Key Points:
Overview of
inequality in New Zealand
A
revolution of the right: reforms and re-reforms
Inequality:
a threat to democracy?
A new
crisis with an old solution
The global financial crisis of 2008
and the deep recession that followed have given people throughout the world
pause to consider the changes that have occurred in their societies in the last
few decades. Massive protests have erupted in response both to the revelations
of scandalous irresponsibility on the part of business elites and to austerity
programs implemented to “solve” the crisis. With the Eurozone teetering in
crisis and the United States experiencing a painfully slow and jobless
recovery, New Zealand has fared relatively well.
Sheltered from the worst of the
speculative maelstrom by the stability of the Australian banking system, we
have been able to sit and wait patiently for commodity prices to bounce back,
without having to resort to the desperate policies of many other Western
governments. We are now a “rock star” economy according to analysts, with
economic growth projected to be in the top six of the OECD nations.[1] But is
this rosy picture deceptive? This article will attempt to answer this question,
taking as its point of departure the proposition that the success of a nation’s
economy should be measured by how the majority of its citizens fare.
Inequality in New Zealand
Perhaps the most widely discussed
aspect of the financial crisis is inequality. Earlier attempts to bring the
matter to public attention were quickly dismissed by mainstream commentators as
being a “non-issue” because “rising tides lift all boats”. We were repeatedly
instructed to embrace Margaret Thatcher’s maxims: “there is no alternative,” we
must “glory in inequality and see that talents and abilities are given vent and
expression for the benefit of us all.”[2] However, it has now been acknowledged
by figures across the political spectrum that inequality is anything but a
non-issue, in fact it may be the
issue policymakers will have to confront if long-term confidence in the present
economic system is to be restored. Research by the International Monetary Fund
(IMF) has indicated that inequality has a cooling or even deleterious effect on
long-term economic growth. They observe three ways in which inequality acts
negatively: by denying low income families the money they need to invest in
their children’s education; by allowing the wealthy to capture the instruments
of policy making; and by making societies more dependent on credit and hence,
more unstable during shocks. The former chief economist of the IMF, Raghuram
Rajan, has also argued that inequality was one of the driving factors behind
the global financial crisis.[3] The international statistics detailing the
extent of inequality and how it has grown paint a clear picture of this crisis.
In the United States, between 1977 and 2007, the top 1% of American income
earners acquired 57% of the net increase in national income, while from 2000 to
2007 the same group gained 93% of the increase. In terms of wealth, the richest
1% owned 35% of household and corporate wealth in the period 2006 to 2007.[4]
Despite New Zealand not having a
powerful business sector akin to the United States the prevalence of inequality
is all too evident. The top 1% of income earners in New Zealand own three times
more wealth than lowest 50%,[5] and own 16% of the country’s total wealth,
while bottom half owns just 5%.[6] Income gaps are the greatest since records began
in 1980s,[7] with the average household income of the top 10% is nine times
that of the bottom 10%.[8] From the mid-1980s to the late-1990s the income gap
between the rich and the rest widened faster than in any other developed
country.[9]
The response of mainstream
economists is blunt: inequality is worthwhile because wealth will “trickle
down”. However, inequality in New Zealand does not mean that we all gain from
the increase in the wealth of the 1%, or even simply that the rich get richer.
Inequality means the poor get poorer, and the middle struggles merely to keep
things level. There are now twice the
number of New Zealander’s living in poverty as there were in the 1980s –
approximately 800,000.[10] Real wages have remained effectively static for the
last few decades. Any wage growth that low and middle-income households
(incomes of $25,900 or less) have experienced has been attributable almost
exclusively to tax credits and other government benefits – that is, the income
from work for these households has not increased since 1987.[11] The share of
national income going to wage and salary earners has dropped from 60% in the
1980s to 45% by 2002,[12] a share lower than in almost any other developed
nation.[13] To maintain living standards as the gap between living costs and
income increased, people have turned to credit, with private debt soaring from
around 60% of disposable income in 1991 to 140% now (the bulk being
mortgages).[14] And, of course, people
have further compensated for the hole in their pay packet by working longer
hours.[15] Meanwhile the top 10% of households have seen their income grow by
nearly 80%, with incomes for the top 1% more than doubling.[16]
Framed in social terms, the effect
of inequality is staggering. Of the close to a million New Zealanders living in
poverty, between 170,000 and 270,000 are children.[17] One major report ranked
New Zealand as 28th out of 30 developed countries for child welfare,
better only than Mexico and Turkey.[18] One fifth of poor households report
going without essential items like decent footwear, heating through the house,
or birthday presents for family members.[19]
In half of poor households, food runs out because there isn’t enough
money at the end of the week.[20] Moreover, Māori and Pacifica are twice as
likely as Pākehā to be represented in these statistics.[21] Inequality
percolates through every aspect of people’s lives, whether it is housing,
health or education.
A revolution of the Right
How then did it get to this? The
answers are complex, but a general causality may be delineated. The post-war
global economy was characterised by an international system of financial and
commercial regulations known as Bretton Woods. The system was designed to
facilitate international trade in the context of nation states pursuing
large-scale programs of investment in public services and infrastructure. In
New Zealand these programs began early with the election of the Labour Party in
1935. By the 1970s cracks in the system began to appear, and these were
exploited by the “New Right” who lead a rapid transformation of the global
economic order – from a Keynesian (or welfare-oriented) to a monetary paradigm.
The new perspective held that inflation was holding back economic growth and
needed to be brought under control.
Simultaneously arguments were made that the market was the most efficient allocator of resources, and that it needed to be freed from state intervention. This process of “deregulation” took place all over the world in a relatively short space of time, and by the end of the 1980s the global economy had changed completely. Quite suddenly corporations were virtually unrestricted in where they could invest or produce – a process known as globalisation. The West underwent a rapid process of “deindustrialisation” as large manufacturers moved to the third world in search of “flexible” labour markets. Full employment, which had been a beloved feature of the post-war West, was over. States slashed spending on public services and sold off as many assets as they could manage politically. The trade unions were defeated and their membership dived.
Simultaneously arguments were made that the market was the most efficient allocator of resources, and that it needed to be freed from state intervention. This process of “deregulation” took place all over the world in a relatively short space of time, and by the end of the 1980s the global economy had changed completely. Quite suddenly corporations were virtually unrestricted in where they could invest or produce – a process known as globalisation. The West underwent a rapid process of “deindustrialisation” as large manufacturers moved to the third world in search of “flexible” labour markets. Full employment, which had been a beloved feature of the post-war West, was over. States slashed spending on public services and sold off as many assets as they could manage politically. The trade unions were defeated and their membership dived.
New Zealand’s experience of this
process is colloquially known as “Rogernomics”, the namesake of the former
Minister of Finance, Roger Douglas, who led the reforms. Like many Western
economies, New Zealand was in decline in the 1970s. The highly protected and
state-subsidised model was no longer sustainable – change was inevitable.[22]
That being said, while it was clear that reforms were needed, the extremes to which
they were taken in New Zealand were quite unnecessary.[23] Unlike the United
States and Britain where the process was led by radical conservative
governments, “Rogernomics” was directed by a Labour government. It was described by the international media as
“an exhilarating dash for economic freedom … Delighted progressive businessmen
hardly dare believe that a Labour government is doing these things, while
bewildered old trade union leaders loyally pretend that it isn’t.”[24] The
government was praised for “out-Thatchering Mrs Thatcher”[25] and creating “a
paradise for free-marketers”, although “not for those New Zealanders who have
lost their jobs,” they reluctantly added.[26]
The reforms of the 1980s were
carried out at lightning speed – most Bills were read under urgency, rendering
the consultation process effectively redundant. By the end a new state had been
cast which looked radically different from the welfare model. Traditional
public services, like housing, health and education, were hollowed out by
funding cuts and restructuring. As one commentator concluded, public servants
were “being asked to do more work with fewer resources, their personal
accountability has been increased, the security of their positions removed, and
the distance between the public and the Public Service widened.” [27] In fact
the gap was so wide that areas of policy-making of critical importance for
general welfare were effectively taken out of public hands. The Reserve Bank
Act 1989 stands out: the Bank was given independence to design and implement
monetary policy with the Minister of Finance only empowered to set inflationary
targets, even though the Minister is actually elected by the public while
officials at the Bank are not.
Some attribute the source of
inequality simply to “deregulation”, and although this is undoubtedly a part of
the problem, the root cause is in fact “reregulation” – that is, the
restriction of democracy. During a parliamentary debate later in 1990, the then
Minister of Finance in the new National government, Ruth Richardson, enunciated
the spirit of the age:
The myth is that the democratic method is that institutional arrangement for arriving at political decisions which realises the common good by making the people decide for themselves. The reality is the process of arriving at decisions through a competitive struggle for the people’s vote. Party politicians are the response to the fact that the electoral mass is incapable of action other than a stampede.[28]
Democracy has always been viewed as
a threat to the power of those by those with capital, and indeed the surge of
democratic tide during the 20th validated their cynical caution: if
ordinary people have power they will demand a more just system, that is, an end
to inequality. In New Zealand this meant a comprehensive welfare state. The
1980s should be viewed, therefore, as the culmination of a great struggle,
taking place over the course of a century, by the powerful to re-establish
their control of democratic institutions.
To demonstrate this connection we must examine the history of late 19th
century New Zealand politics.
Democracy and its decline
The anti-democratic zeal which
characterised the 1980s was reminiscent, although with roles reversed, of the
early struggle to establish democracy in New Zealand. It is rarely acknowledged
when we reflect on our own political tradition that for the first few decades
of self-government from 1854, New Zealand was not a democracy of any form. “Not
only that, but many of those who held power were determined that it would not
turn into one either,” historian Tony Simpson observes, in his revealing study
the early years of our political system.[29]
The constitution of 1852 enfranchised perhaps 6000 men out of a population
of 115,000. There was no secret ballot and, particularly in rural areas, local
magnates kept a close eye on how their leaseholders (and later, labourers)
voted. The move towards a secret ballot (Election by Ballot Bill 1869, enacted
in 1870) was vehemently opposed by leading citizens. One prominent
parliamentarian who rose in opposition was Hon. Hugh Carlton, late of Eton and
Cambridge. An “implacable enemy of democracy and anything else that extended
rights to the people at large”, he rose to correct a statement by another
member who was in favour of the secret ballot.[30] It had been claimed that in
Britain the same system had been introduced to protect tenant labourers who
were being evicted for not voting Conservative.
On the contrary, Carlton argued [emphasis added]:
...it had been found expedient that protection should be given them, not from the aristocrats, for they were the natural allies of the working classes, but from the tyranny and oppression exercised over them by trade unions, and the cruelties which had been brought to bear against those who presumed to differ in opinion from the leaders of those unions.
Undeterred by its opponents, the
cause of labour, embodied in workingmen’s political associations, unions,
lodges and friendly societies, was to gain greater and greater popularity. As
historian Erik Olssen, in his remarkable study of the artisanal working class
Dunedin suburb of Caversham, relates:
Whenever
men and women wished to accomplish any purpose in Caversham they banded
together….Voluntarism had no prophet or champion in Caversham because its
egalitarian ethos permeated the society. That ethos reflected both a powerful
democratic tradition, with its faith in the goodness and reasonableness of all
men and women, and the belief that men and women were social beings who could
only realise their full humanity by living and co-operating with others. ‘It is
only civilised beings who can combine’, J.S. Mill wrote in his essay on
‘Civilisation’. Most people in Caversham would have agreed. The democracy of
the chapel, kirk, lodge and union taught the dignity, equality and independence
of labour, and that master and man belonged to a moral community.[31]
This wave of popular feeling
culminated in the extension of suffrage and finally to the election of the
radical Liberal government, who set about a series of “social experiments” that
laid the basis for what became known as the welfare state, after the election
of the first Labour government.[32] Notably, Simpson concludes, “[t]o these
[politicians who had opposed male suffrage] and others like them who had
dominated New Zealand politics for the preceding four decades, the election of
1890 was not the apotheosis of the egalitarian society it is now generally
regarded to have been. It was, rather, at best a temporary aberration, and at
worst an unmitigated disaster.”[33]
The unions and working-class
communities, always some of the most vibrant sources of democratic feeling,
were among the first targets of the reforms of the 1980s. Savage cuts in social
spending and the move to manufacturing off-shore impacted these communities the
most. Douglas and his clique casually tossed aside many of the victories won
through one hundred years of hardship and sacrifice.[34] The nadir was reached
with the introduction of the Employment Contracts Act 1991 (ECA), which
introduced voluntary unionism, individual employment contracts and restrictions
on industrial action. The result is what Victoria University academics Sandra
Grey and Charles Sedgwick call a “democratic deficit”, in their recent study of
the attitudes of civil sector organisations towards government.[35] They conclude that while these organisations
“have in the past been a strong and necessary voice for the most marginalised
of our society, since the 1980s their place in democratic conversations has
come under challenge,” from both Labour and National governments, “almost to
the point where for some groups the only option is to remain silent.”[36]
A new crisis with an old solution
The precise effects of the
transformation, and its corollary inequality, on non-material variables like
social cohesion are difficult to assess. Doubtless, the changes have meant for
most people that their lives have become more atomised and alienated. Political
journalist Bruce Jesson’s analysis is compelling in this regard. “By the 1970s,
the tradition of progress had acquired a faintly subversive character ”. Now,
“[w]e no longer aspire to anything of significance at all. We now live in a
society that is thoroughly commercial, where no one aspires to anything noble
or worthwhile, or if they do they are ridiculed by the cynics of the free
market.”[37] The goal of “Rogernomics” was “quite simply to eradicate anything
that didn’t conform with the culture of finance. Union influence and public
service ideals were destroyed so that ultimately all that remained was the
financial ethos of efficiency and profitability. At the end of the process, New
Zealand had become a thoroughly one-dimensional society.”[38] “New Zealand
might, without too much exaggeration, be thought of as a hollow society.”[39]
As economist Brian Easton puts it,
“those who command policy – whether effectively or ineffectively – have to
decide to what extent reducing (or increasing) economic inequality is a policy
objective. Is New Zealand satisfied with shifting from a low inequality to a
high inequality society? What would its founding nineteenth century migrants
have thought about the fact that, after allowing for each country’s size and
affluence, New Zealand is now more unequal than the countries they left? And
what would those who invited them here have thought had they known their
descendants would be firmly in the bottom end of the unequal
distributions?”[40] His questions then beg another: Why has it taken so long
for a serious discussion on inequality in New Zealand to take place? For, if it
is a crisis, as some commentators have suggested, we have been in it for two
decades. Alexis de Tocqueville may well have the answer: “When inequality is
the common law of a society, the greatest inequalities do not call attention to
themselves.”[41] Easton poses the right questions, but he errs when he
attributes change agency to policymakers.
The capture of our democracy by
capital is the primary cause behind inequality today. And, as has been
demonstrated, inequality doesn’t simply mean the rich get richer – the poor get
poorer, while the middle struggles to simply stay level. However, the route
forward is not a simple matter of voting the “right” party in. A reforming
government would be faced with a host of barriers that would frustrate any
attempt to instrument a fairer distribution of wealth. The Fiscal
Responsibility Act 1994 strictly proscribes any expansion of government
expenditure, the Reserve Bank Act 1989 places monetary policy effectively out
of the hands of government of the day, while the restructuring of the public
service has created an ideological culture that would likely beget a
bureaucratic coup if structural changes were attempted. The Employment
Relations Act 2000, although softening some of the harsher aspects of the ECA,
still places stultifying restrictions on traditional union activities.[42]
Moreover, New Zealand is now embedded in a global marketplace – a fact that is
not going to turn without significant changes in the economic centres.
A fundamental contradiction in
liberal democratic theory is that many of the rights we now enjoy were not won
through formal processes of government but were instead won through
extra-parliamentary organisation and struggle. This contradiction will persist
as long as those who control the levers of political power are those with the
most money. The hope for the future
therefore lies in community, in those areas where self-organisation and opposition
can go on without restriction by the state or capital. The great project for
this generation – and it is a global project – is the reconstruction of civil
society. It is only through a vibrant civil society that we will be able to
reclaim our natural democratic rights and challenge inequality and its
regressive effects.[43] It will be a long hard road − nothing worth anything
comes easy − but if a rag-tag collection of poor migrants from Europe and
elsewhere could dream of a better world, we their descendants and heirs can
too.
Further Reading
Inequality
‘Special Issue on Inequality and
Class in New Zealand’, The New Zealand
Journal of Sociology, Vol. 28, Issue 3, 2013. See in particular Brian
Easton, ‘Economic Inequality In New Zealand: A User’s Guide’, pp. 9-66, p. 33.
Full issue accessible at http://ndhadeliver.natlib.govt.nz/delivery/DeliveryManagerServlet?dps_pid=IE18625730&dps_custom_att_1=ilsdb
Bryan Perry, Household Incomes in New Zealand: Trends in Indicators of Inequality
and Hardship 1982 to 2011, Ministry of Social Development, Wellington,
2012.
Max Rashbrooke (ed.), Inequality: A New Zealand Crisis,
Bridget Williams Books, Wellington, 2013.
Max Rashbrooke (ed.), The Inequality Debate: An Introduction,
Bridget Williams Books, Wellington, 2014.
Joseph Stiglitz, The Price of Inequality, W. W. Norton,
New York, 2013.
Rogernomics
Brian Easton, The Commercialisation of New Zealand, Auckland University Press,
Auckland, 1997.
Bruce Jesson, Only Their Purpose is Mad: The Money Men Take Over New Zealand,
Dunmore Press, Palmerston North, 1999.
Jane Kelsey, The New Zealand Experiment (2nd ed.), Auckland
University Press, Auckland, 1997.
Social history
Tony Simpson, A Vision Betrayed: The Decline of Democracy in New Zealand, Hodder
and Stoughton, Auckland, 1984.
Stevan Eldred-Grigg, New Zealand Working People, 1890-1990,
Dunmore Press, Palmerston North, 1990.
[1] Phil Taylor, ‘The town that
missed the boom’, The New Zealand Herald,
February 2014, http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11207574 (accessed
6 April 2014).
[2] Lean, Geoffrey, Yvette Cooper.
‘Not Enough for Us: The Theory was that as the Rich Got Richer, We’d All
Benefit. But It Hasn’t Worked.’ The
Independent, July 1996, pp. 52.
[3] Andrew G. Berg, Jonathan D.
Ostry, ‘Inequality and Unsustainable Growth: Two Sides of the Same Coin?’, IMF
staff discussion note, 8 April 2011, pp. 9-10, cited in Max Rashbrooke (ed.), Inequality A New Zealand Crisis, Bridget
Williams Books, Wellington, 2013, p. 11; Raghuram G. Rajan, Fault Lines: How Hidden Fractures Still
Threaten the World Economy, Princeton University Press, New Jersey, 2010,
cited in Rashbrooke, p. 11.
[4] J. Roemer, ‘Ideological and
Political Roots of American Inequality’,
Challenge, 54, 5 (September-October 2011), pp. 76-98, cited in Rashbrooke,
p 39.
[5] Jit Cheung, Wealth Disparities in New Zealand, Statistics New Zealand,
Wellington, 2007, p. 8, cited in Rashbrooke, p. 1.
[6] Ibid., p.8, cited in Rashbrooke,
p. 2.
[7] Ibid., p. 10, cited in
Rashbrooke, p. 1.
[8] Bryan Perry, Household Incomes in New Zealand: Trends in
Indicators of Inequality and Hardship 1982 to 2011, Ministry of Social
Development, Wellington, August 2012, p. 218, cited in Rashbrooke, p. 2.
[9] OECD, Society at a Glance 2011 – OECD Social Indicators, 2011, http://www.oecd.org/social/soc/societyataglance2011-oecdsocialindicators.htm (accessed
26 May 2013), cited in Rashbrooke, p. 1.
[10] The number of people living on
less than 60% of the contemporary median income, after housing costs, rose from
9% in 1984 to 19% in 2011. Perry, op.
cit., p. 105, cited in Rashbrooke, p. 1.
[11] O. A. Aziz, et. al., ‘Fiscal
Incidence of Government Expenditure and Taxation on Household Income, 1988 to
2010’, paper presented at the 53rd New Zealand Association of
Economists Annual Conference, Palmerston North, 27-29 June 2012, p. 7, cited in
Rashbrooke, p. 30.
[12] OECD, ‘Unit Labour Costs –
Annual Indicators: Labour Income Share Ratios’, 1980-2012, http://stats.oecd.org/Index.aspx?queryname=345&querytype=view# (accessed
21 May 2013), cited in Rashbrooke, p. 31.
[13] OECD, ‘Labour Losing to
Capital: What Explains the Declining Labour Share?’, OECD Employment Outlook, 2012, p. 113, cited in Rashbrooke, p. 31.
[14] Reserve Bank of New Zealand,
‘Key Graphs – household debt’, http://www.rbnz.govt.nz/keygraphs/Fig5.html
(accessed 11 December 2012), cited in Rashbrooke, p. 31.
[15] Steven Stillman, Trinh Le, John
Gibson, Dean Hyslop and David C. Mare, The
Relationship between Individual Labour Market Outcomes, Household Income and
Expenditure, and Inequality and Poverty in New Zealand from 1983 to 2003,
Motu, Wellington, 2012, p. 16, cited in Rashbrooke, p. 10.
[16] Perry, op. cit., p. 218, cited in Rashbrooke, p. 31.
[17] Perry, op. cit., p. 107, cited in Rashbrooke p. 2.
[18] David Grimmond, 1000 Days to Get it Right for Every Child:
The Effectiveness of Public Investment in New Zealand Children, Infometrics
Ltd for Every Child Counts, July 2011, cited in Rashbrooke p. 2.
[19] Perry, op. cit., p. 165, cited in Rashbrooke p. 7.
[20] Clare Smith, Winsome Parnell
and Rachel Brown, Family Food
Environment: Barriers to Acquiring Affordable and Nutritious Food in New
Zealand Households, Families Commission, p. 5, cited in Rashbrooke, p. 7.
[21] Perry, op. cit., p. 118, cited in Rashbrooke, p. 3.
[22] The late political journalist
Bruce Jesson observed, “[f]ew said this at the time…which is why I describe the
New Right as operating with the benefit of hindsight. It wasn’t until serious
problems developed in the early 1980s that a coherent critique of the protected
economy appeared in New Zealand. Instead, it was the Left, oddly enough, that
produced a scathing critique of the protected economy during the period when it
was flourishing.” The Left Jesson is referring to here is not the Labour Party
Left. The critique was written by a left-socialist Owen Gager. He argued that
the protected nature of secondary industry in New Zealand meant that workers
and farmers were subsidising manufacturers; that because it was inefficient and
couldn’t pay its own way, secondary industry aggravated the underlying
instability of a dependent economy. Bruce Jesson, Only Their Purpose is Mad: The Money Men Take Over New Zealand,
Dunmore Press, Palmerston North, 1999, pp. 73-74.
[23] As Jesson correctly identifies,
“[f]ree-market policies may have become fashionable throughout the world, but
New Zealand is the extreme case. Most other countries haven’t changed their
policies as radically as New Zealand has, and they have taken longer to do
things. Some countries have scarcely changed at all. In most countries there is
considerable opposition to the free market.” Ibid., p. 19.
[24] Economist, 1 June 1985, p.19, quoted in Jane Kelsey, The New Zealand Experiment (2nd
ed.), Auckland University Press, 1997, p. 7.
[25] Ibid., 15 June 1991, p. 72, quoted in Kelsey p. 8.
[26] Ibid., 13 October 1993, p. 128, quoted in Kelsey p. 8.
[27] D. Bradshaw, ‘Professionalism
in the Public Service’, Public Sector,
Vol. 17, No. 1, pp. 13-14, quoted in Kelsey, p. 142.
[28] New Zealand Parliamentary Debates, Vol. 458, 1984, p. 1313, quoted
in Kelsey, p. 41.
[29] Tony Simpson, Shame and Disgrace A History of Lost
Scandals in New Zealand, Penguin, Auckland, 1992, p. 15.
[30] Ibid., p 17.
[31] Erik Olssen, Building the New World Work, Politics and
Society in Caversham 1880s-1920s, Auckland University Press, Auckland,
1995.
[32] J. D. Salmond, Desmond Crowley
(ed.), New Zealand Labour’s Pioneering
Days: The History of the Labour Movement in N.Z. from 1840 to 1894, Forward
Press, Auckland, 1950.
[33] Simpson, op. cit., p. 17; While its common place to admire, understandably
enough, the Liberal to Labour period of democratisation, it is little known how
much wider in scope the democratic project was in the minds of many at the
time, and how close they came to realising that vision. For many, the
restriction of democracy to the political sphere was unnatural – democracy had
to be extended to the workplace if it was to have real meaning, that is, allow
ordinary people to have a real control over their lives. The defeat of the
Waihi strikers in 1912 signalled the end of that vision in the minds of the
majority of working people, after that it was seen as utopian and impractical.
But had the strikers succeeded at Waihi, a very real possibility, the
implications would have been profound. As Olssen argues, the “union movement
would have been even more powerful, and more left wing, and New Zealand’s first
Labour government would have been yet more radical….all the trading banks might
have been nationalised, worker-control schemes would have been vigorously
encouraged.” Erik Olssen, ‘What if the strikers at Waihi had triumphed?’, New Zealand As It Might Have Been,
Stephen Levine (ed.), Victoria University Press, Wellington, 2006.
[34] One of these was Michael
Bassett. A cabinet minister in the Fourth Labour government, and a leading
support of Douglas, Bassett had start his career as a labour historian and had
written extensively on New Zealand labour and working class history He knew
better than most of the great sacrifices that had been made to achieve the
rights and build the communities he was helping to destroy.
[35] S. Grey, C. Sedgwick, ‘Fears,
constraints and contracts. The democratic reality for New Zealand’s community
and voluntary sector’, paper presented at the Community and Voluntary Sector
Research Forum, Victoria University of Wellington, 26 March 2013, p. 30.
[36] Ibid., p. 2.
[37] Jesson, op. cit., p. 73.
[38] Ibid., p. 139.
[39] Ibid., p. 205.
[40] Brian Easton, op. cit., p. 33.
[41] Alexis de Tocqueville, Democracy in America, quoted in Brian
Easton, The New Zealand Journal of
Sociology, Vol. 28, Issue 3, 2013, p. 19.
[42] As Jesson observes, “[i]f a
non-New Right government seriously attempted a revision of, say, the industrial
relations legislation, it would find itself under siege from the business
community, the media and its own bureaucracy. Supporting it would be a gutted
union movement and nothing much else.” Op.
cit., p. 16.
[43] Some possible strategies are
discussed in Ciaran Doolin, ‘Democracy and Community: New Zealand at a
Watershed’, Labour History Project
Bulletin, Bulletin 59, December 2013, pp. 26-29. The labour movement offers
perhaps the best example of an attempt to create a vibrant alternative culture
one characterised by democracy and self-help. See, for example, Stevan
Eldred-Grigg, New Zealand Working People,
1890-1990, Dunmore Press, Palmerston North, 1990.