The Too Hard Basket
<>THE TOO HARD BASKET
<>Listener: 19 January, 2012.Listener: 22 December, 2011.
Keywords: Macroeconomics & Money;
It has been another difficult year for the world economy. Longstanding problems that were incrementally addressed include population growth, the depletion of limited resources like oil, the exploitation of free resources that threaten to make fish extinct and warm the planet, and the rebalancing of global power. The urgent one – the unsteady global financial system – remains unresolved.
This goes back to the boom of the 2000s, which left the financial system riddled with overvalued assets. Until these fictitious values are eliminated, the world economy will struggle. That may mean your house is not worth what you thought, so you feel poorer. For some, their houses – or in the case of the finance companies, their properties – may be worth less than the mortgages and other debts on them, so the lenders, including depositors in finance companies, lose out too.
These homely examples apply equally to sovereign nations, global financial enterprises (more fell over in the past year) and multinational companies (which, on the whole, have survived – so far). The recent experience of Greece is by no means unique in the history of the world: over 100 economies have gone through similar crises in the past 150 years, some more than once (New Zealand is not one of them).
Greece reached the stage where it was unable to service its debt, having to borrow more to fund public spending because taxation and other revenue was insufficient. Projections suggested its government debt would soon be twice the annual GDP. (New Zealand is desperate to keep its level down to below 40%.)
You might say the remedy is in the Greeks’ own hands: by raising (and collecting) taxation and cutting spending. Well, yes, but the people will only take so much fiscal pressure before they revolt; Greece’s last civil war ended less than three decades ago.
The typical Greek will say, “It is not me who is overspending; I was not a beneficiary of the profligate borrowing.” We can argue over this, but remember the average annual (public and private) net borrowing per New Zealander is around $55 a week; you may insist it is not you, so who is overspending and who is benefiting?
The response of countries in the European Monetary Union was to give the Greeks debt relief by – roughly – halving what their government owes to the banks. Easier said than done. Even allowing for shareholders losing their equity, reducing the banks’ assets in this way would mean cutting back on their lending to others, with fewer advances to businesses and for home purchase. Credit would contract. Meanwhile, European banks are being required to increase their capital reserves to make them less likely to fail – and therefore less likely to need a bailout from taxpayers. There may be a widespread credit squeeze across all the European banks, worsening Europe’s economic downturn.
If Greece goes bankrupt, the banks holding the debt will lose even more of their money and will ask governments for help, which comes (I simplify) by governments taking over some of the debt reduction. That means higher taxes or lower government spending; hence their reluctance to bail anyone out.
The good news is that the reductions are spread over a wider group, so individuals don’t suffer as much. The bad news is that there are other economies – like Italy – that may have to be bailed out; the total cost to the world’s taxpayers is likely to be much higher.
In the meantime, those who hold the overvalued assets – shareholders, depositors and all – try to avoid a loss by getting taxpayers to pay for the write-down of the inflated values. No wonder the public is getting grumpy. The political gridlock may mean the world won’t do enough, or can’t do enough, or does it too late – in which case the world economy may collapse into another great depression with severe unemployment.
It’s a bit like watching a motorway pile-up in slow motion. The roads are wet, the vehicles too close, no one is giving way and – egged on by their passengers – the drivers are being irresponsible.
Listener: 10 December, 2011.
Keywords: Macroeconomics & Money;
The confidence of those lending their international money is fragile. The tougher standards of security they now demand is one reason many debtors around the world are having their credit ratings downgraded.
Nowadays the lenders don’t look at just the state of a government’s books but at the nation’s as a whole. A country with sound public-sector accounts (ours are not too bad) but which is heavily borrowed overseas (as we are) may experience a credit downgrade (as we recently did).
That lenders are concerned with private-sector borrowing as well as that of the public sector was one of the harsh lessons learnt from the global financial crisis, when some countries – notably Iceland and Ireland, but don’t forget the UK, Germany and the US – suddenly found vast quantities of private debt dumped on the government. No longer could you pretend the two were independent.
This is particularly relevant to New Zealand, because before 2008 we explained to the credit-rating agencies that although we had a very high level of overseas borrowing by the private sector, the government accounts were in an excellent state (better than now) and they should give us a good credit rating. The agencies did, but that argument does not carry as much weight now. (The reasons our interest rates did not go up that much when the last downgrading was announced are that every-one expected it and lenders had already been raising their rates.)
Failing to appreciate this change led to a misinterpretation of the Treasury (Prefu) forecasts, released a month before the election. The Treasury expects we will grow around 3% annually over the next four years, while our trading partners grow closer to 4%, a figure based on the consensus forecasts of various international economic agencies.
That means the Treasury thinks we are growing slower than the rest of the world (despite the Canterbury earthquake rebuilding). If the international forecasts are optimistic (given subsequent events they probably are), then the New Zealand economy will grow more slowly, too.
Suppose the world forecasts are right. The Treasury thinks that over the next four years the whole country will borrow offshore a (net) total of more than $50 billion (or about $55 a person a week). It forecasts our net inter-national investment position – roughly how much we owe overseas – will deteriorate from 68.6% of GDP to 77.6% in four years’ time.
That makes a further credit downgrade more likely – especially if international financial confidence remains fragile – despite the reduced government borrowing. The forecasts expect the government to stop borrowing (net) in about three years’ time. The lenders will give us some credit for that but they will continue to worry about the ongoing offshore borrowing by the private sector. In any case, the Prefu is expecting interest rates to rise – by two percentage points in the next three years.
If this analysis is right – I hope it is not, but economic logic usually triumphs over hope – then the Government’s strategy is wrong, because it focuses only on the public-sector deficit, and ignores the private-sector’s borrowing. We should be addressing how to increase private savings, although we are unsure about what to do. Genial optimism is not a lot of help; you would be wise to be personally cautious.
How to prevent another downgrading and further interest rate hikes? If I were a Treasury economist dealing with a credit–rating agency, I would point out that around $20 billion of the (public and private) offshore borrowing of $50 billion is in effect the Canterbury earthquakes rebuilding programme, of which $13 billion is a cost to the Government. (It might help to have a mournful violin playing in the background.)
I’d deflect all questions about whether the Government can really keep to its spending reductions, and I’d highlight the Reserve Bank measures to prevent private debt ending up on the public balance sheet. The agencies are likely to say you can never predict how the next crisis might happen. I’d have my fingers crossed under the table.
An interview by Emma Beer, published in ‘The Wellingtonian’, 24 November, 2011.
Keywords: Literature and Culture; Political Economy & History;
What begins with Michael Joseph Savage and Gordon Coates and ends with Rob Muldoon and Roger Douglas?
A new exhibition that catalogues 60 of the most important makers of modern New Zealand, curated by Wellington economist Brian Easton. Makers of New Zealand 1930-1990 opens at the New Zealand Portrait Gallery this week.
Easton is also the author of the book The Nationbuilders, which covers much the same period. “It told a story of how New Zealand had developed over that period.” He was commissioned to compile a list of 60 names, which he said was no easy task. “I started with the people from Nationbuilders, but not an exact overlap.
“One of the rules [about The Nationbuilders] was you had to be dead to be in it. At that time Allen Curnow wasn’t dead so I’ve switched Denis Glover [who is in the book] for Allen. Although, I’m extremely fond of Denis as poet, Curnow is another step up on that.”
The process of culling the names involved sitting down and deciding what was important, and then discussing it with friends, he said.”In an obvious sense Hillary’s going to be there, but there’s going to have to be somebody reflecting rugby, as a part of New Zealand.” Various names were put to him, but often they were players or stars, rather than people who helped shape the game, he said. “I eventually hooked on to Fred Allen. I knew I was right when I found one of the quotations by him. “He was asked how his great Auckland team would compare with a modern team, and he said, `The modern team would be fitter and more skilled and they’d win, but we had a lot more fun’.”
Easton said he tried to get a notion of development over time, and an important aspect of that was the development of women. Women in the exhibit include authors Elsie Locke and Janet Frame, women’s advocate Sonja Davies, and anthropologist Joan Metge. “I wanted to talk about the change in dining over the period, which is a women’s thing if you think about it.
So Alison Holst is probably the first of the modern cooks. She was one of the later additions.”
Easton said he did not want celebrities in the mix.”There was a trick to that. If you ask people they will invariably talk about celebrities after 1990, because people have forgotten who the celebrities before 1990 were. People will say Kiri Te Kanawa, but her great achievements were after 1990. So who have I got instead? The person who trained her, Sister Mary Leo.”
Easton said the exhibition was not a triumphalist account of New Zealand. “One way of thinking about the country is one triumph after another, but as I’ve tried to explain, we should really ask how successful the period was. “We finish up [the exhibition] by focusing on Muldoon and Douglas, who are both quite problematic politicians in their own way.
Lynn Freeman interviews Brian Easton: 27 November, 2011.
Keywords: Literature and Culture; Political Economy & History;
<>Keywords: Literature and Culture; Political Economy & History;
60 Makers of New Zealand: 1930-1990:Â is at the New Zealand Portrait Gallery from 24 November 2011 to 12 February 2012. It was curated by Brian Easton.
The following is a list of items on the website. At the end is the list of individuals who are portrayed.
1. Curator’s Statement: http://www.eastonbh.ac.nz/?p=1566
2. Description of Exhibition prepared for media purposes: http://www.eastonbh.ac.nz/?p=1568
3. Curator’s address at opening; http://www.eastonbh.ac.nz/?p=1571
4. The panels each of 250 words describing the portrayed: http://www.eastonbh.ac.nz/?p=1573
A selection of portraits are at http://portraitgallery.nzl.org/exx/momex.html
Arts on Sunday interview by Lynn Freeman:
http://www.eastonbh.ac.nz/?p=1611
Photographs from the opening of the exhibition are at http://portraitgallery.nzl.org/exx/momopen.html.
An interview by Emma Beer for the Wellingtonian is at http://www.eastonbh.ac.nz/?p=1588
The Portrayed
1. Michael Joseph Savage
2. Gordon Coates
3. Ngata
4. AH & AW Reed
5. Ratana
6. Te Puea
7. William Goodfellow
8. Peter Fraser
9. Jim & James Fletcher
10. Bernard Freyberg
11. Rangimarie Hetet
12. Bruce Levy
13. Fintan Patrick Walsh
14. Gwen Somerset
15. Sister Mary Leo
16. Arthur Downer
17. Whina Cooper
18. Josef Babich
19. Bernard Ashwin
20 Douglas Robb
21. James Wattie
22. Clarence Beeby
23. Keith Holyoake
24. Jack Acland
25. John Ormond
26. Tupua Tamasese Mea’ole
27. Guy Powles
28. Alister McIntosh
29. Thaddeus McCarthy
30. Bill Sutch
31. Charles Brasch
32. Harold Wellman
33. Bill Gallagher
34. Allen Curnow
35. Jack Marshall
36. Elsie Lock
37. Owen Woodhouse
38. Charles Fleming
39. Arthur Lydiard
40. Lloyd Geering
41. Colin McCahon
42. Henry Lang
43. Ed Hillary
44. Fred Allen
45. Bruce Mason
46. Keith Sinclair
47. Norman Kirk
48. Sonja Davies
49. Ian Cross
50. Janet Frame
51. Joan Metge
52. Ranginui Walker
53. Ralph Hotere
54. Howard Morrison
55. Alison Holst
56. Ron Brierley
57. Ed Durie
58. Sandra Coney
59. Rob Muldoon
60. Roger Douglas
Mum and Dad.
60 Makers of New Zealand: 1930-1990: is at the New Zealand Portrait Gallery from 24 November 2011 to 12 February 2012. It was curated by Brian Easton.
Keywords: Literature and Culture; Political Economy & History;
The following are the panels to go with the portraits. (Each is constrained to 250 words.) They are also tell a story of that period. The sequence is almost in order of birth with a few changes to improve the narrative. The list which immediately follows uses the conventional names; the panels have their full names.
1. Michael Joseph Savage
2. Gordon Coates
3. Ngata
4. AH & AW Reed
5. Ratana
6. Te Puea
7. William Goodfellow
8. Peter Fraser
9. Jim & James Fletcher
10. Bernard Freyberg
11. Rangimarie Hetet
12. Bruce Levy
13. Fintan Patrick Walsh
14. Gwen Somerset
15. Sister Mary Leo
16. Arthur Downer
17. Whina Cooper
18. Josef Babich
19. Bernard Ashwin
20 Douglas Robb
21. James Wattie
22. Clarence Beeby
23. Keith Holyoake
24. Jack Acland
25. John Ormond
26. Tupua Tamasese Mea’ole
27. Guy Powles
28. Alister McIntosh
29. Thaddeus McCarthy
30. Bill Sutch
31. Charles Brasch
32. Harold Wellman
33. Bill Gallagher
34. Allen Curnow
35. Jack Marshall
36. Elsie Lock
37. Owen Woodhouse
38. Charles Fleming
39. Arthur Lydiard
40. Lloyd Geering
41. Colin McCahon
42. Henry Lang
43. Ed Hillary
44. Fred Allen
45. Bruce Mason
46. Keith Sinclair
47. Norman Kirk
48. Sonja Davies
49. Ian Cross
50. Janet Frame
51. Joan Metge
52. Ranginui Walker
53. Ralph Hotere
54. Howard Morrison
55. Alison Holst
56. Ron Brierley
57. Ed Durie
58. Sandra Coney
59. Rob Muldoon
60. Roger Douglas
Mum and Dad.
1. MICHAEL JOSEPH SAVAGE
Auckland MP, Prime Minister
23 March 1872, Tatong, near Benalla, Victoria, Australia –– 27 March 1940, Wellington
Micky (or Joe) Savage was New Zealand’s first Labour prime minister. He was born into a harsh life (his mother died when he was 5), coming to New Zealand in 1907. After a wide variety of jobs, he worked in an Auckland brewery, while actively promoting union and socialist views. In 1919 he won a parliamentary seat for Labour in Auckland, succeeding Harry Holland to the party leadership in 1933, and coming to personify the Party’s commonsense humanitarian approach. The party won the election in 1935, and he was Prime Minister until his death. His government introduced many reforms which enhanced the wellbeing of New Zealanders. He is particularly associated with the Social Security Act; while he did not invent the expression he described it as ‘applied Christianity’. He took an independent line on New Zealand’s foreign policy objecting to the international appeasement policies of the late 1930s; his was the first government to address the trusteeship of Samoa in a humane way. When the Second World War broke out in September 1939 he committed New Zealand, famously saying that where Britain ‘goes, we go; where she stands, we stand’, although New Zealand’s war effort was to be led by Peter Fraser [8]. But by now he was wracked with cancer, and he died in early 1940. at the height of his popularity; his photograph hung on the wall of thousands of New Zealand homes for many years after.
2. JOSEPH GORDON COATES
Kaipara MP, Prime Minister
3 February 1878, Hukatere (?), Northland – – 27 May 1943, Wellington.
While Gordon Coates was Prime Minister from 1925 to 1928, he also played the crucial role as Minister of Finance in the recovery from the Great Depression. Many of his policies were developed and extended by the following Labour Government. Coates was born on the Kaipara Harbour into a farming family. In 1911 he was elected to parliament. From 1917 to 1919 he served in Europe winning a Military Cross and bar. Perhaps it was there he became a committed New Zealand nationalist who was so influential over the younger men who worked with him (including Keith Holyoake [23] and Bill Sutch [29]). He started his political life as an independent Liberal but soon joined the Reform Party, succeeding to the premiership when Bill Massey died in 1925. Through the 1920s he was a major promoter of Maori development, closely consulting Apirana Ngata [3]. The Liberals won more seats in the 1928 election, although winning fewer votes than Reform, and Coates resigned. He became deputy leader of the Coalition Ministry in 1931 and Minister of Finance in 1933 (to 1935), following a dispute over exchange rate policy. He established the Reserve Bank, and developed housing and health policies while working on the depression recovery and attending Imperial Conferences. From 1940 until his death he was a member of the War Cabinet, where he continued to show his pragmatic commitment to policy and the interests of all New Zealanders rather than party, and his effectiveness as a politician and administrator.
3. SIR APIRANA TURUPA NGATA Ngati Porou
Kaumatua, MP
3 July 1874, Te Aroaroa, East Coast – 14 July 1950, Waiomatatini, East Coast
Apirana Ngata was the Maori leader who, more than any other, contributed to the modernisation of Maori in the twentieth century. His knowledge of the Pakeha world and of tikanga and matauranga Maori together with his professional skills assisted his people to develop while also encouraging them to preserve their culture and maintain their own identity. Ngata was born on the East Coast of Ngati Porou and Scots descent. (He said that this Pakeha ancestry was the source of his methodical habits, but otherwise he did not regard it as important.) Grounded in Maoritanga (all things Maori) and te reo, he went to Te Aute College and to degrees in political science and law, being the first Maori to complete a degree from the University of New Zealand. Thereafter he threw himself into reforming the Maori social and economic situation while maintaining their cultural integrity, especially in the areas of farming and land reform. In 1905 he won the Eastern Maori parliamentary seat which he held until 1943, becoming native minister from 1928 to 1934. He had to resign from office when it was found that he did not keep to bureaucratic niceties; he was in too much of a hurry. When in opposition he advised Gordon Coates [2] and Peter Fraser [8]; he recorded Maori waiata, and wrote on Maori issues. As an elder statesman he continued to promote Maoritanga in a manner which contributed to the welfare of all New Zealanders.
4. SIR ALFRED HAMISH (AH) REED & ALEXANDER WICKLIFFE (CLIF) REED
Publishers, Writers
AHR: 30 December 1875, Hayes, Middlesex, England – 15 January 1975, Dunedin.
AWR: 7 March 1908, Ponsonby, Auckland – 19 October 1979, Wellington.
In order to talk about itself, a nation needs publishers to connect writers with their readers. While today there is a healthy book publishing industry, albeit one struggling with new electronic technologies, it arose out of a handful of pioneers who published books which were of no interest to their offshore counterparts. A.H. Reed Ltd was one of our first substantial publishers. Founded in 1907 – before Clif was born – by Alfred Reed and his wife to import Sunday School texts, it started publishing its own books from 1922. Clif joined him in 1925 and the company evolved into New Zealand’s largest publisher of books (and music), under the imprint of A. H. & A.W. Reed and a raupo (reed) symbol. Living in different cities, the two corresponded daily, providing an invaluable archive of how the business ran. The company published thousands of titles, encouraging a host of authors (finds included Barry Crump and Rob Muldoon [59]). Its list covered fiction, gardening, history, sport, education, natural history and Maori subjects and children’s books. However the company was not able to adapt to the rise of television and the changing reading habits of its middle-brow public, and was sold in 1983; many of its staff went on to careers in new and innovative publishing ventures. The most recent purchaser honours the company with its Raupo Publishing imprint. Each wrote many books – including AH’s accounts of his walks around New Zealand which gave him so much pleasure. Both remained devout Christians until their deaths.
5. TAHUPOTIKI WIREMU RATANA Ngati Apa
Kaumatua, Founder of Religion
25 January 1873?, Te Kawau, near Bulls – 18 September 1939, Ratana Pa.
Ratana (Piri Wiri Tua – the campaigner) was the founder of a Maori religious movement which became politically influential, offering the ‘morehu’ (survivors) facing marginalisation and dispossession an alternative to the iwi from which they had become alienated. He grew up as a farmer with little education. After experiencing religious visions in 1918, with ‘the penetrating eyes of a mystic [and] the modesty of a great man’, he became a faith healer leading a sweeping religious revival. He demanded Maori abandon their dependence on tohungaism (especially witchcraft) and Maori gods and unite behind Ihoa o nga Mano (Jehovah of the Multitudes). The Ratana Church was formally established in 1925. It won a Maori parliamentary seat in 1932 and all four by 1943. Shortly after Labour won the 1935 election Ratana met with Prime Minister Savage [1] and gave him a potato (representing the loss of Maori land and means of sustenance), a broken gold watch (the broken promises of the Treaty of Waitangi), a pounamu heitiki (the mana of the Maori people) and a huia feather, the chiefly status which Savage would earn if he could restore the first three. (The gifts were buried with Savage.) Although the ties between the Ratana Church and Labour are no longer as close, the 1946 and 1958 Labour governments depended upon the Ratana MPs for their majority. In the 2006 Census about 50,000 said they were adherents of the Ratana church and over 100,000 of Maori descent said they did not know their iwi.
6. TE KIRIHAEHAE TE PUEA HERANGI Tainui
Kaumatua
9 November 1883, Whatiwhatihoe, nr Pirongia – 12 October 1952, Ngaruawahaia
Te Puea Herangi, a descendant of the first Maori, King Potatau Te Wherowhero (she also had an English grandfather), was born when Tainui was still recovering from the confiscation of their lands following the wars of the 1860s. She was instrumental in developing the mana of the Kingitanga, and enabling her iwi to transform from the subsistence economy of the nineteenth century to a modern Tainui one. From her early years her talents were identified and encouraged. While as a young adult she led an exuberant life, cutting herself off from her people, by her late 1920s she had begun to play a central role in Tainui politics and life. This included resisting conscription during the First World War reflecting the ongoing bitterness at the confiscations, and establishing Turangawaewae, the Kingitanga marae at Ngaruawahia. Apirana Ngata [3] became a firm friend and ally, and she applied his economic development strategy of land development and dairy farming to the Tainui. Following a long, slow, painful and uneven reconciliation between Tainui and the Crown, she agreed with Peter Fraser [8] in 1946 for the Crown to pay an annual sum in recognition of the injustice of the confiscations, as recommended by the Sims Commission in 1927. (It became severely depreciated by inflation.) While there were ‘bitter, poignant memories’ of the confiscations, Te Puea had many personal friendships with Pakeha and a strong belief that the two peoples should learn to respect one another’s cultures so that they could live comfortably together.
7. SIR WILLIAM GOODFELLOW
Businessman in the Dairy Industry
26 May 1880, Alexandria (Pirongia) – 5 November 1974, Auckland.
We so assume the dairy industry as a significant part of New Zealand, that we often forget that it hardly existed before refrigeration in 1882, taking years to slowly build its current production, processing and distribution system. Many were involved – not least farmers who were technologically responsive but also the processors and distributors. Industry leadership was crucial. Although born near Pirongia, William Goodfellow grew up in Auckland. He started selling hardware, but being of an entrepreneurial disposition, when a purchaser defaulted on an order for dairy equipment in 1909, he formed what eventually became the New Zealand Cooperative Dairy Company. It was the first dairy company to have an onsite laboratory; it owned a radio station to keep in contact with its farmer-shareholders. Goodfellow managed NZCDC until 1932 and was subsequently an advising director. He also set up a fertiliser company and was on the boards of some big Auckland-based companies (as well as being a generous benefactor to some Auckland educational institutions). He insisted on firmly controlling offshore marketing, crusading for a unified marketing organisation to prevent the dairy co-operatives from competing against each other in London, getting him into conflict with other cooperatives: dairy politics is fractious because of all its independent farmer-shareholders. Eventually his strategy was adopted by the New Zealand Dairy Board, to which the NZCDC contributed. In 2001 they, and most other cooperatives, merged to form Fonterra which, selling a third of the internationally marketed milk, is New Zealand’s largest multi-national.
8. PETER FRASER
Wellington MP, Prime Minister
28 August 1884, Fearn, Ross-shire, Scotland – 12 December 1950 Wellington
Peter Fraser would be included in any list of makers of New Zealand for his political leadership in arts and culture, education (with Clarence Beeby [21]) and health (his wife Janet Fraser had a very important role) in the first Labour government. But his singular achievement was to lead New Zealand through World War II. In effect leader from its beginning in September 1939, as prime minister Michael Savage [1] was dying, Fraser became premier in March 1940, when the war effort was still faltering. He brilliantly pursued the task of leading the nation through the war with energy, determination and judgement, developing into a statesman of international standing, including chairing the Trusteeship Committee of the United Nations which began the process of independence for the world’s colonies. Fraser was born in the Highlands of Scotland, when the crofters’ clearances from their land were still a living memory; hence his sympathy with the Maori. He had limited schooling because of family poverty, but was self-educated and extremely well-read, despite having very poor eyesight. He arrived in New Zealand in 1911, throwing himself into the labour movement, supporting direct action (strikes) and organising parliamentary elections. He was jailed for objecting to conscription during the First World War because it did not conscript capital, winning a parliamentary seat in 1918 which he held to his death. Alister McIntosh [27], head of his prime minister’s department, admired his ‘farsightedness, astuteness, breadth and enlightened humanitarianism.’ Many think he is New Zealand’s greatest prime minister.
9. SIR JAMES FLETCHER & SIR JAMES MUIR CAMERON (JC) FLETCHER
Businessmen, Construction and Housing Industry
J: 29 March 1886, Kirkintilloch, Strathclyde, Scotland – 12 August 1974, Auckland
JMC: 25 December 1914, Dunedin – 29 August 2007, Auckland.
James Fletcher arrived in Dunedin in 1908, after completing a carpentry apprenticeship in Scotland, with his tools and a couple of pounds in his pocket. With the support of his family, he energetically seized opportunities in developing New Zealand to build one of its largest enterprises. He formed a house-building partnership and moved into construction work. ‘No job was too big’; although the firm sometimes took on projects beyond their capabilities. Many of the iconic public buildings of New Zealand are ‘Fletcher jobs’. Fletchers had a lead rebuilding role after the 1931 Napier earthquake; they are doing the same after the Canterbury earthquakes. When the first Labour Government got its housing program underway Fletchers built state houses (although its residential wing nearly went bankrupt in the process). Between 1942 and 1944, major defence-related construction projects were needed; Fletcher became commissioner of defence construction and controller of shipbuilding. The new managing director was his son Jim, known as ‘JC’, who qualified as an accountant in Auckland, where the company headquarters had moved. In the 1950s Fletchers built the giant Tasman pulp and paper works at Kawerau, becoming a minority shareholder. The firm had long been in the manufacturing sector owning brick, joinery, steel and timber suppliers. The recession of 1986-94 was not an easy time for the company. The merger into a group of related companies, Fletcher Challenge, did not really work. The company returned to Fletcher Building, its core business; a hundred years on it still bears its founder’s name.
10. 1st BARON BERNARD CYRIL (TINY) FREYBERG
Soldier
21 March 1889, London – 4 July 1963, Windsor, England
The social devastation of the Great Depression left many young New Zealand males socially alienated. Yet ‘Tiny’ Freyberg (he was a strapping 183cms (6′) tall) welded those in the Second New Zealand Division into one of the finest fighting units of World War II. Born in London, he grew up in New Zealand, involved in school cadets and the territorial army. (He was a strike-breaker – future prime minister Peter Fraser [8] was on the other side – in the industrial disputes of 1911.) He left New Zealand in 1914, and after a number of adventures joined the British forces, fighting in Gallipoli and France, where he earned a VC and three of his four DSOs. He was retired as a British major-general in 1937 because of ill-health, including war wounds. In 1939 Fraser recruited him to command the Second Expeditionary Force which he led in North Africa, Greece, Crete and Italy. Although a part of the British formation, both Fraser and Freyberg himself insisted he was the servant of the New Zealand government which had a veto over the deployment of its troops. His war leadership was such, that despite political differences with Fraser (he was a British Conservative Party candidate in 1939), he was appointed governor-general in 1945 – retiring to Britain in 1952. New Zealand’s ‘greatest soldier’ is commemorated by the Freyberg Building (outside which stands his bust) in Wellington, the Freyberg Pool (he was a champion swimmer in his youth) and by Freyberg High School in Palmerston North.
11. DAME RANGIMARIE HETET Ngati Maniapoto
Weaver
24 May 1892, Oparure near Te Kuiti – 14 June 1985, Te Kuiti
Maori arts and crafts seemed to be dying at the beginning of the twentieth century. Under the influence of Apirana Ngata [3] they began to revive. Carving (whakairo), dancing (haka), music (puoro?), song (waiata) and weaving (nga-mahi a te whare pora) are now all thriving. Rangimarie Hetet was at the centre of the weaving revival. Born Rangimarie Hursthouse, she grew up in a whanau (extended family) even though she had three Pakeha grandparents. There she learned many crafts, most notably traditional Maori weaving. As with many women, her ultimate career was delayed by bringing up five children and supporting the family (her husband was gassed during the First World War), working as a hotel matron, domestic, cook and farmer. She did much teaching and demonstrating as well as weaving – fine cloaks were her speciality – and she was active in the Maori Women’s Welfare League [16] which she helped found. But her skills and artistic achievements were not widely noticed until her first exhibition in 1965, when she was 73. She continued to exhibit for the next 30 years, including internationally, not confining herself to traditional materials (some feathers were no longer available because the birds were extinct) and forms, so the craft evolved rather than fossilised. (True for the Pakeha craft movement too.) Failing eyesight and arthritis limited her ability to complete intricate weaving, but nothing could dull her passion; until the day she died – 103 years old – she continued to weave.
12. SIR ENOCH BRUCE LEVY
Scientist
19 February 1892, Auckland – 16 October 1985, Tauranga
Lemuel Gulliver was told that ‘whosoever could make … two blades of grass to grow upon a spot of ground where only one grew before, would … do more essential service to his country, than the whole race of politicians put together.’ New Zealand’s second grasslands revolution (the first was the nineteenth-century conversion of native grasses to more palatable introduced ones) made the country a premium exporter of ‘processed grass’ – of wool, meat and dairy products. Instead of draining the natural fertility of the soils, practical farmers adopted the more productive pasture and livestock management techniques developed by scientists. Bruce Levy joined the Grasslands Division of the Department of Scientific Research when it was established in 1928, directing it from 1936 to 1951. Of course Levy, described as ‘the evangelist of grassland farming’, did not do all the science by himself . As well as a host of New Zealand scientists, who sometimes fought among themselves, there were important overseas contributions which the domestic scientists intelligently adapted for local conditions. Levy introduced new strains of grass. Observing that stock and their manure helped make the pasture grow, he researched and advocated ‘recycling of fertility’ from higher stocking rates. Honoured on his retirement – he was the first DSIR scientist to be knighted, Levy continued his proselytising underpinned by his science. He published the third edition of his Grasslands of New Zealand when he was 79, and applied his knowledge and enthusiasm to golf courses and bowling greens.
13. FINTAN PATRICK WALSH
Unionist
13 August 1894, Patutahi, Poverty Bay – 16 May 1963, Wellington.
The 1894 Industrial Conciliation and Arbitration Act left the union movement very dependent upon a state-determined framework, while – like all union movements – it was subject to internal tensions. ‘Jack’ Walsh (a.k.a. ‘the Black Prince’) was at the centre of these pressures. Born Patrick Tuohy on a farm in Poverty Bay, he joined the merchant marine aged 11. (He said he changed his name to Walsh to avoid victimisation from his union activities in the United States.) In 1920 he returned to New Zealand, briefly joining the Communist Party, although later he was vigorously anti-communist. In 1927 he became president of the seamen’s union, which led to involvement in peak union organisations such as the Federation of Labour. With the introduction of compulsory union membership in 1936 Walsh established a number of other unions, particularly for clerical workers. He formed close ties with the first Labour Government, becoming a committed supporter of arbitration and economic stabilisation. Keith Sinclair [35] said that he. along with Peter Fraser [8], Walter Nash and Bernard Ashwin [18] was one of New Zealand’s most powerful men in the 1940s. When Labour lost power in 1949, the union movement faced an unsympathetic climate; he kept shifting his rhetoric and alliances to maintain its power and his leadership, especially as president of the FOL. His failure to support the watersiders during the 1951 Waterfront Dispute was particularly controversial. Similar difficulties were experienced by his successors. When the IC&A Act was repealed in 1991, many unions collapsed.
14. GWENDOLEN LUCY SOMERSET
Educationalist
16 November 1984, Springfield, North Canterbury – 31 October 1988, Wellington
Jenny Shipley, New Zealand’s first woman prime minister, got her initial political experience as a parent in the pre-school movement; this illustrates its importance to many mothers, while of course most children get their first outside-home educational experiences there. It has many components: kindergartens, play centres, kohanga reo, creches … Not only has their range and scope changed but they have become less formal and more child-centred. Gwen Somerset played a key role in that transformation. Born into the Alley family – many of her brothers were high achievers too, including Geoff who was both an All Black and the first National Librarian – Gwen grew up on a farm (her father was also a headmaster) and went to Teachers College, where she was greatly influenced by the idea that schooling should focus on the child. Her various primary teaching stints included Oxford, North Canterbury, where she teamed up with Crawford Somerset (who wrote the famous sociological study Littledene – actually Oxford), and Feilding. Gwen continued teaching when she had two young children, relying on child care. While she shared Crawford’s interest in continuing education, Gwen became increasingly involved in early learning, promoting creative expression and natural curiosity. When the couple moved to Wellington – Crawford to a chair in education – Gwen became, in 1948, the first (and inspirational) President of the New Zealand Federation of Play Centres, publishing a number of books about children’s growth and development, which were widely read by parents as well as educators.
15. DAME SISTER MARY LEO NICCOL
Singing Teacher
3 April 1895, Auckland – 5 May 1989, Auckland.
New Zealand has produced many marvellous singers, a combination of natural talent, institutional and funding support, and brilliant teachers. Sister Mary Leo was an outstanding teacher, best known for her three operatic dames – Heather Begg, Malvina Major and Kiri Te Kanawa – but she had many other very successful students,. Her students won every Mobil Song Quest from 1959 until 1970; some went on to be outstanding teachers in their own right. Kathleen Agnus Niccol grew up on the North Shore with a vocation to be a nun, but first she went teaching, joining the Sisters of Mercy when she was 28. Entering St Mary’s Convent in Ponsonby, she was put in charge of music at the associated St Mary’s College; its choir soon became well known. She had surprisingly little formal training – just an LTC; as was common for her generation, she did not even attend teaching college. Her vital and creative energy and her exacting standards produced students – beginning with Mina Foley in 1950 – who won many competitions in New Zealand and overseas. The relaxations on her order which followed Vatican II in the 1960s enabled her to make a world tour in 1972, visiting her former pupils and hearing them sing in leading operatic roles. She continued to teach until she was 90, when a fall incapacitated her. While there is a multitude of talent among New Zealanders, much of which is internationally recognised, the teachers who fostered it should never be forgotten.
16. ARNOLD FIELDER DOWNER
Businessman, Civil Engineer
4 February 1895, Alexandra, Victoria, Australia – 16 July 1984, Wellington
Today’s New Zealand landscape is not that of 1930. Engineers and others shaped it, changing the landforms and the course of its water; it is also smaller for they improved the networks which connect the country. Not least the tunnels. Arnold Downer was a tunneller, arriving in New Zealand at the age of four, and growing up in Feilding. He served in Egypt and France in the Great War, studying civil engineering in London before returning in 1920. Rejoining the Public Works Department, he was by 1927 engineer in charge of the Wellington-to-Tawa deviation of the main trunk line, building five kilometres of tunnels. After he left the PWD in 1930 Downer kept tunnelling: Wellington’s Mt Victoria road tunnel; hydroelectric works at Waiporui and Cobb River; Milford’s Homer tunnel. His firm took on earth-moving equipment, building airfields here and in the Pacific in the Second World War; afterwards they were used for coalmining, quarrying and dams. It helped build the Roxburgh power station and the Rimutaka rail tunnel. Eventually it merged into Cable Price Downer which survives to this day. Downer was not at the beginning of the PWD, founded by Julius Vogel in 1870 to drive New Zealand’s physical development, but he worked for and with it, as it evolved into the Ministry of Works and Development. He was not alive when the ministry was closed down in 1988-89. Vogel’s vision of government-led development, pursued expertly by skilled engineers, seemed to have come to an end.
17. DAME HOHEPINE (WHINA) COOPER Te Rarawa
Kaumatua
9 December 1895, Te Karaka, North Hokianga – 26 March 1994, Hokianga
Whina Cooper (like Te Puea [6]) grew up believing that girls could do anything, long before the slogan was popular. And she did, including being the first president of the Maori Women’s Welfare League, founded in 1951, bringing together 180-odd local welfare committees established in the previous few years. They were empowering (some iwi prohibited women speaking on their marae atea), educative (one successful campaign was to improve Maori diet) and political. So was Whina. Born Hohepine (Josephine) Te Wake in the northern Hokianga, she had one American grandparent. Her father, a Te Rawara leader, prepared her for leadership. Her style, unlike the more consultative approach of today’s Maori, involved leading from the front perhaps inspired by the moment, which sometimes led to conflict and even exile from her whanau. She taught, kept store – proving commercially successful – and farmed. Before she was 20 she led a protest against a Pakeha farmer who wanted to drain some mudflats where Maori gathered seafood. It was the first of many victories, the most famous being the Land March (Hikoi) of 1975 – she was 80 – from Te Hapua in the Far North to Wellington to galvanise Maori and Pakeha support for Maori determination to retain their land and culture. She also was active in Maori development, implementing among her people the development strategy of Ngata [3], whom she first met in 1934 and greatly admired. Almost a third of New Zealand watched her tangihana (funeral) broadcast live on television.
18. JOSIP PETROV BABICH
Winemaker
23 October 1895, Runovi‰, Dalmatia – 22 August 1983, Henderson, Auckland.
Wine was hardly consumed in 1930 (1.4 litres a head), 85 percent was imported and that made here was often vile (it was said that the best was kept back for the discriminating wine-makers). By the 1990s consumption was 12 times higher and New Zealand wine was winning international awards. Much of the increase in wine’s market share came from displacing spirits, but beer fell from 65 to 58 percent. More important than the statistics has been the change in drinking patterns; today liquor, especially wine, is more likely to be drunk in mixed company with a meal; wine has been an integral part of the new cuisine (Wattie [21] Holst [55]). The revolution depended on improving the quality of New Zealand made wine. Josip Babi‰ came to New Zealand in 1910 from Dalmatia to escape economic hardship and military conscription. He and his brothers first went gum digging, but by 1916 he was planting vines, making mainly port and sherry for the public. It was not easy; he was even prosecuted for selling two bottles instead of the minimum two gallons (18 litres). The lawyer who got him off, told him to ‘get away from this place. There’s no future for a winemaker up here.’ Instead, he persevered; by the late 1930s most of his income was from wine. As the demand for good wine rose from the 1960s his family company expanded; its table wines remain a distinctive brand with a reputation for quality to this day.
19. SIR BERNARD CARL ASHWIN
Secretary of the Treasury
22 September 1896, Paeroa – 12 February 1975, Wellington.
Bernie Ashwin was the founder of the modern Treasury. Previously its staff were bookkeepers looking after the governments payments and receipts, so marginal that they were not involved in the National Industrial Conference in 1928. Ashwin was their first graduate economist, involved in many of the major decisions of the 1930s, including the founding of the Reserve Bank, becoming Secretary of the Treasury in 1939. Keith Sinclair [35] said that he, along with Peter Fraser [8], Walter Nash and Fintan Patrick Walsh [13], was one of New Zealand’s most powerful men in the 1940s, a position he continued through following the change of government in 1949. By the time he retired in 1955, Treasury was deeply involved in almost all policy decisions, and staffed by a cadre of accountants and economists of great ability (including Henry Lang [41]). After his retirement he was particularly involved with the Tasman Pulp and Paper plant at Kawerau which he saw as part of the necessary diversification if New Zealand was to avoid being to over-dependent upon pastoral exports. Ashwin grew up near Thames, joining the Education Department on a cadetship when he was 16, shifting to the Treasury in 1922. He had served in Flanders, catching a bullet which hospitalised him. Had it been fatal, the history of the Treasury may have been very different. Over 18,500 service men were killed during the First World War. Perhaps one of them would have had as big an impact on New Zealand, had he survived.
20. SIR GEORGE DOUGLAS ROBB
Surgeon, Public Health Leader
29 April 1899, Auckland – 28 April 1974, Auckland
Douglas Robb had tuberculosis – a common disease before drug therapies – until he was almost 40. (An elder brother died from the disease in his teenage years). So he did not go to the Great War, but completed his medical degree. From 1923 to 1928 he was in Britain training as a surgeon. He returned when New Zealand surgery was largely a craft, determined to upgrade it to a science (he had an excellent bedside manner). This brought him into conflict with the medical establishment, particularly concerning upgrading the quality of care using medical auditing and postgraduate training. He was sufficiently unpopular that his position of part-time honorary surgeon at Auckland Hospital was not renewed in 1935. In a spectacular reversal of fortune, he joined the Greenlane thoracic unit in 1942 building it up to today’s world-class heart surgery unit. At the same time he became involved in the national debate about the health system, advocating a public health service based on group practices, polyclinics, and six regional health boards with base hospitals, and a national health council. Greenlane was not his only foundational achievement; he helped set up the Auckland Medical Research Foundation in 1956 and played a key role in establishing the medical school at the University of Auckland; he was its first Chancellor in 1961. Described as a ‘persistent dissenter’ and a ‘passionate reformer’ (in his case they were the same thing), he played a major role in bringing the medical profession into the twentieth century.
21. SIR JAMES WATTIE
Businessman in the Food Processing Industry
23 March 1902, Harwarden, North Canterbury – 8 June 1974, Mangateretere, Hastings.
Once, almost every New Zealand household had a vege garden, a few fruit trees and a chook house. A seasonal activity was bottling and making jam. Today any garden is hobby (often organic or for flowers), and most households purchase their vegetables, fruit and eggs. Other traditional household work such as childcare and dressmaking is also outsourced. The work was mainly done in the home by women (men dug the spud patch); the outsourcing, plus the productivity gains from household appliances enabled them to enter paid employment. Those who supplied the goods and services contributed to women’s liberation. Not that Jim Wattie thought like this. There was fruit wasting on the ground around Hastings where he grew up after his shepherd father bought a nearby farm. Canning it enabled sales in stores and to manufacturers – at first in Auckland, later the world. It was a seasonal activity, so off-season he canned baked beans and spaghetti. Seeking the best technology available, he moved into frozen foods; the firm’s skills in promotion and distribution led to Tegel chickens and flour milling, the rew material supplied from throughout the country. An old-fashioned business man who knew his workers personally, he gave much to charity, including medical research; for many years ‘the Watties’ was the premier prize for books. (Today’s successor is NZ Post.) A nationalist, he would have been disappointed when his business was taken over by a global company but the hassled housewife-employee can still find his name in the supermarket.
22. CLARENCE EDWARD BEEBY
Public Servant, Educationalist
16 June 1902, Leeds, England – 10 March 1998, Wellington
‘Beeb’ transformed New Zealand education. Arriving here at the age of four, he got from his Yorkshire family a sense of the tension between inherited culture and colonial adaptation. He studied philosophy, psychology and education at Canterbury University College taking his doctorate in Manchester (and later studying in the US). He became the first director of the NZ Council for Educational Research, catching the attention of the new Minister of Education, Peter Fraser [8], who arranged for his appointment as director of education in 1940. In his twenty-year stint he oversaw the development of preschool services; primary and secondary school curricula; advisory services and new teaching materials for teachers; new multi-purpose schools; and the evolution of technical high schools into tertiary technical institutes; gave greater attention to the education of children with disabilities and in remote rural districts and the Pacific Islands; rejuvenated apprenticeships; and expanded university education to a wider range of students. He wrote for Fraser one of the most noble sentiments in New Zealand’s social policy: ‘The government’s objective, broadly expressed, is that every person, whatever [her or] his level of academic ability, whether he [or she] be rich or poor, whether he [or she] live in country or town, has a right, as a citizen, to a free education of the kind for which he [or she] is best fitted and to the fullest extent of [her or] his power,’ the additions reflect the apology in his 1992 memoir, The Biography of an Idea.
23. SIR KEITH JACKA HOLYOAKE
Pahiatua MP, Prime Minister
11 February 1904, Piahiatua – 8 December 1983, Wellington
‘Kiwi Keith’ Holyoake presided over the post-war boom, as Minister of Agriculture 1949-1957, National Prime Minister in 1957 and 1960-1972, and an effective opposition leader between. His family led a peripatetic life until it settled on a hop, tobacco and fruit farm in Riwaka. Holyoake left school to work on the farm at 12 but continued his education at home with his schoolteacher mother. He won the Motueka parliamentary seat in 1932, to be mentored by Gordon Coates [2], losing it in the Labour landslide of 1938. He won the safe Pahiatua seat in the next election in 1943, retiring in 1977 when he became Governor-General. In the interim he was involved with many farmer organisations. Had he been in parliament in 1940 he may have become second leader of the recently formed National Party. Instead he took over from city-based Sidney Holland, who retired in 1957. He once portrayed his policies as ‘steady as she goes’, capturing his characteristic style of political management, for the longest period of relatively interrupted prosperity in New Zealand’s economic history enabled steady, if unimaginative progress, in many social areas. The last six years of his premiership were more troubled. He reluctantly agreed to the American request to send troops to Vietnam, upsetting the burgeoning youth movement of the 1960s. In late 1966 the price of wool collapsed, the post-war boom came to an end and his ministry struggled with rebalancing the economy, a task left to Rob Muldoon [59], whom he mentored.
24. SIR HUGH JOHN (JACK) ACLAND
Farmer, Chairman of the Wool Board
17 January 1904, Christchurch – 26 January 1981, Mt Peel, Canterbury.
From the early European settlement, New Zealand’s exports (gold rushes aside) were dominated by wool until 1966. Jack Acland, born into the family that had the high country sheep station at Mount Peel, played a key role in the wool industry in the 1930s to 1970s. He became a National Party MP in 1942 (he had been in local politics since 1934), but was given the unwinnable seat of Timaru in the 1946 election after the positions he took were thought more akin to Labour’s. He was elected a growers’ representative on the Wool Board from 1947 to 1973 (chairman from 1960). The collapse of wool prices in 1966 was due to the rise of synthetic fibres. Acland presided over a vigorous response of technological research, innovation, and international marketing. Despite these efforts – and a brief upsurge in 1972 – wool prices never really recovered; the New Zealand economy took a long time to adjust to the collapse of its premier export industry. Because the wool came mainly from crossbred sheep the wool and meat industries were inter-dependent. The intimate nature of the corporatist structure of New Zealand during this period is illustrated by Acland chairing the Wool Board at the same time as his brother-in-law John Ormond [25] chaired the Meat Board. Acland was a man with a genuine concern for the welfare of his fellow man, for the lives of women in the home, and for the idea and practice of the family farm.
25. SIR JOHN DAVIES WILDER ORMOND
Farmer, Chairman of the Meat Board
8 September 1905, Waipukurau – 8 March 1995, Waipukurau.
The introduction of refrigeration in 1882 enabled the export of meat, which became an increasingly important part of New Zealand’s foreign exchange earning. Since 1922 meat exports have been regulated (to some extent) by the Meat (Producers) Board. John Ormond was a member from 1933 – except when he did war service (he won a BEM for gallantry and was wounded in the withdrawal from Greece) – to 1972 (chairman from 1951). Ormond, with deep family roots in Hawkes Bay, was a brother-in-law to Jack Acland [24] who headed the Wool Board. While the two commodities had different challenges, they were interlinked because they mainly came from cross-bred sheep (although beef was also important). Red meats were under threat from white meats (chicken, pork and fish) but there was rising international demand and a need for market diversification, while the critical but increasingly restricted access to the British market (especially after the UK joined the European Union) had to be maintained. Ormond proved to be a formidable and tireless negotiator. The local meat processing industry also proved troublesome, complicated by a diversity of political views that demanded skilful management. Ormond’s mentor was Gordon Coates [2], but his dalliances with various political parties included the possibility of joining Labour. He was fiercely committed to a cooperatively run industry based on the family farm. When the price of wool collapsed those elements, its diversification and openness to technical change, enabled the meat industry to struggle through, although it was never easy.
26. TUPUA TAMASESE MEA’OLE
Samoan Paramount Chief
? 1905, Samoa– 5 April 1963, Samoa.
New Zealanders cannot be proud of their first fifteen years of administration of Samoa, from 1920. Governmental blundering reached its lowest point on ‘Black Saturday’, 28 December 1929, when eleven Samoans and a European constable died during a demonstration welcoming home a political exile. The path to Samoan independence began with the 1935 Labour Government, but the development of the required political institutions (including fair treatment of European settlers) was a slow process with full independence beginning on 1 January 1962, the first such state in the Pacific. Tamasese Mea’ole, had taken the title of Tupua – the paramount chief of the SaTupua clan – when his older brother, Lealofi was shot in the back in the Black Saturday melee. (The other paramount chiefs were from the Malietoa, Mata’afa and Tuimaleali’ifano clans.) He was a fautua (adviser to the administrating authority) through the negotiations. Fortunately the Mau, the political movement of which Tamasese was a leader, had a non-violent philosophy. With the wisdom of the Samoan leadership and of Guy Powles [26] there was much goodwill, which continues to this day. One consequence is that more than 130,000 Samoans (and about the same number of other Pacific Islanders) live in, and are integral members, of New Zealand society, while celebrating their home islands and their culture. Tamasese chose not to be prime minister but was joint first head of state with Malietoa Tanumafili II. Alas he died less than two years after independence.
27. SIR GUY RICHARDSON POWLES
Diplomat, Ombudsman
5 April 1905, Otaki – 24 October 1994, Wellington
Guy Powles’sw father was a sawmiller later becoming a regular soldier who served with distinction in the First World War and as a senior officer in the 1920s. Powles studied law, followed by war service, including at Guadalcanal. Afterwards he joined the diplomatic service serving briefly in Washington. Working for the Far Eastern Commission he visited Japan, to be profoundly affected by its devastation from the atomic bombing. In 1949 he became High Commissioner in Samoa where, with a growing appreciation of Samoan culture and tradition, he established a close relationship with the two surviving fautua, Tupua Tamasese Mea’ole [26] and Malietoa Tanumafili II, to develop a series of constitutional changes that led to the independent state of Western Samoa. Given his heavy involvement it was deemed appropriate to change the high commissioner in the run-up to independence; in 1960 he went to India as High Commissioner. In 1962 Powles became New Zealand’s (and the English-speaking world’s) first Ombudsman, bringing to the office the same ‘fairness, reason and fairplay – with not a little compassion’ which marked his success in Samoa. His approach of being investigative and consultative rather than adversarial, and yet independent, won widespread acceptance of the office. His 1976 recommendations on the NZSIS’s treatment of Bill Sutch [30] precipitated the 1982 Official Information Act. Following his retirement in 1977, having also organised New Zealand’s South Pacific Year of 1971, he maintained an interest in numerous causes; which reflected his humanitarian instincts and interest in international affairs.
28. ALISTER DONALD MILES MCINTOSH
Secretary of External Affairs
29 November 1906, Picton – 30 November 1978, Wellington.
In 1932 New Zealand’s diplomatic service consisted of the High Commission in London and a couple of advisers (Carl Berendsen and Dick Campbell) in ministerial offices. Even relations with Australia, such as there were, operated through London. As secretary of external affairs from 1943 to 1966 Alister McIntosh presided over the development of New Zealand diplomatic service to a wide representation throughout the world, serviced by a career civil service. More important than the institutional arrangements, he, with prime ministers such as Peter Fraser [8] (Mac – as he was universally and affectionately known – also ran the prime minister’s office) evolved an independent approach to foreign affairs in which the diversity of missions showed that New Zealand was no longer dependent upon a single country but would pursue its own interests, judiciously mixing principled stances with a realistic appreciation of the limitations of effectiveness of a small country on the margins of the world. McIntosh took a university degree in history working part-time in the public service (he was a Carnegie fellow in 1932 studying libraries in the US) and joined the prime minister’s department in 1935. In 1966 he became ambassador in Rome – his first appointment to a mission. On retirement he was active in library and broadcasting affairs. While presenting himself of modest talents, he was an excellent administrator and a wise and perceptive strategic thinker, writing in 1943 ‘our rightful place is in the South Pacific paddling our own canoe as best we can.’
29. RT HON SIR THADDEUS PEARCEY McCARTHY
President of the Court of Appeal, Royal Commissioner
24 August 1907, Napier– 11 April 2007, Wellington.
Thaddy McCarthy was an eminent jurist – a ‘plain English’ judge with an outstanding ability to make complex matters understandable . He was President (chairman) of the Court of Appeal (then the highest court in the land) from 1973 to 1976 (and a member from 1963). Perhaps his greatest contribution to New Zealand was chairing seven Royal Commissions (a record for the Commonwealth); three on the State Sector (1961-2, 1968, 1972) and four on Horse Racing, Trotting and Dog Racing (1970), Social Security (1972) , Maori Land Courts (1976) and on Nuclear Generation (1976-78). All were distinguished contributions to public policy but perhaps most notable was his encoding the principles of the social security system, which the Labour government of Michael Savage [1] had instituted in 1938. Following his formal retirement he chaired a number of other agencies including the Press Council (which he helped found) and he was commissioner for security appeals from 1977 to 1994. There were few aspects of New Zealand’s development with which he was not involved. Born in Napier, he wanted to go into farming; but could not afford to so he articled as a law clerk, practising as a lawyer from 1931 before becoming a judge of the Supreme (now ‘High’) Court in 1957. He served in the Middle East and Italy during World War II, including working in the headquarters staff of Bernard Freyberg [10]. It is said he ‘thought of himself as an ordinary man [but] he was an extraordinary man with a common touch’.
30. WILLIAM BALL SUTCH
Public Servant, Public Intellectual
27 June 1907, Southport, Lancashire, England – 28 September 1975. Wellington
Bill Sutch arrived in Wellington at eight months, growing up in a Lancashire Methodist working-class family. He completed a doctorate in economics at Columbia University, returning home through Europe observing the depths of the Great Depression. From 1933 he worked for Ministers of Finance Gordon Coates [2] and Walter Nash. War service, the Ministry of Supply and UNRRA led him to representing New Zealand at the United Nations (1947-1951), where he helped established UNICEF. He returned to be economist and later chief executive of the Department of Industries and Commerce, laying the foundations for the export diversification which followed the wool price collapse of 1966. Near the end of his life he was charged under the Official Secrets Act 1951. Little evidence was provided to the jury (his security files released 25 years later show no significant security concerns) and they acquitted him. From 1964 he was an independent consultant, but continued to play an active role in the public debate articulating in books and lectures the development of a national, rather than colonial, culture. Chairman Thaddeus McCarthy [29] described his submissions to the Royal Commission on Social Security as proposing a ‘minor social revolution’. People were at the core of his vision – children were a key to the future, and he was a vigorous advocate for women’s rights – pursued through an interventionist democratic state, promoting economic activity based on high-quality exports and providing protection and support by means of full employment and public education, health and welfare services.
31. CHARLES ORWELL BRASCH
Writer, Literary Editor, Patron
27 July 1909, Dunedin – 20 May 1973, Dunedin
Although Charles Brasch came from a privileged background, he lost his mother when he was four. He went to Oxford in 1927 and spent the next two decades mainly in Europe and as an archaeologist in Egypt, reflecting a belief that his future was in England with the European tradition. Arriving home in 1946, he established a quarterly journal Landfall, a title reflecting his personal situation as well as echoing the celebrated poem ‘Landfall in Unknown Seas’ by Allen Curnow [34]. For 20 years this meticulous and intelligent editor produced a literary journal of extraordinary quality which was also a forum for critical comment on society and culture. Even today, older readers will cite particular contributions as seminal. Typical of Brasch’s role was pushing Elsie Locke [36] to write with frank honesty about leaving the Communist Party in 1956. A distinguished poet, his standards reflected his belief that New Zealand must adhere to the highest standard of the European tradition, while aiming to establish a worthy New Zealand culture. Landfall depended on – like most literary publications – a subsidy. While the Literary Fund gave regular support, the main source was Brasch’s considerable personal fortune (inherited from his Hallenstein ancestors) which enabled him to edit it full-time. This was also used to support writers and artists and to found fellowships in writing (Burns), music (Mozart) and art (Hodgkins) at the University of Otago – typically anonymously. He left its libraries his rich legacy of books, paintings, and personal papers.
32. HAROLD WILLIAM WELLMAN
Geologist
25 March 1909, Devon, England – 28 April 1999, Wellington
New Zealanders knew they lived in ‘the Shaky Isles’ with volcanoes to boot, but it is only recently that scientists have explained that New Zealand is part of a mostly submerged continent which broke away from Gondwanaland and straddles two clashing tectonic plates. At their interface is the Great Alpine Fault discovered in the early 1940s by Harold Wellman (with Dick Willett, a future director of the Geological Survey); the tradition is that they first found it at Hairy Mary Creek. Wellman had come out from England with his family in 1927. Initially trained as a surveyor, he was left unemployed by the Great Depression and bummed around the West Coast. In the 1930s he joined the Geological Survey at the Department of Scientific Research, which was now identifying the commercial opportunities from New Zealand’s mineral reserves. He transferred to Victoria University of Wellington’s geology department in 1958, where his interests spread from the geology of the West Coast to loess in Manawatu, Maori coastal occupation layers, Antarctic geology, sea-level changes, active faulting, recent crustal movements of the southern North Island, and the origins of the Southern Alps. Realising the importance of the new theory of plate tectonics, he proposed the then revolutionary idea that the horizontal displacement on the Alpine Fault had occurred within the last six million years. Today the coloured map of New Zealand with the Great Alpine Fault and the Hikurangi Trench cutting through is so familiar we may overlook the marvellous scientific effort behind it.
33. ALFRED WILLIAM GALLAGHER
Businessman, Inventor
17 May 1911, Hamilton – 8 August-1990, Hamilton.
Nowadays we talk about ‘innovation’; Bill Gallagher and his family just did it. Their greatest legacy is the electric fence, which has been exported to over 100 countries, adapting the basic technology for local conditions: elephant control in Malaysia, protection of Canadian beehives from bears. The firm even designed an electric fence for snails – to stop the dratted molluscs climbing up and shorting the current. As for many inventions, the idea of the fence was serendipitous; a pesky horse was stopped from rubbing against a car by wiring it up. It took much development (and a change of law, because initially the fences could not be wired to the mains) before the boon to farmers managing their pastures became widely available. Bill Gallagher grew up on a farm. Although he got the idea for the electric fence in the mid-1930s, Gallagher Engineering was not established until 1963. In the interim there were many other inventions, boat building and sailing around the South Pacific. The firm thrived but the upheavals of the 1980s meant its engineering activities were sold off and the group concentrated on power fences (it has since expanded – sometimes by takeover – into other products). Why was it not destroyed by the sharemarket boom and bust of the mid 1980s like Allflex, the equally innovative maker of livestock eartags? The Gallagher Group is a family firm unavailable for takeover by short-term financiers who destroy long-term value. Bill’s family is there for the long haul.
34. THOMAS ALLEN MONRO CURNOW
Poet
17 June 1911, Timaru – 23 September 2001, Auckland.
Allen Curnow is New Zealand’s greatest poet. He began theological training – his father was a vicar – but settled for a BA. In an evolving literary community he began writing poetry, attempting to express an authentic but sceptical New Zealand vision, including the much quoted ‘Not I, some child, born in a marvellous year / Will learn the trick of standing upright here.’ While his introduction to a 1945 anthology of New Zealand poetry was sometimes misread as a narrow nationalist manifesto, it established many of the terms of debate about the history, character, purposes and value of poetry in New Zealand for the rest of the century. Although continuing to write political satire as ‘Whim Wham’, his later poetry turned to probing the relationship between the self and the world, problems of belief and ethics, and the nature of memory, myth, history and language. In 1951, after two decades as a journalist, he was appointed to the staff of Auckland University College. While not a great teacher, his top students found his meticulous analysis of a poem riveting. He continued to write in a long retirement increasingly gaining international recognition. His biographer, Terry Sturm, wrote ‘the two worlds represented by his father and mother – one strongly rooted in New Zealand, the other aware of colonial exile and loss – provided a formative dual influence.’ Curnow succeed in both, here and overseas; he was only the second poet outside Britain to receive the Queen’s Gold Medal for poetry.
35. SIR JOHN ROSS (JACK) MARSHALL
Wellington MP, Trade Negotiator, Prime Minister
5 March 1912, Wellington – 30 August 1988, England (suddenly, he was resident in Wellington)
In 1933 Gordon Coates [2] suggested that Britain would be unable to take unlimited quantities of New Zealand produce; it began restricting access after the Second World War. Even though General de Gaulle famously said ‘Non’ to the British application to join the European Economic Community in 1963, thoughtful New Zealanders knew that eventually Britain would form very close links with the rest of Europe. Their response – Bill Sutch [30] was notable here – was a diversification of export products and markets plus an intensive effort to retain the British market for as long as possible. As Minister for Overseas Trade, Jack Marshall was the key politician negotiating the New Zealand Australian Free Trade Agreement in 1966 and the concessions for New Zealand when Britain joined the European Community in 1973. New Zealand did better than Australia over the EC in part because of Marshall’s outstanding negotiating skills. He took over from Keith Holyoake [23] in 1972 an attempt to renew the 12-year National Government, but lost the election at the end of the year. As premier he adopted Owen Woodhouse’s Accident Compensation Scheme [37] and Thaddeus McCarthy’s recommendations on Social Security [29], arguing that National Party was the party of social welfare. Britain was already a diminishing market for New Zealand in 1973, but the public thought Mummy was rushing off with a wicked Continental gentleman. Today there are at least five more important overseas markets but sentiment and history mean that Britain and New Zealand remain cousins.
36. ELSIE VIOLET LOCKE
Peace Worker, Children’s Writer, Historian, Feminist
17 August 1912, Waiuku, South Auckland – 8 April 2001, Christchurch.
New Zealand’s nuclear-free policy grew out of ordinary citizens’ demands. Christian Pacifists were conscientious objectors in both great wars, but it was nuclear weapons (and, later, the Vietnam War) which turned the peace people into a mass movement. Elsie Locke was a typical member, working at a host of activities, encouraging the young. But she was exceptional in the length and depth of her commitment. A second generation feminist, Elsie Farrelly was born in Waiuku, a South Auckland settlement near a Maori kainga. She wanted to write; her large corpus includes children’s books (often with an environmental slant) and histories (she was scrupulous about the treatment of Maori; some whanau call her ‘Aunty’); often both. After a part-time university degree she was active in the Working Women’s Alliance and the formation of the Family Planning Association in the 1930s, joining the Communist Party, which she believed was committed to peace. She left after the 1956 Hungarian Uprising showed it was not, participating in the newly established CND where she played a low-level, but very active, role (she did not want it associated with even ex-Communists). A keen tramper, she – typically for those in the peace movement – also pursued civil liberty, community, environmental and women’s concerns. She had four children and was hospitalised with TB. Christchurch named the park next to its main city pool after her; she biked there daily for a swim almost to the end. There is a bust of Elsie outside the Christchurch Arts Centre.
37. Rt HON SIR ARTHUR OWEN WOODHOUSE
President of the Court of Appeal, Royal Commissioner
18 July 1916, Napier –
Owen Woodhouse is best known for chairing the Royal Commission on Personal Injury (universally known as the ‘Woodhouse Commission’) which recommended fault-free treatment and compensation for those suffering an accident. Especially because of this report, and his deliberations on matrimonial property, he is seen as an inventive Judge whose name has throughout the world been identified with enlightened reform. Born in Napier, he, like many lawyers of his generation, trained part-time (in Auckland) and did war service, including captaining a torpedo boat, liaising with the Yugoslav partisans, and acting as a naval attaché to the British Embassy in Belgrade, experiences which gave him an independence and confidence in himself and a faith in ordinary New Zealanders. His post-war legal career developed with a commitment to ‘decide cases upon the law as it has been developed and made applicable here for contemporary New Zealand needs and conditions.’ In 1973 he became a judge of the Court of Appeal (then the highest court in New Zealand) and its President (chairman) from 1981 to 1986. He also chaired an Australian enquiry recommending the ending of disparities between the way that victims of accident and sickness should be treated. He said ‘New Zealanders like to think they are good practical people, as they are, but I think they are also a caring community, though they don’t always say much about that. That scheme I tried to put together pulls those two qualities together.’
38. SIR CHARLES ALEXANDER FLEMING
Natural Scientist, Conservationist
9 September 1916, Auckland – 11 September 1987, Wellington
New Zealand faces an ongoing tension between preserving its unique natural environment and transforming it for economic development. In the nineteenth century the second predominated with a great loss of biota and native locations. Popular and expert movements to protect the environment developed from the beginning of the twentieth century. Charles Fleming, one of New Zealand’s most distinguished environmental scientists, was also active in the conservation movement. He grew up surrounded by scientists, books and collections of natural history; in his teenage years he participate in some major collecting expeditions including one to the Three Kings Islands; later he would visit the Chatham Islands and the Auckland Islands where he did his war service. After arts and science degrees – his masters thesis was on birds – he joined the Geological Survey. Although his research on both land and sea was primarily on the origins of New Zealand’s flora and fauna, he also investigated iron-sand deposits for commercial use. From the 1970s he increased his conservation efforts in the Fauna Protection Advisory Council, the Environmental Council, and the National Parks Authority as well as in the non-government Native Forest Action Council and a wildlife sanctuary. He protested against raising Lake Manapouri to provide more electric power, His ability to cross interdisciplinary boundaries and to communicate his findings well beyond the scientific community, and his first-hand knowledge of many isolated areas, together with his industrious research and numerous publications, made him an accomplished advocate for the environment he so greatly loved.
39. ARTHUR LESLIE LYDIARD
Athletics Coach, Fitness Pioneer
6 July 1917, Auckland– 11 December 2007, Houston, Texas.
On a marvellous day (2 September 1960) New Zealanders won gold medals for the 800m and 5000m at the Rome Olympics. Peter Snell and Murray Halberg became national celebrities; the man who trained them changed New Zealand. The key to Arthur Lydiard’s scientific training system was an aerobic base, strength from running over hills or sand dunes, and speed from repeated short fast runs. For a while other New Zealand male and female athletes prospered. But training methods cannot be patented and New Zealand’s edge was lost as Lydiard’s approach was adopted throughout the world (for other sports as well). Today’s distance running is dominated by African athletes who, in effective, train on Lydiard principles. Meanwhile he helped found the Auckland Joggers’ Club, beginning a movement for mass fitness, attracting those with heart problems, who unprecedentedly were encouraged to ‘run for their lives’, an activity which has become world-wide. The joggers who populate the streets are partly reflecting the movement to cities with its more sedentary life, but they are also inspired by Lydiard. While he was not a great athlete himself, Lydiard made major sacrifices to pursue his chosen profession, once running daily as a mailman and – more controversially – working for a tobacco company. Sport was still largely amateur in those days. Later he practised as a coach overseas as well as occasionally coaching New Zealand teams. Lydiard was considered too uncompromising to play a significant administrative role in his chosen profession; pioneers often are.
40. SIR LLOYD GEORGE GEERING
Religious Scholar, Public Intellectual
26 February 1916, Rangiora –
Lloyd Geering is New Zealand’s leading public intellectual and religious thinker. Graduating from the University of Otago as a Doctor of Divinity, he first served as a parish minister in the Presbyterian Church, before turning to theological teaching in 1956, becoming Professor of Religious Studies at Victoria University of Wellington in 1971. In 1967 he was found not guilty in a heresy trial brought by the conservative members of his church, defending himself with a speech that Martin Luther would have approved. He is a radical (some would say ‘secular’) Christian; among Geering’s many provocative publications is Christianity without God. He rejects Christian (and Muslim) fundamentalism, but he also set a standard for all New Zealanders by demonstrating that everyone had the right to follow their own religious conscience. In 1951 82 percent of the population belonged to the big four churches (Anglican, Presbyterian, Catholic and Methodist); in 2006 it was 39 percent. Many give no religious status, but a multitude of smaller religions are flourishing, and the bigger churches tolerate greater diversity of belief. After his formal retirement in 1983, Geering continued active teaching and thinking. In 2010 at the age of 92, he gave four lectures which were published as a book, challenging (yet again) a part of the Bible, for Psalm 90 says the normal life span is ‘three score and ten’ years. In 2006, 8.6 percent of the population were over 70, although not all are as active as he is.
41. COLIN JOHN McCAHON
Artist
1 August 1919, Timaru – 27 May 1987, Auckland
Many visiting art experts remark on the extensive use of words in New Zealand paintings, one of the many innovations of Colin McCahon who shaped how our artists paint and how we see the world. In 1946 he painted biblical scenes in a New Zealand landscape rather than an Italian renaissance one. (Charles Brasch [31] may have mentioned that Palestine looked like Central Otago.) Today we can see New Zealand landscapes as ‘McCahons’. Following a 1952 trip to Australia sponsored by Brasch, he experimented with cubism; now it is widely accepted. After a trip to America in 1958 he painted on unstretched canvases, including the powerful Northland Panels. He was influenced by sign-writing and comics – later he used darker tones; and he painted words! Spiritual concerns were central to his work – his last paintings were words from the troubling Ecclesiastes scattered through the sky like stars, with a sliver of earth in the corner reflecting our insignificance. Yet he was never readily or quickly accepted. His first substantial painting was refused by the local arts society for an exhibition; other young painters withdrew their work in support. Rejection of McCahon’s innovations was common, although he also had a group of discerning supporters. When his work attracted derision, he was deeply hurt – but he continued to keep to his vision, sacrificing himself and his family for his art. Eventually his work attained international standing; eminent American art historian Thomas Crow brackets McCahon with contemporary American greats Jackson Pollock and Mark Rothko.
42. HENRY GEORGE LANG
Secretary of the Treasury
3 March 1919, Vienna – 17 April 1997, Wellington
New Zealand has been blessed with a fine public service notable for its competence, political independence and loyalty. Heinrich Georg Lang was an outstanding example of this tradition. He arrived in New Zealand as a refugee from Hitler in 1938 (remaining an opponent of authoritarianism for the rest of his life). He quickly adapted to his chosen country, including anglicising his name to Henry and going tramping. He took a number of manual jobs becoming a foreman, graduated with a degree in philosophy (later adding a Diploma in Public Administration) and joined the public service in 1946 after a period of war service in the air force. Eventually he settled in the Treasury as a protégé of Bernard Ashwin [18], like him having considerable influence before he became its Secretary in 1968, where he built up a cadre of officers in the best public service tradition, while presiding over, and requiring, a lively debate about the advice being tendered to the government. From the 1950s he supported economic liberalisation, but the greater challenge was managing the adaption of the economy to the structural fall in the wool price in December 1966. He retired in 1977 but continued to be involved in the policy debate, while actively promoting the arts (and continuing skiing). New Zealand took about 1000 Jewish refugees in the 1930s; Lang was only one of many who made significant contributions to New Zealand’s development; what if we had taken 2000?
43. SIR EDMUND PERCIVAL HILLARY
Mountaineer
20 July 1919, Auckland – 11 January, 2008, Auckland
While Ed Hillary is internationally known, with Nepali Tenzing Norgay, as the first to climb Mount Everest, his iconic status in New Zealand arises from the grace with which he approached his fame. ‘The media have classified me as a hero, but I have always recognised myself as being a person of modest abilities. My achievements have resulted from a goodly share of imagination and plenty of energy.’ To which can be added the intelligent application of practical manual skills, his decency and his commitment to good works, attributes also greatly valued by New Zealanders. Hillary grew up in rural Auckland; at first he was a beekeeper, but he was always mountaineering, even when he was in the RNZAF during the war. In the 1953 British expedition to Everest, he and Tenzing ‘knocked the bastard off’. For the rest of his life he made his living largely from expeditions and writing highly readable books with a spare, understated, and often humorous style. In the 1955 Commonwealth Trans-Antarctic expedition, Hillary’s team was the first to reach the South Pole overland since Robert Falcon Scott’s tragic journey. Shortly after, he established the Himalayan Trust, which built schools, airfields, bridges, hospitals and clinics and restored Buddhist monasteries in Nepal. The Sherpas called him Burra Sahib (‘big in heart’). He was the New Zealand high commissioner in Delhi and to Kathmandu from 1985 to 1989. New Zealand’s outbreak of grief at his death has been compared to that which occurred when Norman Kirk died [46].
44. SIR FREDRICK RICHARD ALLEN
Rugby Player & Coach
9 February 1920, Oamaru –
Sportswriter Don Cameron described Fred Allen as ‘THE man of New Zealand rugby’. He missed playing a lot of rugby because of the Second World War, fudging his age to join up in 1940, and serving in the Pacific and Italy where he was wounded, missing death by inches. At the war’s end he was commandeered by Bernard Freyberg [10], to join the famous ‘2NZEF Kiwis’ team. He was first picked for the All Blacks at the age of 26, captaining in all his 26 games, including the 1949 tour to South Africa, notorious among the game’s lovers for the All Blacks scoring more tries but losing all four tests, and its dissenters for going there for the second time without Maori in deference to apartheid. Disillusioned – dropping his boots into the Indian Ocean on the way home – Allen turned to coaching with the extraordinary record of Auckland’s 25 consecutive defences of the Ranfurly Shield from 1960 to 1963, and 14 wins, no losses with the All Blacks in 1966 and 1967. Later he became president of the Auckland Rugby Union, although the Wellington hierarchy never warmed to him. Despite his business activities, including the Fred R. Allen range of women’s fashion , his nickname ‘The Needle’ reflected his disciplined coaching. Asked to compare Auckland shield sides he said the recent ones were ‘fitter and stronger than we were in the 60s. They would win, but I wonder whether they would have had as much fun as we did.’
45. BRUCE EDWARD GEORGE MASON
Playwright
28 September 1921, Wellington – 31 December 1982, Wellington
Bruce Mason wanted to be a professional playwright. There was a long tradition of theatre in New Zealand, often amateur, sometimes professional visiting companies, presenting foreign and well-established plays. But professional local theatre with plays about New Zealand issues? Surely not? Today every major centre has at least one professional theatre, and they put on New Zealand plays – perhaps beyond Mason’s wildest dreams, although he was a founder of Downstage. He wrote solo plays, like his best known The End of the Golden Weather, for the practical reasons that they required minimal resources to produce and could be easily taken on tours. Golden Weather (written in 1959 and revised in 1970, later turned into a film by Ian Mune) reflects his childhood on Takapuna beach. (He said ‘This huge panorama has formed a backdrop to my life. No anguish but was not subtly redeemed by it: no joy not deepened by it’.) Other plays reflected Maori-Pakeha themes stimulated by his editorship of Te Ao Hou, a magazine about Maori issues. He wrote satirical pieces on such topics as a New Zealander returning from overseas to a stifling suburban life, New Zealand society crushing a different immigrant culture, and New Zealand’s jingoism, His works, though, were also imaginative, like his last (35th) play Blood of the Lamb. One of its characters observes, ‘Well, I guess that’s the most we can expect from this time and clime.’ With Mason we got better.
46. SIR KEITH SINCLAIR
Historian
5 December 1922, Auckland – 20 June 1993, Auckland
Historians can make a profound difference. No one has contributed more to the study of history than Keith Sinclair, professor of history at the University of Auckland, whose colleagues and students are among the fine group of professional historians who have developed the understanding of our history which so influences all New Zealanders. A charismatic lecturer and a gifted, prolific and accessible scholar, his reputation spread far beyond New Zealand’s universities. He wrote many books, most notably his best selling Penguin History of New Zealand, but more typical are those which involved a close analysis of archives, covering the racial troubles of the nineteenth century and two major biographies, of William Pember Reeves and Walter Nash. (He also wrote an autobiography, Halfway Around the Harbour.) Sinclair was the founding editor of The New Zealand Journal of History, and proposed The Dictionary of New Zealand Biography. He was born and grew up in Auckland, and spent much of his life in Auckland – he served overseas during the Second World War – completing his BA and going on to a PhD at the Auckland University College. Asked about his special interests when applying for training college, he was laughed at for saying ‘reading New Zealand literature’; the interviewing panel thought there was none. As well as his histories he wrote a children’s book and published many poems. Despite calling New Zealanders ‘Prussians of the Pacific’, his poem ‘The Bomb is Made’ is an integral part of our peace tradition.
47. NORMAN ERIC KIRK
Christchurch MP, Prime Minister
6 January 1923, Waimate – 31 August 1974, Wellington
Norm Kirk was prime minister for less than two years (1972-1974). But the development of the Labour Party under his leadership reflected an evolving New Zealand; he inspired Labour politicians through to the Clark government (1999-2008). Kirk was particularly committed to the welfare state and social justice, to an independent foreign policy, to the arts and education, and to harmonious race relations. His support for opening up the economy to the world was almost a change in direction, but it was in a context of ‘nationhood’, with a more inclusive vision than traditional chauvinism. People wondered whether he had Maori ancestry. He had not; he was just a great human being, spontaneously reaching out as portrayed in the famous photo with the boy on the Waitangi marae. Kirk was born in Waimate, grew up in straitened circumstances, even building his own house in Kaiapoi, where he became mayor at 30. He had limited formal education but his natural intelligence, his energy, and a drive for self-improvement, combining the charisma of Savage [1] with the political astuteness of Fraser [8] and the vision of them both, quickly marked him as a star when he entered parliament in 1958. His blind spot was a failure to recognise the increasing importance of women in public life; perhaps they would have made a lesser contribution to Labour had he lived longer. Even so, the outbreak of nation-wide grief at ‘Big Norm’s’ death has been compared to that which occurred when Savage died.
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48. SONJA MARGARET LOVEDAY DAVIES Ngai Tahu
Unionist, Feminist
11 November 1923, Upper Hutt – 12 June 2005, Wellington
Sonja Davies was a second-generation feminist who affected many aspects of New Zealand life including human rights, healthcare, and early childhood education; she also campaigned in the peace and anti-apartheid movements. No one has had more impact on women’s working conditions. Sonja Vile was born in Upper Hutt to a solo mother. (She did not discover that she had Ngai Tahu ancestry until she was 46.) Leaving home at 16, she became a nurse, contracting tuberculosis in her workplace (and also suffering sexual harassment). She was a solo mother herself for a time but married Charlie Davies, a union organiser, taking over his job when ill-health forced him to retire. She worked her way up through the union movement to become (the first woman) vice-president of the Federation of Labour in 1983, retiring in 1987. Earlier she had steered through the adoption of the Working Women’s Charter; the most contentious of its 16 points was the right to safe abortion. She spent 1987 to 1993 as a member of parliament opposing the economic policies of the Fourth Labour and National governments, a time she describes as the ‘worst years of my life’. In retirement she kept fighting for her causes as long as her health allowed. Her autobiography Bread and Roses was turned into a film by Gaylene Preston. There is an annual Sonja Davies Peace Award and a kowhai tree with a plaque honouring her in Parliament grounds, while the Labour Caucus Room in the building bears her name.
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49. IAN ROBERT CROSS
Journalist, Novelist
6 November 1925, Masterton –
The media is such a dynamic fluid complex and fragmented phenomenon that it is difficult to represent it by a single portrait. Yet whether it was the radio from the 1930s, television from the 1960s, or newspapers from as far back as we can remember, it has shaped New Zealand in the way it thought about itself and what it knew. Ian Cross’s life involved various aspects of it. He worked as a journalist in the 1940s and 1950s (later switching sides to work in public relations), was a television commentator in the 1960s and 1980s, edited The New Zealand Listener from 1973 to 1977, and was chief executive of Television New Zealand from 1977 to 1986. when TV3 began competiting against it. Cross was born in Masterton and grew up in Wanganui with an ambition to be a novelist. His writing – he also served on the Indecent Publications Tribunal and the Arts Council – includes two memoirs and four novels, most notably the much praised The God Boy. He abandoned fiction in 1961, because he found it difficult to make a living. ‘I’m married and have three children [there was a fourth on the way] … like eating and drinking, and a reasonable degree of comfort, and must provide these and other satisfactions for five people … Nobody asked me to be a writer and I enjoy being a father much more.’ In 1993 he advised aspiring writers to ‘Leave New Zealand as fast as you can.’ Many stayed on.
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50. JANET PATTERSON FRAME
Writer
28 August 1924, Dunedin – 29 January 2004, Dunedin
Janet Frame overcame poverty, insecurity and exceptional shyness (which was cruelly mistaken for schizophrenia) in order to write. Yet her intelligence, her verbal dexterity, her imaginative powers and her cussed determination produced outstanding and internationally recognised novels, short stories, poems and three autobiographies. She came to the attention of the wider public with her autobiographical writing, which was filmed by Jane Campion as An Angel at My Table. Because her father was a railwayman, Janet moved around in her early childhood, eventually settling in Oamaru, her ‘kingdom by the sea’. Success at school did not translate into her becoming a teacher, and she ended up under psychiatric care, some of which would be judged barbaric today. The success of her first book persuaded her doctors not to proceed with a pre-frontal lobotomy. She lived a peripatetic life, living overseas and in a variety of New Zealand towns and sometimes cities, supported by the literary community (including Charles Brasch [31], Frank Sargeson, Karl Stead, Denis Glover and Michael King) despite its fractious nature. She showed other New Zealand writers that it was possible, with persistence, to push boundaries and to remain true to one’s own vision. Widely respected and admired abroad, today’s writers have been influenced by her, and there is now a scholarly industry devoted to her work. In the long run, she is likely to have a similar role and status in New Zealand as Katherine Mansfield, but she was based here.
51. DAME JOAN METGE
Anthropologist, teacher
21 February 1930, Auckland –
Joan Metge is an outstanding example of the many Pakeha New Zealanders who have helped non-Maori to come to terms with Maori. It was not so much of a problem before 1950, because most Maori lived in rural areas isolated from Pakeha. When they began arriving in the cities, cultural inter-relations became more common and intense. Joan’s life follows that story. She was born and grew up in Auckland with no Maori contacts. She was ten when her family moved to Pukekohe where a warm friendship with a Maori classmate revealed ‘a whole hidden Maori world that Pakeha didn’t know about, that I wanted to explore’. She trained as an anthropologist, doing her first fieldwork in in the Far North and Auckland, tracing the shift from country to city in her first book A New Maori Migration. Her ten books are the printed record of all her teaching in which she has shared the knowledge and insights entrusted to her by Maori mentors, and which highlight the rewards of cross-cultural dialogue. Fittingly The Treaty of Waitangi Companion ends with a quotation from her latest book Tuamaka: the Challenge of Difference in Aotearoa New Zealand, published when she was 80. It advises leaving Hobson’s’ ‘He iwi tahi tatou’ untranslated because of the complexities in its meaning, ‘while all of us continue to debate and work out how to relate to each other, with the Treaty as our guide.’
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52. RANGINUI JOSEPH ISAAC WALKER Whakatohea
Kaumatua, teacher
1 March 1932, Waiaua, Opotiki –
Rangi Walker has been deeply involved in the development of Maori following their migration to cities after the Second World War. As chairman of the Auckland Maori District Council from 1974 to 1990 (he was secretary from 1969), he played a pivotal role in the adaption of Maori and their institutions to urban life, including being associated with and influenced by – but not a member of – Nga Tamatoa, the new assertive generation of young Maori of the 1970s responding to Maori urbanisation. But he also interpreted Maori ways and concerns to the non-Maori, notably in a series of columns in The Listener (some of which were published in Nga Tau Tohetohe) and in other books, notably Ka Whawhai Tonu Matou: Struggle Without End, which provides Maori view of New Zealand’s history. He has also written the definitive biography of Sir Apirana Ngata [3], He Tipua: the Life and Times of Sir Apirana Ngata. An anthropologist with a doctorate, he has published numerous papers on Maori education and organised several Maori leadership conferences on urbanisation, gangs, Maori land, Maori fisheries, Maori educational development, and Maori representation in Parliament. Despite an active life in Auckland where he lives, he is closely involved with his iwi Whakatohea of Opotiki (where he was born). He is also of Lebanese descent. An emeritus Professor of the University of Auckland, he also worked as a primary school teacher and at the Auckland Teachers College.
53. HONE PAPITA RAUKURA (RALPH) HOTERE Te Aupouri
Artist
11 August 1931, Mitimiti, Northland –
While some Maori preserved and developed traditional Maori arts and crafts (Hetet [11]), others seized on European art forms such as writing, music (Morrison [53]) and painting, creatively weaving into them Maori traditions and perspectives, but also breaking out in new directions which greatly influenced Pakeha artists too. Ralph Hotere is an outstanding example of the post-war Maori renaissance of artists who migrated from the countryside into the cities. Born just north of the Hokianga Harbour, he went to Teachers’ College and became a schools’ art advisor. In 1961 – he was 30 – a scholarship enabled him to study in London and visit Europe, including the Sangro War Cemetery, where his brother, who fought in the Maori Battalion in Italy, is buried. He returned home in 1965 to produce stunning series after stunning series. Many reflect political topics and Maori concerns; many are innovative in their use and treatment of materials notably metal for ‘canvases’ and car enamels for paint; some engage with New Zealand literature. They can be ironic but all are about religion, spirituality, silence and beauty. Often they involve an imaginative use of Maori ideas or words. It is said he made black a respectable colour – sometimes the only colour in his works. Hotere settled in Aramoana near Dunedin (where he protested against the aluminium smelter which was never built – some of those works are in aluminium frames), but he worked all over New Zealand and exhibited all over the world.
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54. SIR HOWARD LESLIE MORRISON Te Arawa
Popular Singer
18 August 1935, Rotorua – 24 September 2009, Rotorua.
New Zealand’s early popular music came from Britain, although other migrants added to it. From the 1920s, popular American culture – especially film and music – had an impact while, as they urbanised, Maori contributions became prominent. (The Maori Battalion returned with a rich collection of Italian songs.) Legendary Howard Morrison – he was part Irish and Scottish – was born in Rotorua, then a village of 6500 souls. He grew up in a rural environment – except for a brief stint at Te Aute College near Napier (20,000) and died in a Rotorua of 55,000. In between, he toured New Zealand and the world. He first came to national prominence as the leader of the Howard Morrison Quartet which performed foreign songs adapted and interspersed with New Zealand material and approaches. Some were subversive, ‘The Battle of the Waikato’ is about the New Zealand Wars from a Maori perspective; ‘My Old Man’s a Dustman’ got changed to ‘My Old Man’s an All Black’ (Morrison’s father was a Maori All Black) with the line ‘There aint no horis in the scrum’ referring to the exclusion of the Maori from rugby tours to South Africa. Front-stage they built the audiences, back-stage the infrastructure required for indigenous popular music. After the quartet broke up, Morrison continued to perform solo, famously combining‘How Great Thou Art’,with ‘Whakaaria Mai’ at a 1981 Royal Command Performance. Today it is almost a national hymn, and a sign of how in a secular society Maori have maintained a spirituality.
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55. DAME ALISON MARGARET HOLST
Cook
1 February 1938, Dunedin –
‘From foreigners with their unintelligible cooking … defend us’ was the ironic prayer from the early 1950s of M. K. Joseph, a soldier who had served in Italy. After the cuisine revolution, it would be rare for even the plainest meal to have no ‘foreign’ ingredient; Continental and Asian style meals are common. One of the leaders of the revolution was first chosen because she was conservative. Born Alison Payne (her diva sister Patricia says she cooks better than Alison sings), she graduated from, and taught in, the Otago School of Home Science. Her television career as a cook started in 1965, to offset ‘Galloping Gourmet’ Graham Kerr, whose approach was thought to be out of place in a home kitchen. Four million copies of 100 plus cookbooks followed, with ‘everyday food’ – nutritious, safe, affordable, time-efficient and practical, its ingredients available from local shops; a boon to the busy housewife, now probably in the paid workforce. The most significant food-writer in New Zealand over the past four decades, Holst’s recipes have evolved to suit new kitchen equipment, newly available imported foods, especially condiments, and new knowledge of nutrition. Today cooking has its practical side and its hobby side, for many men and women like to serve a sophisticated meal for the pleasure of doing so. Many more go to restaurants which offer a wide variety of menus, based on fresh produce with matching wine. We have moved from dull uniformity to a celebration of variety, just as our food has.
56. SIR RONALD ALFRED BRIERLEY
Businessman
2 August 1937, Wellington –
After the war many New Zealand businesses were profiting comfortably, hiding behind external and internal protections and subsidies provided by the government, so they did not bother to explore new markets nor to pursue efficiency. Sometimes the firm founder retired leaving a generation which had neither his energy nor flair. ‘Corporate predator’ Ron Brierley raided companies whose assets were not generating sufficient profits. Reorganisation ‘unlocked value’ which frequently meant the stripping out of underutilised assets and redundancies in low productivity divisions. The business establishment hated Brierley, for their comfortable directorships were under threat from this bumptious young man. Many took action to protect themselves; some even improved their firm’s performance. Had there been no Brierley in the 1960s and 1970s, business would have found it much harder when the protection was removed the 1980s. Brierley grew up in Wellington, not even completing an accounting qualification – although he showed a mastery of company accounts – and founded Brierley Investments Limited in 1961. By 1981 the conglomerate was one of the largest companies in the New Zealand sharemarket. His investing strategy was actually quite cautious; BIL was slow into the sharemarket boom of 1985-87, avoiding the collapse after the October 1987 sharemarket crash experienced by many investment companies which did not do as much homework – but only by a ‘gnat’s tit’. But there were not the same takeover opportunities after 1990; without protection businesses were leaner and meaner. BIL became an ordinary investment company and Brierley stepped down.
57. SIR EDWARD TAIHAKURIE DURIE Jnr Ngati Raukawa, Ngati Kauwhata. Ngati Rangitane
Chairman of Waitangi Tribunal
18 January 1940, Fielding –
Eddie Durie was the first Maori judge of the Maori Land Court (from 1973), its first Maori Chief Judge (1981-1998) and the first Maori judge on the High Court (1998-2004). But his singular importance to the development of New Zealand is that from 1981 to 2000 he was (second) chairman of the Waitangi Tribunal, New Zealand’s ‘truth and reconciliation’ commission. Astute and creative, he transformed the Tribunal from a cultural sideshow to one of the central institutions for remaking Maori policy, especially after 1985 when the Tribunal’s scope was extended back to 1840. His lucid reports brought into prominence Maori perspectives in a multi-cultural framework, confronting all New Zealanders with the manifest wrongs of the past. He held Tribunal hearings on the marae increasing its sensitivity to Maori customary practices (kawa). Durie wrote there was a need to ‘move beyond guilt [i.e. the issue of the Crown’s wrongdoings and Maori grievances] and ask what can be done now and in the future to rebuild the tribes’, which he saw as a prime obligation under the Treaty of Waitangi. This key shift in approach paved the way for the settlements with iwi that began in the 1990s. In 2009 he chaired the Ministerial Taskforce on the Foreshore and Seabed Act, another Maori grievance. Durie grew up in the Manawatu and went to Te Aute College (as did Ngata [3] and Morrison [54] ); after graduating with arts and law degrees he practised as a lawyer in Tauranga, specialising in Maori land law.
58. SANDRA LORRAINE CONEY
Feminist
22 October 1944, Wellington –
Sandra Coney is probably New Zealand’s best-known representative of third-wave feminism which has so dramatically changed women’s lives. In 1972 she was one of the founders and first editor (to 1985) of Broadsheet, the monthly magazine which supported the progress of women (especially vigorously supporting Maori women). Then there was no equal pay for the same job nor women judges, only four women members of parliament, child care outside the family was rare, sexual harassment in the workplace was tolerated, lesbians were in the closet, and 30 percent of the (market) labour force was female in 1971 (it was 47 percent in 2006; in 1936 it was 22 percent). To describe oneself then as ‘Ms’ was an act of aggression. A particular concern was women’s health – the Contraception, Sterilisation, and Abortion Act was passed in 1977. Ms Coney, with Phillida Bunkle, wrote the ‘Unfortunate Experiment’ which precipitated the Cartwright Commission leading to better cervical health care and institutionalised informed consent for everyone. Sandra Pearce was born and grew up in Auckland. Like many of her generation she first went to Teachers College, moved on to university but it proved difficult because there were no creche facilities for her children; the university council rejected women’s demands for one. As in the case of other makers of New Zealand, many of the radical concerns of her youth are now accepted by almost everyone. More recently her political activities have extended to the environment; she represents Waitakere on the Auckland Council.
59. SIR ROBERT DAVID MULDOON
Auckland MP, Minister of Finance, Prime Minister
25 September 1921, Auckland – 5 August 1992, Auckland.
Rob Muldoon had the misfortune to take over the finance portfolio in early 1967 shortly after the long-term collapse of wool prices, struggling with the consequence throughout the following 17 years – except 1972-1975 when his party was in opposition. The collapse of a major export sector – wool plus the joint-product of sheep-meats were over half of export revenue – required a major economic adjustment. Rather than addressing it, Muldoon permitted inflation, shifting the real income reductions onto those whose savings were devalued. His mentor was Keith Holyoake [23], but his economic management became increasingly erratic and opportunistic, as with the major energy-based projects (Think Big) which left the financial risk with the public purse. Muldoon was an only child, with a permanently hospitalised father, hiding his private shyness by an aggressive and arrogant public persona, much disliked – from those who opposed his backing of the 1981 Springbok Rugby Tour to the new private enterprise sector which thought he favoured old interests. He did; his political survival depended upon them. But he also saw himself passionately defending the New Zealand values with which he had grown up, derived from the hardship of the Great Depression, the camaraderie of war service, and the opportunities which enabled him to train as an accountant in London. He believed in the importance of social cohesion, and yet was the most divisive premier in New Zealand’s history, as he tried to prevent social and economic change. When Muldoon left office, the pent-up pressures exploded into Rogernomics [60].
60. SIR ROGER OWEN DOUGLAS
South Auckland MP, Minister of Finance
5 December 1937, Auckland –
For 50 years, the shadow of the 1930s Great Depression dominated New Zealand’s economic management. Roger Douglas was the first Minister of Finance to be born after it. In a third of the time of his predecessor, Robert Muldoon [59], his stewardship transformed the economic mechanism, abandoning the controls which had been built up since the Slump and intensified by Muldoon. So he quelled inflation and increased economic flexibility. But to do this he had to abandon fairness. The new aim was to eliminate ‘privilege’, the advantages which came with the old system’s controls. Douglas was privileged. His grandfather and father had held safe Labour seats. Trained as an accountant, Douglas himself held a South Auckland seat for 21 years. The ending of one privileged group created another, even allowing for those who committed kamikaze in the sharemarket boom and bust of 1986-7. The new wealthy were different from their predecessors. Instead of spending quietly, many flaunted their wealth; even charitable contributions – and there were many generous ones, as the state reduced its patronage – were no longer mainly anonymous. Yet the changes did not improve economic performance, precipitating New Zealand into a seven-year recession from 1986, the longest post-war stagnation (thus far); in four years almost half the labour force became unemployed. Douglas argued for more change, but the public turned from ‘Rogernomics’, although they remained uncertain as to which of the old values and ways they wanted to retain and how to adapt them for the new conditions.
ENVOY: YOUR MUM AND DAD
New Zealanders’ Mothers and Fathers
DTE: 4 April 1919, Sheffield, England – 6 November 2005. Christchurch
HSPE: 12 July 1918, Trentham – 29 April, 2000, Christchurch
While there are New Zealanders who made an exceptional contribution to the making of New Zealand or who illustrate exceptional forces for change, all the individuals who lived through the period made a contribution and collectively had more impact than any single New Zealander, or even 60 of them.
37. Rt HON SIR ARTHUR OWEN WOODHOUSE
President of the Court of Appeal, Royal Commissioner
18 July 1916, Napier – (15 April 2016, Auckland)
Owen Woodhouse is best known for chairing the Royal Commission on Personal Injury (universally known as the ‘Woodhouse Commission’) which recommended fault-free treatment and compensation for those suffering an accident. Especially because of this report, and his deliberations on matrimonial property, he is seen as an inventive Judge whose name has throughout the world been identified with enlightened reform. Born in Napier, he, like many lawyers of his generation, trained part-time (in Auckland) and did war service, including captaining a torpedo boat, liaising with the Yugoslav partisans, and acting as a naval attaché to the British Embassy in Belgrade, experiences which gave him an independence and confidence in himself and a faith in ordinary New Zealanders. His post-war legal career developed with a commitment to ‘decide cases upon the law as it has been developed and made applicable here for contemporary New Zealand needs and conditions.’ In 1973 he became a judge of the Court of Appeal (then the highest court in New Zealand) and its President (chairman) from 1981 to 1986. He also chaired an Australian enquiry recommending the ending of disparities between the way that victims of accident and sickness should be treated. He said ‘New Zealanders like to think they are good practical people, as they are, but I think they are also a caring community, though they don’t always say much about that. That scheme I tried to put together pulls those two qualities together.’
60 Makers of New Zealand: 1930-1990: is at the New Zealand Portrait Gallery from 24 November 2011 to 12 February 2012. It was curated by Brian Easton.
Keywords: Literature and Culture; Political Economy & History;
Thank you for coming this evening. I hope you find the exhibition interesting and provocative. I am sure you will find the evening’s company so.
I should also like to thank the New Zealand Portrait Gallery for inviting me to curate an exhibition of makers of New Zealand in the 1930 to 1990 period. I am guessing that the invitation came to me following my book The Nationbuilders published a decade ago. This forms the skeleton of the exhibition, although for various reasons there is not an exact overlap, while the 15 odd portrayed in the book has been extended to 60 in the exhibition.
That has meant that the exhibition covers a much broader picture of New Zealand in the sixty years. There are a goodly number of portraits illustrating the shift of Maori from the rural backblocks to the centre of New Zealand life; more art forms and cultural activities are covered; attention has been given to foreign affairs and to public intellectuals; there is the recognition that our way of life has changed – I’ve tried to illustrate that the change that women have experienced has been even more radical than the change men have experienced.
It is not a triumphalist account of New Zealand. Triumphs are recognised; Allen Curnow, Janet Frame and Colin McCahon are internationally outstanding. But I’ve tried to capture the uncertainties of our development. Of course we all suffer from the Golden Weather syndrome – that our childhood was much better than what came after. But there are deeper questions raised by the portraits.
The portraits begin with those of Michael Joseph Savage the founding prime minister of the Labour Party, and Gordon Coates who was also a prime minister and the outstanding Minister of Finance during the Great Depression and who might be also thought as an inspiration of the National Party. Each, in their way, offered the vision of New Zealand which underpinned the following sixty years.
As you walk around the gallery you will see their vision elaborated in the portraits which are in roughly the order they were born. At the end corner around, there are three great New Zealand public intellectuals – Charles Brasch who played a founding role in the evolution of the arts and of the public forum, Allen Curnow that perceptive nationalist who became an internationally praised poet and Bill Sutch who shaped the way we think of our economic and social development. The Maori dimension aside, each played a defining role in the vision of who we are and what we are: what it means to be a New Zealander.
The story evolves as you walk back ending with National’s Rob Muldoon and Labour’s Roger Douglas returning across from Coates and Savage. I leave you to ponder on the continuities and discontinuities they represent. A good portrait should provoke a reflection; I hope the exhibition generates much reflection too.
To conclude with some further thankyous. I am also grateful to the families and institutions who have loaned precious images for the exhibition. It is good that some of you are here this evening.
But I must end by mentioning Avenal McKinnon who has converted my list of people into the portraits around the walls. It has not been easy, for many of the subjects do not have formal portraits. To give but one example I find it extraordinary there is not one of Sutch. The lacuna partly reflects the rise of photography (and there are some very good photo-portraits on the wall), partly modesty, but also – I think – that despite many fine portraitists we lack the rich tradition that a nation needs. Avenal has imaginatively filled in the gaps, and we are grateful to the Laurie Bushnell Bequest and Denise Almao who enabled the commissioning of some of the portraits. There are other works on show that the Gallery would like to acquire. If you would like to contribute, a word to Avenal would be much appreciated.
As well as co-curating the exhibition, Avenal is the director of the New Zealand Portrait Gallery. I want to say here that she is hopelessly overworked. We are immensely grateful to the government and to minister Chris Finlayson for enabling a long term lease on this building which gives the Gallery a home. Its own collection is slowly growing already enriching the nation’s visual legacy and historical record. But the day-to-day expenses are not well covered and Avenal has been stretched. Finding the resources to support her and the Gallery is a challenge we must address. Can I see the Makers of New Zealand who surround us nodding agreement?
60 Makers of New Zealand: 1930-1990: is at the New Zealand Portrait Gallery from 24 November 2011 to 12 February 2012. It was curated by Brian Easton.
Keywords: Literature and Culture; Political Economy & History;
Choosing 60 New Zealanders to reflect the development of New Zealand was not easy, says Dr Brian, Easton Curator of the New Zealand Portrait Galleries ‘Makers of New Zealand: 1930-1960′, Of course economics development was an important part of the story, which starts with the Great Depression and goes through the post-depression and post-war booms to the Rogernomics stagnation. But more than that happened. opportunities for Maori and women opened up, the Pasifika peoples arrived, the significance of Britain diminished, we adopted a nuclear free foreign policy, the arts flourished and we came surer of our national identity, top sport drifted towards professionalism. How to capture that all?
Obviously there are people you cant just leave out – like Ed Hillary, politicians, industrialists and farm leaders. But many of the portraits represent important phenomenon. How to represent the extraordinary flourishing of music in the period – especially so many international class opera singers. ‘I chose a teacher Sister Mary Leo who trained three operatic dames’. What about the media which had transformative role? Ian Cross was a newspaper reporter, television commentator, magazine editor and the first chairman the Broadcasting Corporation.
‘I wanted to reach out. The New Zealand Portrait Gallery is in the heart of Wellington, but I did not want just to represent bureaucrats and politicians. Sure there are key civil servants there like Clarence Beeby, who founded the modern education system, and Henry Lang, secretary of the Treasury, the model public servant who has a park named after him next to the Beehive. Foreign policy is represented by Alistair McIntosh, the founder of the Ministry of Foreign Affairs, but also Elsie Locke, who represents all those ordinary citizens who worked for peace, and who wrote a book about them Peace People.’
There has been an enormous change to the Maori and race relations. How to represent that? Sir Apirana Ngata was an obvious choice but then there was Tahupotiki Wiremu Ratana who represented another strand of Maori development. There are a whole series of Maori illustrating the development , but ‘I realised there is also the race relations aspect. So there is Dame Joan Metge and Ranginui Walker, two of the most important interpreters of developments.’ By a nice coincidence the two are next to one another.’
How to handle the growing Pasifka dimension of New Zealand life?They were still just arriving in 1990, but New Zealand had been long involved in the Pacific before. ‘Sometimes our record was not ideal, but Tupua Tamasese Mea’ole, who led the Samoan independence movement, chose to forgive us – it seems New Zealand police shot his brother in the back – and that path of reconciliation made it possible to for the Pasifika people to be welcomed here’. Right next to him is Sir Guy Powles who was the New Zealander who worked through Samoan independence with him.
There are a lot of portraits of contributors to ‘high’ culture which has so much develop our sense of identity, but a younger woman asked about pop music. ‘She was right, and the show should be reaching out to the likes of her, even those if she was not born after 1990.’ So there is Howard Morrison. ‘One can easily overlook that popular arts ware also involved in our political life.’ As Morrison’s ‘My Old Man’s an All Black’ reminds us, ‘There aint no horis in the scrum’ in 1960.
Nor is intellectual life left out with portraits of Lloyd Geering, Keith Sinclair and Bill Sutch.
The representation of ‘women’s liberation’ proved a bit of a problem, because in the period they had a lower public profile; most were still anchored in the home – even those who worked in the paid labour force were still on domestic duties. So there are classic feminists like Sonja Davies and Sandra Coney, but also Dame Alison Holst who is a part of the cooking/eating revolution. There is also a sly reference to Sir James Wattie, one of the industrialists in the show , pointing out that his processing of foods made it easier for women in the kitchen. Another sly reference is to Fred Allen. ‘Rugby afficiados tell me he is the best example of someone who shaped rugby over the period, and he is also there to remind us that then rugby was still an amateur sport. ‘But also mentioned is that he had his own women’sa fashion line.’
‘Although initially I simply chose people, I found myself telling a story about the times, an especially useful exercise given that I am writing a history of New Zealand.’ It is not necessarily an entirely upbeat story. It begins with Michael Joseph Savage and Gordon Coates politicians who founded the main streams of our political life, and Ngata. It ends with Sir Robert Muldoon and Sir Roger Douglas, who leave the visitor more puzzled about where in 1990 New Zealand was going. But next to them are Sandra Coney and Sir Edward Durie, who as chairman of the Waitangi Tribunal shaped Maori development and race relations. So it has not all been ‘downhill’.
60 Makers of New Zealand: 1930-1990: is at the New Zealand Portrait Gallery from 24 November 2011 to 12 February 2012. It was curated by Brian Easton.
Keywords: Literature and Culture; Political Economy & History;
This exhibition is an experiment to see whether a history of New Zealand can be represented by a series of portraits. The period it covers is often seen as one of great change and transformation, beginning with the Great Depression, struggling through the Second World War, followed by post-war affluence and change until the verities of the age were challenged at its end. Other than the land, few things remained the same; even the All Blacks, that exemplar of amateur sport, were drifting towards professionalism.
All the nuances of the period could not be captured in a limited exhibition, and each curator or visitor would have their own choices. But it has been important to include not only the key players but also some of the key changes transforming New Zealand.
Although very proud to be a New Zealander, I have not chosen to present a triumphalist account of New Zealand. Indeed the last two portraits deliberately raise questions of success and failure. Nor is every one of the sixty my choice of a dining companion, although the portraits frequently suggest there is more character to the man or woman than the public image allows.
When the portraits were put in order of date of birth (with a few exceptions) I found they were telling a story of the development of New Zealand, as the accompanying panels expand. I hope especially, those who were to young to remember most of the period, will come away with an appreciation of what happened and of some of those who made it happen.
Something we learned from the exhibition is that New Zealand’s portrait record is erratic. We have had, and have, some excellent portrait artists, and some terrific portraits. But in the course of looking for suitable images we found some severe lacuna. Why is unclear. Perhaps it is that we are over modest, perhaps many do not appreciate that a good portrait adds something that a snapshot cannot. The director of the gallery, Avenal McKinnon, has done a marvellous job of identifying so many portraits – often filling the gaps with imaginative alternatives. I am very grateful for her initiative, energy and support and for those who have loaned us their part of New Zealand’s precious heritage. Most of all I am grateful to the New Zealand Portrait Gallery for presenting me with such an interesting challenge.
Brian Easton is an economist and public intellectual, one of whose books The Nationbuilders covers the same period as the exhibition.
Know someone you would like a proper portrait of? Be they nationally significant or just significant to you, leave your name and contact details at the desk, and the New Zealand Portrait Gallery will make some suggestions of artists you might approach.
Listener: 23 November, 2011.
Keywords: History of Ideas, Methodology & Philosophy; Social Policy;
Economists always knew income was just one contributor to total well-being, but it was the only bit they could study. Later, as the databases became more comprehensive, new research enabled them to turn their minds to what else matters and to look at whether they might have anything to say about this.
This is well illustrated in the Treasury framework set out by the outgoing Secretary of the Treasury, John Whitehead, last May
There is a broad range of material and non-material determinants of living standards.
Individual freedoms and capabilities are very important.
The distribution of living standards across different groups in society is an ethical concern for the public, and a political one for governments.
The distribution of living standards over time is of high importance, both for equity concerns but also to make sure we are sustainably managing our resources.
Measuring living standards directly, using self-assessed subjective measures of well-being, provides a useful cross-check of what is important.
It’s a bit clunky, but crucially the framework is saying the Treasury is no longer exclusively focused on income (or GDP per capita, which is much the same thing). It is also a humbler account of the world than the arrogant one of the 1980s when so much of what was proclaimed true has since gone wrong. (Few of those who were in the Treasury then are there today.)
I mention this because many people have not forgotten the arrogance and think there has been no change. They are wrong. Let’s be honest: professionals tend to be arrogant and professional economists are not immune to that disease. But so, too, are most of their critics; they constantly tell me what economists think – typically, I don’t; most of us don’t.
What the critics often overlook is that there are thermodynamics-type laws in economics, too. Such as you cannot borrow unless there is a lender. Treasury officials repeatedly have to remind us there are no perpetual-motion machines. But doing this is quite different from giving the radical but wrong advice of the 1980s and 1990s.
The Treasury is changing – you might say it is getting back to normal. We need to respect that change and not assume it is repeating its loony elements from the past.
Rather, we need to tackle any doubts we have about Treasury thinking by assuming it is analytical not ideological. That is what Whitehead was covertly saying. So it should be. It is good to see the downgrading of income as an objective and the recognition of the importance of equity, capabilities, health and jobs. But there is much more to be said.
I have been doing research for the Massey University Centre for Social and Health Outcomes Research and Evaluation (Shore) on the social impacts of alcohol and gambling. When we measured the effect of higher incomes on well-being, we found there was some effect, but not much. More important are other economic variables, such as employment, and there are others that economists don’t have much to do with, such as family circumstances and mental health. Sometimes the economy can make a contribution, such as with resources for education and health delivery, but other factors, such as how education and health professionals use the resources, are probably more important.
Suppose someone promises to increase New Zealanders’ incomes but as a result education will be poorer and health worse. (Such promises may not be credible, and the promisers – having no competence to make the judgment – will claim that destroying the delivery systems will make us all better off.) Is that what you really want?
The research suggests we would require huge increases in income to justify such a trade-off. For instance, the Shore studies suggest alcohol abuse and gambling abuse directly reduce the welfare of the abusers and others far more than the loss of (effective) economic output.
We can’t be sure where this research will lead. It is often hard to interpret. That is why the Treasury needs to be a little behind the research frontier. But it is great to see the direction in which it is moving.
Listener: 10 November, 2011.
Keywords: Political Economy & History;
What do we really think about economic issues? It is hard enough trying to answer that today, but if you are writing a history of New Zealand, as I am, it’s even harder. Commentators tell us what they think others think, but how do they know? Do you really trust today’s pundits and opinion polls?
When trying to trace the rise of the Labour Party in the interwar period, I thought I could rely on the electoral outcomes. Electors may not tell you what they mean, but at least voting is an objective act. In fact, the story throws more light on the misfunctioning of the first-past-the-post electoral system.
The Labour Party first stood in its current form in 1919, when it won 23.8% of the vote but only eight seats in Parliament (or 10% of the total). In the next election, in 1922, it won a slightly smaller share – 23.7% – but more seats: 17 in all. So what happened in 1925, when its voter share went up to 27.3%? Its seats fell to 12. Getting the picture? Are you surprised that in 1928 Labour’s voter share fell to 26.2% but it won more seats (19)?
The parties of the right had equally bizarre electoral experiences. In 1928, the Reform Party won 34.8% of the voter share, well ahead of the United (Liberal) Party’s 29.8%. Yet with their allies, United won one more seat and became the Government. Or take the 1935 election, usually portrayed as a triumph for Labour. It won 46.1% of the vote. The parties of the right were divided. Together they won 43.1% of the vote; had they not split their vote they would have won 43 seats out of 80, and there would have been no Labour Government.
The voting outcomes settled down a bit once the electoral system was dominated by two parties (after United and Reform merged to form the National Party), although in 1978 and 1981 Labour won more votes than National but fewer seats. Even 1951 and 1954 had peculiarities. Following the waterfront dispute, National’s share of votes went up and it won more seats. Yet its share of enrolled voters actually went down. The big change in 1951 was the rise of non-voters, who were saying, presumably, “a plague on both your houses”.
In 1954, non-voters turned to Social Credit; National won marginally more votes (1548) than Labour, but 10 more seats, and a fifth of the enrolled were not represented in Parliament. The 1957 election was almost a mess, too. Labour won 48.3% of the votes compared with National’s 44.2% but only two more seats – in a proportional system, Labour’s majority would have been four. The first-past-the-post voting system has not reflected voter intentions at all well. Some call it winner-takes-all. There is no winning post to pass; those ahead when the election music stops are called the victors.
Given that the winner-takes-all system did not serve us well, why did it persist? Because successive Governments tried to reflect the country as a whole and not just the people who elected them.
That ended in the 1970s, in part because we were becoming more divided (take, for example, the Springbok tour of 1981) but also because governing became more divisive. Prime Minister Rob Muldoon was so preoccupied with not addressing the country’s economic problems he divided the nation; his financial successors Roger Douglas and Ruth Richardson thought they knew the solutions, imposing them without consultation. They never got the country to back them, as shown by the trivial support for the Act Party; their policies failed and subsequent governments have been trying to clean up their mess.
There is probably no perfect electoral system – economist Ken Arrow proved that – but we introduced MMP to restrain the elected dictators. It reflects the diversity in society, instead of pretending, as the other proposed voting systems do, that it does not exist. It won’t help future democratic government to continue that pretence. Whatever the system, the need is for a government that listens to the whole of the country, while offering leadership and not just short-term non-solutions to long-term problems.
Listener: 28 October, 2011.
Keywords: Social Policy;
Is New Zealand the best place in the world to bring up children? A report from economist David Grimmond, The Effectiveness of Public Investment in New Zealand Children, suggests not. After combining 26 indicators of children’s welfare from 30 OECD countries – ranging from drunkenness, bullying and suicide to overcrowding, educational deprivation and public spending – Grimmond found we came 28th, ahead of Mexico and Turkey but behind every other country. It’s hard to say it, but we’re an international disgrace.
How did the disgrace come about? In 1974 researchers identified children and their parents as the largest group of the poor in New Zealand. It was a revolutionary finding. The poor were not beneficiaries, for many poor households depended on wages. (Already, provision for the aged was keeping most of them above the poverty line.)
It was not just solo parents and their children, as more two-parent families were in poverty; it was not just tenants, as more were pinned down by a mortgage; and it was not just Maori and Pasifika, as more were Pakeha. The poverty rates were higher in each of the former groups, but the latter groups involved more people, so they had a larger share of the total of the poor.
What did we do about it? We tut-tutted. We said poverty did not really matter. In truth, at the time there was not a lot of direct evidence that it did. But over the years the research, little of it publicly funded, has brought together a mass of evidence that shows poverty does matter. The recently published Child Poverty Action Group’s report, Left Further Behind: How Policies Fail the Poorest Children in New Zealand, summarises a lot of it.
Various half-hearted attempts have been made to address child poverty, but the problem has been too big for the small-minded to tackle. Often the interventions were poorly targeted and even more poorly designed – the Working For Families package is about as clumsy as it gets. Worse though is the proposal put to me recently that a high minimum wage would reduce child poverty. There may be other reasons to hike the minimum wage, but many of those on it don’t have children; many with children are not on it – some are not on any wage; and the minimum wage does not discriminate between large families and poor families. There are too many people with opinions they don’t think through; some of these people are politicians.
Why don’t we put in an effort to deal with deprivation among our children? The short answer is that children can’t vote, and often their parents don’t vote, sometimes because they are so overwhelmed by the day-to-day pressures of poverty. Give the children a vote and I bet the politicians would take notice of them. Kissing babies would become popular. Instead it will be a miracle if children are a significant issue in the election campaigns over the next month.
What to do? The Every Child Counts coalition argues we should focus on the first thousand days of life (together with the pre-birth period). That would be a beginning, although the Child Poverty Action Group report shows there is much to be done after the first three years. But there is an interesting difference within the community committed to giving children a better deal. What should be the approach to mothers working?
Most thinking about poverty measurement is based on the model we developed in the early 1970s – today’s users are largely unaware of its assumptions. We need to review those about working mothers, which reflected the norms of four decades ago, although the model is probably robust enough to be developed rather than rejected.
In those 40-odd years, children have been born into the deprivation the research identified, grown up in it and borne children into similar deprivation, who in turn have borne children growing up in further deprivation. Three generations. Is it going to be four?
Stout Research Centre Research Roundup: 26 October 2011
(A previous version of this paper is at http://www.eastonbh.ac.nz/?p=1504)
Keywords: Political Economy & History;
Today I want to talk about my current project: writing a history of New Zealand from an economics perspective – it has the tentative title Not in Narrow Seas.
Economics is not much of an experimental science – when it is a science at all – so as an applied economist I use the past as a means of testing hypotheses. For instance I first got into considering the history of depressions and long recessions – the topic of the last part of this paper – in the 1970s when I was puzzling about the contemporary state of the economy.
Keynes said that he did ‘not know which makes a man more conservative – to know nothing but the present, or nothing but the past’. (Perhaps economists have solved the problem by knowing nothing of either; we are experts on the future.) Some of my books are about contemporary events, but often I find that I have to go deep into the past to provide a foundation for the narrative.
The precipitant of the current project may have been my 1994 Hocken lecture Towards a Political Economy of New Zealand: The Tectonics of History which explained how one might think about the development of New Zealand. After it, Tom Brooking told me I should write a history of New Zealand. If that was the beginning, Tom has once more a lot to answer for.
For whatever reason, I am writing a history of New Zealand. For the record, I am up to about 1955 and have written 190,000 odd words. To give you an idea of that size, Michael King’s history is about 150,000 words, and I have 60 more years to go. Jamie Belich’s two books are 300,000. I hope to come in below that number before the heavy editing starts. (The word count includes technical appendices collecting together the statistics – the bones around which the narrative is fleshed. They are a small book in their own right, but may not be published. They are also a reminder that this history is not – as was originally intended, and is largely true in the case of King and Belich – simply a synthesis of existing research; in a number of areas I have had to go down to the original material.)
I have been fortunate to have received funding support from the Claude McCarthy Trust for the work on the pre-market economy, from the Stout Trust for the nineteenth century economy, and from the New Zealand History Trust for up to 1966 when the pastoral economy’s dominance ended. After which the funds run out; like other independent scholars, I live in the hope that something will turn up.
I have also received much support from historians, anthropologists and scientists. I’ll mention some as I proceed. It would be remiss of me not to mention the support of Elizabeth Caffin. There is barely a coherent sentence in my writing which has not been improved by her; she gives much other support besides.
Does history from an economic perspective have any merit? The book may give an answer for you to judge, but it is a few years off. Today’s presentation is an interim response.
The deep answer is this. It is not just that in all ages humans spent a lot of time involved in economic activity – not just market activity like paid work and purchasing and consuming products. My study pays attention to the non-market economy which includes the subsistence economy and the household economy. The balance between the market and the non-market economy changes as individuals’ economic activities become more specialised, while rising household productivity releases housewives into market work.
But not only do humans spend a lot of time in economic activity, it generates a surplus over necessary spending which shapes the lives we lead. Who commands that surplus? How is it used? Unless we address these issues we can hardly engage with society. It matters a lot whether the surplus is used for the suppression of one’s own citizens or is shared for everybody’s wellbeing.
In arguing that the economy contributes to society and its history in these important ways, I am not claiming some exclusive role for an economic perspective. I celebrate histories which, for instance, focus on Maori, women or the environment – or even politicians.
But even if we ignore the grand issue of how the economy shapes the societies in which we live, conventional histories often overlook obvious economic aspects of the narrative which would add to their richness and coherence. A few examples:
I respect Judith Bassett’s biography of Harry Atkinson, but hope that when she updates it, she will pay more attention to his tenure as Colonial Treasurer during the period of severe fiscal austerity of the Long Depression. Another politician whose reputation has suffered because he presided over a period of severe fiscal austerity is Gordon Coates, neither of whose biographers grasped his achievements as Minister of Finance during the latter part of the Great Depression. Or consider Joseph Ward; to understand the end of his first premiership – the end of the Liberal government – you need to know that the economy went through a climacteric – a growth slowdown to stagnation – in about 1908. John Condliffe remarks that it was a ‘crisis which demoralised New Zealand industry and trade’; Ward’s biographer focuses on political crises.
Conversely, we sing the praises of the First Liberal Government and the First Labour Government. But much of their social innovations were financed by the great economic booms over which they presided – in each case per capita output doubled in ten years. We dont attribute the Liberal boom to the Liberal government and, pinkish sentiments aside, the Labour boom was not particularly due to actions of the Labour government – it was well underway under Coates and almost came to an end in 1939 except for the war. The Liberals and Labour may have spent the growing fiscal surplus wisely – in a way in which others under fiscal austerity can only dream of – but the fiscal surplus made them, not the other way around.
There are many other examples. I have chosen these because they are part of the common knowledge of our history; often while reading some New Zealand historical writing I mutter ‘it’s missed the bloody [economic] point’.
Let me illustrate the practical relevance of economics to a general history by going through some of what I have already written.
Humans dont arrive in New Zealand until the book’s Chapter 3. There aren’t any humans in Chapter 1, which is the geological history of New Zealand going back as far as I dared – 650 million years. At issue is not just that we unzipped from Australia 70 million years ago. Geological history created our living environment: the shape of the land, the ruggedness of the country, the quality of our soil, the minerals (or lack of exploitable ones) beneath, the biota – even the prevailing westerlies are a consequence of Australia separating from Antarctica 30 million years ago. There’s also the groundshakes and thermal activity; volcanoes may be more important than earthquakes.
Chapter 2 is about the sort of lives the ancestors of the Maori lived before they got here; Raymond Firth’s studies of Tikopia are a major source. (His Economics of the New Zealand Maori is central to Chapter 3.) Too often we forget that new arrivals bring baggage from their homelands. I do the same for the Europeans in chapters 6 and 19, and will do the same for Pasifika people later.
(While the first 32 chapters and five appendices are written, they will be subject to revision as new material accumulates. For instance Joan Druett’s recent biography of Tupaia requires us to rethink aspects of pre-contact Maori development.)
There follow three chapters on Maori; on the settling in of the new arrivals and then on the pre-market Maori society, and an account of the Maori engaging with the market economy – an extraordinary adaptation which happened so rapidly it is usually overlooked. That’s four chapters on Maori and their ancestors to about 1860; there are another three which treat them almost as exclusively: Chapter 13 is about them after the New Zealand Wars, Chapter 29 in the first half of the twentieth century; a later chapter will be on Maori urbanisation and renaissance. This is not to isolate them, for Maori appear in other chapters, but until around the mid twentieth century the Maori economy was distinctive and largely subsistence in character.
By now we are at chapter 7 – 30,000 odd words in – and we turn to European settlement. The next five chapters might be thought of as subversive. The grand narrative sees New Zealand settlement as sustainable from the beginning. It wasnt – until around 1870 the prosperity of the settlers depended on offshore borrowing and the quarrying of seals, whales, timber and gold, while the British-funded war was economically beneficial to those behind the lines (although they charged us for it as debt). Keith Sinclair’s History of New Zealand nicely illustrates this lacuna; less than a paragraph on the southern gold rushes, no mention that about the same time Auckland was a war camp.
The grand narrative gives little recognition to how heavily New Zealand was borrowing. Export receipts rarely exceeded import payments before 1887; add in debt servicing and the current account was in deficit even longer. Early New Zealand was on an edge of unsustainability; the collapse of Newfoundland in the 1930s was nearly our destiny.
My chapter 9 uses the wonderful material that Brad Patterson has brought together on Wellington, whose initial prosperity was dependent on whaling; later I use Russell Stone’s equally valuable material on Auckland. While we are so keen to see ourselves as here forever, we forget how fragile was the survival of the first European settlements. As environmentalists will tell you, sustainability does not come easily.
Chapter 8, on the establishment of the settler governance of New Zealand, introduces another major theme. The government preceded settlement, which never had the opportunity to flourish without it; instead New Zealand society developed dependent upon it. When it has a problem it turns to Wellington for a solution. This chapter also contains my standard illustration of why I cannot write a pure economic history. It would be somehow deficient to state just that the Tiriti o Waitangi brought British commercial law to New Zealand.
Sustainable settlement became possible when it was discovered that sheep thrived in New Zealand – the offshore quarrying of phosphate and oil aside. It was going to be a very different settlement under the great stations which produced only wool – more like the Falklands. Sheep stations were largely self-sufficient so there were no rural towns, aside from those in the Wairarapa which provisioned Wellington. (Thankyou Roberta McIntyre for reminding me.) Generally, small settler farms were near subsistence, even exchanging their surpluses with the local store for goods rather than for money.
The economic story of the Vogel Boom followed by the Long Depression is reasonably well known although the book adds a couple of complications.
The failure of Maori to develop economically was not simply the result of the loss of their land, an explanation which has only the vaguest of causal mechanisms such as ‘demoralisation’ – whatever that means. Ian Pool argues that land sales and confiscations were followed by the arrival of settlers who brought disease from which Maori had no natural immunity; so their mortality rose.
While many iwi had more that enough land for subsistence living, they were unable to benefit from the staple industry of wool, because they were not located where sheep thrived. Aside from the East Cape, there were hardly any sheep north of Taupo because the land lacked trace elements, so stock suffered from bush sickness; or was swamp, and the sheep suffered from footrot.
The geography was the consequence of the Taupo eruption in about 220CE. We can but be in awe that an event 1600 years earlier was shaping crucial features of the nineteenth century economy. Instructively, Maori south of Taupo had flocks similar in size to the settler ones, after allowing for their population size. Today’s Ngai Tahu may be ahead of their northern cousins on various socio-economic measures in part because they could farm sheep in the nineteenth century.
Settlers north of the Taupo line could not get into sheep farming either. In the late nineteenth century New Zealand was two disconnected economies. That resolves one of the disputes about the extent of the Long Depression. Russell Stone and Ian Hunter describe a boom in the 1880s, while others describe depressed economic conditions. Both are right; the Aucklanders are talking about the Auckland economy; others about south of Taupo, which faced falling wool prices and borrowing difficulties in Britain. Auckland was not dependent upon wool but the quarrying of hard-rock gold, kauri gum and timber; it prospered by linking into booming Sydney and Melbourne. When the Australian economy collapsed in the late 1880s – almost a decade after the European one – Auckland went down too, and in the early 1890s depression covered the entire country. That was when the three New Zealand-based banks had to be bailed out.
Europe pulled out of its Long Depression in the mid 1890s; so did New Zealand but it was a different economy. Wool prices remained weak, but refrigeration enabled smaller – crossbred sheep and dairy – family farms to survive. Farms converted from subsistence modes of production, others emerged from the breaking up of the large estates in the South Island and the Maori estate in the North. The rural towns which serviced them flourished. Out of this transformation the relatively socially flat, some would say ‘classless’, society of the early twentieth century arose.
It was this burgeoning rural economy which dragged the Liberals away from the initial Lib-Lab coalition, and led to the eventual establishment of the Labour party. The Liberals used the surplus to create many of the institutions which we think of as integral to New Zealand life, but their luck ran out in 1908 when the boom ended.
It was partly the impact of the world economy, but productivity growth in the farm economy faltered, despite an increase in the number of farms. Perhaps they were on more marginal land, while the established ones were suffering from depletion of soil fertility. Artificial fertilizers were not heavily applied until the middle of the 1920s; followed by rises in farm productivity. When farmers cut back on their application – in the early 1930s when they were broke; in the early 1940s when phosphates were diverted to explosives – farm production again faltered.
The economic history of the decade after 1908 is problematic; the data is inadequate, while the narratives, concerned with political upheaval and the Great War – do not offer a lot of economic insights. Apparently the economy stagnated. There was a sharp downturn in 1920 as war conditions reversed; a stagnation largely continued in the 1920s, with odd ups and downs, collapsing in the Great Depression following a borrowing crisis and a dramatic fall in the terms of trade. It seems likely that the economy was broadly stagnant in per capita output terms from about 1908 to 1935, so the interwar recession was longer than we usually think.
Economic stagnation does not mean nothing happens, as I am reminded when I see the – alas disappearing – art deco picture theatres built during the depths of the Great Depression. It is silly to say they were to take people’s mind off their misery; it was more that new technologies opened up opportunities for entrepreneurs despite depressed aggregate demand.
At a structural level the interwar period is one of urbanisation and industrialisation; the main cities became less dependent upon the countryside, beginning to develop as mature and independent social and cultural entities.
Malcolm McKinnon is doing some great work on the Great Depression, so I have only a couple of chapters on it, although because I use a thematic approach with overlapping periods, it – like the Maori – appears elsewhere. I cannot mention Malcolm – or Brad Patterson – without noting how much I admire the craft of historians.
I was going to devote only one chapter to the First Labour government – the Second World War aside. But the material and the thematic approach meant I added two chapters on the development of the welfare state, starting as far back as I dared go and ending in about 1972; a later chapter will argue that the subsequently changing social and economic circumstances have made the framework less robust, illustrative of a theme which will dominate the end of the book. Economic and social change undermines the old verities.
Another verity which has got replaced – in part anyway – is the controlled economy. I’ve realised that Labour was not elected in 1935 with a plan for extensive controls. Rather it was pushed into them by the exchange crisis of 1938 and the war economy. New Zealand was not markedly out of line with similar economies in this respect during the war; what seems unusual was the reluctance to abandon the controls. Why, is a question to be addressed in the post-war narrative.
I am writing about the early post-war period at the moment, and expect to get to 1966 before January. Then the golden wether ended with the collapse in the wool price. The pastoral economy which refrigeration and the Liberals founded began to unravel. I’ve already written much of that story in my earlier book In Stormy Seas and it will be the main focus of next year’s work.
Before doing that there will be the three ‘migration chapters. One traces the story of the Pacific Islands from when the proto-Maori left 800 odd years ago to today, paying particular attention to the recent Pasifika migration to New Zealand, and the resulting communities.
The second covers the post-war Maori migration to the cities and the resulting renaissance. It follows on from chapter 29 which describes the Maori shift from the subsistence economy at the beginning of the twentieth century to the more commercial economies that had developed by the middle of that century. By now they have run out of land, and urbanise to find jobs; there are parallels here with the Pakeha postwar experience. The consequential industrial protection debate is covered in chapter 30 but echos through many of the subsequent chapters.
The third great migration was for women from the house into paid workforce – although like the other migrants they maintained an active relation with where they had come from. I am both looking forward to the challenge of writing this chapter – because it promises to progress the analysis of the women’s economy in a way economics has not for more than 60 years, when it realised that women’s unpaid work had a critical role in the economy. However I am also dreading it, because we do not have the quantitative base to discuss the productivity shift in the household economy which made the migration possible.
In Stormy Seas does not cover these migrations well. At the moment I do not see a need to change its main theme of how external and other internal economic changes cause enormous changes to the political economy of New Zealand, many aspects of which we have yet to grasp. Relating that story has to be left to another occasion. Instead I would like to use the last part of my time to reverse my theme and talk about how history can assist economists.
In late 2008, shortly after the Global Financial Crisis began, some New Zealand economists knew that economic theory was not enough to guide them, while New Zealand’s experience would be quite different from those of the central economies of the United States and Europe. So they went to history to bolster theory and commonsense. You might call it a ‘Sarah Palin moment’. They knew history was important, but they did not know much history.
They rightly dismissed the previous downturn – the 1997 Asian crisis – as a shallow business cycle compared to what is now being called the ‘Global Long Recession’. They tried to remember the Ruthanasia downturn of the early 1990s. It turns out not to be particularly relevant because it was domestically generated and involved dramatic changes to the economic structure.
Scraping around in their memories they overlooked the 1966 to 1978 growth recession and the 1945 to 1953 post-war recession, which I shall come back to. They knew there was the Great Depression but they weren’t too clued up on that either.
Fortunately there is a rich economic literature on the Great Depression in America and Europe to which many quality economists have contributed, including Ben Bernanke, chairman of the US Fed. It enabled them to take measures to avoid a second great depression, but they could not prevent the rich-world economy stagnating. The New Zealand experience during the Great Depression was different. We were already in borrowing difficulties in 1928, and we suffered a severe fall in our relative export prices – most other countries did not. This time none of our banks collapsed.
Instead, when I looked through our economic history I was struck most by the parallels with the Long Depression which ran from about 1879 to 1895 – some sixteen odd years. We were over-borrowed although it was not evident at the time; Vogel was sailing off to London to raise more money in October 1878 when the City Bank of Glasgow crashed precipitating the long stagnation. A sound financial system can cope with a single bank crash, but there was systemic unsoundness – more London-based banks fell; it took a long time for the financial system to recover.
New Zealand’s prosperity of the 1870s had been underwritten by the Vogel borrowing binge which depended upon capital gains from land values. Afterwards borrowers struggled to service the national debt, as did the country’s leaders – Atkinson not least. Wool prices began falling, although they were probably offset – to some degree – by the sheep industry’s rising productivity as farmers managed their flocks better and bred wools demanded by the market. Meanwhile a new pastoral industry evolved, based upon the export of refrigerated meat and dairy products. Recall Auckland was hooked into booming Sydney and Melbourne and collapsed later. That may have parallels with today’s dairy industry hooked into China.
While the parallels between the Long Depression and the current economy are suggestive, they are not exact. But studying them, and those of other severe downturns, helps us think systematically about today’s circumstances. So back at the end of 2008 I was able to warn that it seemed likely that the stagnation which followed the Global Financial Crisis would last longer than a couple of years.
How long might the stagnation last? Measuring and defining recession length involves a lot of judgement, even when the data base is reliable. Here are my assessments of five periods of poor economic growth, noting that there is a sense that by current standards there was a stagnation during the 600 years of the New Zealand pre-market economy from the arrival of the proto-Maori to the first Europeans.
The first post-market stagnation was The Long Depression which I have already discussed. It lasted from about 1879 to about 1895 – as long as 16 years.
Second was The Interwar Recession. If one measures it from the beginning of the sharp depression of 1920 to the end of the Great Depression in 1934 its length was 14 years. Given there is a plausible case that it began in the first decade of the twentieth century, it may have lasted over 25 years.
The Post-war Recession was the third, running for ten years from 1944 to early 1954, with a temporary production boost from the wool price boom of 1950. Expenditure did not stagnate because of the favourable prices for our exports, so we could spend more without producing more. I suspect National’s post-war economic boom – of around 15 years – was more the consequence of our receiving favourable prices offshore than anything we did.
Our fourth market stagnation was the recession which followed the wool price collapse of 1966. It did not really come to an end until mid 1978 which makes it over 11 years long, although there were only 8 years of stagnation. Perhaps it was a growth recession rather than a period of total stagnation.
The final great stagnation – the current one aside – was the Rogernomics Recession beginning in early 1984. The output flat-lined to the end of 1990, collapsed into a deep dip and was back at the flat-line level at the end of 1993, a total of 10 years.
The five long stagnations total almost 70 years. For over a third of New Zealand’s measurable economic history, production has stagnated for long periods. That proportion also applies to the post-war era.
The New Zealand economy peaked in output per capita terms in the September quarter of 2007. That is four years ago. The Treasury PREFU forecasts have the economy not returning to that level much before 2013, more than five years after. New Zealand is in another Long Recession.
We do not listen to Cassandras. New Zealanders are natural optimists; anyone whose ancestors sailed thousands of miles to a barely known destination has optimism wired into their genes. Pessimism is not welcomed even when the evidence favours it. As Keynes remarked, ‘worldly wisdom teaches that it is better for the reputation to fail conventionally than to succeed unconventionally.’
How long will this long recession last? That largely depends on the world economy. The weight of the opinion of those who have been mostly right up to now is that it will take at least another five or so years for it to recover. That is 2016; an eight or so year long recession, not untypical of the postwar era. Perhaps I’ll finish the book about the time we come out of it.
Fabian Society, Wellington, 20 October, 2011
(Note that this is a revised version of the paper at http://www.eastonbh.ac.nz/?p=1524.
Keywords: History of Ideas, Methodology & Philosophy; Macroeconomics & Money;
Tonight I want to talk about our economic priorities. I’m going to differ from the conventional wisdom by arguing we should pay less attention to the growth of material output and more attention to employment, to social coherence and to the quality of life. While that may leave the conventional wisdom uneasy, I want to insist that my approach is within orthodox economic thinking, albeit a little ahead of much of the profession.
Before doing this I have to say something about the economic context – about the past, the current, and the possible future state of the economy.
Since New Zealand became a market economy it has experienced five great stagnations, long periods – five and more years – when per capita real income did not rise. In all but the Rogernomics Recession of 1984 to 1993, the stagnation was caused by an unfavourable world economy. The indications are that the world economy is once more in a period of a long stagnation which began in the United States in 2007; about the same time and quite independently New Zealand also went into a recession, which turned into a long stagnation when the world economy stagnated.
We dont know when the stagnation will end, although it is unlikely to in the near future, despite some economists promising that there will soon be an upturn. I am reminded of the wife of an economist who sued for divorce on the basis of the non-consummation of the marriage. She explained that her economist-husband just stood at the end of the bed, beating his chest, and saying things were going to get better; ‘but they never did’.
Not all economists are so inept, although they get less media coverage. Many of those I respect – those who warned that a global financial crisis was likely to happen – are saying that the world is in a long recession and there will be no early recovery – that is, a return to sustained economic growth. They are not saying we are in a double or triple dip recession, they are saying we are in the same one. They cannot tell the exact date it will come to an end, but they can say something about the conditions necessary to end it.
To understand their argument, you need to recall Joseph Schumpeter’s theory that the function of a depression is to eliminate various weaknesses that build up during a boom. Schumpeter talked of ‘creative destruction’, where inefficient firms go out of business during the cyclical downturn, releasing resources for firms that will thrive during the following upswing. A financial crisis involves a slightly different form of creative destruction.
During a boom, households, firms and financial institutions borrow to acquire assets which prove to be overvalued; as a result much of the apparent value of such assets is fictitious. That means they have too much debt relative to the true value of their assets or, to put it another way, the owners have much less equity than they desire or is desirable. Until they get a better balance sheet – a better balance between their assets, their liabilities and their equity – they typically have to reduce their liabilities. For instance, a household may cut back, by spending less and paying off their consumer debt or some of their mortgage. If a lot of people do this, then there is a drop in spending, a fall in production and there follows a rise in unemployment.
There are a numerous ways which balance sheets can be rebalanced. A particularly vicious form is when a finance company simply announces it will no longer – it can no longer – honour its debts, even those to its depositors. So it goes bankrupt with zero assets and zero liabilities. But its liabilities are other people’s assets, so the weakness of the finance company (or whatever ) gets pushed onto depositors and shareholders because their assets in it also become valueless; their balance sheet gets screwed up, and they have to cut back their spending.
Whether the balance sheets are rebalanced by saving more or through bankruptcy, there is economic disruption. The worst such experience, thus far, was the Great Depression of the 1930s. More commonly there is a stagnation, or recession, which will last as long as it takes to get those balance sheets right. That is the current international situation, as best we can judge. Far too many balance sheets are out of kilter – not only in households and the finance sector. The balance sheets of some governments are weak, and deteriorating because the governments are still borrowing, and/or because they are taking over private sector liabilities.
This is all a bit complicated, but there are two simple lessons. First, policies which do not address the balance sheet problems are not going to resolve the underlying economic problem; they may worsen it.
Second, it will take quite a while to work through these imbalances. That’s why those who predicted the global financial crisis expect a long stagnation. They cant tell you how long because no one knows how the imbalances will be resolved. Some talk about most of the world being in a recession for another five years – that is, to 2016; nobody whose judgement you would value has said that such a forecast is crazy, although some are more cautious. .
There is one further complication which I dont think anyone thought much about in 2008 when the crisis really began. The conventional wisdom had been complacent about the soundness of the economy. You might think that the crisis would have led them to revise their smug theories; instead many keep on with a belief that the theories are right and revise the facts. Unfortunately by doing this, the complacent are encouraging policy responses which inhibit the required balance sheet adjustment, and prolong the recession they keep promising will end. So the recession also has to purge out their bad theories as much as it has to purge out bad liabilities.
This raises a very serious issue. How do you get people to abandon faulty theories? Some will hold them till death, but people of goodwill who latch on to a bad theory may take a long time to give it up. It was over a decade before the conventional wisdom recognised how stupid were the extremes of Rogernomics; what convinced them was that ten years on the promises – the chest beatings at the end of the marital bed – of better economic performance had still not happened. Instead, – despite regular claims the economy would recover the next year, we had a ten-year stagnation under Rogernomics while the rest of the world prospered.
The current reluctance to abandon bad theories in the face of contradicting facts suggests that the recession will have to be quite long to get rid of the bad theories – even longer than the balance sheet analysis might suggest. Alternatively there may have to be a cataclysmic event – like the Great Depression – to dump them. I hope not, but as long as the existing conventional wisdom predominates, we are not going to get easily out of the mess.
Now I have been discussing here the world economic situation. New Zealand’s balance sheets – be they of household, farm, finance sector, corporate or government – are not among the worst in the world, although many are a bit shonky. (We could say the same about our conventional wisdom.) But what goes on in the rest of the world has a major impact on us; how we cope with what the world deals us is our responsibility.
I shall not give further detail of the context tonight. Instead, given the prospect of a long stagnation I ask what is to be done. I am not foolish enough to argue here for policies which will boost New Zealand’s economy – dragging the rest of the world out of recovery behind it. Rather I want to consider that, if we are in for a period of stagnation, whether we should despair.
Many think GDP – market production – equates with the welfare of the population. So if per capita GDP remains the same, as it does during a stagnation, they think there is no increase in welfare, or even that it is declining. However in recent years economists have been evolving a more sophisticated account of what determines wellbeing.
This account has been possible because of growing data bases. In the past economists did not have them. They knew their understanding of the determinants of wellbeing was limited, but lacking the empirical evidence, they were unsure how to modify their theories. Recently accumulated data enables some progress.
We ask individuals about their wellbeing, with questions like ‘how happy are you?’ The response is subjective, but there is evidence that individuals’ responses are consistent with the objective evidence. These surveys usually involve thousands of people and have been carried out in many different countries. The conclusions are pretty consistent across cultures; including for New Zealand.
We use the responses to identify regularities. For instance, women tend to say they are happier than men, although the difference has been converging over the years. The young are happier than the middle-aged, but after about the age of forty the decline reverses and the elderly are as happy as the young. Being married is, on average, associated with being happier than not being married.
All the results I report assume all other things are equal. If you dont do that you can end up with weird results. A market research firm concluded widows were happier. There are not a lot of 40-year-old widows but a lot of elderly ones and the age effect outweighs the marriage effect; dont bump off your husband to make yourself happier, but you are welcome to outlive him.
Economists and government cannot do much about age, gender or marital status, but we claim to be able to influence incomes. What is the evidence about the impact of incomes on happiness? There are three salient results which require a little care to reconcile.
The first result comes from looking at the data over time. More than 60 years of survey data from America shows no rise in average happiness, despite real incomes more than doubling. The implication is that raising national income does not increase happiness.
The second result comes from looking at the data between countries. It shows that happiness among rich countries does not seem to be affected by relative income. For instance, New Zealanders are typically happier than Australians even though our income is lower.
However, those in poor countries are on average less happy than those in rich ones. It is not hard to see that an increase in income improves the lives of the desperately poor. But once the basics of food, clothing and shelter are met, it appears that rises in average income do not directly lift wellbeing. This level is well below New Zealand’s standard of living, so the phenomenon does not generally apply to us.
The third result comes from looking within a country. It shows that those on higher incomes are happier than those on lower incomes. The effect is small; for instance, compared to the non-married the married on about half the equivalent income are happier. But the effect is definitely there; research I have been involved with confirms it is here in New Zealand too.
How to reconcile that a rise in income for everyone does not increase happiness, but for one person it does? Instead of thinking of income as facilitating what you can buy, think of it as indicating what you can buy relative to others.
Economists describe this phenomenon by a theory of positional goods, but it comes from a much older tradition developed by an American economist and sociologist Thorstein Veblen of ‘conspicuous consumption’, where goods and services are acquired mainly for the purpose of displaying income or wealth and power.
You will be aware this is widespread in a modern affluent society. Particular products – homes, cars, clothes, extravagant parties – are used to display the holders’ wealth, and to upgrade their position in society. Underneath this is the notion that’s one social status is determined largely – or importantly – by one’s income. But only income relative to others’. What is happening appears to be the additional income does not in itself generate happiness, but the social status which may go with it does. But if everyone can buy more, the average ranking does not change, and people dont get happier.
So what is the point of raising incomes since nobody, on average, is any better off? We have an economic system based on each of us seeking to raise our income; on the whole it succeeds, and yet it does not make us individually happier. That leads to the deep philosophical question of the purpose of it all – I am not going to answer that tonight. But to progress it, let’s think about the differences between me and my father, who was born about a quarter of a century before I was.
It is a matter of record that, on the whole, my income has been higher than my Dad’s. It is a reasonable conjecture, on the basis of the research I have just reported, that I am no happier than Dad. So am I really better off than he was (except I have the better son)?
What strikes me is that despite all his achievements Dad did not have the opportunity to go to university – he had the ability – and pursue the career for which he was naturally qualified – he would have been a superb general practitioner (as his final career as a psychopaedic nurse well demonstrated.)
That is the difference between Dad and me. I can look back at my father and regret that he missed his natural vocation; I doubt my son will think that I missed mine in the same way. Dad did not have the choices that I did. Economic and social development – and the support from Dad and Mum – meant I had opportunities that they could only dream of.
(Arguably my mother did worse than my father, because she was a woman. Following a series of changes, later generations of women will not suffer as much as her generation did. That is true for other minorities. They may not yet have attained the same opportunities but the gap has narrowed. Of course many of the policies which reduced those gaps have little to do with economics.)
What I have been describing is a simplified account of objectives set out by the great Indian economist and philosopher, Amartya Sen, who emphasises the importance of life opportunities and choice: not the choice we have when we go into a supermarket and select between brands of baked beans, but the real choice of being able to select a life style consistent with one’s potential.
On the whole, the development of the economy improves those opportunities. From this perspective higher incomes are a collateral consequence of rising opportunities but they are not the social purpose of the economy, for there is an imperfect correlation between rising incomes and increased opportunity; sometimes the relationship may even be negative with higher incomes and lower opportunities. That means we should not focus on income as the sole policy target.
Consider the argument that higher taxation reduces the efficiency of the economy and lowers income. Suppose it were true. Having broken away from the fallacy that social purpose is about rising income, we can instead ask whether the additional income advances opportunity and achievement. It might not, if the consequence is a drop in the wrong public spending.
Some public spending – that which cannot be delivered effectively in any other way except through the public purse – contributes to the wellbeing of some individuals. This is a treacherous area because it involves supply-side and distributional issues, which I have not time to reflect upon tonight. So let me just list some salient examples of public spending which can increase wellbeing in non-economic ways: culture and heritage, the environment, recreation, safety and security. In each of these the private sector has manifestly failed to supply sufficiently for our needs. Reduce taxes and cutting them back may reduce wellbeing.
Education which creates fundamental opportunities and enlightenment is another area where it is difficult to envisage adequate private sector provision. That is why so much education is publicly funded. (But we should treat vocational training differently; that is about economic development.)
An even bigger public spending item is healthcare. While income may not really add to one’s happiness, effective healthcare may by prolonging the period when one is happy. Privately driven healthcare is ineffective and expensive – the American failure is a salient example – so it makes sense for the public sector to be involved. How to design that involvement is complicated – let’s leave that for another day too.
Observe then that my support for public spending is pragmatic rather than ideological. Its need arises when the private sector does not supply it well; taxation is a consequence. The economist’s task is primarily about evaluating the trade-off between more public spending less private spending (although economists get sucked into managing the expenditures, if others do not try to use the resources the economy supplies them efficiently).
However there are some aspects of the economy, other than the level of public spending, which directly impact on welfare and where economists have some expertise. One is the degree of inequality in a society.
Recently there has been a lot of excitement about the book The Spirit Level, published a couple of years ago, although there was a precursor The Impact of Inequality published four years earlier by the senior author, Richard Wilkinson. Another key player in this research is Ichiro Kawachi, who did his doctorate in New Zealand. His and Wilkinson’s work goes back to the 1990s, so what I am to tell you is not as new to the profession as it is to the public.
What this work shows is that there is a correlation between the degree of inequality and various measures of poor social performance. The strongest and longest established correlation is that a larger gap between the rich and the poor is associated with poorer health status; poorer mental health, greater drug use, more suicide, poorer physical health, lower life expectancy, greater obesity and earlier pregnancy. More recently, violence and criminality has been shown to be associated with greater inequality. Inequality is also associated with unequal life chance opportunities, but that has been long known.
While there have been challenges to the conclusion that income inequality is associated with poor social performance, the empirical evidence has been too strong to dismiss the relationship out of hand. More controversial is what the underlying causal processes are.
Social inequality is a complex phenomenon. Consider a society which pays insufficient attention to its elderly; contrast it with another that does not support its children and with yet another which has high unemployment which severely disadvantages its young adults. Each could generate exactly the same measure of income inequality, yet each is likely to malfunction differently. Ignoring the elderly is unlikely to increase criminality, disadvantaging adolescents may.
Wilkinson and his co-author Kate Pickett argue that neuro-endocrinological stress, provoked by a perception that others enjoy a higher status than oneself, undermines self-esteem and generates these malfunctions. Can a single channel explain so much, even if it seems consistent with my earlier discussion about the importance of social status in the economy? I think it better to treat their explanation as a hypothesis and look for further supporting evidence and alternative explanations.
But whatever a research scientist may think, for practical policy purposes the material the authors bring together counsels that it is sensible to try to reduce income inequality and unwise to increase inequality except for a very good reason.
Increasing income in order to accelerate economic growth is not a good reason. Some vigorously advocate cutting taxes on the rich to do so. The empirical evidence is that lower taxes would not have much effect on the growth rate; some contradicts it suggesting lower taxes may even reduce GDP. If there is any effect, it is very, very small; so small that we cannot measure it with any certainty. In any case higher incomes do not in themselves promote greater wellbeing or happiness.
The rich are quite right when they say the tax cuts will benefit them. It increases their self-esteem. But Wilkinson and Pickett warn that not only may this be at the expense of those lower in the income distribution, but also at the expense of the nation in terms of poorer health, more criminality and loss of opportunity.
The second directly economic issue is the level of employment and unemployment. The survey evidence is that the unemployed are not as happy as the employed; that would be true even if they had the same income as they could earn, rather than the much leaner unemployment benefit. That is because work is a socially valuable experience. It does not just pay us, but it also provides what are called the latent social functions of work:
* Employment imposes a time structure on the working day:
* It involves regularly shared experiences and contacts with people outside the nuclear family:
* It links an individual to goals and purposes which transcend her or his own:
* It enforces activity.
A quick summary is that we because we are social animals we are happy to work, for it gives us more than just income. (However let us acknowledge that the last few hours of each week – say Friday afternoon – are a bit of a burden.)
The implication of work having these values to a social animal is that we can enhance wellbeing by keeping unemployment to a minimum. Now while it might seem to be easy to guarantee everyone a job, it is actually hard. Work and Income would love to get the unemployed off their books, they put a lot of effort into doing this, but they are not that successful. More subtly, we cannot guarantee everybody a job for life, other than by having a totally stagnant economy, which would reduce the opportunities which enhance wellbeing.
If people do not have a job for life, that means sometimes individuals will be in transition between jobs: they will be unemployed. Some unemployment is not avoidable, but we can handle it poorly or badly. We sometimes talk about a pool of unemployment; a little limnology can be helpful. The pool may be stagnant with the water sitting there full of rotting detritus. Or the pool may consist of freshwater flowing in and flowing out quickly the other side. Far too much of our pool of unemployed is of the first sort; we need to extend the second, especially so a person who becomes unemployed has some confidence that the stay in the pool will be short and not too unpleasant. A first step would be to stop pouring the acid of contempt onto the unemployed. Their pool is an integral part of a dynamic economy.
Observe that I am sneaking in a case for economic progress. Its aim is not to lift incomes but to generate jobs and opportunities. Because of technological change, because of physical shocks like earthquakes, because of changing overseas conditions, the economy has to be dynamic and changing, even if aggregate real income is not increasing. We need to direct the dynamism so it contributes to wellbeing.
For instance, I support the development of a strong urban Auckland. If we fail there, New Zealanders will go offshore for the opportunities a big urban centre generates. That may, or may not, be a bad thing for the migrants personally – there is no way Rutherford could have thrived here had he stayed. But the rest of us may be worse off. By promoting Auckland, New Zealanders will find more of their children and grandchildren are here rather than Australia. Your family offshore means a loss of wellbeing, even though it is not measured in your income.
Yet I am not arguing we should try to catch up to Australian income levels at all costs. That is what some people want to do, although they are silent on just how the policies they advocate would do this. After all the same policies, when implemented a quarter of a century ago, got us well behind Australia. Moreover the policies will increase income inequality – did you know that we had the largest increase in inequality in the OECD between the mid 1980s and 2010? Didnt help us to catch up with Australia much. Our inequality is about seventh highest in the OECD. Is that really where we want to be? If Wilkinson and Pickett are right, we would be heading for poorer health, more crime and less opportunity.
Did you know our secondary schooling system is doing better than the OECD average and slightly better than Australia on the PISA scores? It is true that we have a brown tail of poor achievers where we need to do better. But will cutting back on educational spending and even privatisation – the inevitable consequence of tax cuts – mean we will do better?
New Zealand life satisfaction is not only higher than Australia’s, it is higher than for most OECD countries. On some measures we do well relative to Australia, on others we do worse. Will tax cuts address those we do badly in? I doubt it. Will it make those we do well in worse? Often.
Forgive the tone of irritation in the last few sentences but it captures the central theme of this presentation. The empirical evidence cautions against the obsession of equating income with wellbeing or of pursuing income growth at all costs. There are other things which contribute as well, and some things – even economic things – may contribute much more: certain sorts of collective spending, better health and education, lower income inequality, less stressful unemployment. The economy can contribute to much of this, but we would be unwise to sacrifice them for the pursuit of income. It should be our servant, not our master; the same applies for economists.
Instead, as Socrates advised us, we should be promoting the good life well lived. Which is what happened with my Mum and Dad. With Amartya Sen’s addition that we should be enhancing people’s life opportunities. Beside that goal, income maximisation is trivial; in any case the economy is going to be stagnant for a while.
Paper to NZIIA Seminar ‘Addressing the Global Agenda’, 20 October 2011
Keywords: Globalisation & Trade;
My message today is both simple and troubling.[1] The simple version is that the unipolar world is coming to an end, and is being replaced by a multipolar one. The change reflects a new phase in the globalisation of the world economy, in which economic power is moving from a concentration in the North Atlantic to where the population is concentrated, especially – at the moment – in East and South Asia. But it is a troubling change because we know little about how a multipolar world will function; particular troubling because it is not clear how New Zealand fits into such a world.
This future is not simply a projection of past trends. Indeed as we shall see, the past is misleading in a fundamental way. The underlying analysis is based upon a formal theory of world economic development best expounded by Masahisa Fujita, Paul Krugman and Tony Venables which I adapted and extended in my Marsden-funded Globalisation and the Wealth of Nations.[2] The underlying model is non-linear – with a strong interaction between economies of scale and the costs of distance – which is why a past trend may bend sharply, despite the model being well calibrated to the past.
The story is an evolving one, and its evolution is uncertain, with perhaps one exception. For the first time in the history of the modern globalised economy there will be no hegemonic power. We are so used to one country regulating the world, that we tend to think of it as an inevitable norm. If there is one message I hope to convey today, it is that we have got to stop repeating the thinking habits of the past, stop looking for the hegemon, and start thinking about what happens in a world in which there are five countries contesting for leadership, but none can succeed.
The Evolution of the Global Economy
First to explain what is happening to the world economy. About two hundred years ago the falling costs of distance triggered a new phase of globalisation where industry developed faster in North West Europe and later in eastern North America, while the rest of the world became suppliers of foodstuffs and raw materials to these industrial centres. This geographical concentration was caused by the economies of agglomeration, the major productivity gains from industries being close to one another. This meant that those industrial centres could pay higher wages: with the industrial concentration there was increasing global inequality of incomes.
However concentration also generates congestion and so the industry spread out to nearby locations – the rest of the Europe and North America. That is still happening, but a new phenomenon was the industrialisation of Japan which was much poorer than Europe at the beginning of the twentieth century, and had caught up at the end. Further falls in the costs of distance enable low wage countries to undercut the high wage economies, especially if they have concentrations of population.
In the last three decades we have seen that relocation of industry occurring in east and south east Asia, and now in India. As the costs of distance fall further, industry, including relocatable services, will move to where the population is. Given that the population is not concentrated in any particular country, economic activity becomes more internationally dispersed.
An Aside: The Future of Food
As a very important aside. the first phase of globalisation was associated with falling terms of trade for foodstuffs, with food prices rising more slowly than the price of manufactures. That – and the falling terms of trade of wool – was a dominant context of the New Zealand economy for most of the twentieth century. However in the second phase, when manufacturing switches to low wage countries whose workers have a high demand for food, the food terms of trade start rising. And so it has been for New Zealand now for almost two decades, coinciding with the East Asian economic boom. That is good news for the prospects of the New Zealand economy, although we have yet to work through the implications for our economic and social development, a topic for another day.
The End of the Global Hegemon
There are numerous nuances to this story of the dispersal of economic activity, but for today’s purposes, this dispersion will lead to a dispersal of the political power which underpins international relations. This is not a pure economic deterministic argument; it observes that in order to be internationally powerful a country needs an economic surplus in proportion to its ambition. It can, for a while, punch above its weight, say as Britain did militarily in the mid-twentieth century, but the cost is to divert its surplus from strengthening the economy and eventually it gets behind those who deploy their surplus more frugally.
For most of the last two hundred years, there was one economy which was so powerful that it regulated the world. Britain did so until the early decades of the twentieth century, America subsequently. The hegemon did not have unlimited power while there was a period in the interwar era in which there was a transfer of the dominant power. The hegemon played a crucial role in orderly international relations, not least in international economic relations.
The existence of the hegemon derived from the high degree of affluent industrial concentration that the falling costs of distance made possible. As this concentration becomes more dispersed, then the political power that goes with it becomes more dispersed too. The sums suggest that there are likely to be five large powerful economies in the medium term: China, the European Union, India, Japan, and the United States of America. None will be large enough – that is, have enough economic surplus – to dominate the other four. (Brazil, Russia and South Africa are each less than half of the smallest of the Big Five. They will each have a significant role in the multipolar world – in part because there is no hegemon – but they are not placed to contest for dominance.)
This is a very different world from that which we are used to. The anxiety of the hegemon is that it will be replaced; there is a huge popular American literature in which each of the other four challenges the United States. The fear is based on the fallacy that necessarily there must be a hegemon. The likelihood is that there will not be, at least in the lifetime of this audience. Instead there will be a group of countries contesting for power.
The era is ending more quickly than one might have expected. You see this in various international negotiations – the Doha Round, on global warming, on sorting out the current financial crisis – where America can no longer provide the leadership that a couple of decades we would have thought normal. That is why the world cannot get a proper settlement on any of these issues.
In simple terms, as America’s dominance diminished, its reaction has been to pursue policies which have accelerated the decline – as Britain did as it lost its hegemony. One may regret some of those policies, but an even greater regret is the speed of the decline, for a rapid decline is making it so much harder to adjust.
New Zealand in a World without a Hegemon
I have not time to discuss how the world might adjust, but I want to use the second half of my presentation to consider how New Zealand might adjust. Our experience has been in a world dominated by a hegemon, and our broad strategy has been to pack in behind it, recognising that generally we are too insignificant – by size and location – to go it alone. Even so we have not been an uncritical acolyte, for our interests have not always aligned with those of the patron-hegemon; moreover sometimes we have, as a good friend, drawn attention to where we think the approach of our patron-hegemon has been wrong.
But we are entering a world in which there is no hegemon. Who is to be our patron now? Can we go it alone? I doubt that course would be easy, for while we may be insignificant we still have international interests. Do we follow one of the Big Five, or try to straddle more than one?
My guess is that if this room were to break into groups each of which was to consider the issue from a particular perspective – capital flows, culture, diplomacy, human rights, law, migration, refugees, security, trade flows and so on – the groups would report back with strategies which were not entirely consistent.
There would be some commonalities. Our relations with Australia would loom large, but in truth while their economy is bigger than ours and they are better located geopolitically, Australia is not particularly significant in the world either and faces challenges similar to those we do. There might also be some agreement that we should work through multilateral institutions, although despite the collapse of the hegemon, many of the most important multilateral institutions are likely to be ineffective for some time to come. So what should we do?
Aside: The Future of Economic Sovereignty
In order to stay within my time constraint I am going to confine my remaining remarks to trade policy. Before doing so I need to say something about the integrity of national boundaries and sovereignty. The fall in the costs of distance is playing a key role here.
The phenomenon of chaining, in which components made in a number of different countries are assembled in yet another one, is no more than the global equivalent of the factory which outsourced production of components to other factories in the town, and later to factories in other towns as the costs of distance (and the economies which come from scale and specialisation) made that efficient.
The new issue from chaining is that different jurisdictions are involved; it is instructive that so powerful are these cross-national outsourcing forces that much of trade policy is about aligning jurisdictional arrangements. What is important is that the jurisdictions are still necessary, not least because businesses need a framework in which to resolve their disputes. That is almost certainly the reason that financial institutions have not created artificial locations to hide from local laws – except for tax avoidance, which involves transactions between related parties. But while international business needs sovereign jurisdictions, the ability of an individual nation to run a totally independent economic and legal policy is being undermined. What this means in Westphalian terms I am unsure, but it certainly means that the functions of the independent nations which have evolved under the Westphalian arrangements will have to adapt.
Future Trading Policy
I begin my focus on trade policy with the platitude that New Zealand is a specialised economy and will have to participate vigorously in international trade. Past experience – from when we were once over-dependent upon Britain – suggests that we should go for diversification, rather than depending on a single market. This may apply as much for a sector as for an economy as a whole. Should general manufactures be too dependent upon Australian markets? Fonterra must worry about becoming over-dependent upon the Chinese market.
That is one of the reasons we are negotiating a trade deal with India, which is likely to be another major market for our food. Indeed we shall have to be opportunistic seizing opportunities for improving trade as they come up. A major caveat is that we dont get into a negotiation the way the Australians did with the United States, where they committed themselves to a deal when hardly anything was on offer.
Because we are such a small player we cannot rely on bilateral deals, say, with each of the Big Five. Meanwhile the multilateral Doha round seems to be comatose. That suggests we will be looking at plurilateral deals, such as the Trans-Pacific Partnership. Again to say the obvious, I would be more comfortable were Japan a part of the negotiations. But the TPP is an opportunity, not a long term strategy. What are we going to do when it is complete; hope another opportunity will occur?
We need to be proactive. Having ruled out a special relationship with any of the Big Five – China, Europe, India, Japan and the US – although of course we want to have as strong relationship with each as our size allows, I want to suggest that there is a case for a special relationship with the ASEAN group. We have a free trade agreement but can we get closer?
The Importance of ASEAN in New Zealand’s Future
To highlight the issue let’s go to an extreme and consider joining ASEAN, although we would need to do that with Australia (and, no doubt, Timor Leste). ASEAN describes itself as equivalent to the ninth to largest economy in the world, although that depends on how the economies which make up the European Union are treated. If Australasia were to join, ASEAN would make a (growing) contribution of between 6.5 and 7.0 percent to the world GDP (measured in purchasing power parity terms). That is about the same contribution as India and Japan, currently the smallest of the Big Five.
Of course ASEAN with or without the extra three, is a much looser political federation than any of the Big Five, which has some advantages to us because it avoids activities, like military adventures, we may not want to get involved in. On the other hand the looseness may limit ASEAN’s effectiveness.
I have used joining ASEAN with Australia only as illustrating a possible strategy. They may not want us, the Australians may not want to, on closer inspection the downsides may be too great. Nor other than size (and implicitly location) have I set out the various attractions of the ASEAN grouping. But it strikes me that we probably need to get closer to ASEAN not only because of the trade potential there, but because the grouping with Australasia is likely to have some significant leverage in international trade diplomacy. And yet that closeness will not infringe our ability to trade with the Big Five or any other grouping or economy in the world.
What is the alternative? I cant answer that, so let me repeat my main message. The international economy which was dominated by a few high wage economies in the North Atlantic and Japan is coming to an end; manufacturing and tradeable services are going to be more dispersed; if they are concentrated it will be in low wage populace conurbations. That is good news for New Zealand as a food exporter, but less cheerful is the likelihood that the new world regime will have no hegemon to regulate international relations. Instead there are likely to be five big players, contesting for leadership, with none able to dominate the rest as the British and the Americans did in the past.
New Zealand faces an enormous challenge in this rapidly evolving international environment; something which will preoccupy us for the next two decades. I have made some tentative suggestions, the most important of which is that Australasia probably needs to get closer to the ASEAN grouping.
[1] While self-contained, this paper is also a continuation of B. H. Easton (2011) ‘The Coming World Economic Order’, New Zealand International Review, September, October, p.7-11.
[2] M. Fujita, P. Krugman & A. J. Venables (2001) The Spatial Economy: Cities, Regions, and International Trade; B. H. Easton (2007) Globalisation and the Wealth of Nations.
Poverty in New Zealand, St Peters on Willis , Wellington, 17 October, 2011. (This followed a presentation by Stephanie McIntyre, the director of the Downtown Community Ministry.)
Keywords: History of Ideas, Methodology & Philosophy; Political Economy & History;
I want to begin by saying I have an enormous respect for Stephanie McIntyre, the team she works with, and the many teams in New Zealand and throughout the world, who deal with similar – often intractable – social problems. You need a temperament, an optimism and a faith to work in places like the Downtown Community Ministry, talents which I have not got. I deeply respect those who do, especially as it can be pretty grim down there.
Tonight I have been asked to put their work in a wider context. Pretending that the DCM is solving the problem is a nonsense. It is dealing with our failure as a society, providing an ambulance at the bottom of the cliff. I’ve been asked to look at the fencing at the top. We will always need ambulances, but do have to have so many wrecks for them to deal with? Cant we make the fence better?
In a context such as here at St Peter’s Church, my natural reaction is to start off with a biblical text. An obvious candidate would be the parable of the Good Samaritan. It is worth recalling that Jesus told the parable as a response to the question of who was my neighbour; his answer makes it clear to those in Judea that their neighbours included the Samaritans whom they treated as quite different people.
That is what Stephanie and her team are doing, accepting those who – one way and another – society has rejected. But while we need to reach out to those who have been mugged, do we have to have quite so many who suffer that fate? Can we reduce the amount of robbery on the road. Have we got the right political and social system? Is it providing enough fences?
This was an acute issue in the nineteenth century. Industrialisation and rural depopulation was causing social turmoil. Among the most important critics of, and conscience for, change were Christians of all denominations. Our social security system, which aimed to remedy some of the defects of capitalist society, was called ‘Applied Christianity’. You dont hear that expression much, do you, nowadays? Perhaps that is the problem; when people try to change our social welfare system, they forget its underlying principles.
That inattention to ethical principles in the modern economy is at the heart of what I want to discuss tonight. An economy is not a moral entity; economic development does not occur according to some fundamental moral rules. Morality has to be consciously introduced if we want to have a moral economy in a moral society. That is what our ancestors did in the nineteenth and early twentieth century.
How do they do this? In a modern society that is the function of democracy – to give moral guidance to the technical decisions. Christian dont have any collective competence in designing bridges, but they may be involved in determining where the bridge should go.
Oh I know that Christianity is no longer as dominant in as it was when – say – the social security system was introduced. And I know too there are people in this audience who belong to other faith communities, or reject them altogether. But all of you have a moral code, and when it comes to the public policy questions with which I am concerned tonight, there are is almost universal agreement. If I am using a Christian framework it is because of tonight’s venue.
But let us not ignore the differences. Islam tends to think differently about interest from Christianity. That is debate which I am happy to contribute to in another context. Tonight there is sufficient agreement on my main point: there is remarkably little public morality in economic management.
So here’s a question. What are the ethical principles which underpin the way we manage the economy? Of course there are some non-ethical principles which restrict what we can do – such as the laws of thermodynamics. There are the equivalents in economics: a simple one is you cant borrow – run a deficit – unless someone is willing to lend to you; if they think you have borrowed too much and stop lending to you, then you are going to have to live within your income.
Can we think of any ethical principles which we use in making decisions today about the economy? Not necessarily ones directly in the scriptures, but principles of which Jesus might have approved. For instance one of the reasons social security was called ‘Applied Christianity’ was because it was based on the principle that the young and the old and the sick would have first call on the resources of the community. I dont think that is explicit in the Gospels anywhere – it is implicit in the Torah and again you can find things like it in the Koran – but I reckon Jesus would have been comfortable with the principle.
One can observe, I think, in our human rights framework principles that Christians would be proud of, but what about economics? What principles are used to govern today’s economy, principles one might say are moral?
At this point I invited the audience to nominate ethical principles which appeared to apply in economic management today. The only one they could think of was that the whole economy contributed when there was a calamity like the Christchurch earthquake. It is the issue I develop shortly.
I cant think of any others either – which is interesting, isnt it? – especially if you follow the literature that argues that Christian attitudes were critical in the development of capitalism. Has capitalism got away from its foundations?
So I am going to tackle the issue the other way around. Let’s look at a policy which seems terribly important in the management of the economy, and ask how it relates to ethical issues. Because I have only limited time I am going to focus upon only one.
A principle that appears to be central in our public policy is that tax rates should be low and should be reduced overtime. There are a lot of complexities in this, but to illustrate consider the options the government had to pay for the almost $10 billion that the Christchurch earthquake has imposed on the public purse. At the time I raised the possibility that we should fund this horrendous cost by a levy of about 3 percent on income taxes – that would raise a 30 percent income tax rate to 31 percent, not a big levy but after about ten years it would pay off the cost of the earthquakes.
Apparently the government considered the possibility. A senior minister told me of two reasons why they did not implement it. The first was that they still could, although in my judgement the window of political opportunity has gone. Shortly after the most damaging of the quakes we were aching to show solidarity with our Christchurch brethren. I saw a reaching out to those who were suffering and a willingness to share the burden of their pain. It is still there but for the government to raise the levy would now seem opportunistic, as the second reason explains.
For the minister also said that having just reduced income taxes the government did not want to appear to reverse its direction. For the record I am a pragmatist on the level of tax; for me it is the means of raising revenue to pay for the collective goods and services that a community wants. If we need more, then taxes need to go up, if we need less, they go down. Apparently this government thinks they should be going down whatever. That is not a pragmatic decision, it is an ideological one.
Let’s look at it pragmatically. The government is committed to eliminating the public deficit by 2014. This is a technical decision reflecting its judgement of how much the world will continue to lend to us. The judgement may be wrong, but it is not an ethical one; I take it as a given.
But how is the government going to reduce the deficit? If it wont raise taxation, the deficit reduction will have to come from cutting government spending. Now you might say that some of those cuts are a good thing, you dont approve of particular programs or you think the program delivery is inefficient. Again we can discuss these as technical issues, and certainly we should make cuts if the program is undesirable while seeking to increase the efficiency of government delivery.
But we should pursue such cuts irrespective of whether there were those dreadful Canterbury earthquakes or not. The issue here is that in order to cover the costs of the earthquakes, what further measures are necessary above what we would do anyway? We have resolved that the costs will not fall entirely on the victims, although the effect of the government policies is that they may end up carrying a greater share of the burden than has been promised. Who is to carry the rest?
Rejecting the earthquake levy means that the burden of the earthquake is not being carried according to an ability to pay. Let me repeat that. The contribution to the public weal from income tax means that the better off make a greater contribution. When the government said it would not introduce the earthquake surcharge, it was saying that those with the greater ability to pay would not carry a greater share of the burden.
Instead the burden is going to be paid by further cutting government spending. In which case it is the beneficiaries of that spending who are going to pay for the burden of the earthquake. But are not the beneficiaries from public spending those who are in greatest need? There are some exceptions, but as a rule ‘yes’. Those who will suffer from the cuts are the young and their parents, the old, the sick and the invalids or marginalised in society like those Stephanie and her team work with. The environment – that is, the future – will suffer too.
Especially as we run up to an election, politicians will put their hands on their hearts and say we would not dream of charging the earthquake to these people. Dont reply with a ‘yeah right’, but ask who do they intend to carry the burden instead?
This opens up the debate on low taxation rates. Remember I am not opposed to low taxes as a matter of principle; but I am challenging economic managers whose policy is to lower taxes irrespective of circumstances.
They will offer various justifications, including arguing that low taxation increases economic output and economic growth. Whether it does is a technical issue; my review of the empirical evidence suggests that it if there is an impact from moderate tax levels on economic growth it is very small – too small for a scientist to be sure there is any impact. If there was scientific evidence, we would not be having these debates.
But suppose, just suppose, the tax level impacted on aggregate output. You are quite entitled to say – so what? Is the purpose of a society to maximise economic output? Didnt a couple of millennia ago a bloke by the name of Paul say something about ‘the love of money is the root of all evil’?
Paul may have been a bit extravagant, but he challenges us to ask what is the point of economic activity. On Thursday evening, I am reporting to the Fabian Society – at the sister church across the road, St Johns – that the empirical evidence is that above an income threshold, increases in material consumption dont have much effect on happiness or life satisfaction. Now you may want to challenge whether happiness and life satisfaction are the purpose of life, but I’d have thought those sort of objectives were closer to the ultimate purpose of being human than material consumption.
To make it clear: as a pragmatist, I know there are some benefits from increased material output, and some downsides too. But I dont think of consumption as an ultimate objective any more than I think lowering the tax level is an ultimate objective. By building economic policy around them we damage what we really value, we undermine the ultimate concerns we have.
Humankind is a social animal. We have had interesting confirmation in this from a book The Spirit Level by Richard Wilkinson and Kate Pickett. They report a mass of studies which suggest that societies with greater gaps between the rich and poor tend to have poorer health performance than those where the gap is narrower. (They also report – with less evidence – that high inequality is also associated with higher criminality.) We dont know quite what is going on in a causal sense; perhaps low inequality societies deploy their health resources more effectively, perhaps there is a physiological process involving stress which is higher in high inequality societies. Whatever is the mechanism it almost certainly involves some social processes, confirming that humankind is a not an isolate but lives in a community.
As John Donne said: “No man is an island, entire of itself; every man is a piece of the continent, a part of the main … any man’s death diminishes me, because I am involved in mankind and therefore never send to know for whom the bell tolls, it tolls for thee.”
That is why we were moved by the sufferings from the Christchurch Earthquake, by the sufferings of the sort of people that Stephanie and her team look after, why we support the spending of $500 million a year on cancer treatment, and so on. It is not simply ‘there but for the grace of God go I’. After all it might be more commercially efficient to insure yourself against such eventualities. But that is not what we are concerned about; we are concerned to reach out to our fellow human beings. Sometimes we do it professionally as Stephanie and her team do, sometimes we do it individually as when we make a charitable donation or help an old lady across the road, but we also do it communally through the state and other collective agencies, especially when these more private decisions are unable to give the community response we desire.
Taxation is a way we empower the state to act upon our behalf. As we lower the tax take we reduce the power of our ability to act a community. That is the danger of making tax reductions a fetish.
Taxation is not the only way we empower the state to act on our behalf, although it is the only one I have had time to deal with tonight. Rather than trying to list all the other ways, I want to ask what we can stop the crippling of society from economic policies which are not anchored in human principles?
We have lost our moral compass; we debate and program economic issues ignoring the ethical underpinnings. The faith communities remain the major custodians of that compass. Surely they, and others of good ethical will, should be holding the politicians and the technicians to account by asking what are the ethical principles underpinning the policies they advocate.
Dont engage with them on the technicalities of their policies. You dont have the expertise to do this, and you will be sucked into the amoral morass that these technical debates thrive upon. (And for these purposes, dont get tangled up in non-economic ethical issues, as important as they are in other venues. Jesus gave a lot more advice on how to organise society than he did on sexual conduct.)
Your comparative advantage is to scrutinise policies from an ethical framework. Actually it is an absolute advantage, for the technicians have virtually no knowledge about the ethical foundations of their policies. Initially they wont even understand the challenges you are posing, so morally autistic have they become; they will fudge. Persist.
Explain that you are not interested in their personal ethical standards – theirs are probably as high as yours. What you want to know is the moral foundations of their public policies. Insist that if they cannot explain their ethical principles in simple terms to a non-technician like yourself, they have no moral right to be recommending the policies they pursue.
Jesus said: “ No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. You cannot serve God and Mammon.”
Certainly we must harness Mammon to serve us and to serve God. But Mammon is in a subservient role not a dominant one, for there are higher principles. Is it not time for the godly to stand up for them?
Listener: 14 October, 2011.
Keywords: Macroeconomics & Money; Regulation & Taxation;
I have been preoccupied by leaky building syndrome, which may have damaged up to 110,000 dwellings as well as costing considerable domestic stress and even lives. Commercial and public buildings have suffered, too. There were many causes of the disaster but it illustrates the failure of regulation, which should have overridden them. Light-handed regulation – the fad of the past two decades – assumed that private actors would govern themselves to a high standard and not take short cuts or exploit others; that where they were not naturally inclined to behave this way, the threat of litigation would give the right result.
Of course there would be the odd failure; and although a few might be understandable, 110,000-odd suggests sheer carelessness. It is not the only regulatory failure. There are many others, including Cave Creek, and possibly the Pike River coal mine and Tamahere coolstore, which cost lives.
You don’t see expressions like “light-handed regulation” much nowadays, and measures are being introduced to impose public supervision. Even as the Royal Commission on Pike River continues deliberating, the Department of Labour has all but accepted responsibility for one aspect of mine safety by establishing a High Hazards Unit, with considerably more resources than the fig-leaf of mine inspection that characterised recent years.
However, the general impression is that the Government does not really know what to do, and those who benefit from the slack oversight have resisted any attempts to impose adequate public regulation. The Minister of Building and Construction announced the Government could not afford to fund all the leaky building remediation, implicitly accepting its responsibility for the failure resulting from the light-handed regulation it introduced. Do we have a disaster so big the taxpayer cannot afford to fix it?
It’s not just a matter of remedying past failure – although those who have lost dear ones can hardly be expected to be consoled, and many will be badly out of pocket through no fault of their own. Apparently there are still troubles in the building industry that may lead to more badly built buildings.
I have also been preoccupied by the long recession the world is in, with its unemployment and lower incomes costing considerable domestic stress and even lives. There were many causes of the global financial crisis, but it, too, illustrates the failure of light-handed regulation. It was assumed the financial sector would govern itself to a high standard and not take short cuts or exploit others. There would be the odd financial failure (of course), but not the near collapse of the world’s entire financial and economic system.
You don’t see expressions like “light-handed regulation” much today, since (even) Alan Greenspan, the chairman of the US Federal Reserve who presided over the regulatory failure, admitted his reservations. And although a variety of measures have been proposed to increase public supervision, nobody is quite sure what to do.
Meanwhile, the international finance sector, the main beneficiary of the slack oversight, resists significant change. Individuals made fortunes out of the light-handed regulation (paid for by others’ losses) and they are not willing to give up future opportunities to extend them, let alone admit their wealth was obtained in not entirely honourable ways.
The governments involved with these troubles are saying they cannot afford to fund all the required bailouts. So we have an international disaster so big the world’s taxpayers cannot afford to fix it. Because there is no international authority, there is no one to say this is how we are going to fix it, allocating the costs – fairly or unfairly (as we had with our leaky building syndrome). Instead we have a stand-off, and the world economy continues to leak. There is even the possibility we will have a second global financial crisis.
The fallout from leaky building syndrome is minuscule compared with that of the global economic crisis, but the parallels suggest something more fundamental is going on: that the world has entered into political arrangements that are neither preventing some appalling failures, nor able to address them when they occur, instead grimly marching on to repeat its mistakes.