This was an essay I wrote for a competition; when I realised it it did not not meet the competition rules, I did not submit it.

While writing a history of New Zealand from an economic perspective, I have been continually confronted by the environment as an integral part of New Zealand’s history. This is not the same thing as a history of the environment where we have a number of useful contributions. In contrast the majority of New Zealand conventional histories neglect the impact of the environment thereby omitting a critical dimension of the nation’s story, just as – and this is the main theme of the book – a neglect of the economy gives a limited and distorted account of our nation’s story.

Why should an economist pay attention to the environment? Just as economics, if you understand it in any depth, is founded on the laws of thermodynamics, there is a sense in which economic history is equally dependent on the environment. This essay illustrates the dependency with (mainly) nineteenth-century examples, although there are –of course – many twentieth-century examples, and there will be many twenty-first century ones too.

The book starts off 600 million years ago, before New Zealand existed in any form. (Our oldest rocks are 510 million years old.) New Zealand – or more precisely the continent Zealandia, most of which is under the sea – is the erosion from the Gondwanaland craton which sedimented off the east coast of Australia. About 85 million years ago it unzipped and began drifting east, opening up the Tasman. Because the earth’s crust was being stretched, the continent began spreading out and sinking. It could have ended up under the sea for ever, but about 23 million years ago the Pacific tectonic plate began expanding, smashed into the Austro-Indian plate, driving up the land we know as New Zealand.

Being on the plate boundary explains why the country is a long straggly one, why we have rough mountain chains and why we have earthquakes. Big shocks can be a bloody nuisance, but it is well to remember that were there not the forces that create them, there would be no New Zealand at all.

A consequence of our geology is that, aside from coal and hydrocarbons, New Zealand has few commercially interesting minerals. Generally its soils are also of poor quality and thin (thanks to the ravages of the ice ages and volcanic eruptions), lacking the nutritive minerals and the physical properties which make them good for farming.

When our European forefathers first arrived, they saw lush bush and assumed that meant fertile soils, not realising that the vegetation had evolved over the millennia to cope with the soil deficiencies. It often took many times the cost of the land purchase to make it suitable for farming. The cost of converting, in the 1840s, a hundred acres of Hutt Valley land purchased for £100 could involve an investment of £2,500-£3,000, with the calculation taking no account of expenditure on residences, fencing, nor even the hireage of casual labour, nor the subsistence requirements of the land owner and his family. Similarly the Waikato swamplands confiscated from Maori were sold cheaply by the government at 6d a acre, but the cost of converting one into farmland could be close to £100; not surprisingly many of the investors were bankrupted or near bankrupted by the venture.

The impoverished land is nicely illustrated in the early part of the twentieth century when there was no growth in farm productivity. A farmer opening up new land would get a reasonable crop for up to four years, exhaust the soils and then struggle on, although he might not notice because those first years involved the hard grind of establishing the farm. It was not until the mid-1920s, when farmers begin spreading phosphates, that farm productivity took off. When they stopped using fertilizer – in the 1930s when they were broke, in the war years when the phosphates were diverted to explosives – land productivity fell.

Exhausting the soils and mining phosphates – even from overseas sources – are ultimately unsustainable activities. Political economists call it ‘the quarry’. New Zealand histories tend to play down the significance of quarrying despite it dominating the economic activity of the first Europeans; instead they give the impression that the European settlement was sustained by farming from the beginning.

However the first Europeans exploited seals, whales, fish, timber, kauri gum and gold. The initial prosperity of Wellington depended upon the whales that came through Cook Strait; within a decade of settlement they became almost extinct. Fortunately by then the Wairarapa wool cheques had started coming in.

Other towns were sustained by gold: Dunedin, Auckland, even Christchurch, which prospered from supplying the Victorian goldfields (as did Wellington) as well as local ones. Another unsustainable activity was warfare. There is much about the battles and the politics in our conventional histories, but few observe that Wellington in the 1840s and Auckland in the 1860s were military camps. Local farmers supplied the quartermasters as well as the goldfields.

After the quarrying phase the economies of the southern towns were based on a wool economy. Wool became the single largest export from the late 1860s, as the alluvial goldfields were exhausted, and it remained so for a century. (The collapse of the price of wool at the end of 1966 was to have a dramatic effect on the course of New Zealand thereafter; but that is another essay.)

Auckland, however, was excluded from the wool economy, for the top half of the North Island suffered the consequences of events 1650 years earlier in 233CE or so, when the Taupo volcano had its last major super volcanic eruption. (Around 1314 Mount Tarawera erupted; although it was a much smaller eruption – perhaps a twentieth of Taupo’s – its Kaharoa ash spread, as far north as the Bay of Islands, added to the soil impoverishment.)

The ash which spread to the north and west was deficient in trace minerals, especially cobalt and selenium. Stock which grazed on it wasted from bush sickness. New Zealand scientists identified the soil deficiencies in the middle of the twentieth century – one of their outstanding scientific achievements– and today the missing minerals are added to livestock’s diets.

After the volcanic explosion there was a great lake in the Waikato river basin where the water broke out of the caldera – Lake Taupo – and found its way to the sea. The swamp meant footrot for sheep. It was not until the Waikato railways were established in the early twentieth century that dairying could take off. Cows are not prone to footrot but their produce – butter and cheese – needs heavy transport.

The consequence for the city of Auckland was that it remained a port servicing quarrying activities – gold, timber, kauri gum – until a generation later than the southern towns. Moreover Coromandel gold was in hard rock, not alluvial which can be panned by individual miners. Hardrock gold requires substantial investment in underground mines and rock-crushing batteries. The risky capital to fund the enterprises led to the development of an Auckland business community built round a share market. Other centres had smaller ones, but without the same need to raise capital they were neither as vigorous nor as vulgar as Auckland’s. Thus was laid the foundations of today’s Auckland’s business predominance.

Not only did the Taupo volcano cleave the settler economy in two – south and north of the lake – it also had a major impact on Maori economic development. In a period when the nation’s economic thrust was growing wool, the majority of Maori lived in the sheepless areas. North of Taupo there were 7 percent of the sheep and 60 percent of the Maori (compared to 20 percent of the settlers). It is true Maori had lost a lot of land, but they retained much – on some measures more per capita than the settlers – enough to develop a viable sheep industry. We know this because Maori sheep flocks south of Taupo were comparable – relative to their population – with settler flocks. But there were far fewer Maori there.

So as far as their economic development was concerned, too many Maori were located in the wrong places in the nineteenth century. By the time economic activity moved north to dairying early in the twentieth century, Maori were too impoverished to go into dairy farming, which required greater investment than sheep farming.

The proto-Maori, when they first arrived, quarried the environment just like the Europeans did. We cannot be sure what led to the extinction of the moa, but it would seem likely that their hunting by the Maori was important. Archaeologists know from the middens that early Maori fished out some species, and know that the seal line – where the seals were – steadily retreated south during their first five centuries.

It is broadly true that Maori were living in a sustainable balance with the environment just before the Europeans arrived. For the politically correct it is inconceivable that their actions could have led to the extinction of species. What they forget is that the proto-Maori, who arrived 700 hundred plus years ago, came from a tropical environment and would have made environmental blunders because of their ignorance too. But there were fewer of them; their environmental destruction was not as great.

If this essay focuses on the way in which the environment shaped New Zealand before the twentieth century it is only space rather than significance which precludes a similarly detailed discussion of what happened after 1900. Quarries remained important especially coal, while the economy and society became dependent upon imported oil and phosphates quarried offshore. There was a constant interaction with the natural environment, not only with the soil but with the native bush which was sufficiently depleted that a plantation forest program was introduced at the beginning of the twentieth century. As population numbers increased and the economy expanded, waste disposal intensified, including the contamination of the waterways. Natural catastrophes disrupted and and reshaped localities, both physically and in the way people lived. In the case of the Canterbury earthquakes the impact may prove to be national; they almost certainly affect the future of the whole of the South Island.

The relationship between New Zealand’s history and its environment is ongoing and integral, not to be ignored or shunted into a separate chapter – although the numerous monographs on books on the history of the environment are invaluable to a writer of a general history. The serious scholar must take up the challenge rather than ignore it.

In turn readers can marvel at the story and the extraordinary progress science has made towards our understanding of the environment. In the end they may reflect too on its lessons. Perhaps the most salient one is that over the five hundred years after their arrival Maori developed a sustainable lifestyle. We shall have to learn from their example although it is much harder in a globalised economy – and we have less time to do it.