Seminar presentation at the NZIER, 2 August, 1995.

Keywords: Distributional Economics; Maori; Political Economy & History; Social Policy;

The seminar is the result of an invitation by the director of the NZIER, John Yeabsley, to describe some of my work with the Maori, especially in terms of the challenges I have experienced as a research economist and social statistician. The material presented here is primarily that which is on public record. Some confidential work is omitted. However while it is of interest and has been challenging, the work broadly covers the same areas as are in my public record. Some very small projects are also omitted.

Perhaps I should record my introduction to working with the Maori. It occurred in Wellington airport when I was returning from giving evidence to the Royal Commission on Broadcasting.[1] One of the issues I had been thinking through was the question of the ownership of the airwaves, because the Treasury evidence had automatically assumed they were the property of the Crown, and could privatize it. Professor Whatarangi Winiata, who was on the New Zealand Maori Council, was going the other way. I said to him – lightly at the time – that I thought the Maori had a good case for claiming the airwaves as their property under the Tiriti o Waitangi. This led to an invitation to assist the Maori with their broadcasting claim, described below.

Property Rights over Resources

The Maori have claimed a number of resources under article two of the Tiriti, which guarantees their rangatiratanga. Ultimately any claim will be settled by public policy, perhaps through the courts, preferably in an equitable and sustainable manner. To do this the principles which underlay the public policy need to be clarified. In practice this means identifying the property rights associated with the resource, and relating this to the provision of article two, especially “taonga katoa” – all treasures. As a result I have been consulted on the following resources:
– radio frequency spectrum (RFS)[2];
– geophysical resources[3];
– Te Oneroa-o-Tohe (Ninety Mile Beach)[4];
– fishing[4],[5];

For the economist land is rarely an issue, since it’s resource status is not disputed, although the history of its ownership may be – and often is. However the theory of property rights comes from land, although it is well developed beyond that today. So my work was in that foundation area of “law and economics” using, for instance, Richard Posner’s Economic Analysis of Law. However the tradition of law and economics tends to be mono-cultural – some would say imperialist. My task was to meld it with a different culture. This included close analysis of the Tiriti (to which I will return) and reference to traditional Maori economic practice, using especially Raymond Firth’s Economics of the New Zealand Maori. A key conclusion is that for economic purposes rangatiratanga is not the same notion as ownership. In some respects it subsumes the notion, in another respect ownership can include rights and powers the rangatira did not have (or had devolved). A similar situation applies in the English notion of the royal prerogatives over land. [2:12-15]

My first, and perhaps the most challenging, case was the Maori claim over the airwaves. The story is too tortuous to report here ending up in the Privy Council. My task was to give the Maori account of the economics (and related disciplines) in their claim. [2] One problem was that the Maori did not know about the radio frequency spectrum in 1840, but then neither did the British signatories or anyone else. The issue here is what did the Tiriti say about resources which were not identified at the time? As second problem was whether the RFS was a resource at all. (My answer is that if something could be privatised, then whatever was being privatised was a resource.) This led to one of those instances that need to be recorded somewhere.

It involved negotiations between the Crown and Maori Council representatives, at which I was present. A Crown official was arguing that some physicists did not think the RFS physically existed, the point being – as I understand them – the RFS is a mathematical construct rather than a physical reality. If this were true, it would be hard to claim rangatiratanga since the construct was created by mathematicians after the Tiriti was agreed. We tossed the notion around a little – other scientists disagree – and a little after the Council chief negotiator, introduced the Maori creation myth of Rangi and Papa, making the point that all things which were created by God (including the RFS) were in the dominion over which the Maori were given rangatiratanga. Again the issue was tossed around, and then we broke for a lunch, which began, as is the Maori custom, with a Christian karakia. So within not much more than a quarter of an hour we had moved from high science, to traditional Maori religion, to Christian practice, a contrast with the mono-cultural approach that an economist is typically involved with.

Sometimes the non-Maori pour scorn on the Maori for some of the apparently odd claims they make. But listening carefully, the situation can be as odd from the non-Maori side. Here is a case, again from the Maori claim over the broadcasting spectrum.

The Pakeha [a member of a parliamentary select committee] asked the Maori. “Do you claim all the airspace?”
“We claim rangatiratanga of all the space between Papa and Rangi.”
“Even that which the Russian sputniks go through?” [He was a national MP.]
“Yes. The Maori recognise no boundaries. Even for the realm of Tangaroa. Perhaps if the Maori had been negotiating the Law of the Sea, the outcome would have been different.”
The Pakeha looked at the Maori with amazement, concluding if I judge his expression right, that the Rangatira – despite his American PhD – was not quite with it. The claim over expanses over which the Maori had no statutory authority and no means of policing seemed ludicrous.
The very same week the New Zealand government signed an international declaration which prohibited drift net fishing in waters well outside our 320 kilometre limit, and far beyond that realm our navy could plausibly police. Yet no-one, Pakeha or Maori, concluded the agreement was ludicrous, or the Prime Minister who sponsored it – and who also has an American doctorate – was not quite with it.[6]

The detailed argument for the Maori claim for rangatiratanga over the RFS is set down in the Tribunal evidence. [2] At this point I note that the other resources listed above did not prove nearly as challenging to argue a case. However I should add that in a number of other cases of privatization, typically involving state assets created since 1840, the Maori asked me whether they might have a legal case for ownership under the second article. My usual conclusion was not. Rarely did a significant claim proceed (although almost certainly that was due to factors more than any advice I gave).

Maori Development

It was the Muriwhenua (the most northern iwi (1)) claim to Te Oneroa-O-Tohe, which led me into my having to think about Maori economic and social development via the question of compensation. Initially I was asked to elaborate the nature of property rights involved with the beach – a cinch in comparison to the airwaves – but the question of appropriate compensation for the loss of these rights arose.

Where an asset is of no commercial value, but of great significance to the Maori – perhaps wahi tapu – the remedy for a claim is relatively straight forward, although even here one may ask whether there should be some payment for the use of the asset before the return (and what is the appropriate compensation which may not be cash). However where the asset is of commercial value, any Maori loss of the use of that asset also meant a loss of income, which could have been reinvested to generate a substantial capital sum, often much more than the value of the asset itself, as the following calculation shows.

Consider an asset which was alienated 150 years ago. Suppose the true value of the asset had been reinvested at a real interest rate compounding at 3 percent per annum. Today the sum would be around 84 times the current value of the asset. (2) Merely returning of the asset would miss the true compensation by a factor of 83.

Crucial to this calculation is the real rate of return. In principle the return of financial assets can be calculated using historical data, although there are complications over the choice of investment portfolio and the treatment of taxation. However it is reasonable to assume that had the Maori the money they would have invested some of it in the education and health of their people, and we know this gives a substantially higher return than on financial assets. The calculation gets murkier when we allow that under such a scenario Maori mortality might have been lower, and the population larger, although the possibility of any earlier convergence with non-Maori fertility and hence a lower birth rate has to be allowed for. Very soon we are evaluating an extremely controversial counterfactual scenario with enormous ramifications.

I turned to a different approach. Certainly wherever possible improperly alienated assets should be returned to the Maori, or a cash (or other) compensation offered if that is not possible. If that was not sufficient, what other criteria might we use?

It is a matter of record that the Maori standard of living was not dissimilar to the European settler one in the middle of the nineteenth century. Today the Maori has a lower attainment on most socio-economic indicators – income, employment, human capital, health (see below). We might ask what measures are necessary to raise them to the national average, say, income. Full cash compensation is impracticable – some crude estimates I made suggest it would involve a lump sum of around $90 billion, more than total annual GDP. Instead I suggested there should be compensation by some sort of development strategy which would aim to take them to relevant socio-economic status variables similar to the non-Maori. Realistically, since it has taken 150 plus years to depress their standards substantially below that of the non-Maori (discussed below), it is likely to take another 150 plus years for them to attain parity.[7]

The content of the development plan called upon the extensive literature in economic development. A couple of points here. Most of my work has been in rural areas, where the literature is more immediately relevant, although increasingly the Maori are an urban people. One of the issues the Muriwhenua, and most other iwi face, is that their rohe (traditional iwi area) is no longer the place where the majority of their people live. I have not really addressed the issue of an urban development strategy yet. That is going to be quite a challenge.

Second, there is a tendency to over emphasize the return of the land in the remedy. This is understandable for a people who have sentimental attachments to it, and whose elders observed that the successful people in the rohe were farmers (some were farmers themselves). However the new economy is one where land is much less important, and where technology, human capital, and physical capital is key. I have been especially anxious that the Maori appreciate the significance of education, training, and health in their development strategies.

There is a point here, well established in the development literature, that development changes the power relations within the village or whatever. In regard to a human capital strategy it empowers the young relative to the old, and women relative to men Although older men may still remain the most powerful, other groups may gain a greater share of the power. Add in the differences between those in the rohe and those without, and there may be a complex tensions coming out of any settlement with the Crown. (Another complication is the treatment of Maori in the rohe who are not tangata whenua.)

Even if we confine our concern to the rohe of the iwi, the economic strategy has to be broader than land development, including research to improve the productivity of the farm land, and infrastructural investment. (The Far North has tended to miss out on both because it is on the regional margins of New Zealand. Iwi in Taranaki, East Cape, and the centre of the North Island could make a similar claim.) Other land uses may be more relevant – forestry, minerals, horticulture (rather than traditional pastoral farming), and tourism can all be important land uses, while fishing is also important. The Maori might also have a strategy which will tradeoff employment against output/profit.[7]

Sadly, the Muriwhenua claim is still some distance from the completion of hearings, and even further from any settlement, so that the question of development has not been addressed yet. To my mind there is some urgency and the Crown would do well to begin some measures -perhaps as a regional development initiative – immediately. (3) I am looking forward to the next stage in the work because it involves the task of evolving a practical development strategy, whereas till now my work has been largely textbook.

Of course the question of appropriate regional development is a development economics issue, complicated in New Zealand’s current state both by an unwillingness to intervene (even in a moderate manner), and the downward pressures on government spending. There is an understandable perception by the Maori that they have been major losers out of the economic reforms.

Other development I have been involved with has been more limited. It included advising an Arawa iwi, Ngati Rangiteaorere as to the development options on their Te Ngai farm had been returned to them.(5) I also worked for Auckland Casino Ltd, which included Maori in the consortium, on their unsuccessful claim to convert the Auckland Railway Station into a casino, although this was a fairly straight forward case of economic evidence in a property development.

There have also been various tasks which amount to valuation of the lost in a context where the property involved is fairly simple, although there may be complicated issues as well. In the case of the settlement between the Maori and the Railways Corporation I was involved in setting out the conceptual schema on which the resolution of the land claims was based.

Statistical Analysis

I am also a professional statistician, and some of my work for the Maori has used those skills as much as my economic ones. Three salient examples have been:

I appeared before both the Waitangi Tribunal and the High Court in the Maori grievance of the treatment of the Maori Electoral Enrolment Option. My work included a comparison of the Crown expenditure on this campaign in relative to other campaigns, an estimate of the numbers of Maori who were not on the electoral roll or were not identified as Maori on the roll, and a summary of the implications of the new system for Maori politics.[8]

The Waitangi Tribunal commissioned me to convert data available from the 1991 Population Census (the first census to ask iwi affiliation) to a Iwi Data Base, useful for investigating the socio-economic status of iwi or combinations of iwi.[9] Ultimately the data base could be used, say, to evaluate how different the Muriwhenua socio-economic attainment is from nation-wide and all-Maori attainments – a conclusion likely to be useful for assessing compensation and development strategies. One of the tasks of data base construction is the development of access protocols.

There is a particular ethical issue worth mentioning. Data bases have (or should have) strong privacy protections for individuals (and usually corporations) but not, for instance, regional communities. We may ask what is the appropriate treatment for disclosure of information about an iwi, which have some of the characteristics of individuals (of families, insofar as they typically are the descendants of some – often eponymous – ancestor) and corporations. This is something for the Maori to decide themselves, but until they do I have suggested access to iwi data in the data base be limited to the individual iwi, and to those whose access it approves.(6)

I would add that once we have got through these questions of kawa, we also have a very powerful means of investigating some general features of the Maori experience, since the current socio-economic status of any iwi is in part a reflection of its historical experience.

Another task involved Maori and smoking, which arose while I was using Census data to estimate longevity by whether one has ever been a smoker. This was possible because the 1976 and 1981 censuses asked questions on individual’s smoking behaviour.[10] The following tabulation summarizes the outcomes by all New Zealanders and by Maori.

LIFE EXPECTANCY: Years at Age 25
Never-Smoker

	Male	Female
TOTAL	60.2
MAORI	58.7	65.3

Smoker

	Male	Female
TOTAL	43.7	44.6
MAORI	35.4	41.5

Source: [10]

The tabulation indicates the devastating impact of smoking on Maori longevity – in part because they smoke more and are less likely to quit – cutting back their life expectation by about 23½ years at the age of 25, in contrast to the 13½ shortening for the whole population. The good news might be that Maori never-smokers live longer than the rest of the population, although this might be an artefact of sampling error. Given that much higher proportions of Maori smoke, the implication is that there are considerable gains to be made in Maori health from successful anti-smoking campaigns, something which in recent years the Maori have recognized and are beginning to undertake.

I might mention that an ongoing problem for a statistician is definition of Maori, through time and across data bases. Any melding must be done with the greatest caution.

Maori Socio-Economic Status

A lot of my work as a social economist has been about measuring socio-economic status variables, trying to identify their determinants, and evaluating policies which influence outcomes. Thus I have had a long interested in Maori socio-economic status both for its own sake, and to provide insights into the social processes which drive all socio-economic status. One has to be careful not to exploit the Maori data for selfish or purely academic reasons, independent of the interests of the Maori. So over the years I have been hesitant to put too great an effort into Maori statistical analysis, unless I have their support. On the other hand it would be unacceptable to do some of the population-wide work I have, without commenting on the particular circumstances of the Maori. It is a fine balance, so I have cautiously reported Maori socio-economic variables, especially income, in a number of wider studies,[11],[12][13][14] and indeed used them in some of my work for the Maori.[4],[10] A major problem is that often the number of Maori in a sample survey such as the Household Economic Survey and to the Household Labour Force Survey is usually too small to be statistically reliable.[15]

An example of the work is that in the seventies I suggested the “rule of three”, that there are proportionally three times as many Maori in deprivation as non-Maori.[11] However I can report on some measures there appears to be some relative gains over time, with age adjusted male incomes rising from 66.4 percent of the average in 1951 to 81.6 percent in 1986. [12],[14]. However there is evidence that Maori household incomes tended to fall in the late 1980s.[13]

Recently I was commissioned by Te Puni Kokiri to provide a report on Maori labour force status, using data from the Population Census. I had also some econometric work by Diane Craig of Statistics New Zealand. It was an invitation I accepted with alacrity. I took the task to be one of providing new insights, rather than repeating the conventional wisdom. The report is too complex to summarize here, but it involves a conceptual approach of some interest to economists.[16],[17]

What I found was that there were substantial differences in labour force behaviour between the Maori and non-Maori which I explained by social (including cultural) differences. Economists, especially under the leadership of the Gary Becker, have tended to ignore cultural explanations of economic phenomenon. I could have used the standard Chicago School explanation that the differences were the effect of discrimination (defined very narrowly by them). Instead I argued that the individual Maori is in a different social environment to the non-Maori. For instance evidence from overseas studies suggests that family and friends are a major means of successfully find work. If the social context is of a circle who are also unemployed, the chances of finding work are reduced, and likelihood of unemployment increased. (Another consequence of this work is that for cross-cultural comparisons it makes more sense to look at the variable Not-in-Employment as a proportion of the relevant population, rather than the unemployment rate, because disguised unemployment is partly a cultural dependent phenomenon.

My approach disturbed some economists, so committed are they to the Chicago School methodology. Yet curiously even the Chicago School would not insist on the same explanations for male and female labour force behaviour. Their different social situations mean that participation rates, for instance, are quite different, and address their policy needs in different policy way (e.g. early childhood education). What I was doing with the Maori was no more than hypothesizing Maori males (and females) are in a different social situation to non-Maori males (and females), just as males are in a different situation to females. (Indeed one of the investigatory approaches on the Maori used precisely the same method as would be done for females, except in this case the outcome is so routine that no one would think the commissioning worthwhile.)

That does not mean that racial discrimination is irrelevant. However this richer approach suggests new policy possibilities: should the Maori be running their own labour exchanges, or at the very least have the notion of finding work for your mates inculcated to them as deeply as it is to a middle class pakeha family. If there is racism, its most blatant form is surely the claim that Maori social and cultural differences are not relevant.

Historical Research.

Traditionally history was an integral part of economics. My work on the Maori has led to two (or three) useful historical developments.

First I have probably integrated the Maori up to the nineteenth century into our economic history as well as any other New Zealand economic historian.[15],[18] At least part of the insights came from the consulting work requiring me to think about nineteenth century the (Muriwhenua) Maori economy, and the pre-market Maori economy.

The second (two) insights came from having to think about the Tiriti o Waitangi, especially the interpretation of the rangatiratanga provisions in article two in relation to the kawanatanga provisions of article one. The first is that the Tiriti appears to be, and appears to be conceived to be, almost exactly a social contract in the tradition of Thomas Hobbes, John Locke and Jaques Rosseau.[19],[20],[21] Even since my last version of the paper, there has been more evidence which further supports its conclusion.(6)

The other finding is in a sense even more surprising. It is often stated that there are two versions of the treaty of Waitangi, and English language one and a Maori language one. The historical evidence is clear. There was only one version agreed at Waitangi, the Maori language one. What we call the English language version is an early draft of the Maori language Tiriti, and had no legal status – and only a little historical status – before 1855, when it was formally incorporated in law by the colonial government.

Both these items refer to events now over 150 years old, and their significance today is unclear, or what we wish to make of them. Perhaps the point to be made here is that being a good economist is not being a poor mathematician, nor an accountant with a little intellectual ambition. The profession has a tradition where history and political theory are an integral part.

Conclusion

I have been lucky to have had so much consulting work with the Maori. Most of it has been intellectually challenging, using a wide variety of economic ideas in innovative ways, and leading to research insights, many of which I have been able to publish.

I would add that perhaps the work has not always been financial rewarding as standard consultancy work. There is no economic theorem which says the justice of one’s case guarantees the means to finance the transaction costs to pursue it. I recall a Maori lawyer leaving by car at 4 o’clock in the morning for a tribunal hearing in the Hawkes Bay because the client iwi could afford neither air tickets or hotels, even though their grievance was outrageous. I do not want to suggest that all the work has been financially disastrous either, but there have been other compensations, even above those of helping some remediation of injustice.

In particular I have enjoyed enormously working with the Maori, often in locations I would not normally visit. It has been a pleasure to enjoy their hospitality and their friendship. This has been particularly important to one who grew up in Christchurch in the 1950s, with nary direct Maori experience, and who is still unable to speak their langauge, because – it would seem – a linguistic ineptness – for I have tried to learn. Even today when I go awkwardly onto a marae I am aware that I am a guest, but it is always a welcome one, in which my inadequacies over the kawa are tolerated to be overwhelmed by a kindness and generosity.

One day I should like to write a book about my work with the Maori. It will be to share with a wider audience the experiences and the insights the Maori and the work has given me to and to say thankyou to the Maori for the pleasure and privilege of working with them. This paper is perhaps a feeble memoir of some of the things I want to tell.

References
1. Throughout this paper “iwi” refers to “tribe” or “tribes”, and not to “people” or “nation”.
2. Assuming its price had increased at the same rate as the underlying rate of inflation.
3. There is a story attributed to John Kennedy of his coming across a gardener who had dug a hole to plant a tree in the White House lawns. When asked why he had not completed the job, he explained it was late in the day, and the tree would be planted tomorrow. In any case it would take the tree 150 years to grow to maturity. To which Kennedy is said to have replied “then you should then have planted it yesterday”.
4. The farm is just to the north of the Rotorua Airport, before the junction of the roads to Tauranga and Whakatane from Rotorua. The most visible indication of the change is the forest nursery on the flats to the immediate east of the road.
5. I tested the data base with the Nga Kohere-iwi, those who reported they had no iwi affiliation
6. It turns out that James Busby, the drafter of what is called the English version of the Treaty, was actively commenting on the “social compact” in his diary and letters.

Bibliography
[1] Evidence to the Royal Commission on Broadcasting and Related Communications, NZIER Working Paper 86/12, Wellington. (1986)
[2] A Pakeha Economist’s Perspective on the Maori Broadcasting Claim, commissioned by the New Zealand Maori Council, Wellington. (1989)
[3] A Pakeha Economist’s Perspective on the Maori Geothermal Claim, report to the Waitangi Tribunal (Wai 153), Wellington. (1993)
[4] Evidence of Brian Easton with Respect to Te Oneroa-o-Tohe, report to the Waitangi Tribunal, (Wai 45), Wellington. (1991)
[5] e.g. Property Rights and the Maori Fishing Deal, (although I have not had a major role in this extensive dispute). (1994)
[6] “The Green Maori”. Listener, May 14, 1990, p.96.
[7] Te Whakapakari Paapori, Ohanga o Muriwhenua: Towards a Development Plan for the Muriwhenua, report to the Waitangi Tribunal, June 1993.
[8] Evidence of Brian Easton to the Waitangi Tribunal on the Matter of the Maori Enrolment Option, report to the Waitangi Tribunal (Wai 413), paper A13, Wellington. (1994)
[9] A Data Base of Iwi, report (and disks) to the Waitangi Tribunal, Wellington, May 1995.
[10] “Smoking in New Zealand: A Census Investigation”, Australian Journal of Public Health, Vol 19, No 2, 1995, p.125-128.
Social Policy and the Welfare State in New Zealand, Allen & Unwin, Sydney, 1980 p.36-41.
[12] Income Distribution in New Zealand, NZIER Research Paper No 28, Wellington, 1981, Chapter 12.
[13] “The Economic Distributions”, in A. Bollard, R. Lattimore, & B. Silverstone (eds) A Study of Economic Reform: The Case of New Zealand, North Holland, 1996, p.120-121.
[14] In Stormy Seas: The Post-War New Zealand Economy, Otago University Press, Dunedin. Appendix 1: The Social Impact. (1997)
[15] Shirley, I., B.Easton, C.Briar, & S.Chatterjee , Unemployment in New Zealand, Dunmore Press, Palmerston north, 1990, p.126-127.
[16] The Maori in the Labour Force, A report commissioned by Te Puni Kokiri. (1994)
[17] “The Maori in the Labour Force”, in P.S.Morrison (ed) Labour, Employment, and Work in New Zealand: Proceedings of the Sixth Conference, Victoria University of Wellington, Wellington, 1995, p.206-213.
[18] Towards a Political Economy of New Zealand, (1994 Hocken Lecture), Hocken Library. Dunedin, 1995.
[19] “For Whom the Treaty Tolls”, Listener, February 5, 1990, p.116.
[20] Contract, Covenant, Compact: The Social Foundations of New Zealand, address to Spring Lecture Series of St Andrews Trust for the Study of Religion and Society, published in Socialist Politics, Issue 90/3,4. (1990)
[21] Contract, Covenant, Compact: The Social Foundations of New Zealand, revised version of address to St Andrews Trust for the Study of Religion and Society. (1994)