Contribution to a Panel on ‘The Big Questions and Research Challenges in the economic history of Australia and New Zealand?’ AEHB Conference, Sydney, 14 February, 2007.
 

Keywords: Political Economy & History;
 

I have been asked to offer a New Zealand perspective on some of the big questions facing New Zealand economic history. My responses are mainly on the supply-side. Faced with the list of possible questions, I am reminded on Winnie-the-Pooh who when visiting Rabbit was asked ‘Honey or condensed milk with your bread?’ was so excited that he said, ‘Both,’ and then, so as not to seem greedy, he added, ‘But don’t bother about the bread, please.’  My reaction to the circulated list of issues is the same: ‘all of them’. But we must prioritise.
 

Because New Zealand is only a fifth of the size of Australia, we cannot expect the same degree of covering everything. There will be gaps, and we wont have the same intense reworking of topics and periods which Australia can afford. Instead, we will be grateful for monographs, like Hazel Petrie’s Chiefs of Industry, which fills in some of Maori economic history in the middle of the nineteenth century, although what happened before and after remains largely a mystery, hile regional differences were probably more nuanced than Hazel was able to tease out. The issue then is how to get more of such work done?
 

That requires more scholarly interest in economic history. As I said in my main paper – A New Economic History of New Zealand: Some Issues , New Zealand general historians are not greatly interested in economic history, perhaps because of limitations in their vision. (Some seem to think that converting a historical price into its current equivalent is all that required.) It is good though to see the exceptions – general historians like Hazel and Jim McAloon – tackling economic history topics intelligently and energetically. We need more of them.
 

We also need more economic historians in our universities. That means attracting more students. It would be good if general historians encouraged their students to take ECON 101 (although I acknowledge it is often dreadfully taught), and then to do some economic history papers. We need more inspiring teachers. Last evening Bruce McComish and Ian McLean were recalling with great affection John Gould of Victoria University of Wellington in the 1960s. It reminded me of my debts to British economic and social historian Barry Supple and to Graham Miller of the University of Canterbury.
 

Another source of students and teaching is business history. It is good to see a group developing around the Auckland Business School. Business histories in New Zealand are typically written by general historians, and tend to be without economic history, anecdotal, and often celebratory. In contrast I recall Barry Supple’s history of the Guardian Royal Insurance in which he also used to write a history of the nineteenth century insurance industry. Guardian Royal Insurance could not have asked for more: their history recalled 30 years later on the other side of the world. That is not the fate of celebratory business histories.
 

The third source of students is economics itself. We treat economics students badly if we teach only a highly theoretical economics with no sensitivity to institutional differences. Ric Garside is challenging Otago students by asking whether Japan’s different economic institutions were important in its economic success. Les Oxley of the University of Canterbury sees economic history as a source of material for applied economic research, although he is better than those econometricians who simply see it as source of data for cranking through mechanistic a-institutional econometrics.
 

Public Policy students need some economic history too, again to avoid being trapped into an a-theoretical or rigid institutional framework. The public histories, such as those John Singleton are writing, are thus also important as economic history to reaching out to those involved in public policy.
 

I’ve stressed the role of teaching because that has to be the foundation for research in New Zealand. Currently research is not well supported or funded. To give but one example: I have just applied for research funding but there was no single subject group which covered my topic of an general economic history of New Zealand, and I had to apply to three groups – Economics and Human and Behavioural Sciences for economics, Humanities for history, and Social Sciences for business studies. One shant be surprised if the application falls between all three stools.
 

Finally, moving from the supply-side, I want to say it is crucial New Zealand economic history is done in comparison with the history of other economies. You may think that some of New Zealand is so particular to its experience, there is no parallel with anywhere else. But when Hazel Petrie was studying Maori Tribal business she looked at, among other places, Hawaii where King Kamehameha was doing similar (but earlier) things.
 

If we don’t look elsewhere and do the comparisons, we fall into an isolationist trap. We will think we are exceptional when we are not, and miss when we are really exceptional.
 

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A RESEARCH CHALLENGE IN THE ECONOMIC HISTORY OF AUSTRALIA AND NEW ZEALAND: Paper to a workshop at the 2007 EHSANZ Conference, Sydney, 14 February 2007.[1]

Keywords:  Political Economy & History;

Exceptionalism is the notion that one nation’s story differs qualitatively from others, because of its unique origins, national credo, historical evolution, distinctive political and religious institutions, or whatever – that the experience of a nation is so different that its story can be told without reference or only in contrast to others. Perhaps the approach is most vigorous in American – commencing with Alexis de Tocqueville in 1831 with Frederick J Turner’s frontier thesis particularly influential. [2],[3] [4] Especially in today’s America – but also at other times in, other nations – exceptionalism has had a political agenda justifying the nation operating in ways unlike other nations.

The focus in this essay is the implications for (economic history) research. Economic exceptionalism most commonly arises in the argument that the unusual nature of an economy justifies policies which are outside conventional analysis (as distinct from advocating that all economies should pursue such policies), but necessarily there is an exceptionalist economic history which underpins this.

A rejection of exceptionalism still accepts that every country or economy is unique, that each has characteristics which make it different from others. At issue is the degree in which those characteristic are so qualitatively different – so exceptional – that there is little need nor use for drawing parallels with other economies.

That a country comes on some valid dimension at an extreme does not prove its exceptionalism either. Some country has to be top or bottom in the ranking. Thus even were Keith Sinclair correct in arguing that New Zealand was the most classless country in the world, that does not prove New Zealand is exceptional. [5] Some country has to be the most classless.

Nor do doubts about the extent of exceptionalism mean it never occurs. Britain’s industrialisation was exceptional, because there were no competitors. It would be wrong however, to assume that all other industrialisations are as exceptional, or that the exceptionalism of British nineteenth century industrialisation means that Britain is necessarily exceptional today.

Exceptionalism is sometimes associated with isolationism. It need not be. An economy may remain open to trade capital, technologies, and migrant, but they play a peripheral role in the story being told. One of the most astonishing versions of this is the tendency to discuss innovation policy as if there is no technology transfer, and that only domestic research and development matters. More subtlety, it is not unusual to write a history – even an economic history – where events overseas play a minor role.

It might seem that economic histories are less prone to exceptionalism, since their accounts are greatly influenced by the generic models which economists use to describe economic development. It might seem that most economic historians use the same set of equations, but insert different parameters and other external variables, resource endowments, initial conditions, and so on.

Yet, consider the historiography of the Argentinian economy. It was among the richest economies of the world at the beginning of the twentieth century with a per capita GDP above that of the Western European twelve, that the Maddison data base provides as a benchmark. [6] By the end of the twentieth century it had fallen out of the club, with a per capita GDP of about half of the twelve. There is a considerable economic literature explaining this poor performance usually involving explanations peculiar to the Argentinian experience, covering land ownership, the banking system and Peronism and so on. [7]

The same data base portrays Uruguay having a very similar experience – albeit starting from a slightly lower level in the early twentieth century. As it happens Argentina and Uruguay are the only two economies to have fallen out of the ‘Rich Club’ in the last century. Exceptionalism might attribute this to something in the water of the Rio da la Plata, or whatever. However, the next two poorly growing high income economies were Australia and New Zealand. Because each then had very high incomes relative to its other members at the beginning of the twentieth century, they remain members of the Rich Club, although their relative position has fallen.

Explanations particular to the La Plata economies cannot apply to the Australasian experience. The commonality between the four is that they are all primary product exporters, and in each case they have experienced falling relative prices for key exports. It is not difficult to construct an account of economies which face falling terms of trade for their exports experiencing economic difficulties which slow down their growth rate. [8] Instructively, there are no other ‘Rich Club’ members which are so dependent upon primary product exports (although Canada and the US have regions with similar economies). Fifth on the poor growth performance ladder is Britain, presumably the result of losing its first-mover industrialisation advantage.

The general explanation of deteriorating terms of trade for primary products does not invalidate the multitude of exceptionalist studies of Argentina (and Uruguay, Australia and New Zealand). Rather they describe the mechanisms by which the deterioration in the external sector fed through to an overall poor economic performance, perhaps explaining a little of the magnitude of the decline, but not its general direction

It will also be necessary to discriminate between the experience of different primary products. Argentina, New Zealand and Uruguay have few valuable minerals, their exports being mainly pastoral products. However, minerals have become a significant component of Australian exporting, and have experienced a different price path.

That leads to consideration of the third member of the South American Cone. In in 1900, Chilean incomes were not quite high enough to make it a member of the Rich Club. Over the century they grew faster than those of the other two southern-coners, and today are slightly higher.

An exceptionalist explanation might be that the ‘free market’ policies implemented by the Pinochet regime caused the high growth rate. The statistical story is a little more complex. The advent of the regime set back the long term growth rate, and the economy did not return to the trend for 20 years. The above trend performance only applies since 1992, a period in which copper prices have been very favourable. Chile is the world’s largest exporter of copper, and copper is its largest export earner (40 percent).

Would it be exceptionalism to give prominence to the Chilean copper industry in an analysis of its recent economic performance? The answer depends upon the degree to which the explanation is with or without reference to a general account of how the terms of trade influence economic growth – the extent to which the experience of comparative economies is a part of the story. (In another sense of the work ‘exceptionalism’, it would be if the elaborated account dealt exclusively with copper and did not test other possible explanations.)

Avoiding exceptionalism in economic history therefore involves comparative analysis using a common model albeit perhaps with different parameters and variables. Simply using the standard generic model is not enough.

Big questions comparative analysis involves a major challenge, because the (economic) historian needs to have a wide knowledge of other economies. There are a few bilateral comparisons but even fewer useful multilateral ones. Thomas Bender’s A Nation among Nations got around the shortage by selecting five well-worked topics (but this in no way minimises the achievement, nor interest, of the book). [9]

It is easier to challenge exceptionalism than it is to constructive an alternative. The way ahead probably (initially) involves (bilateral) comparative histories of economies, and (multilateral) comparisons of particular topics across a number of economies. The choice needs care. There may be little value in comparing Australia with Britain,  say, except to get a contrast – which may slip into exceptionalism.

The obvious comparators for the Australasian economies are the Southern American Cone, South Africa, the Canadian resource based provinces, and the American West. The simplest comparison may be Australia and New Zealand (or Argentina and Uruguay) although a rigorous comparison of the Australian state economies may also be fruitful. However, a danger of exceptionalism lurks in the simplest comparisons. It profits little to conclude that neither Australia nor New Zealand is exceptional, but leaving open the possibility that Australasia is. Any explanation has to be tested against other countries.

There is not the space to do so in this short paper. Here we set out in a preliminary way a big question. The accompany graph [graph not available] shows since 1870, the ratio of Australian per capita GDP to New Zealand per capita GDP in common prices, sourced from the Maddison data base. I propose not to consider the first two decades. They look so interesting one is reminded of the caution of Moser’s law that if a statistic looks interesting it is probably wrong. Careful analysis of the data quality is necessary before a conclusion is reached.

Much of the data in the period from 1890 to the 1960s is problematic too, although by the 1950s the data is official. The story it tells over the three-quarters of a century is that the two economies had roughly the same level of per capita production albeit with deviations not more than 10 percent from each other. (If the data is sufficiently robust, there is a case for studying the cyclical variations, but space precludes that here. )

It is after the 1960s which is intriguing. Commence at 1966 because that is when New Zealand suffered a major shock when its structural terms of trade fell about 20 percent, mainly because the price of wool, which made 40 percent of exports by value, fell 40 percent relative to import prices. [10] In contrast to New Zealand crossbred wool, used for carpets, the price of Australia’s finer wools, used for fashion-ware, did not fall to nearly the same extent. It is also the time when the Australian great mineral boom begins. From 1966 the Australian economy grew faster than the New Zealand economy by an average of 1.2 percent p.a. in per capita terms. (This may not be a productivity difference, since labour force utilisation may differ.) Why? Once I argued that the aforementioned terms of trade fall explains much of New Zealand’s subsequent economic performance after 1966, and while I do not resile from this analysis, it does not explain the superior performance of the Australian economy, nor does it seem likely that a one-off shock could alone have a continuing impact four decades later.

 My one comparison between the two economies (with Rolf Gerritsen) assessed the effects of the different market liberalisation policies in the 1985 to 1995 period, concluding that New Zealand’s more extremist liberalisation policies were more damaging. [11].[12] That is not so evident in the Maddison data, but even were a more delicate analysis confirm that conclusion, it does not explain the poorer performance before nor after.

Having found myself guilty of a form of economic history exceptionalism, by being over-concerned with New Zealand, I plead in mitigation there is probably no New Zealand economist who has focussed more on the global connectedness of the economy, nor done as much comparative analysis. (In the second case my error arose because I used the OECD as a benchmark, instead of Australia.) And I have volunteered my guilt, identifying here a ‘big question’ in Australasian economics: to explain a massive divergence in growth performance in the last four decades, after a twice-as-long period of near convergence. Explaining the difference ought to involve some cross-checking with other comparator countries: such as Argentina and Chile despite each being poorer.

More generally, my error – which nonetheless reflects some research progress – is a good illustration of the analytic weakness of excessive focus on a single economy, without comparing and contrasting it with others – the dangers of exceptionalism.

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Notes

[1] This paper reflects my Marsden funded Globalisation and the Wealth of Nations (to be published by AUP at the end of this year), It is also prospective of an economic history of New Zealand, which is currently funded by a Claude McCarthy Fellowship.

[2] A. de Tocqueville (1835, 1840) De La Démocratie En Amérique (Democracy in America) 2 Vols.

[3] F.J. Turner (1921) The Frontier in American History.

[4] For a New Zealand contribution see M. Fairburn (2006) ‘Is There a Good Case for New Zealand Exceptionalism?’ in T. Ballantyne and B. Mologhney Disputed Histories.

[5] K. Sinclair (1959) History of New Zealand.

[6] A. Maddison (2001) The World Economy: A Millennial Perspective.

[7] Space precludes a comprehensive list of references but see V. Bulmer-Thomas (2003) The Economic History of Latin America since Independence. The terms of trade story is explored in Easton (2007) op.cit., Chapter 13 There are a number of comparative studies including A.E. Dingle and D.T. Merrett (1985) Argentina and Australia: Essays in Comparative Economic Development and D. Greasley and L. Oxley(2000) “Outside the Club: New Zealand’s Economic Growth 1870-1993. International Review of Applied Economics.. Vol 14, No 2.

[8] B.H. Easton (1996) In Stormy Seas.

[9] T. Bender (2006) A Nation Among Nations: America’s Place in World History.

[10] Easton (1996) op. cit., Chapter 5.

[11] B.H. Easton, & R. Gerritsen (1996) ‘Economic Reform: Parallels and Divergences’, in F.G. Castles, R. Gerritsen & J. Vowles (ed). The Great Experiment: Labour Parties and Public Policy Transformation.

[12] B.H. Easton (1997) The Commercialisation of New Zealand.

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The author has been awarded a 2007 Claude McCarthy Fellowship to develop a new economic history of New Zealand. This paper raises some issues.
 

Keywords: Political Economy & History;
 

General Histories of New Zealand
 

New Zealand general histories tend to ignore the economy and its implications for the evolution of New Zealand. One example will illustrate the point.
 

Keith Sinclair’s A History of New Zealand devotes about a paragraph to the gold rushes, and that was only how it attracted immigrants. That the rushes were short-lived is not mentioned. That he equates gold with land as an attraction for new settlers means he overlooks that the gold was a depletable, and like other depletables – seals, whales, other minerals, timber, kauri gum – would soon be exhausted so providing no basis for a sustainable settlement for the population it attracted. That Sinclair is writing from an Auckland viewpoint is not defence. Auckland depended upon depletables too (gold, timber, gum) and in the 1860s it was a military town unsustainably funded by the British government. Sinclair is implicitly supporting the myth that the ‘glorious’ European settlement in New Zealand was always sustainable. Until the arrival of refrigeration it probably was not, at least at the level of the settler population had risen to.
 

This is but one example of where economic history can throw light on – and indeed challenge – the evolution and myths of New Zealand. But there is a tendency for general histories to avoid such opportunities and insights. There are some recent exceptions. Both Jamie Belich’s two volume general history and Phillipa Mein Smith ‘s Concise History are aware of economic forces, although each is limited by the inaccessibility of economic history to general historians.
 

The relevance of the economy in history need not be a matter of materialistic determination, but that omitting the economy leaves an incomplete account, not unlike the argument that until recently New Zealand histories were blind to the experience and relevance of women.
 

Economic Histories of New Zealand
 

When the issue is raised with historians they frequently cite 1985 Gary Hawke’s The Making of New Zealand (even when they have not read it). It is not the first New Zealand economic history. Preceding it are John Condliffe’s two volumes to 1957, Muriel Lloyd Prichard’s volume to 1939, Colin Simkin’s account of the macroeconomy between 1840 and 1914, John Gould’s examination of the post-war economy to 1981, plus the three long essays in the first edition of The Oxford History of New Zealand by (historians) Jim Gardner and Tom Brooking and by Hawke.  There are three books by Bill Sutch, two first published in the 1940s but substantially revised when published in the 1960 together with a volume of essays in 1966. (However, Sutch did not write about the ‘monoculture’ (or ‘processed grass’) stage of New Zealand’s economic development, in them, and one has to go to reports and the oral tradition.)
 

Whatever the achievements of Hawke’s book, it had a limited focus. It barely touches on the economy before the 1850s, and devotes but a twentieth of its space to the economy after 1966, despite being written almost two decades later. In any case, history has moved on. Both Belich and Mein Smith devote about a fifth of their works to events after the mid 1960s, while there has been considerable work by economic historians since 1985 both as monographs and papers, and occasionally books.
 

If history has moved on, so has historical research. Even over the hundred odd years the Hawke book covers, there have been significant contributions by David Greasley and Les Oxley, (economic geographer) Alan Grey, Brad Patterson, Keith Rankin, (political scientist) Herman Schwartz, Brendan Thompson, the Auckland Business History Group, and on the Maori economy.
 

In the second edition of The Oxford History of New Zealand Hawke extends his contribution to 1992. Third edition will have chapters by (historian) Jim McAloon to 1910 and Geoff Bertram after. John Singleton wrote the New Zealand contribution to the E.H.Net online Encyclopaedia of Economic and Business History. There are also numerous articles, monographs and books by general historians which are of interest to economic historians, of which Malcolm McKinnon’s Historical Atlas of New Zealand is a magisterial example. (Note that these need not include works of biography, policy or public history, which are usually not treated as in the scope of economic history. Were they relevant, mention would also be made of histories of the Reserve Bank by Singleton et al and the Treasury by McKinnon.)
 

Research on history of the population has also progressed, especially under the leadership of (demographer) Ian Pool. (It is not unusual to assume that population changes were responsive to the economy – the economy of scales issue aside. However, it seems likely that population growth – perhaps in relation to key resources or the like – drove some of the economic changes.)
 

Data are documents to an economic historian. Another important recent resource is the long-term of demographic, social and economic data series in New Zealand covering the period between 1840 and 2004 on the Statistics New Zealand website, collected by staff at Treasury
 

My own contribution is most notably In Stormy Seas which covers 1920 to 1995, and includes a chapter on the earlier economy based on my earlier Towards a Political Economy of New Zealand. I was also the major contributor to the economic section of Te Ara, the online New Zealand Encyclopaedia. Additionally I have produced since 1995 various monographs on economic history topics, not all of which cover the post-1995 period.
 

So there is much new research since Hawke’s book. The next sections ponders on some of the issues which have already confronted the writer in planning the book.
 

The Scope of An Economic History
 

Economic histories of most rich countries pay little attention to their pre-market economies. But in the case of New Zealand it existed less than two centuries ago. Even so, most of the works cited above which do not address the Maori New Zealand economy, or do so superficially. To do otherwise presents a challenge beyond economics, which tends to focus on markets and leaves earlier economic forms to anthropologists.
 

Today, general histories of New Zealand cover pre-European times, albeit cautiously for there are many uncertainties and gaps. Moreover, there are continuities between different periods, and that – as will be discussed – must apply also from pre-market to market Maori. The implication is that no matter how fragmentary the evidence and how ‘anthropological’ that which is available, there should be an account of the pre-market economic history of New Zealand today.
 

How far back should it go? The answer might be as far as the evidence of economic activity allows. However, like much history, the issue of the past interaction of the economy and the environment has something to say about contemporary issues, especially the possibility of a sustainable economy which is increasingly a part of the public vision. .
 

Unusually among rich economies, New Zealand’s human settlement goes back only a thousand years (roughly). Before that the environment was, in some sense, pristine. It is possible to trace the impact of humans on that environment, including even – to some degree – the impact of the first Pacific Island settlers. A larger impact came from the first European: there has already be mention of the dominance of the ‘quarrying’ of depleting resources in the early settlement, although much environmental destruction was collateral – such as the loss of specie from habitant destruction – or through ignorance – soil erosion may be the most spectacular example. A major conduit for that damaging impact was the economy so it would be almost irresponsible not to include the environment in a modern economic history, even if earlier ones had not. .
 

Thus a chapter on pre-economy seems appropriate to set a base for the environment. Mein Smith begins her account with New Zealand’s break away from the rest of Gondwana 80 million years ago. My story may begin earlier. It will also remind the reader that geological events led to mineral deposits and landforms which are the basis of New Zealand industry.
 

One issue to be settled is the state of the pre-agricultural soil. While the earliest European settlers saw it as bountiful (we dont know what the first Pacific Islanders thought), they may have been mistaken, for much of today’s New Zealand’s soil is of poor quality. If this is correct, then again the myth of the glorious settlement needs modification. (The alternative may be a more heroic myth – sustainable settlement facing great odds, but the committed settler overcoming them.)
 

Having settled the period to be covered, there is the issue of what are the relevant boundaries of the economy. Having just completed a study of globalisation I am acutely aware that economies can override jurisdictional boundaries. My tentative conclusion is that it would be sensible to include some Pacific Island dimension in the economic story.
 

This first arose thinking about Pacific Island migration in the late twentieth century. (Globalisation and the Wealth of Nations argues that the diaspora and the homeland are intimately connected so the chapter also covers relevant Pacific Islands.) At the other end of the history, the reader needs to now something about the Pacific Island (pre-market) economies from whence the first Pacific Island settlers arrived. If the study is to say something about the Pacific Islands a millennium ago and today, should there be some link chapter to the modern Pacific Island economies? Ideally yes, perhaps, but space and a lack of material may preclude a lengthy account. My current thinking is to focus on Samoa and Cook Islands illustrating different labour market arrangements with New Zealand. I have added Nauru, because of it illustrating how the quarry moved offshore. (Middle East oil fields would be another example). Again what is available will be key to what is included and no South West Pacific Island will be ignored if there is useful material on its economic history.
 

If the economies of Pacific Islands where the first settlers came from are relevant to the story, then so must be the economies from whence the first Europeans settlers came. Here the challenge is not a lack of material but its overwhelming plentitude. Indeed there is a growing research field which sees the ‘neo-European’ periphery economies linked to the core. How to incorporate that into the story?
 

Although less prominent in most histories, this linkage was central theme in my In Stormy Seas. Fortunately there is a useful expository simplification from focussing on export and import prices as a means of dealing with the changing balance of commodities. In terms of destination, until the 1960s, Britain dominated the links (although before the 1880s, many shipments were consolidated in Australia). Following the great external diversification of the 1970s New Zealand no longer depended upon a single economy, although the world economy is more coherent although still not quite a single economy in its own right. The variety of export products and destination (and import product and sources) will make the exposition somewhat messier, although I do not recall that being a problem when I wrote In Stormy Seas.
 

So a New Economic History is likely to begin before there was an economy in order to include the environment, and also cover the pre-market economy. It should contain the economic history of South West Pacific Islands as much as that is possible, and will pay attention to the economies with which New Zealand has had substantial interactions.
 

The Relation to General History
 

The economic history books listed above are of two sorts. Those of Condliffe and Sutch might be best described as general histories from an economic perspective. The remainder, including my In Stormy Seas, are written for a narrower audience of economists and economic historians (and their students). Neither approach is ‘wrong’, but the writer of a new economic history has to decide where on the spectrum the study is to be located.
 

My initial approach was to locate my work near the economist end. However, rereading the general histories in preparation for writing a specialist one, I became aware of a general problem, which I illustrate by asking where does the Treaty of Waitangi fit in an economic history? Condliffe, not unsympathetic to the injustice the Maori faced, gave it three paragraphs; as did Lloyd Pritchard, in each case primarily in reference to land sales policies with a glancing reference to sovereignty; Sutch a fraction more. None of Grey, Hawke or Simkin refer to it. (And neither did I in the brief (11 pages) chapter on the pre 1920 economy in In Stormy Seas.)
 

It would be inappropriate to predict just how much space will be devoted to the Treaty in future economic histories of New Zealand. In general histories its role in the transfer and location of political sovereignty is central? While that is normally taken for granted by economic historians (all the books just cited do), the question of how commercial law entered New Zealand is a not unimportant one, especially in terms of developments in economic thinking of the last decade. It is not a simply matter of the effect of the Treaty, as Alan Ward demonstrates in A Show of Justice, albeit involving a different part of law. A passing remark that the Treaty was part of the pathway by which commercial law became established in New Zealand and land was alienated from the Maori is almost certainly insufficient.
 

(As I have pondered on such matters, I have realised that we need to distinguish ‘commercial sovereignty’ from ‘political sovereignty’, a distinction made which underpins such expression as ‘neo-colony’. At this stage, however, I am not sure what this all means. It is flagged here for future work.)
 

The point about the treatment of the Treaty of Waitangi is that it is an example of a major concern of general histories which a new economic history neglects at its peril, especially if the purpose of the book is to engage with general historians and the general public.
Recognising this further pushes the project towards the Condliffe end of a general history. I do so, I confess, with some regret. As In Stormy Seas illustrates, my natural predilection is to dive deep into the economic analysis and statistics. Those foundations will still be there, but most readers may not see them.
 

The Structure of the Economic History
 

Most of the economic histories cited above given an account in historical sequence, the natural frame for exposition. The exceptions is Hawke’s The Making of New Zealand, in which the historical sequence is broadly followed within a sectoral approach of farming, manufacturing (sometimes services) and the government presented in a parallel.
 

I have chosen a more ambitious approach based on separate political economies. Rather than see the economy (and society) as a smoothly evolving cohesive whole, the approach recognises an economy of distinctive ‘political economies’ organised around particular economic and social technologies, resources and ideologies. which have an internal coherence but which clash with others. The result is a more conflictual account of economic development, but one which better captures the structural changes an economy undergoes over long periods of time and allows greater sense of the political evolution of New Zealand.
 

In my past writings, I have likened these political economies to tectonic plates which clash, subduct and override one another. However the more geology I study, the more I am aware the analogy, while useful, is not deep. Political economies are not rigid, but evolve, illustrated by the path of the Maori economy from the first settlers to the Modern Maori. I am in two minds whether to use the geological image in the final book. In the interim I retain its use here.
 

One advantage of this approach is that it avoids accounts involving periods with abrupt divisions. Political economies do not suddenly disappear. They fade away or are over-ridden. Subduction of tectonic plates takes time, and sometimes a residual is left for ages after. Occasionally there are identifiable cataclysmic events which change the balance of political economies. But even so there is a transition thereafter: tectonic plates are very robust. One advantage of not requiring specific endpoints is that very often they are designated in terms of political events which have responded to changes in the political economies, rather than to have their instigate them. .
 

Currently I am thinking of seven such major political economies as follows::
1. The Environment
2. The Pacific Islands (mainly the Cooks, Samoa, and Nauru).
3. The Maori.
4. The Rest of the World.
5. The Quarry (The economy that depends upon depleting resources.)
6. The (Pastoral) Settlement..
7. The New Economy (As explained below I am not happy with this label.)
 

One complication, and one simplification. First there are geological ‘hotspots’ where volcanoes erupt almost arbitrarily in the tectonic plates and which change its landscape. The best known New Zealand examples are Banks Peninsular, Mount Taranaki, Rangitoto and the caldera of Lake Taupo. (The latter a part of the thermal region running to White Island is admittedly more complex than just a hotspot.) There are also hotspots in the political economy, most notably the First and Second World Wars but also the New Zealand Wars (which like the Taupo eruptions were at the edge of two conflicting tectonic plates).
 

The simplification is in the handling of the informal economy (which always presents a challenge to economics, since it is outside the market and difficult to measure). Conveniently they are not a separate political economy but an integral part of existing political economies. (Having come to that conclusion I still need to think through how to integrate it in the discussion.)
 

To show how the political economy approach comes together, here is the current proposed structure of the book. (Beginning and end points are tentative.)
 

The book may be in four parts of 5, 6, 7, and 7 chapters respectively. The chapters will not be of equal length.
 

I: In the Beginning
1. Before the economy. (–1350) The Environment
2. The Pre -European Pacific Island Economies (–1800) The Pacific Islands
3. The First Settlers (1350–1500) The Maori.
4. The Classical Maori (1500–1820) The Maori.
5. The Environment After the First Humans.(1300–1790) The Environment
 

II: The World Economy Arrives in New Zealand
Note that while the Part is generally intended to finish towards the end of the nineteenth century, some of the nineteenth-century political economies went well into the twentieth century, while the pastoral settlement of Part III begins in the mid-nineteenth century and more strongly from 1882 and ceases to dominate from the end of the 1960s.
 

6. The First Phase of Globalisation (–1915) The Rest of the World. (The world economy including the European economy’s first interaction with the Maori.)
7. The Quarry (1790–1920) The Quarry
8. The Nineteenth-Century Maori (1820-1950) The Maori.
9. Hotspot 1: The New Zealand Wars
10. The Post European Pacific Islands (1800–1965) The Pacific Islands
11. The Nineteenth Century Environment (1800–1920) The Environment
 

III: The Pastoral Settlement
12. The First European Settlers (1820–1880) The (Pastoral) Settlement..
13. The Pastoral Settlement (1880–1965) The (Pastoral) Settlement..
14. Hotspot 2: The First World War
15. The Stagnation of Globalisation (1915–1950) The Rest of the World.
16. Hotspot 3: The Second World War
17. The Twentieth-Century Environment (1920–1985) The Environment
18. The Urban Economy (1920–1965) The (Pastoral) Settlement..
           
IV: The New Economy
19. The Second Phase of Globalisation (1950–) The Rest of the World.
20. Diversification (1965–1985) The New Economy
21. The Second Great Migration: Maori (1950–) The Maori
22. The Second Great Migration: Pacific Islanders (1965–) The Pacific Islands
23. Reform (1985–1995) The New Economy
24. Towards Sustainability? (1985–) The Environment
25: A New Economy? (1995–) The New Economy
 

Some Issues
 

I finish this paper with a few issues which have arisen without – yet – any clear resolution.
 

The Maori Transitions
 

While we have an account of the pre-market Maori economy in Raymond Firth’s Economics of the New Zealand Maori and of the early market economy in Hazel Petrie’s Chiefs of Industry. there is little on the transition between the two. From today’s perspective, markets are an obvious means of reaping the benefits of specialisation (although it is well to remember that Adam Smith only made the point after James Cook reached New Zealand). It was less obvious to those from a pre-market era, where regular trade was based on kinship.
 

Serendipitous trade can occur coincidence of wants and barter, but the notion of planning production for strangers, as the Maori did for ships, involves a different head-space, especially where it involves specialisation and investment. A medium of exchange – money – in the trade, rather than pure barter is also a novel notion. (A transition arrangement would be a fully backed currency. The Urewera Maori used tobacco into the 1850s.) Yet the Maori seem to have made the transition reasonably quickly – perhaps in a generation – in part (as Petrie shows) because tribal forms were maintained in the production process while external negotiations were the prerogative of chiefs. One might say that the hapu ran a family business.
 

The second transition to the pastoral economy in the late nineteenth century was much less successful. It is easy argue that population decline and land alienation were its causes, but one must wonder whether hapu based businesses could not adapt to the new regime based on the family farm. If so, that which made the Maori economically successful in the mid-nineteenth century inhibited success at its end?
 

There is a third key Maori transition – the post-war urbanisation. Again we know broadly about the beginning and end, as the Maori moved from rural to urban locations, but we know very little about the economic and social processes. Was it a simply that population growth outran opportunities in the countryside, and the poor moved on, or was there some distinctive Maori dimension to the migration (other than the racism that they met)?
 

Structural Change and Cycles
 There is some disagreement within the profession of whether there was a ‘long depression’ in the second half of the nineteenth century. The disagreement may be a matter of definition rather than facts, it may reflect different choices of period, or it may be that the experience of different parts of the country was different – particularly Auckland from the pastoral South. .
 Implicit in the preceding discussion is the tension between focussing on structural change or the changing levels of aggregate output including booms and slump. Both are necessary, but how to meld them into single account?
 

As set out, the book will be based upon the political economy of structural change. But it would be unwise to ignore the various economic cycles. How often does the economic historian reading political histories groan when some event – say an election – is being discussed and the writer does not mention the economy was in a strong upswing or heading into a depression (or whatever). This is not to argue for economic determinism, but that to pretend the economy has no influence is nonsensical.
 

The First Wars
 

There is little on the economics of the New Zealand and the New Zealand Wars. The census data suggests that at times in the 1860s the North Island was close to an armed camp. Presumably it brought population and built infrastructure (as well as leading to land confiscation). Is that all we can say? Much of the war was funded by the British Treasury. What sort of economic return did New Zealand get from it?
 

There is also very little on the economics of the First World War (except the compulsory acquisition of commodities for export). We would like to say more than that.
 

The data base becomes richer immediately after the First World War. What happened in the period before is a mystery. Of course we dont expect as detailed quantitative knowledge of the nineteenth century economy, but that thought does little to relieve the frustration of our ignorance of the first two decades of the twentieth.
 

Jack Baker’s The War Economy covers the Second World War well enough.
 

The Interwar Period
 

While there seems little disagreement about the course of the Great Depression of the 1930s in New Zealand (except how important relative prices were), how it fits into the interwar period is less understood. Popular histories sees it as a great turning point, especially in that it led to the Labour Government (although the preceding Coalition Government was already moving to a more interventionist stance). But where does the shorter – possibly deeper – downturn of the early 1920s fit in? The 1920s seems to have been a period of slow growth, so the post-Great Depression recovery with its exceptional growth rate may in fact a recovery from the 1920s as well.
 

I am also uneasy at the focus on aggregate economic output without attention to the changing political economy. There are various hints that there were more fundamental changes in the inter-war period than a temporary – albeit severe – depression: the urban centres seem to be consolidating, key production processes (such as in freezing works and car assembly) were switching from craft to industrial processing while, as Gordon Coates noted at the time, the relationship with the British market was changing and there was some diversification of export destinations. Moreover, contemporary writers at the time seem to be as much concerned with the inability of pastoral exports to provide sufficient foreign exchange to employ the working population even when export prices were good, which suggests the need for more attention to the population story.
 

The interwar period economy needs a fresh look, especially one whose vision is not dominated by the Great Depression and the subsequent success of the Labour government.
 

The Economy Over the Last Four Decades
 

A re-interpretation of the interwar period may not change our understanding of the period after the Second World War and it is very unlikely to change the economist’s story of the 1966 wool price shock which severely damaged sheep industry (which contributed three fifths of export revenue). The resulting diversification and adaption took perhaps thirty years to work its way through in full so while the shock was abrupt the subduction was not. (Whether economists will ever be able to convince those into politics and culture that Britain’s entering the European Community (Union) in 1973 was not as central to the economy is another matter.)
 

However, we must ask what did the economy diversify to? Earlier we tentatively used the expression ‘new economy’ but that is a holding label which may look as relevant in due course as William the Conqueror’s ‘New Forest’ does today. Whatever the label, we need to understand its constituents. Is it the pastoral economy has extended to a resource and processing based ones including horticulture, fishing, forestry, energy, mining and tourism as some of the rhetoric would have? Or is there new urban based industries and services as the countervailing rhetoric would have?
 

Fortunately we dont have to answer this question today, merely to pose them. But the book will have to address it, preferably with some of the gravitas that history brings, rather than the superficiality of instant commentary.
 

Exceptionalism
 

There is a separate essay on this. To summarise: although the New Zealand economy is unique (all economies are) it may not be exceptional. Many of the experiences it went through are similar to those in Australian, the Southern American Cone, some states and provinces of North America and (even) Southern Africa. 

It would be another study to details these parallels, but even so the writer of an economic history of New Zealand needs to keep them in mind and not leave the reader with the impression that New Zealand’s experience was exceptional.
 

Conclusion
 

There are numerous challenges to writing a new economic history of New Zealand: the bringing together of a host of recent research by economists, historians and others; the dealing with conflicts and gaps in the available accounts; the looking at the conventional wisdom afresh, but not abandoning the well proven. And to do all this in a way acceptable to the economic history profession and accessible to the general historian and public.
 

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References Cited
 

General Histories,
K. Sinclair (1959: 1st ed) A History of New Zealand
J. Belich (1996) Making Peoples
J. Belich (2001) Paradise Reforged
M. McKinnon (ed) (1997) Historical Atlas of New Zealand
M. McKinnon (2003) Treasury: The New Zealand Treasury 1840-2000
J. Phillips (2004 and subsequently) Te Ara, Encyclopaedia of New Zealand
P. Mein Smith (2005) A Concise History of New Zealand
J. Singleton with A. Grimes, G. Hawke & F. Holmes (2006) Innovation and Independence: The Reserve Bank of New Zealand 1973-2002 .
Ward, A. (1974) A Show of Justice : Racial “Amalgamation’ in Nineteenth Century New Zealand
 

Economic Histories To 1985
J.B. Condliffe (1930) New Zealand in the Making
W.B. Sutch (1941 1969) Poverty and Progress in New Zealand
W.B. Sutch (1942, 1966) the Quest for Security in New Zealand
C. Simkin (1951) The Instability of a Dependent Economy
J.B. Condliffe (1959) The Welfare State in New Zealand.
J.V.T. Baker (1965) The War Economy
W.B. Sutch (1966) Colony Or Nation? : Economic Crises in New Zealand From the 1860s to 1960s
M.F Lloyd Prichard (1970) An Economic History of New Zealand to 1939
R. Firth (1972) Economics of the New Zealand Maori (2ed)
W.J. Gardner (1981) ‘A Colonial Economy’ in The Oxford History of New Zealand, 1ed ed W.H. Oliver and B.R. Williams (also 2ed ed G Rice)
T. Brooking (1981) ‘Economic Transformation’ in The Oxford History of New Zealand, 1ed ed W.H. Oliver and B.R. Williams (also 2ed ed G Rice)
G.R. Hawke (1991) ‘The Growth of the Economy’ in The Oxford History of New Zealand, 1ed ed W.H. Oliver and B.R. Williams
J.D. Gould (1982) the Rake’s Progress? : the New Zealand Economy Since 1945
G. Hawke (1985) The Making of New Zealand
 

Economic Histories After 1985
H. Schwartz (1989) in the Dominions of Debt : Historical Perspectives on Dependent Development.
K. Rankin (1990) Labour Supply in New Zealand and Australia, 1919-1939.
I. Pool (1991) Te Iwi Maori.
G. Hawke (1992) ‘Economic Trends and Economic Policy, 1938-1992′, in The Oxford History of New Zealand, 2ed. ed G Rice.
B.H. Easton (1993) Towards a Political Economy of New Zealand
A. Grey (1994) Aotearoa and New Zealand.
B.H. Easton (1996) In Stormy Seas.
B.H. Easton (1997) ‘Brendan Thompson’s New Zealand Work Force Series’, Labour Employment and Work in New Zealand: Proceedings of the Seventh Conference
D. Greasley & L. Oxley (1999) ‘Growing Apart? Australia and New Zealand Growth Experiences, 1870-1993. New Zealand Economic Papers.
D. Greasley & L. Oxley (2000) ‘Measuring New Zealand’s GDP: 1865-1933: A Cointegration Approach’ Review of Income and Wealth
E. Pawson and T. Brooking (2002) Environmental Histories of New Zealand
D. Greasley & L. Oxley (2002) ‘Regime Shifts and Fast Recovery on the Periphery: New Zealand in the 1930s’. Economic History Review.
D. Greasley & L. Oxley (2004) ‘Globalization and Real Wages in New Zealand 1873-1913′ Exploration in Economic History
B.H. Easton & others (2005) ‘Economy’, in Te Ara, Encyclopaedia of New Zealand ed J. Phillips.
D. Greasley & L. Oxley (2005) ‘Refrigeration and Distribution: New Zealand Land Prices and Real Wages, 1873-1939 Era’ Australian Economic History Review, 45, 1, 23-44, 2005
I. Hunter. & D. Morrow eds. (2006) City of Enterprise
H. Petrie (2006) Chiefs of Industry
J. Singleton (n.d.) ‘New Zealand’ Encyclopaedia of Economic and Business History
I. Hunter (2007) Age of Enterprise
I. Pool, A. Dharmalingam & Janet Sceats (2007 forthcoming) The New Zealand Family from 1840: A Demographic History
B. Easton (2007 forthcoming) Globalisation and the Wealth of Nations
G. Bertram (in manuscript) ‘The New Zealand Economy 1910 to 2005′ in The Oxford History of New Zealand, 3ed. ed G Byrnes..
J. MacAloon (in manuscript) ‘The New Zealand Economy to 1910′ in The Oxford History of New Zealand, 3ed. ed G Byrnes..
B.R. Patterson (in manuscript) Wakefield’s Wooly Wastelands.
 

Maori Economic History
A couple of references appear above (Firth 1972, Petrie 2006), but most material lies in Waitangi Tribunal reports and the like and has yet to be extracted.
Data Sources
A. Maddison (2001) The World Economy: A Millennial Perspective
Statistics New Zealand (2004) Long Term Data Series
 

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