masterclass of fiction reviewing with his review of Tally Stick by Carl Nixon, also at the Academy site. But the very best review of 2020 was by Giovanni Tiso in Landfall 240 of Brian Easton’s economic history Not In Narrow Seas. Tiso references WB Sutch, Bruce Jesson and Ranginui Walker as he places Easton’s great work in the tradition of important histories of how New Zealand was shaped. He talks about the book reaching “an undeniable crescendo”; the review operates that way, too, as both Easton and Tiso size up the trauma – and abject failure – of Rogernomics. This is first-class thinking and a joy to read.”

Jeremy Agar: ‘Not In Narrow Seas The Economic History Of Aotearoa’, Watchdog 155 December 2020, p.80-85.

Tom Brooking, Jim McAloon and Melanie Nolan gave excellent critiques at the November 2021 New Zealand History Association Conference. They are password protected.

Watchdog 155 December 2020, p.80-85.

Brian Easton has been researching the New Zealand economy for about 60 years. He writes that the pre-sent analysis is offered as a summary of his life’s work. By focussing on the economy, Easton wants to emphasise that it is how people earn a living that shapes social relations. As a text to explain who New Zealanders are and why, readers will find the book invaluable.

The title is derived from the poet Allen Curnow, whose often quoted thoughts about NZ were of “two islands not in narrow seas/Like a child’s kite anchored in the indifferent blue’. British migrants had ventured to a “A land of settlers/With never a soul at home”. Echoing Curnow, who wrote in the 1940s, the leading literary journal called itself Landfall. In 1933 Gordon Coates, the last Reform Party Prime Minister, remarked that before refrigeration, that is up to the 1870s, we were an isolated island.

Bruce Jesson- observed this cringe, which he saw as the immaturity of a “hollow society”. Unlike, say, America, which had evolved its way of life for generations before its successful war of independence, the migrants were starting from scratch. In these musings, Maori are absent, the general attitude being that they could mostly be ignored.

When Curnow wrote I was a small boy, but shortly after he was fretting about his narrow seas, I had my first political thought. My grandmother, born in Waimate, had referred to the UK as “Home”. I told her off. Despite that, I recall not being sure what country I was in. We kept hearing about England, the producer of books, singers, games, famous people, and there were waves of Brit immigrants in the immediate postwar years. Discussing this with a contemporary in my university years, my friend said she remembered the same confusion.

Perhaps this was a Christchurch thing? But Easton might say that it was in fact a countrywide thing. He points out that most of the early migrants were either from small farms in southern England or from Presbyterian Scotland. As a result, the crude Church of England versus (Ireland and) Catholic hostilities were not imported to any great extent (but note the final paragraph below). Many wanted nothing more than to own enough land to be able to farm and to be left alone. The culture was marked by pragmatism and moderation. Migrants wanted to escape the rigid class divisions and urban slums of the old world.

So, real life meant that the Wakefield plan to transplant British habits of class and ethnicity failed. He had wanted to set a “sufficient” price for land so that workers could not buy-in. He had envisaged an economy based on crops, but pastoralism dominated. In any case there was very little money around. Maori had some as they sold food to the settlers but most Pakeha struggled.

The widespread lack of capital meant the early farms often failed. Imported animal pests depressed productivity. Rabbits took over parts of Otago, forcing farms to be abandoned (astonishingly, only in the last few years has the importance of biodiversity and conservation values begun to attract serious attention. Seven generations after the rabbits first plagued and the gorse first spread, there are still political leaders who think looking after the environment would detract from economic performance).

Myths

Easton talks a lot about myths, pointing out that the frequent use of “myth to denote a false story is not its main meaning here. Easton’s myths are stories that might or might not be true. Often, they describe something that was real but has become less so. Myths are what we like to see, whether true or not. A unifying theme is that the popular political myths from history are almost always distortions, the Left being not as radical as its champions deem to be the case, and the Right being not as reactionary as it is often said to be.

This applies to the first Liberal and Labour governments, not really all that radical, and to Reform and National governments, not really all that awful. Circumstances create policies, and not vice versa, Easton insists, and NZ governments have (almost) always reacted to them as circumstances seemed to suggest, without preconceived notions.

The defining circumstance of post-European settlement has been town versus country. In this context the Liberals, personified by Richard (King Dick) Seddon, and Labour, by Michael Joseph Savage, are the townie tradition, and Julius Vogel was the chief architect of Reform and National. Perhaps so, as his ambitious public borrowing could be seen as foreshad

owing Piggy Muldoon’s “Think Big” schemes, but a social democratic history of investing in public infrastructure is also Vogelian.

The Quarry Economy

Both traditions were reacting to circumstance. Theory and grand ideals have seldom been in play. Another central theme in the book is what Easton calls the “quarry”, the extractive enterprises which the Governments of the UK and NZ saw as the purpose of New Zealand. Before organised migration to the main towns began in 1840, the islands that Abel Tasman had named were of interest only to restless men who hunted seals and whales.

The first Europeans were adventurers who saw the new colony as a resource for immediate exploitation. Untroubled by the thought of a permanent or regulated future, they hunted seals and whales to near extinction. Then, following organised migration, came the flax economy. Gold rushes saw Dunedin becoming the main city, whereas, after the kauri gum market declined, so did early Auckland, which was evolving past being just a quarry, but with links to Sydney, it became a focus for manufacturing and finance, and after Waikato’s swamps were drained, dairy boomed.Coal was first mined as early as 1849, and is still being dug up, but with at least some environmental awareness these days, it is going the way of the pre-Adamite seals and whales (in some parts of the country “Pre-Adamites” refers to the Europeans who pre-dated Government sponsored migration). The quarry economy attached itself to the town and country division. Coalmining, for instance, was at the core of support for Seddon, who represented Westland. Sheep farmers and suppliers tended to the Vogel strain; shearers and freezing workers, quarriers, to the Seddon strain.

One Big Sheep Farm

The product which most shaped the country was wool, which helps explain the historical dominance of conservative interests. The east side of both islands from Hawkes Bay to Otago was virtually a sheep farm. In 1882 the first refrigerated ship set off for the UK with frozen lamb and mutton. Butter also became a viable export, so the relative dominance of wool was eased as the economy became a bit more rounded.

The myth has it that a radical Scot in the Seddon government was so enraged by the feudalistic land-owners in the old country that he led the charge to break up the huge sheep farms. Easton does not even mention the brave warrior (John McKenzie), preferring a more mundane explanation. He discusses Ready Money Robinson, who farmed 90,000 acres around Cheviot in North Canterbury. He says the estate was broken up because of a family dispute, in the context of the emerging meat export market rendering the vast wool farms no longer viable.

According to Wikipedia, the farm, heavily in debt, was subdivided after Robinson’s death. His will had left the matter to his four daughters. They could sell if all agreed, as they did. Is Easton too eager in his myth busting? It wasn’t about just one family. In all, across the country 1,000,000 acres were subdivided, creating 7,000 smaller farms. That changed the country. Another historian has written that the difference in wealth between the Ready Money class and the poorest was more extreme than what had existed in France before their revolution.

Whatever. It was during King Dick Seddon’s day that the ethic that Jack was as good as his master began to dominate social discourse. Smaller farms meant more jobs and services in the provinces. The role of women became more appreciated, Seddon saying that they were a civilising influence. Easton’s essential point is upheld. It was changes in the economy and technology that led to Liberal dominance, not Liberal dominance that led to this enhanced democracy.

Yet it remained the case that only two animals, sheep and cows, and only one market, Britain, accounted for pretty much all NZ’s place in the global economy until the UK joined the European Economic Community in 1973. Or so goes another myth, but Easton argues that diversification of both products and markets was already under way. Otherwise, NZ would not have adapted to the new order as successfully as it did.

While the influence of the Liberal Party lifted living standards generally, for Maori, not living in sheep country, it was less so. The first land sales were limited to Governments, but this lapsed as private sales to settler farmers came to be allowed. Easton suggests that a reason for this was that the UK government never wanted to spend more than it needed to for basic law and order in its quarry, so cash-deprived NZ governments were relaxed about allowing private sales. They would have wanted to speed up settlement.

Maori land, communally owned and thereby less able to adapt readily to change, was less likely to prosper. Much of it was in the central North Island, remote from markets and rail links. So, Maori poverty persisted. Some lived frugally by choice, preferring traditional subsistence farming, as did quite a few Europeans. An impatient State, with a “use it or lose it” ethic, was unimpressed.

Easton provides statistics from 1900, by when early trends had settled in. Life expectancy for non-Maori New Zealanders, at an average of 58, was considerably longer than what the average Briton, American or Australian could expect, but for Maori it was considerably less than all four others, reaching the 1900 non-Maori level only by the 1960s.

Similarly, non-Maori New Zealanders were more literate than Britons, and taller, but Maori were often more literate than both, because Protestant missionaries wanted them to read the Bible. Life was tough for most. In 1900 11 of every 12 non-Maori babies survived, but less than half of English babies, and only a third of Maori babies, survived. In England more babies survived in the country than in (industrially polluted) towns. NZ now sees five in 1,000 non-Maori and seven in 1,000 Maori die in infancy.

In all these health and welfare measures, Maori have been closing the gap with other New Zealanders in every decade since the settlers arrived, but as we know only too well, the gap persists. Of course, the statistics are relative. NZ might have been more progressive and more egalitarian than the UK and the US, but, by present standards, for the majority life was a struggle through the first 100 years.

Consensus About Social Security

The tradition of moderation and compromise that held – until the 1980s’ Lange government’s assault on living standards – is exemplified by the consensus about the benefits of social security. Here again, Easton is keen to take us down the middle of the road. While Liberal and Labour governments were typically the original sponsors of welfare measures, Reform and National tended to accept the changes once they were in place.

But not always. Harry Atkinson, who put out early feelers for a Welfare State in the 1870s, was accusedof being “subversive of the social order”. In 1882 George Grey (sounding very much like Donald Trump) held that any attempts to better the lot of the working class would be “anti-family, anti-Christian, extreme communism”. Savage, the first Labour PM, saw them as “applied Christianity”. Sid Holland, the first National PM, saw them as “applied lunacy”.

Wanting a minimalist State, Governor Hobson in 1840 and his immediate successors – effectively the first Governments – had not taxed income and they did not invest in education and health, which is part of the reason that the 1918 flu pandemic claimed 8,550 lives. Following the conventional wisdom, Easton suggests that the start of modern policy came in two stages, the first from the Liberals at the turn of the 20th Century. They introduced pensions, female suffrage, industrial arbitration and other measures which, together, saw off the minimalist State.

The second stage could be dated to the first (1935-1949) Labour government. They built State houses and raised working class living standards. In 1938 the Savage government passed a Social Security Act, enabling the tradition of social democratic policy that still informs (if hesitantly) Labour today. By 1944 health, previously surviving on crumbs, was allotted 2% of GDP. It is now 7%. Significantly, in this time of Covid and recession, it should be borne in mind that, because of the Savage/Walter Nash investment in public welfare, NZ recovered from the Depression earlier than did the austerity regimes in the old world.

That progressive and humanist impulses have always co-existed with the minimalists is indicated by the 1852 thoughts of James Fitzgerald, Superintendent of Canterbury: “There is something awful to my mind in the prospect of a great mass of the community increasing in wealth and power without the moral refinement which fits them to enjoy the one or that intellectual cultivation which enables them to use the other”.

Or, take the recommendation of Bill Sutch, one of the country’s great civil servants, who argued in 1962 that “the greatest need was for the development not of ‘land’ nor of ‘capital’ but of the third, the ‘human’ factor in production”. The next year Sutch wanted to persuade Wellington that in “the mature economy… (an emphasis on) education, the arts, industrial design, housing and town planning and infrastructure’ is needed to guide policy. Without that focus NZ would remain dependent as a “neo-colony”. He was not just talking about the economy. To achieve real independence, NZ needed a social and cultural transformation. In Easton’s terms, Sutch was talking about how NZ might become more than a quarry.

What a pity it is that, 170 years after Fitzgerald and 60 years after Sutch, the minimalists still among us reject a humanist culture and think the only purpose of public education is to turn out products for the labour market. And what a pity that their quarry mentality holds that productivity is enhanced mainly by lowering wages, extending working hours, and exporting raw materials (in Canada, once another quarry, historians refer to how the country’s early migrants were seen to be “hewers of wood and drawers of water”).

After the early benefits of trading with unprepared colonists, Maori were mostly either on the land or in the quarry. Apirana Ngata, the much-celebrated champion of Maoridom, thought that most were “satisfied to live on minimal reserves, with seasonal excursions into the labour field”. He advocated “modernisation”, the need to move to towns and cities. In 1901 the Maori population was 45,000. In 1951 it was 135,000. At that stage, when economic growth in the country at large was surging, most Maori were still farming. Others were typically working in freezing works or construction.

More recently, the increased importance of urban jobs encouraged a significant Maori uprooting from the country to the cities and the ethnic wealth gap began to close. “A Maori born in 1974 had about as much training as a non-Maori born 30 years earlier”.38% of Maori worked as managers, professionals, technicians or trade workers as compared to 53% of non-Maori jobholders.

As the national economy grew, so too did an increased Pasifika immigration, but Rogernomics was soon to betray both demographics by closing down many of the very enterprises which had encouraged them to move in the first place. This was the root cause for much of the urban unrest and dislocation that worries us now.

Reluctance To Acknowledge Class

Easton, though, warns against the present obsession with associating brown people with child poverty, crime and unemployment, even if well-meaning liberals hope thereby to champion their cause. He points out a simple fact that the national conversation seldom acknowledges: the majority of poor households are non-Maori. “Part of this confusion arises because of the reluctance of New Zealanders to contemplate the existence of socioeconomic class. The consequence of the neglect is that the existence of a Maori meta-class – despite its considerable social graduations – is often used as a proxy for class analysis”.

A result of this bias is that “policies which target only Maori fail to address most of the poor”. This is why “middle class good intentions sometimes result in working class racism”. There is good reason to assume that, were NZ to have shared the severely racist past of, most obviously, the US, and were it to have encouraged a present tense Trumpist politics, we would have been suffering a comparable Deplorable breakdown into tribal division and hate.

Individual prejudices might exist, whether based on ethnicity or religion, but how much do we need to prioritise race relations? Easton suggests that as “most Maori have some education, have jobs, live peaceful and enjoyable jobs in societies, the current emphasis on culture and language has created a stereotype of Maori as failures”.

Referring to 2013, Easton looks at the comfortable class who were enjoying an income of at least $100,000 a year. It included 5.9% of non-Maori, but also 2.6% of Maori. The poorest, defined as those existing on less than $15,000 a year, comprised 29% of non-Maori and 36% of Maori. These numbers are close. What is not close is the difference between 100,000 and counting and 15,000 and not counting. The one big underlying fault line is not ethnicity but inequality, which hampers everyone. Here again the popular mythology is inaccurate. “Gross income inequality is slightly less for Maori” than for the country as a whole.

A reader of the main parties’ platitudes who did not have experience of living in NZ might be surprised that the 2017 election saw 29 Maori MPs in Parliament (a number essentially unchanged after the 2020 election). They included Winston Peters, Simon Bridges, David Seymour and Jami Lee Ross, but not Paul Goldsmith. As a quartet they do not strike one as being notably put upon, nor as champions of an equality of life chances. What all four happen to have in common is a distaste for placing ethnicity at the core of what public policy should consider. They are not alone. Easton reports that one in six New Zealanders report Maori ancestors (how many of us know all about our ethnic antecedents?).

To see how we all got to where we are now, we could go back 75 years to the third period of policy development, when the present Labour/National dominance emerged. For the first two decades after World War 2 pastoral exports were humming along so well that there was no pressure for governments to adapt policy to suit a world that was changing. Easton thinks that is part of the reason NZ policy makers succumbed to the Rogernomic attack so readily. They had not been thinking about the need for fresh approaches.

Nation Yet To Recover From Neo-Liberalism

Easton counts five long stagnations in NZ’s post-colonial history, all but one of which were brought about by external factors that little NZ was powerless to resist. The exception is the Lange/Douglas recession. That wound was self-inflicted. For ten years from 1985 the dogma of neo-liberalism went unchallenged and unabated, resulting in an economic contraction so severe that it was not until 1995 that the economy returned to the level from which it had started. In the meantime, deep austerity and National’s subsequent Ruthanasian slashing of welfare investment and benefit payments created generations of deprivation that disproportionally affected the poor. The nation is yet to recover.

Easton shows that at the core of neo-liberalism was a wish to transfer wealth to the already wealthy through tax cuts. A severe increase in inequality was the intended and necessary result. Giving the one per centers more did nothing to help the country at large, there being none of that mythical trickling down that resulted. Public resources were reduced by the same amount as private riches were increased. End of story.

Earlier complacency was one thing, but another reason for the lack of progressive response to the Rogernomes was that the Kirk/Rowling Labour government (1972-1975), admirable in other ways, had done nothing to anticipate life after the collapse of wool prices from the mid-60s, Kirk having little interest in economics. The pastoral economy had peaked in 1966 when wool provided 91% of exports. It now reaches 3%. Then followed nine years of Muldoon’s very traditional ministrations. So, almost everyone outside the Beehive when Labour’s coup against its supporters was launched was unready.

We’re given an insight from as far back as 1904, when Andre Siegfried remarked that a New Zealand propensity to be “scornful of scientific thought makes them incapable of self-distrust. Like almost all men of action they have a contempt for theories; yet they are often captured by the first theory that turns up. They propose simple solutions to the most complex problems with astonishing audacity”.

He could have been talking about 1985, when the State was in thrall to a handful of young economists just back from picking up the fad of economic libertarianism, largely from American academies. We’ve critiqued them all in these pages ever since, and nothing we have said needs to be amended now. When Lianne Dalziel, Christchurch’s Mayor, sought financial advice – should the city sell its assets? – she went to Rob Cameron. Cameron is known for a long history of pushing for all and any public assets to be privatised. That is what his company is there for.

Dalziel knew what the answer would be. Even after 35 years of neo-liberal failure, some (at least) Labour politicians have not changed their spots. In the name of growth, growth and more growth Cameron and his mates contrived to shrink the economy, which through the Rogernomic years grew at 15% less than it had previously. The experiment was “an abject fail ure”. Siegfried would not have been surprised that the ideologues despised empirical research so they did not know that in the Savage/Peter Fraser era the economy had grown faster than even their own imagined rate would have achieved.

In contrast, during the manic years between 1988 and 1993 unemployment averaged 8.7%. Just as you can simultaneously develop human social potential and financial wellbeing (Savage) so can you simultaneously deprive human potential and shrink gross domestic product numbers (Roger Douglas).Helen Clark used to point out that if you are in a hole you should stop digging, but this was not advice that the Rogernomes, with their cult-like faith in untested theories, would have appreciated. They preferred the “ludicrous argument” that the failures were the result of the Lange, Palmer, Moore and Bolger governments not having dug themselves even deeper into debt and inequality.

Easton quotes Geoffrey Palmer’s 2014 opinion that the civil service then would have been unable to carry out 1985 reforms, so massive had been the assaults on administrative capacity and institutional memory. Implicit in the narrative is that the first two years of the Kirk government were pivotal. Big Norm, enormously popular, has assumed an iconic (mythical?) status in Labour circles. He left school at 12. He built his own house. Only the third Kiwi-born prime minister, he was also its first genuine working class leader, being neither a former union official nor a full time party official. And he will certainly be the last such leader.

It was the Kirk team that introduced the country to the idea that NZ could challenge the foreign policy assumptions of the UK and the US, and it was the first to take internationalist perspectives such as expressing support for the UN. Kirk spoke up against South African apartheid, and the 1975 Treaty of Waitangi Act introduced the country to all the related policies and processes that have followed.

In some ways Kirk was a child of his time. He seemed unaware that women were burning their bras and looking up at glass ceilings, and he did nothing to reform and democratise economic policy. Looking back, it might seem surprising that it was not until 1977 that the National Anthem asked God to defend NZ rather than asking Her to save our gracious Queen. Kirk had gone by then but he had prepared the ground for this simple flowering of independence and maturity.

Labour’s Focus On Identity, Not Economics

The subsequent Labour focus on identity, diversity and culture, as opposed to economics, can be dated from this time, as can the trend for the Party’s politicians and supporters to emerge from the professional classes rather than the working classes (is this another reason for Norm’s big reputation? Did Labour feel it had to reward the retiring era with a gold watch?).

Curiously for such a moderate and unemotional observer, Easton flips in the occasional unsupported generalisation. He talks of NZ’s “extraordinarily effective system of governance”, and even of an economic “miracle”. He’s probably referring to the bureaucracy, which gets more credit, even if it is often implicit, than the politicians do. Some civil servants are expressly praised. Clarence Beeby, in education, is singled out, which is fair enough, but why not Sutch?

As part of Easton’s myth busting, none of the PMs who are habitually exalted are much so here, but a couple who are usually ignored are picked out for praise. NZ’s first settlers might have thought they were in narrow seas but, following Kirk, the Ardern government has the potential to look up from the provincial quarry and see across the oceans.

When Jacinda was reminding Judith that Collins is living in the past, she was saying that the time when the needs of the quarry economy dictated policy about everything else has been and gone. In common with successful societies around the globe, a mature post-colonial NZ is moving beyond crude extraction.

Time For Quarry Economics To Be Scrapped

As Thomas Piketty insists jobs based on sheer physical labour are inevitably becoming fewer and remuneration for toiling at them will continue to lag. Technology and services will continue to dominate. Education is going to become increasingly necessary. This much should be obvious.

Easton does not try to forecast where to from here, but we can give it a shot. The 2020 election could be seen in Eastonian terms as being at least, in part, an expression that the country is ready to move beyond the quarry economy and the quarry culture, the incoming Government not having to endure the carping of New Zealand First, the one Party that has been all quarry.

There’s a myth that Easton treats only lightly, the one that has it that only the National Party can understand economics. This is myth in the sense of being untrue, and there has never been a rational reason to believe it. And now, at last, the 2020 election has purged the fake news. Neo-liberalism has long been discredited. Could quarry economics join it in the scrap heap?

As a hint as to what changes in attitude and policy might suggest themselves, consider the lot of the Irish. Up until about World War 2, male Irish New Zealanders tended to be hampered by an imported discrimination which induced them to be stuck in the various quarries or else, as in America, in limiting alternative ambitions to being a cop or a priest. Yet, as the economy broadened in the era of post-war growth, this long anachronistic hangover of imperialism vanished. After just a few years any lingering class or ethnic or religious biases based on British history were unimaginable.

Review of Not in Narrow Seas: The economic history of Aotearoa New Zealand by Brian Easton

Landfall 240 Summer 2020

Some years ago, a friend on a brief visit from the UK asked me to suggest a few introductory books on the history and politics of New Zealand. I gave him three from my own library: W.B. Sutch’s Quest for Security, Ranginui Walker’s Ka Whawhai Tonu Matou; Struggle Without End and one of Jane Kelsey’s books on the neoliberal reforms. The first two had been important texts in my own education as an immigrant in the late 1990s, while the third grappled with events that changed the New Zealand known by my partner, who finished university and left for her OE just as the first Bolger government came to power in 1990.

Making sense of the country in those years wasn’t easy: it felt like the scene of a recent explosion, its collective trauma still largely unprocessed. In my search for clues I came across outgoing Prime Minister David Lange’s valedictory speech, in which he took time to ‘thank those people whose lives were wrecked by us, because we did do that’—an extraordinary admission for a politician to make, even while maintaining that his government’s actions were ultimately justified and necessary. Yet the public debate on this and other matters seemed practically non-existent: either I didn’t know how to navigate the public sphere or there wasn’t much of a public sphere to speak of. Brian Easton was one of the few exceptions, writing columns for the New Zealand Listener that laid out trails of crumbs into the economic events of the previous two decades: things I could read up on.

I never asked my friend if he read the books I gave him, but I find it useful to think of the value of national histories beyond the primary audience they are written for. The quest for security described by Sutch was a story I could relate to in my own country and, for that matter, in my own family, just as the struggle for self-determination narrated by Walker is both uniquely situated and paradigmatic of Indigenous movements elsewhere. I approached Easton’s Not in Narrow Seas: The economic history of Aotearoa New Zealand in a similar way—as a book of this place, illustrating ideas that will be relevant in most if not all places.

It wouldn’t make for a very punchy title, but it may be more accurate to describe the book—as the author does in its epilogue—as a history of Aotearoa New Zealand centred on the economy, rather than an economic history in a restrictive sense. Although narrower in scope and not aspiring to the same degree of impartiality, the closest precursor that I know of is Sutch’s bestseller: that is, a history written by an economist with a broad public in mind. While some of Easton’s preoccupations—for instance, whether or not Muldoon was in fact a social conservative—may seem to belong to a general or political history, the book’s most distinctive characteristic is the consistent focus on shifts in the country’s political economy.

So, for instance, while the 1966 collapse in the price of wool is treated briefly in Michael King’s Penguin History of New Zealand as a discrete event affecting a particular sector of the economy, Easton articulates its reverberations and long-term effects on policy and governance on the whole nation across several chapters. While this approach reaches the peak of its explanatory powers in the section on Rogernomics (more below), it is evident from the characterisation of early generations of Maori settlement as a ‘quarry economy’ dependent upon resource depletion, later supplanted in the ‘Green Maori’ stage by the institution of the rahui. The quarry economy will make its return with colonisation and is shown to play a role in the early development of today’s main urban centres, until the century-long shift to a political economy based around the unit of the commercial farm (although farming retains quarry elements in the present day, as the state of our waterways and its appetite for non-renewable phosphate attest).

Alongside this structural focus, there are a few recurrent themes. One is the notion of the ‘hollow society’, which describes the lack of institutional brakes between the government and the people, making it possible to enact blitzkrieg-style reform projects. Bruce Jesson originally deployed the phrase in his 1999 book on the neoliberal reforms, Only Their Purpose Is Mad, but the span covered by this book allows Easton to track this phenomenon to its very beginnings, with the establishment by Hobson of a central colonial government in advance of its (settler) society. A government that precedes social institutions rather than arising from them is persuasively presented as the constitutive element of a hollow society.

Another theme is the debunking of popular myths, and most especially depictions of the country as ‘the land of the long pink cloud’. This refers to the preponderance of histories written from a leftish academic (therefore largely city-centred) perspective, with a tendency to present rural Pakeha as reactionary and their economic activities as backward, as well as to present political progress as having mostly been driven by Labour, in spite of the relative infrequency of its terms in government. While the case for creativity and innovation in the farming sector is well made, it seems important to mention the formation of an actual union-breaking cavalry by the Farmers’ Union during the strikes of 1913—something Easton leaves out. The omission is consistent with the scant treatment of labour disputes and protest movements, whose impacts on the political economy are either portrayed as marginal (1913,1951) or not entertained at all (Bastion Point). This in turn reflects a tendency in the book to equate politics with governance, leaving unanswered the question of what role, if any, political movements such as those for land occupations might play in filling the hollow society (Ihumatao hit the national headlines just as the book went to print).

While the book is impressive for both its scope and its detail, its greater value ultimately resides in the quality of its ideas and the clarity of its explanations. Issues such as the relationship between the terms of trade, employment, inflation and the policies that attempt to regulate all three are part of an education that can be hard to acquire, and too often political discussions suffer from our lack of literacy in these areas. Easton has the didactic verve of a Sutch, and perhaps the best thing I can say is that all of the book is absorbing and interesting, even as the range of its arguments is impervious to summary. It’s an appeal that derives precisely from its shift in perspective, which makes even familiar stories read differently.

There is, however, an undeniable crescendo, a high point, and it comes with the discussion of Rogernomics. This is where the book’s themes converge—from the hollow society to the centrality of the political economy—allowing Easton to write a powerful history, without narrowing qualifiers, of that revolution. The premise is that some form of modernisation was necessary, that the political economy had failed to reckon with upheavals such as the permanent fall in the price of wool, placing intolerable stress on the country’s finances. His conclusion, however, is that the path chosen – neoliberalism, defined here as a policy regime under which ‘the role of unconstrained markets is maximised’ – was an abject failure by its own standards, resulting in a decade of GDP stagnation and leaving people on lower incomes to pay the entire price of restructuring the economy. This is also the story of the brutal method by which these objectives were achieved (`by a small group isolated from their critics and from common sense’), and the further hollowing of society as dissenters were marginalised or saw their careers cut short, while (in what struck me as another blow to a popular myth) ‘the vigorous public economic debate of the Muldoon era collapsed’.

There is no nostalgia for the pre-1984 times in this account, and Easton is more Keynes than Lenin: he would rather we had fixed the broken engine of the market economy according to a socially democratic model than look for an entirely new form of transportation. But even this moderate stance could place vigorous demands on our political system—a call to repair what remains of the failed reforms, including the never-reversed cuts to social welfare benefits, and to fill the hollowness of our polity so as to make it more democratic as it prepares to face existential challenges. Not one for grandiose pronouncements and perhaps mindful of the detachment required of a historian, Easton stops just short of making such a call.

Instead, he concludes the final chapter of his magnum opus with a modest, understated defence of the role of public intellectuals—those solitary figures who did not flee the narrowness of the nation’s public sphere, and in whose ranks it’s not very hard to see the author himself.

A reviewer need not be quite so restrained: this is the culmination of the work of one such committed public intellectual, and an important contribution to the literature on Aotearoa New Zealand.

New Zealand Journal of International Affairs, November/December, Vol 46, No 6, p.28.

Not in Narrow Seas makes an important contribution to the history of New Zealand centred on the economy. Brian Easton sees the economy as near the heart of any society for, as he argues, ‘it produces the goods and services that sustain the life of everyone within it’. In doing so, economist Easton says in a lengthy epilogue, it also shapes that life, ‘sometimes even in areas that do not involve economic activity’.

Easton covers a large canvas. He focuses on the environment, on technical change and on globalisation, yet does not ignore the diversity of social groups and regional differences. New Zealand histories, he says, tend to begin with the first steps of migrants on these shores. Not only did the shores exist long before, but migrants arrived with cultural baggage accumulated in the generations before migration. So he looks at where the first Maori came from and delves back into the 17th century to understand 19th century British migrants as well as to describe the last 200 years of the Pacific Islands where an increasing proportion of New Zealand’s population comes from.

The Europeans brought the market economy to New Zealand with its inevitable pattern of boom and bust. But by 1845 the whale catch had fallen to a point where it could no longer carry the colony. The question was what would? Wool turned out to be a valuable staple. But it was refrigeration that provided the long-term answer to New Zealand’s economic stability. The first frozen lamb was shipped in 1882, leading to a boom in sheep farming; a dairy boom, also based on refrigerated exports, came a little later. Society changed as towns grew into cities. Politics reflected the change with the rise of the Liberals, the early welfare state and then the Labour Party. Women achieved a more prominent place in public life but boom times under the Liberal Party led to a long period of stagnation as overseas prices fell. Easton’s chapter on the Great Depression, which struck in the early 1930s, provides a useful comment on how it unfolded, how we compared to other countries and gives a summary of the Kiwi experience.

In a wider context and as an indication of New Zealand’s continuing attachment to the imperial centre, the leadership in 1909 donated a battlecruiser to Britain. As the First World War turned into a contest among imperial powers, there was no doubt among most New Zealanders that their country was politically and commercially a part of the British Empire and thus automatically at war. Nevertheless, it was at Gallipoli that New Zealand troops saw themselves as neither Britons nor Australians and, for the first time, fought overseas under the New Zealand flag as a further indication of an emerging New Zealand identity. That identity was brought home with some emphasis when, almost as a reality check, consumer prices rose 67 per cent between 1914 and 1920 and many began to understand that external forces shaped their destiny. While Britain, pre-EEC negotiations, was our major market, the need for trade with other countries was recognised and the role of diplomats in both bilateral and multilateral trade development grew. Although Easton explores many of the complexities and subtleties of New Zealand’s international inter-connectedness, he has little to say about New Zealand’s participation in international trade-based discussions in the General Agreement on Tariffs and Trade, and its successor, the World Trade Organisation.

Easton argues that Britain’s entry into the EEC was not the major turning point that many assumed at the time. Of much more lasting importance, in his view, was the collapse of wool prices in 1966. He questions the oft-repeated myth that New Zealand is an egalitarian country where ‘Jack’s as good as his master’ and analyses Roger Douglas’s input to New Zealand’s economic structure in the 1980s — a legacy which New Zealand is still coming to grips with. The increased power of business represented a fundamental change in the political economy and Easton considers that ‘sometime in the late 1990s the business community began concluding that neoliberalism no longer served its interests’. There was a return to the traditional partnership with government or, as Easton puts it, a revived form of New Zealand Inc. Nevertheless, he notes that what this means in policy terms remains unclear. Some might argue that many in the New Zealand business world are still in thrall to neoliberal thinking.

On the Maori Renaissance Easton concludes that the new MMP system of voting gave Maori much more political the opportunity to achieve more economic strength, though he sees the extent of that new wealth as often exaggerated.

It is difficult to sum up the period leading to the present. Easton does a pretty good job when he says the Clark–Cullen Labour government wanted to reverse the extremism of Rogernomics but had trouble thinking through alternatives to the neo-liberal structure. He sees the Key–English National government’s pro-business approach as mixing pro-business crony capitalism with policy inertia. To bring the narrative up-to-date, Easton expresses the generally understood view that Labour had little expectation of being elected in 2017 and was only ‘partly prepared in policy terms for government’. But New Zealand’s reality remains ever present: a government must continue to negotiate its role in the global economy. On that count the coalition had to come up to speed pretty quickly.

Easton’s book provides an excellent platform for understanding the background to the equation that makes up what he refers to as Aotearoa New Zealand.

Presentation to the Wellington South Rotary Club, November 4, 2020

I called my history of Aotearoa New Zealand Not in Narrow Seas, partly to recognise New Zealand’s greatest poet Allen Curnow but the book title is also apt. The phrase comes from the title of a collection of poems Curnow published in 1939, when he was pondering on the history of New Zealand, evoking our isolation and fragility. ‘In your atlas two islands not in narrow seas / Like a child’s kite anchored in the indifferent blue’.

But I also chose it, even before I began writing, because it captures foundational ideas in the study. The first was that it was not going to be simply an economic history. Its intellectual tradition is more that of the nineteenth century political economy in which the social sciences did not draw tight narrow boundaries between themselves but worked cooperatively together. It makes no sense for economics to ignore the political and social dimensions of society. Indeed the book draws as widely as anthropology to geology and, as the title suggests, draws on literary traditions too.

The second foundational idea was that any account of New Zealand could not confine itself to its shores but had to place it in an international context. This notion is at the centre of my history of the postwar economy, In Stormy Seas which argues that you have to look offshore to understand the New Zealand economy, not with a colonial cringe but conscious of the external impacts and constraints. In addition to this constant monitoring of what was happening elsewhere, the book has four (out of sixty) chapters about where we came from. Migrants bring a lot of baggage. The history of our migrant origins is a part of New Zealand’s history.

As I said, the title framed the journey I was about to undertake. However, at its end I found a 1941 poem by Curnow, which aptly described the main findings of the journey. ‘The Unhistoric Story’ concludes

And whatever islands may be

Under or over the sea,

It is something different, something

Nobody counted on.

Something nobody counted on. While I had inklings of much of the story I was to tell when I started out, some discoveries on the way surprised me.

It is part of the human condition that we project from the past into the future. Admittedly many do not know much of their past so their projections are based only on the very recent past – I hope my book will help cure some of this innocence. A longer perspective would show the trends they identify were repeatedly disrupted; that almost every point in our history a projection based on recent trends would be wrong.

Sometimes the disruptions were smallish, sometimes they were huge. One way of describing the big ones, is to use the metaphor of the ‘hinges of history’. There is continuity across a hinge but the two sides point in different directions – the trend changes.

Not in Narrow Seas identifies five major hinges and leaves us wondering about a sixth. The five are

            1. The arrival of Polynesians 700 years ago;

            2. The arrival of European settlers in the nineteenth century;

            3. The introduction of refrigeration in the 1880s, leading to an eight decade domination of the pastoral economy;

            4. The redirection of economic and political management in the 1930s and the 1940s;

            5. The collapse of the wool price and the end of the dominance of the pastoral economy in 1966 which led to Rogernomics.

The sixth is whether we are currently going through another hinge. I shall finish with a few cautious words on this but first, those we know about.

The Origins of New Zealand

New Zealand began, so geologists told us, about 650 million years ago, when erosion from the Gondwana craton washed into the sea to the east of what is now Australia.. About 75 million years ago the consolidating land separated off to form the world’s eighth continent of Zealandia, most of which is undersea.

Zealandia went though the normal, yet extraordinary, geological processes of uplifting and compacting which are still happening. The book remarks that sea levels around New Zealand have risen in the last hundred years by an average of about 20cms. Why ‘average’? Because the land itself is shifting up and down. Following the 2016 Kaikoura earthquake, Cape Campbell rose almost one metre as well as moving north-northeast by more than two metres. However, usually geological changes are so slow we do not notice them. Next time you are at a beach imagine what it looked like in your great-grandparents’ time when the seas were 20cms lower.

The First Hinge: The Arrival of Polynesians

While that geological and accompanying biological and ecological evolution has been going on for 650 million years, it was disrupted by the arrival of Polynesians about 700 years ago. It is clear that the proto-Maori were associated with environmental extinctions about that time, while the impact of the introduced species would change the nature of New Zealand dramatically The environment was being redirected.

I call the new arrivals ‘proto-Maori’, for Maori evolved here, just as Pakeha are evolving here today. On the whole, Maori evolution was slow. They seem to have developed a sustainable way of life – perhaps the Pakeha will do the same on day – but there is some evidence of population pressures by the eighteenth century.

The Second Hinge: The Arrival of European Settlers

Maori development was disrupted about two hundred years ago by the arrival of Europeans and what they brought with them. Some of the new technologies had disastrous effects. The Musket Wars wiped out perhaps a third of the population, although, as the book explains, the arrival of potatoes were key to making the warfare so destructive.

There has been a tendency to overplay the role of nineteenth-century warfare. Not nearly as heroic, but more devastating, were the epidemics from diseases which Europeans brought to an immunologically virgin population. The nineteenth century epidemics were more important for the population than the 1918 influenza epidemic or the current Covid Crisis.

The history also suggests that Maori recovered better after the New Zealand Wars than the conventional wisdom allows. Certainly land was confiscated but some was returned and a lot more was lost via other (some moral, many not overly moral) devices.

The outcome of the wars is often portrayed as a loss of sovereignty but even had the wars not happened, Maori would have been challenged to retain sovereignty. In 1840 there were about 80,000 Maori and 200 Europeans. By the end of the century Maori were about half their earlier numbers (just over 42,000), while those of European origin were closing in on a million.

Where Maori missed out was in economic development. The economic staple in the middle of the nineteenth century was wool. Unfortunately the vast majority of Maori were located north of Lake Taupo where sheep did not thrive. The reasons are instructive. Around 232CE, the super-volcano whose residual crater is Lake Taupo erupted with a much greater impact than any in our time. (The Kaharoa eruption of 1314CE followed.) Its ash, scattered north of the lake, lacked key trace elements, particularly cobalt, which resulted in bush sickness to grazing animals. The Waikato river was redirected into what is now the Waikato basin where it formed a vast swamp causing footrot in sheep when hundreds of years later they tried to pasture them. Thus the vast majority of Maori were not able to get into sheep farming. (Those to the south of Lake Taupo were more economically successful but there were far fewer.) It is sobering that what may have been the single most important event shaping late nineteenth century Maori economic and social development happened before there were any humans in New Zealand.

In fact, New Zealand did not have a sustainable economy in the middle of the nineteenth century. Initially it depended on quarries – seal, whale, and gold were the biggest – which would eventually deplete and the worker-quarriers would have to move on. There was also an injection from borrowing for war and development, neither of which was sustainable.

Even the wool economy was struggling. There was depletion of the fertility of the soil and the export price of wool was falling, so despite technological innovation farm profitability was falling. Increasingly, the wool industry was insufficient to sustain the burgeoning population especially as the flood of young woman immigrants of the 1870s meant that births were replacing immigration as the main driver of population growth. The short term solution was to continue the borrowing but eventually the patience of the foreign lenders would run out.

The brutal possibility was an outflow of migrants – it happened in the 1880s – or an economic and sovereignty collapse, like that which happened to Newfoundland in 1930s, when they went into a sort of receivership under Britain and were merged into Canada.

The Third Hinge: The Arrival of Refrigeration

Fortunately, and unexpectedly, for New Zealand, the arrival of export refrigeration of foodstuffs offered an alternative prospect. The new way of farming it made possible was transformational.

After the third great hinge, New Zealand had a sustainable economy based on land-intensive small family farms It was no longer destined to be the Falklands of the South Pacific.

But it was not just the economy that was transformed. So was society and politics. The land-extensive sheep stations would have increasingly generated a more hierarchical society. The stations themselves had a quasi-feudal structure while they were surrounded by small farms which were quasi-subsistence, earning some cash but largely self-sufficient and sharing within the community.

In the new post-refrigeration political economy, the core of farming was family farms based on sheep producing meat and wool and later with cows for dairying. (Until the middle of the twentieth century Maori farming remained largely subsistence.) Family farming dominated New Zealand society. (As late as the early 1920s, half of the New Zealand labour force worked on farms, serviced farmers or processed their output.) Farmers and their wives were independent and self-reliant and they set the tone for the whole of New Zealand society. Early immigrants had democrat aspirations; the new pastoral economy made them achievable.

So in the decades after refrigeration began, universal suffrage was introduced. It included women, for a sustainable economy and living here forever meant giving a place to the nurturers of future generations. The temperance movement was in part the shrugging off of the male-dominated quarries which would eventually exhaust themselves and the population move on. Formal political parties began to establish, replacing the shifting coalitions of the ruling oligarchy of the nineteenth century.

New Zealand had struggled with the Long Depression in the 1880s. The foreign borrowing on which economic prosperity depended had dried up – refrigeration was still just beginning. Despondent New Zealanders talked of joining a federation of Australian states. By the time the federation began in 1901, New Zealanders were sufficiently self-confident to tell the Aussies to take their ball elsewhere.

The pastoral political economy – sometimes described as a monoculture of processed grass – would dominate New Zealand for over eight decades. In the 1930s and 1940s there was a further hinge which did not replace it, but changed the direction of economic management.

The Fourth Hinge: The New Economic Management

As traumatic as it was, it was not the Great Depression which caused the hinge. After all, it came at the end of the Long Interwar Stagnation which began three decades earlier in 1908. Some of the policies of the Labour Government elected in 1935 were continuations of past developments. For instance, the 1938 Social Security Act can be seen as a continuation of public income support promoted from the end of the nineteenth century. The big change was how the economy was to be managed; that came about as a result of the Second World War.

There is not the space to detail the rise of central and detailed management of the economy; perhaps too, one can see it at earlier times. It becomes especially relevant after the next hinge, the end of the dominance of the pastoral political economy.

The Fifth Hinge: The Wool Price Collapse

In a way, the relative decline of the pastoral sector was inevitable. New Zealand had run out of new farmland in the 1950s. It moved to a more intensive farming but that reduced the number of workers on farms. It ran out of water, integral to the intensification, about a decade ago. However, rather than drifting away, the dominance ended with a bang in December 1966 when the price of wool collapsed 40 percent; it has never really recovered.

At the time the sheep industry which earned three fifths of New Zealand’s foreign exchange suffered a grievous and – as it turned out – permanent blow. For over a century, wool had been our single biggest foreign exchange earner, earning 40 percent and more. Today its contribution has dwindled to about half a percent.

You will have to go to Not in Narrow Seas for the details, but broadly when one of the most powerful drivers in the economy – in this case the sheep industry – lost its power – in this case over a quarter of its revenue – there had to be a massive adjustment.

Part of the economy adjusted well. There was a great export diversification. Before 1966 New Zealand had one of the most concentrated export sectors in the OECD measured by both the commodities exported and where they were sent. By 1980 it was in the middle of the OECD on both dimensions.

However the internal adjustment that the external diversification required was slow. Moreover, the fall in the external terms of trade – from the wool price collapse – required some reduction in domestic incomes. But nobody was willing to take a share of the fall, each hoping the income cuts would occur to someone else.

Basically, the new direction required some retrenchment to get underway. But the the economic management regime which had arisen during the Second World War was not designed for the part. It had served New Zealand reasonably well when wool prices were high, but that was a period of moderate but genial growing prosperity.

Yet the leadership failed miserably to realise we had gone through a hinge and persisted in thinking that the future was a continuation of business-as-usual requiring only minor adjustments. (The book describes other social changes, of social diversity and urbanisation which perhaps were coped with better than the fundamental economic one.) The simplest example of the failure can be seen in the Planning Council’s reports which seem irrelevant to what happened shortly after. But the Council only reflected a general unwillingness to think through what was happening.

Rogernomics Sets the Direction for the Fifth Hinge.

In the 1970s and early 1980s New Zealand had a political leadership protecting the past while the market economy was evolving in quite a different direction. Eventually the tensions became reconciled by arrival of Rogernomics. I am not saying it was a good response; the book goes to some length to explain the new regime’s failures. But at least it addressed the economic change needed to respond to the wool price collapse in a way that its predecessors had not.

In effect, the period from 1966 to 1995 was the same long hinge – the fifth – just as the second hinge – the arrival of European settlers – was a long one too. It ended up with Rogernomics setting New Zealand on a new direction. That is why you can still observe a neoliberal framework in much of public policy, protestations to the contrary and the various attempts to roll neoliberalism back in some areas.

Generally historical judgement struggles to understand events of recent decades. This is true for Not in Narrow Seas. An indication of the difficulties is that the chapter (55) which assesses the Rogernomics revolution offers three distinct perspectives: a neoliberal one, one from the centre right and one from the traditional left. Readers of the manuscript complained that they wanted a single authorial conclusion; perhaps there is one hidden there; perhaps – I wouldn’t know.

The Last Decade: A Sixth Hinge?

Life goes on and there is a further five chapters which are basically a narrative about recent events. The story ends in January 2020 when the book was sent to the printer so it does not cover the Covid Crisis – historians are no better at predicting the future than economists or political pundits.

There is a problem about the last decade or so, which may be exacerbated by the pandemic. The Global Financial Crisis from 2008 provides a trenchant critique of neoliberalism. Curiously, such was the inertia of the neoliberal framework and the international financial system which it justified, that the policy response was largely a repeat of the austerity of the Great Depression, as if the neoliberals had learned nothing from that event or the GFC.

However, during the Covid Crisis, the neoliberals have been remarkably quiet, other than grumbling about the loss of freedom that lockdowns cause.

One begins to wonder whether the world, and therefore New Zealand, is going through another hinge; perhaps it is a long one starting with the GFC. I have two salient reasons for this hypothesis.

To deal with the Covid Crisis – even in those economies which have manifestly failed to control the virus – public policy has introduced extraordinary fiscal, monetary and regulatory interventions, perhaps comparable to fighting the Second World War, perhaps greater in magnitude, certainly faster.

Second, economic theory has broken out of the neoliberal headlock and seems to be going through a renaissance. Partly the new thinking is a response to the GFC but the new policies the Covid Crisis has introduced have broken open the barriers to serious macroeconomic discussion in the last decade. In the intellectual turmoil it is unclear what is going on; there is certainly no new Keynes although a lot of the discussion goes back to the old one. Significantly, I have not seen a weighty contribution from the monetarist-neoliberals. Their silence is deafening (and unfortunate because a new paradigm needs a critique from the old one).

Before reflecting on the implications of a possible hinge, here briefly are five other factors which might or might reinforce a new direction.

            1.         The diminishing global dominance of the US;

            2.         Global warming, climate change and rising seas;

            3.         Secular (long-run) stagnation so that economic growth may stagnate in the rich world;

            4.         Covid has drawn attention to the general problem about the future of global connectedness. It is likely to remain even if the world gets a totally effective vaccine because of the – what may be permanent – breakdown in some supply chains and what seems to be a shift towards self-sufficiency.

            5          There are threats to the sovereignty of nations. The immediate issue is the rise of social media but it may be a wider than that.

(Some may want to add a sixth, of populism crowding out democracy. I am not so sure; it has always been an uncomfortable tension.)

Observe that this list and the two earlier possibilities are essentially international trends. New Zealand’s challenge will be to adapt the international wisdom to local particularities, rather than merely imitating it. That is always our challenge.

Something Nobody Counted On.

Are we at a hinge? I might be able to answer in a couple of decades if I am around. But what I can tell you that if there is one, we will not deal with it effectively by projecting past trends in the expectation they will continue on indefinitely, just as we did in the past.

The prospects are not promising. One online news site commissioned twenty commentaries by ‘experts’ to explain how ‘Covid-19 has changed New Zealand forever’. The substance of all the responses could have been written six months earlier before the Covid Crisis struck. You may say to it is too soon to tell, but one is struck that those described as ‘some of the smartest people in the country’ were not even trying to think through the question that was posed to them. Back to business as usual. The Planning Council is back.

Sadly, one of the central insights of Not in Narrow Seas is once more confirmed. Too often, our public thinking and conversations have been of poor quality.

I finish with Allen Curnow.

And whatever islands may be

Under or over the sea,

It is something different, something

Nobody counted on.

Economics Column: New Zealand Herald, 19 Jume 2020.

These are historic times we are living through, so there is illumination, and some comfort, to be derived from contemplating our history.

A richly informative contribution to that is Brian Easton’s latest book Not in Narrow Seas: The Economic History of Aotearoa New Zealand .

It is history from an economist’s perspective and the better for it, because the economy is not some abstraction. It is where we all live and the forces at work in it can really mess up people’s lives.

Overall, our national story so far is one of progress and advance. Few of us would want to trade places with our ancestors. Will future generations say the same of us? Look around. This can’t be the best it ever gets.

Easton makes clear that this progress has been far from steady. There have been recessions and other setbacks and surprisingly long periods of stagnation, as measured by such metrics as per capita income. It would be foolish to assume we are immune from more of that.

All but one of the recessions — that engineered by Rogernomes — has been the result of events overseas.

It is an important point. We are prone to insularity. If you live in New Zealand and it stretches to the horizon it is a bit easy — admittedly not so much these days — to forget about the other 99.8 per cent of the world economy and its endless ability to sideswipe us.

Sometimes it has been a financial crisis like the Wall Street crash of 1929 or the global financial crisis 12 years ago. And sometimes a sharp deterioration in the terms of trade — the mix of export and import prices.

Our heavy dependence on commodity exports makes us especially vulnerable to that.

The global Great Depression hit a New Zealand economy already weak and saw per capita output fall 13 per cent by its nadir in 1933. But that was compounded by a fall in the terms of trade which saw per capita national income decline by 25 per cent.

Conversely, the boom from 1950 to the mid-1960s, when GDP grew by an average of 4.3 per cent a year, was underpinned by strong terms of trade, which came to an abrupt end in 1966 with a 40 per cent fall in wool prices.

Will fake meat wreak similar havoc to nylon carpets then, or will it be more like margarine and butter?

The most recent boom, now emphatically over, was underpinned not only by unusually favourable terms of trade but also by exceptionally strong net immigration, which has come to an abrupt halt.

“The case that immigration is beneficial to natives’ incomes needs care,” Easton writes. “It is possible that during the 2010s GDP per capita went up but that income growth accrued to new immigrants rather than to those already here. This probably contributed to the lack of enthusiasm for economic conditions which voters showed in the 2017 election.”

Hardly anyone expected National to lose that election, he says, including those who won.

A key Labour election promise was to progressively reduce child poverty — the social scar tissue from the Richardson/Shipley welfare cuts of 1990.

But the current Government has given no indication that it knew how big a task it had set, Easton says, nor did it set up an institutional framework to tackle the challenge. “The parallels with KiwiBuild are evident enough.”

Another clear theme running through the history is adaptability and changes of land use. Land abuse, often, to be honest.

A persistent pattern since Europeans arrived has been what these days is politely called depletion of natural capital, or what Easton calls quarrying.

It started with the slaughter of seals and whales, moved on to excessive deforestation and continues with intensive farming practices that turn our rivers into sewers.

If there is now a rural/urban divide on the issue of whether environmental degradation should be addressed by voluntary initiative or regulatory fiat, it reflects an extraordinary change in the country’s political economy over about a century, Easton says.

“In the 19th century when towns were but outposts of the countryside — when livestock roamed on Lambton Quay or in Cathedral Square — such tensions were inconceivable.”

The years since then have seen not only demographic change but shifting attitudes towards the state, and the adoption of a more representative electoral system, MMP, as a reaction to the excesses of Rogernomics.

“The popular lesson from the Depression was to reinforce trust in the state, especially that it could insulate the New Zealand economy from the rest of the world. It was a vision which lasted half a century, perhaps more, for even today it remains deeply wired into the psyche of New Zealanders.”

But by the mid-1980s, following nine years of Robert Muldoon, confidence in government was at a low ebb and the tsunami of radical change associated with Roger Douglas and then Ruth Richardson followed: cut taxes, deregulate, privatise, open the borders, stand back and let markets work their magic. It took 10 years for per capita GDP to return to its 1985 level.

Aside from that brief deviation into ideology between 1984 and 1993, New Zealand has been primarily governed by pragmatism, Easton says.

“Sometimes this has taken the form of following special interest groups. Only occasionally has there been leadership which has looked past the short term.”?

Economics Column: New Zealand Herald, 19 Jume 2020.

These are historic times we are living through, so there is illumination, and some comfort, to be derived from contemplating our history.

A richly informative contribution to that is Brian Easton’s latest book Not in Narrow Seas: The Economic History of Aotearoa New Zealand .

It is history from an economist’s perspective and the better for it, because the economy is not some abstraction. It is where we all live and the forces at work in it can really mess up people’s lives.

Overall, our national story so far is one of progress and advance. Few of us would want to trade places with our ancestors. Will future generations say the same of us? Look around. This can’t be the best it ever gets.

Easton makes clear that this progress has been far from steady. There have been recessions and other setbacks and surprisingly long periods of stagnation, as measured by such metrics as per capita income. It would be foolish to assume we are immune from more of that.

All but one of the recessions — that engineered by Rogernomes — has been the result of events overseas.

It is an important point. We are prone to insularity. If you live in New Zealand and it stretches to the horizon it is a bit easy — admittedly not so much these days — to forget about the other 99.8 per cent of the world economy and its endless ability to sideswipe us.

Sometimes it has been a financial crisis like the Wall Street crash of 1929 or the global financial crisis 12 years ago. And sometimes a sharp deterioration in the terms of trade — the mix of export and import prices.

Our heavy dependence on commodity exports makes us especially vulnerable to that.

The global Great Depression hit a New Zealand economy already weak and saw per capita output fall 13 per cent by its nadir in 1933. But that was compounded by a fall in the terms of trade which saw per capita national income decline by 25 per cent.

Conversely, the boom from 1950 to the mid-1960s, when GDP grew by an average of 4.3 per cent a year, was underpinned by strong terms of trade, which came to an abrupt end in 1966 with a 40 per cent fall in wool prices.

Will fake meat wreak similar havoc to nylon carpets then, or will it be more like margarine and butter?

The most recent boom, now emphatically over, was underpinned not only by unusually favourable terms of trade but also by exceptionally strong net immigration, which has come to an abrupt halt.

“The case that immigration is beneficial to natives’ incomes needs care,” Easton writes. “It is possible that during the 2010s GDP per capita went up but that income growth accrued to new immigrants rather than to those already here. This probably contributed to the lack of enthusiasm for economic conditions which voters showed in the 2017 election.”

Hardly anyone expected National to lose that election, he says, including those who won.

A key Labour election promise was to progressively reduce child poverty — the social scar tissue from the Richardson/Shipley welfare cuts of 1990.

But the current Government has given no indication that it knew how big a task it had set, Easton says, nor did it set up an institutional framework to tackle the challenge. “The parallels with KiwiBuild are evident enough.”

Another clear theme running through the history is adaptability and changes of land use. Land abuse, often, to be honest.

A persistent pattern since Europeans arrived has been what these days is politely called depletion of natural capital, or what Easton calls quarrying.

It started with the slaughter of seals and whales, moved on to excessive deforestation and continues with intensive farming practices that turn our rivers into sewers.

If there is now a rural/urban divide on the issue of whether environmental degradation should be addressed by voluntary initiative or regulatory fiat, it reflects an extraordinary change in the country’s political economy over about a century, Easton says.

“In the 19th century when towns were but outposts of the countryside — when livestock roamed on Lambton Quay or in Cathedral Square — such tensions were inconceivable.”

The years since then have seen not only demographic change but shifting attitudes towards the state, and the adoption of a more representative electoral system, MMP, as a reaction to the excesses of Rogernomics.

“The popular lesson from the Depression was to reinforce trust in the state, especially that it could insulate the New Zealand economy from the rest of the world. It was a vision which lasted half a century, perhaps more, for even today it remains deeply wired into the psyche of New Zealanders.”

But by the mid-1980s, following nine years of Robert Muldoon, confidence in government was at a low ebb and the tsunami of radical change associated with Roger Douglas and then Ruth Richardson followed: cut taxes, deregulate, privatise, open the borders, stand back and let markets work their magic. It took 10 years for per capita GDP to return to its 1985 level.

Aside from that brief deviation into ideology between 1984 and 1993, New Zealand has been primarily governed by pragmatism, Easton says.

“Sometimes this has taken the form of following special interest groups. Only occasionally has there been leadership which has looked past the short term.”?

Not in Narrow Seas: The Economic History of Aotearoa New Zealand , published by VUP, was released to bookshops in the week of May 23 (delayed like so many other things by the Covid Crisis).  Here are some web-based items on the book. (For reviews see here.)

‘Introduction’ to Not in Narrow Seas. In The VUP Home Reader p.131-143. April 2020

Covid19 and History In Pundit 4 May 2020

Debunking the Egalitarian Myth. Excerpt in NZ Herald. May 14, 2020

Book puts farming at the centre of New Zealand’s history. Rural News. June 2, 2020

Do We Really Know Our History? In Pundit 20 June 2020

Hinges of History: After Covid-19? Presentation to the Fabian Society 25 June 2020

There was a Dialogue with Alan Bollard. Tuesday 30 June, 2020: Unity Lunchtime Event, 57 Willis St. 12.30-1.15

Writing Not in Narrow Seas (Phanzine September 2020)

There was a conversation between Geoffrey Rice and Brian Easton at ‘WORD Christchurch Spring Festival’ at 10.30am, October 30.

Sailing in a New Direction (November 2020)

Not in Narrow Seas was on the 2020 NZIER Prime Minister’s Summer Reading List.

A Brief History of the Māori Economy: How Things Change (February 2021)

Introduction to Stout Research Centre Seminar (April 2021)

Conversation with Nikki Mandow at the Auckland Writers Festival (May 2021)

Published in The VUP Home Reader 2020 p.131-143

Not in Narrow Seas borrows its title from Allen Curnow’s pioneering 1939 work, a collection of great poems evoking New Zealand’s isolation and fragility. ‘In your atlas two islands not in narrow seas / Like a child’s kite anchored in the indifferent blue,’ says the opening poem, ‘Statement’. New Zealand is seen as ‘cringing’ beneath a cold wind from Antarctica, ‘Two islands pointing from the Pole, upward / From the Ross Sea and the tall havenless ice’. Curnow famously suggested that the inhabitants of these remote islands were still not sure who they were: it was ‘a land of settlers / With never a soul at home.’ And his next collection (Sailing or Drowning, 1943) concludes with the endlessly recycled lines ‘Not I, some child, born in a marvellous year, / Will learn the trick of standing upright here.’

            Curnow’s poetry is a gift for an economist. It captures certain brutal truths about our country. If the land mass later known as New Zealand had sunk beneath the waves 23 million-odd years ago, the history of the world would have been little different. If the tyranny of distance and global insignificance gave life here a particular edge, its economic effects were profound and permanent. Curnow’s ‘anti-myth’ about the anxiety and uncertainty of the nation’s people perhaps bred the familiar counter-myth described by historian Keith Sinclair as the LBW syndrome: New Zealand ‘leading-the-bloody-world’ or sometimes ‘lagging the bloody world.’ In fact New Zealand usually ranks in the middle of the bunch of the 30 or so rich countries. Global interconnectedness is more complex and subtle than LBW supposes.

            As for New Zealanders’ recurrent obsession with their identity, this too has deep economic roots. Once the European settlers exposed New Zealand to the world, it had colonial (or neocolonial) status. As Britain’s imperial reach shrank, its ties to Britain loosened and New Zealand began to engage with more of the world’s economy. Because it is small, it remains a ‘neocolony of the world’; in a globalised age most economies do. Hence New Zealand’s constant preoccupation with nationalism and national identity. Even the common nineteenth century idea that New Zealand was a ‘better Britain’ articulated some sense of national uniqueness, however subservient it might now seem.

            New Zealand’s story is about immigrants and how the newcomers coped. Each wave of settlers arrived with a great weight of cultural baggage, accumulated over generations. We can’t understand our history unless we understand something of the migrants’ back-story. So it is necessary to consider where the proto-Maori came from, to delve back into the seventeenth century to understand nineteenth-century British immigrants, and to describe the last two centuries of the Pacific islands whence came New Zealand’s Pasifika people. In each case the immigrants had to adapt their inherited ways to life here.

            The islands they came to were not passive; they interacted with the humans, each shaping the other. The earliest settlers, having made a heroic 3000-kilometre ocean journey from east Polynesia, found that some staples of their diet (kumara) would grow here but others (taro) would not. These migrants were truly on their own in the new land as climate change made the journeying back too difficult. It was perhaps inevitable that their economy was based first on mining the country’s resources, starting especially with the most easily available: the staggering riches of the sea, the lumbering meat larder of moa, seals, and some of the native birds.

            This is the economy of the quarry, and it would be replicated by the European settlers. In each case the result was the same: depletion and even disappearance of resources that could not be readily replaced (cleared forests and dying species; the moa and the whale are totems). At a certain point the problem of resource sustainability had to be faced, and it was then that the now-celebrated Green Maori appeared with a hard-won strategy of the rahui, a ban on the taking of depleting resources. The European settlers’ quarry economy, of course, caused a much greater devastation and the effects are all around us. Fishing quotas, native forest protection regimes and even the measures to combat global warming are modern versions of rahui.

            Many historians have told the New Zealand story before; but an economist uses a particular lens and, I would argue, helps us to see our nation’s history in a new way. Too often we take the hard economic core of our history for granted, or we give it merely fleeting attention. Sex is notably absent from the Victorian novel; the economy is almost as rare among recent novels and histories. To give an account of a society without paying attention to its economic underpinnings is about as sensible as telling a love story without sex. It can be done, of course, but certain vital facts of life are left out.

            The biographies of some of our most famous politicians, for instance, rarely consider the economic environment in which they lived. The Liberal Premier Richard John Seddon and Labour Prime Minister Michael Joseph Savage governed in periods of prosperity, and it is partly for that reason that they are remembered. Contrast them with two equally important but far less well-known politicians who led their country, Harry Atkinson from the nineteenth century and Gordon Coates from the early-middle twentieth. Both were important precursors to the two great reforming leaders Seddon and Savage, with Atkinson an early advocate of the welfare state and Coates of a more active form of economic management. But they were long undervalued and remain inadequately remembered, partly because they both held power during economic depression and stagnation. Politicians who live in hard times tend to get a bad press, if any.

            Or consider the much-celebrated political break-up of the great settler farming estates by the Liberal Government at the end of the nineteenth century. This was a major political and economic reform. The great sheep stations represented a hierarchical, class-bound society; the much smaller family farms created by their dismemberment symbolised a more egalitarian, family-based and less formal one. But the changes were driven by economic factors and would probably have taken place anyway and that the political reform was much less important than the economic drivers that helped make it possible. Refrigeration and the rise of the meat industry made the break-up more profitable for the estate owners. They had good economic reasons to dismember their vast holdings.

            Or take the role of the gold rushes in the quarry economy and the rise of the cities. Histories of my own home town of Christchurch, for example, tend to take its early prosperity as a given. That contrasts with most other settlements which, after an initial boom, lapsed into depression. The difference with Christchurch seems to have been that about the time it should have gone through the same down cycle, the Melbourne goldfields opened up (in 1851). Christchurch prospered, as did other regions, by supplying the miners with food. So economic facts neglected by historians throw a new light on the city’s story.

            Similarly, Britain’s entry into the European Economic Community in 1973, is often seen as a major break in New Zealand’s history. This, so the story goes, shocked New Zealand into diversifying its export market and its economy more generally. It would have to sell to the world and not just the Mother Country. The reality is rather different. In 1973 the diversification was already underway. The Britain export market was already in rapid decline. It was certainly still a major buyer of farm products such as butter, cheese and lamb; but by then these made up only 30 per cent of New Zealand’s total exports of goods. So the diversification was driven by the market rather than British politicians. A far more important change to the economy was the almost permanent collapse of the wool price at the end of 1966, effectively ending the political economy which had reigned since 1882.

            An even more important economic event in New Zealand’s history was the introduction of refrigerated shipping in 1882 – and other related technologies – which substantially reduced the tyranny of distance. It enabled the country to sell meat and dairy products to markets – Britain above all – on the other side of the world. But it also made possible a more sustainable economy in a land whose quarry economy was being exhausted and increasingly looked as though it could not pay its way in the world. It transformed the political economy to one where the family farm was at its centre.

            Modern New Zealand is a market economy which sells its products to the world; the fact is so familiar that we tend to forget how important the non-market economy has always been. The economy of the Maori was based on Polynesian gift-exchange, where the transaction was more about mana than profit. Similarly, European settlers sprang from pre-market or even feudal Britain. Nor did they entirely leave that pre-market when they came to New Zealand. Much of their small farming was self-sufficient or near-subsistence. While family farms had become commercial operations by the end of the nineteenth century, subsistence farming (supplemented by some off-farm sources of cash income) continued in Maoridom until well into the twentieth century.

            Economic activities in the home occur largely in the non-market economy. Changes there, driven by new technologies and changes in family size and composition, led to big changes in the story of New Zealand as well as of the economy. The entry of women into the workforce, partly freed from the household by labour-saving devices, changed everything. The largely invisible half of the workforce – traditionally not even included when workers or the unemployed were counted – could no longer be ignored.

            Modern New Zealand is politically centralised. The line between direction by the market and by the state has shifted over the years, but compared with other economies with similar standards of living, the state has played a very central role in the economy. Part of the reason is that government preceded European mass settlement. In other former colonies such as the United States, settlement began 150 years before a federal government was formed. This meant that American society produced deeply rooted social institutions with which the state had to negotiate or contend. New Zealand, by contrast, was a ‘hollow’ society, without independent entities to mediate between the government and individuals.

            The implications for our development are many, not all of them positive. The state developed a commanding presence and could powerfully affect economic development. But the state could also create institutions which were mere creatures of statute and without statutory support might weaken and even die. The history of trade unionism is a case in point. Long sponsored by the state, when unionism lost that support with the introduction of the anti-union Employment Contracts Act of 1991, the unions withered.

            Some powerful economic myths have played a major role in the history of New Zealand; one is the claim that it is an egalitarian country, where Jack is as good as his master and wealth and incomes are evenly spread. It is hard to judge how much truth there is in the myth. There is some evidence for it in colonial times, when British farm workers had the opportunity in the colony to become small farmers. And in the 30 years after the Second World War there is strong evidence of a reduction in inequality of incomes. However, inequality grew markedly during the top-down economic revolution (1985-1993) known as Rogernomics.

            The argument about inequality also raises the spectre of New Zealand as ‘the land of the long pink cloud’. Much of our history has indeed been written from a leftish perspective. However, the pink cloud obscures the real story of New Zealand’s development. The history of the labour movement, for instance, tends to focus more on its militant wing – perhaps inevitably, since that was the one whose activities were so controversial – than on the quieter working majority.

            The left perspective sets out a tension between the pink progressive governments and the blue conservative ones in which the former win in the long run despite being out of power for two-thirds of the time. However, many of the blues were also progressives – National governments have a tradition of accepting the reforms of their Labour forerunners – but with a different agenda. New Zealand may be the land of the long white cloud. But it is a green land nestled in blue sea and sky.

            This takes us back to the ‘colonial cringe’. The mistake of the pink cloud thesis arose from taking well-established foreign theories but failing to adapt them to local conditions. Rather than thinking through the local problem, those suffering from the cringe grab whatever is going off a foreign shelf. This is a long-standing habit in New Zealand. At the heart of Rogernomics, for instance, was the application of an extremist form of free-market theory to New Zealand as though the country was an idealised United States. The result was a deep and self-inflicted wound to the economy arguably unique in our history. The period of stagnation between 1986 and 1993 was the result of the influence of ideology, unlike previous recessions and depressions, which were generally caused by contractions in our overseas markets.

            This history falls into six parts.

            The first covers the physical development of the islands and the economy of the first Polynesian settlers up till the arrival of the European settlers. The proto-Maori and Maori economy was a subsistence one, but subsistence did not mean starvation. Their gardens and fishing grounds provided adequate food, and economic surpluses went into artistic creation and community-building activity. The people generally lived the good life. Tsunamis and earthquakes could cause sudden devastation, but the effects were usually local and limited. When the Europeans arrived Maori life expectancy was probably not much different from their visitors’.

            Economic exchange in pre-European times was typically of the ‘gift exchange’ variety, where the focus was on the transactors rather than the transaction. ‘Gifts’ brought an obligation of reciprocity sooner or later, an obligation not captured in the English word. The relative values of the goods or services exchanged, moreover, were well understood. Some of the exchanges amounted to bartering. This meant Maori were experienced traders, and they quickly became expert at trading with the European settlers.

            Maori attitudes to land, however, were utterly unlike those of the Europeans. The idea of permanent alienation of land through sale – the dominant European idea – had no place in traditional Maoridom. If land was transferred, it was to cement marriage and diplomatic ties, or as a result of conquest in war. There was a gulf in values and in understanding between the two cultures, and it helped lead to war. The European musket had already devastated the Maori world; it turned limited hand-to-hand traditional conflict between tribes into mass slaughter (perhaps 20,000 Maori died). Its economic effects were also large; Te Rauparaha was said at one point to have had 2000 slaves preparing flax to trade for guns.

            As Part II explains, the Europeans brought the market economy to Aotearoa, and its inevitable pattern of boom and bust. The first boom, partly the result of a sudden inundation of settlers, was quickly followed by the first bust. Within a year of the arrival of the Tory, the flagship of the colonising New Zealand Company, the new colony sank into depression. There was not enough land for the colonists, and with a continuing wave of ships arriving there were too many workers and wages slumped.

            And already there were signs that the new European-based quarry economy could not last. By 1845 the whale catch had fallen till it could no longer carry the colony. But what would? In the short run there was the stimulus of war. Wellington became an armed camp by the late 1840s; feeding the soldiers fed the economy too. The New Zealand Wars of 1861-72 helped create an economic infrastructure (roads, bridges, and ports were built for invading soldiers); and the vast confiscation afterwards of Maori lands provided the fertile farmlands the settlers craved. Gold rushes in the 1850s and 1860s provided another source of income, although inevitably a temporary one.

            Wool turned out to be a staple commodity of a more long-lasting economy. But by 1870 many of the fruits of the quarry were disappearing while the wool economy had not yet fully launched. Help arrived in the shape of Julius Vogel, the most significant early example of the Borrow-and Hope, Think-Big politician – a type which would recur. Vogel’s overseas-funded development programme kick-started the economy and built valuable infrastructure. But there was no export staple to pay for it, and his Think Big programme could have led to disaster.

            This very nearly happened, because the long depression of the 1880s and 1890s in the Northern Hemisphere soon spread to New Zealand. Hardrock goldmining boom and its trade with the Australian market helped see Auckland through. But the fundamental risks and dangers of the colonial economy were now clear. How could New Zealand make its way in the world?

            The answer was through refrigeration, as Part III explains. The first frozen lamb was shipped in 1882, leading to a boom in sheepfarming; a dairy boom, also based on refrigerated exports, came a little later. Family farms provided the meat and the wool and stimulated jobs in service industries and towns. Society changed as towns grew into cities with a recognisable working class; politics reflected the change, with the rise of the Liberals, the early welfare state, and then the Labour Party. Women became a more prominent part of public life. But boom times under the Liberals turned to a long period of stagnation as overseas prices fell; depression struck in the early 1930s. Recovery from depression, the result of rising overseas prices and Keynesianism at home, flagged in the late 1930s; but world war brought another boom.

            Postwar New Zealand, as Part Four explains, brought a long-lasting boom and unprecedented social transformation. Class structures were changing and so was politics. Labour Cabinet Minister Bob Semple said ‘the bastards walked to the poll booths [in 1935] to vote us in, and drove to them [in 1949] to vote us out’. Increasing affluence brought increasing conservatism; National proved to be the more enduring party of government. Society was changing fast: Maori flooded into the cities and Pasifika people into New Zealand, mothers flowed into the labour market. National embraced the welfare state after condemning its launch by Labour; it continued to administer an economy heavily controlled by the state, with import licensing at the border and a centralised system of wage-fixing.

            The whole system started to unravel in 1966 when wool prices collapsed. After a brief recovery in the early 1970s, wool prices never returned to their real postwar levels. A major prop of the pastoral economy was undermined. Economic growth slowed; farmers could no longer generate the overseas income the country needed. In a protected and centralised economy the losses were passed on like an economic version of ‘pass the parcel in a Belfast pub’, where the bomb of a real income cut was passed on via price and wage hikes to the next person. Unemployment rose and inflation soared. Robert Muldoon, despite being the most aggressive politician in New Zealand history, could not make the changes desperately needed.

            The revolution in economic policy known as Rogernomics is the focus of Part Five. The aim was to modernise the economy and find an alternative to a framework which had clearly broken down under Muldoon. Undoubtedly a more-market approach to the economy was needed. Import licensing, launched by Labour in 1938, had by the 1980s become a barrier to economic development, locking the manufacturing structure into the past and entrenching manufacturing interests opposed to its dismantling. Unions, similarly, were locked into an inflexible system: compulsory unionism delivered members to often small unions enmeshed in a complex steel web of relativities. The external economy had rapidly diversified; the sclerotic internal system held it back.

            Rogernomics recognised the failures of the system, but its remedies were extreme and often ineffective. The consequence was a rise in social inequality and a rolling back of the welfare state which was only possible because the ‘hollow society’ could not resist it. Labour’s revolution – continued during National’s first term – sparked a populist revolt which upended the Front Runner (Winner-Takes-All) electoral system. While Rogernomics was broadly a failure, however, the political debate about it continued.

            In Allen Curnow’s ‘Out of Sleep’, the newly awoken poet tries to make sense of his surroundings: ‘[A] gust in the damp cedar hissing / Will have the mist right off in half a minute. / You will not grasp the meaning, you will be in it.’ An historian contemplating very recent history faces a similar difficulty. But the attempt must be made; Part Six tries. There has been a renaissance in Maoridom, with the new MMP system giving Maori much more political power. Treaty settlements have also given Maori much more economic clout, though the extent of that new wealth is often exaggerated.

            The increased power of business represents a fundamental change in the political economy. At some time in the late 1990s, however, the business community began concluding that neoliberalism (Rogernomics) no longer served its interests. There was a return to the traditional partnership with government, a revived form of NZ Inc. But what this meant in policy terms remains unclear. We are still trying to decide what to do with the legacy of Rogernomics, and in particular the hefty rise in inequality – and poverty – which it has left.

            The Clark-Cullen Labour Government wanted to reverse the extremism of Rogernomics, but had trouble thinking through alternatives to the neoliberal structure. The Key-English National Government’s pro-business approach included elements of crony capitalism mixed with policy inertia: the politics of manana or, to use the Kiwi version, of ‘she’ll be right’, an approach all too familiar in New Zealand’s history. Jacinda Ardern’s Labour Party did not expect to be elected in 2017, and was hardly prepared in policy terms for government. The resulting coalition government continues to grapple with the implications of promises without policy and a formidable backlog of unmet social and economic needs.

            Under the Ardern-Peters Government, as under those before it, New Zealand is constantly renegotiating its role in the global economy. No man is an island, John Donne said, and no economy is either, even an economy of remote islands set in the vast blue sea.

To be published by Victoria University Press in May 2020

Here is the publisher’s announcement.

Here is the publisher’s description of the author.