Powered by Aotearoa
Four decades of failing to plan for population growth in Aotearoa New Zealand, and how we can use the Renewable Energy Transition to catch up
Summary
There has been a growing pile of complaints, lately, to the effect that none of the key players in the 2023 New Zealand election campaign is offering any big idea or credible plan to turn this country’s decline around. Indeed, for nearly fifteen years the politicians have tried and failed on that count, from John Key’s 2025 Taskforce, charged with closing the gap with Australia by 2025, but which merely offered warmed-over Rogernomic leftovers, to Jacinda Ardern’s promise of a “government of transformation.” Chris Hipkins’s less ambitious “bread and butter” approach has left the phone off the hook with the young, while few seem to believe the figures behind National’s promise to get the country back on track. And yet, there is a plan for closing the gap with Australia that is staring us in the face.
Introduction
IN 1965, my parents emigrated to New Zealand, lured out by the idea that it was a good place to bring up kids. At that time, their adopted country had a population of 2.6 million, or in other words only half the population of today.
And it seemed that there would be plenty of room and opportunity for the next 2.6 million, for prospective migrants were heavily propagandised by films such as 1959’s The New Zealanders, which insisted that New Zealand was a land without poverty or exploitation or an especially noticeable class structure:
Education’s almost wholly state-administered and free. All New Zealanders attend the same sort of schools and most talk with the same sort of accent. . . . There are universities in all the main centres. Varsity education is also free to all who pass the entrance examination. . . . Having a baby brings no financial worries . . . The best medical attention is free in the hospitals. Medicine is also distributed free of charge. With health care right through life we’ve come to believe that the people’s welfare is the government’s responsibility. . . . New Zealand’s a wonderfully healthy country, a great place for bringing up children. . . . . All workpeople must belong to unions . . .
Like so many old newsreels and other information films, The New Zealanders is on YouTube these days, so you can see for yourself.
At the same time, much of what we take for granted had also been created in that half-population nation of 1965: the railways, a national electricity grid, and the overall appearance of our cities.
Industrial development was also being actively fostered by the government to prevent what the Wellington-based historian David Hamer, in 1963, referred to as the potential “superfluousness and precariousness” of a growing urban population. With reference to the New Zealand Government’s successful agitation for inclusion of rights to employment and housing in the founding charters of the United Nations, and a previous, 1944 conference between the Australian and New Zealand Governments which arrived at a similar conclusion, namely that these sorts of rights had to be positively protected by the state, Hamer wrote that:
The most distinctive contemporary feature of New Zealand as a ‘small democracy’ is probably our insistence, proclaimed to the world in no uncertain terms in the Canberra Pact and at the founding of the United Nations, that the state must maintain full employment. That this problem of employment should have come to figure so prominently in our politics reflects the exceptionally wide variance between our basic economic situation and the human needs of our society. In a country whose economic well-being is dependent on primary production for export and whose economy is therefore founded on commercial farming, people do seem very superfluous. . . . This situation of superfluousness and precariousness with regard to employment has been felt all the more keenly because we are a small and isolated country. And, because we are a democracy, these feelings have become the material of political pressure and political action, so that, after the bitter experience of two depressions, ‘full employment’ and ‘social security’ became basic principles of our government’s policy.
One of the most important methods by which the state would safeguard these rights and protections would be by supercharging high levels of investment in energy, industry, and housing.
To accommodate the same population as had been built up by 1965, all over again, and in 58 rather than 125 years, our state should have become more active than ever in supercharging the investments needed to accommodate a rising population and thus protect it from “superfluousness and precariousness.”
Unfortunately, that did not happen, with consequences that are evident all around us.
Housing is the most obvious area of shortfall into superfluousness and precariousness. But there are many others, including a lack of industrial development and a lack of electrical generating capacity as well.
Our last large dam, the Clyde Dam, started producing power more than thirty years ago now, in 1992, when our population was nearly two million less than today. The development of additional, non-hydro sources of power since that date has been modest, a fact that helps to explain why household electricity prices have risen dramatically, after allowing for inflation, over the same period (it is fair to say that larger users have faced less steep rises, and even some falls, but few would deny that householders have been gouged.)
It is this failure to invest that the present essay will interrogate, while at the same time proposing a solution, or the core of a solution, in the form of renewed investment for the coming energy transition from fossil fuels to renewables: a local Green New Deal to develop our abundance of wind and solar energy.
Powered by Aotearoa: A Green New Deal for New Zealand
Wind and solar are resources which have lately become the most economic sources of electricity. Yet these sources of electricity are still very underdeveloped in this country: indeed, to a surprising degree given our ‘clean green’ reputation.
This is true both by the standards of overseas levels of investment in wind and solar, and also in relation to those energy sources’ actual abundance in New Zealand. Few of our windfarms have been built lately, with their installation actually tapering off after 2010 or so rather than expanding as in other countries. And solar photovoltaic (PV) panels are still a rare sight.
This is partly because New Zealand primarily leaves investment in new electricity supply up to market forces at the present time, as opposed to the idea of having the electricity sector support industrial, community, or environmental goals.
Our electricity sector was run for national-development purposes for most of its history, with a more commercial approach taking formal hold in the late 1990s, in which the state-owned system was divided up into four nominally competing generator-retailers or ‘gentailers, which came to be known as Contact Energy, Mercury Energy, Meridian Energy, and Genesis, which were managed for profit. Contact Energy was privatised in 1999, and the three remaining state-owned gentailers were partly privatised (49%) in the early-to-mid 2010s.
The expectation was that competition between the ‘big four’ gentailers, commercialisation, privatisation, and new entrants to the market, would lead to lower electricity prices than had been the case under the unified state system of the past. In more recent times, the falling cost of wind and solar has also been expected to help decarbonise the electricity supply system.
The New Zealand Government has an officially ‘aspirational’ goal of lifting an electric power system that is already 82 to 84 per cent renewable, mainly as a result of legacy hydroelectric and geothermal power stations, to 100% renewable by 2030, there are only very limited government incentives to install wind or solar power. This is perhaps the main reason why the goal of 100% renewable electricity by 2030 is described as aspirational, with the final result essentially up to market forces in reality.
(Having said that, as of the very date of publication, 18 September 2023, the government has announced some new incentives, which bring us closer to what tends to be offered overseas.)
For, unfortunately, despite their growing cheapness, it turns out that the purely commercial incentive to expand the supply of renewables is weak.
Part of the weakness of the incentive to install more renewables lies in the fact that our electricity market is self-contained, with no opportunities to sell surplus electricity offshore, nor for that matter to buy electricity in in times of shortage.
Under these conditions, it seems that the ‘big four’ gentailers face perverse incentives not to flood the New Zealand market with cheap sources of power, and that, among other things, this has inhibited the development of new wind farms even as the cost of installing them has fallen.
Perhaps the most hard-hitting of several recent critiques is a report called Generating Scarcity, by an alliance of environmentalists and trade unions, which makes the point that the system is being run on what seems an extractive basis, with dividend payouts exceeding profits:
Since the partial privatisation of Genesis, Mercury and Meridian, the gentailers (including Contact Energy) have distributed $8.7 billion in dividends to shareholders, $3.7 billion more than they earned in profits over this period. This has starved the network of the investment needed to fund new generating assets while keeping existing gas and coal-generating facilities on life support. (note reference deleted)
Until recently, there has been even less interest in developing solar power than wind in New Zealand: albeit for an additional reason.
This additional reason lies with our comparative industrial underdevelopment, Because of a lack of industries as compared to, say, Denmark, a small European country with a similar population to our own, our use of electrical power during the day is modest compared to a pronounced peak of electrical demand at dusk, when New Zealanders come home from work and put on ovens and kettles and heaters all at once.
While solar power can be stored by various means, this does tend to add cost as compared to using the power when it is created.
In more heavily industrialised countries, on the other hand, daytime demand forms a larger proportion of the total or even the actual peak. And so, they have fewer inhibitions about investing in solar.
Denmark, with a similar population to New Zealand but only about one-sixth of our land area if we do not count its Greenland dependency, and generally about as far from the equator as Macquarie Island in our part of the world, nonetheless plans to have 9 GW of solar PV capacity installed by 2030.
(GW is short for gigawatt or gigawatts. One GW equals a billion watts or in more familiar units, a million kilowatts).
9 GW is nearly the same, in terms of rated capacity at least, as New Zealand’s total generating capacity, from all sources, of 9.8 GW.
Despite our lack of industrial development, a host of new proposals for solar farms in New Zealand have lately been made. This is basically because there are fewer barriers to entry, as economists say, than with wind. Solar panels are easier to put up than wind turbines and more likely to get consent, as they are often invisible from a distance.
According to an article by George Driver in this August’s North and South magazine, freely online, only a quarter of the recent solar-farm proposals have been made by the incumbent gentailers: most have come from startups and overseas investors.
This sudden interest in solar has largely blindsided the powers that be, such as grid operator Transpower:
The rise of solar farms was largely unexpected. Transpower’s forecasts in 2020 predicted there wouldn’t be any solar farms here before 2030 and only one gigawatt of grid-scale solar by 2050. The Climate Change Commission estimated there would be 950MW of solar farms by 2035 if its recommendations were adopted. Now Transpower expects almost seven times that amount will be built in the next seven years based on the scale of projects announced in the last couple of years alone.
Even so, unless there is a complementary expansion in industry, the current, market-led solar bubble in New Zealand is likely to be just that. As the North and South article, which bears the ominous title of ‘Solar Eclipse’, notes, we should indeed not make the mistake of supposing that the falling cost of solar and a sudden flurry of investor interest, alone, will turn New Zealand into a renewables powerhouse without a supportive government strategy to back it up.
Drawing on the work of Forsyth-Barr’s energy analyst Andrew Harvey-Green, Driver sounds a cautionary note:
Still, Harvey-Green says only a fraction of what’s been proposed is likely to be built. He believes about 5 per cent of our power will come from solar farms by the end of the decade, a similar proportion to existing wind generation. Even once consented, many power projects won’t eventuate. One solar company in Hawke’s Bay has gone into liquidation, for example. One factor that could affect what goes ahead is the queue of 58 projects — three-quarters of them for solar farms — seeking connection to the grid. Some fear it could take years to clear.
It follows that any Green New Deal to develop these energy sources in earnest must involve a degree of public pump-priming to organise both complementary transmission infrastructure as required, and growth in complementary industrial uses as well.
The latter is not as difficult as we might suppose. Although the Industrial Revolution began in areas that had abundant coal, as railways, steel ships and oil pipelines developed, fossil fuels were increasingly transported over long distances to power industries and cities that were, for the most part, located close to the original coalfields.
In the coming age of renewables, there will be a shift in this dynamic, in some ways back to the earlier industrial condition in which industry sprang up next to the coalfields.
That is to say, the future industries of the world will tend to be located where the renewable energy is most available. This is because it is generally less economic to transmit renewably-generated electricity across oceans than it is to ship the finished goods made with that electricity.
The same is true of ‘green hydrogen’: hydrogen made energy supplied from renewable sources. Green hydrogen is an energy carrier and chemical feedstock that is key to decarbonising some of the more seriously industrial processes such as the manufacture of steel and of a wide range of chemicals. But it is less economic to transport hydrogen over long distances on land than it is to transmit electricity, and it is virtually impossible to ship hydrogen across the oceans. The most economic solution for processes that involve hydrogen is therefore to locate any factory that uses the hydrogen within a few kilometres of an electrically-powered hydrogen production facility, or even to integrate the two on one site.
The idea that, in the future, industry will come to where the power is, is one that has been seized with both hands by the Australians, who have an abundance of potential solar resources, and also a certain amount of hydroelectricity in places like Tasmania and the Snowy Mountains, with which to smooth out short-run fluctuations, over minutes, hours, or days, in the amount of power supplied by solar panels and wind farms.
The idea of attracting masses of new, zero-carbon industry to Australia was championed by the economist Ross Garnaut in his 2019 book Superpower.
Despite the recent nature of Superpower, a book still only four years old, Australian state governments, along with the more recently elected federal Labor government in Canberra, have moved with wartime urgency to implement Garnaut’s scheme.
Thus we have the example of the Tasmanian Renewable Energy Action Plan and the associated initiative called ‘Powered by Tasmania’, from which I shamelessly borrow the title of the present essay, Powered by Aotearoa.
A publicity video for Powered by Tasmania begins with a couple of old-time surveyors, before moving on to protests that mostly shut down additional dam construction in the 1980s just as they did here, only to suggest that the old hydroindustrial idea now has a new lease of life in the age of wind and solar.
In late 2020, South Australia’s then Liberal state government announced a renewable electricity target of 500% of current electrical grid demand by 2050. This was intended to electrify South Australia’s existing industries along with the vehicle fleet and, as with Tasmania’s scheme, to attract additional industries to the state.
The South Australian Labor Party, returned to office in 2022 after one term of the Liberals, also has a strong track record of supporting renewable energy.
And then there is Queensland’s $19 billion Energy and Jobs Plan, part of a wider scheme for a tenfold increase in the amount of wind and solar power deployed in Queensland as they shut down their fossil-fired generation. You can click on the following cover thumbnail to go to the report.
There are many good reasons for us to pursue a similar policy of state-coordinated expansion of renewable geneation, renewable transmission, and renewably-powered industries.
Such an expansion will revive our economy and wean it off its curiously anachronistic dependence on animal farming: a technology of biblical antiquity which is now facing retirement for all sorts of reasons, from its greenhouse-gas emissions to the near certainty that one day soon, scientists will come up with artificial milk and artificial beef patties that are indistinguishable from the real thing, but healthier, cheaper, and more long-keeping.
That animal farming is potentially at risk, as the Australian ethicist Peter Singer has lately put it, of going the way of photographic film (remember Kodak?) tends to be officially denied in this country. But then again, you know what the journalists say: ‘never believe anything until it has been officially denied’.
Indeed, something like this has already happened to our farming sector once. The main reason our hills no longer teem with sheep in the way that they did in the 1960s is because back then, the scientists came up with nylon and polyester. So, something like the impact of a prospective ‘post-cow world’ has happened to us already, in ways that partly account for our chronic economic malaise ever since the 1960s, and in ways that make denial of the prospect of a post-cow world all the more stupid and uninformed.
A swift and coordinated expansion of renewable generation, transmission, and use, will also serve as our contribution to helping the world decarbonise, earning us positive carbon credits for our economy instead of negative ones payable once we get to 2030 and find that we have failed to meet our Paris climate change obligations, in part because of all those cow burps.
Garnaut takes the view that no country is more favoured by geography and climate to catch the coming wave of renewably-powered industrial investment, than Australia.
But he is wrong about that. We are even more favoured by geography as a package, if, obviously, on a smaller scale.
Like the hydroelectric resource that was gradually developed throughout the twentieth century, most of our solar resource is in the South Island, very largely in the same places and with a degree of local abundance that will come as a surprise to many.
Our solar resource is, in fact, colossal compared to that of Denmark, where, as noted, they plan to have 9 GW of solar PV installed by 2030, the same date as that by which our government aspires to close up the last 16 to 18% of our current generation with renewables (but only aspirationally, mind you).
Most of the bits that appear as red on the map look like this, arid uplands of the kind that are ideal for generating lots of solar power even in winter.
A high-voltage direct current (HVDC) link, one of the first of its kind in the world, has been collecting and transmitting much of the South Island’s power to the North Island, where most of the population currently lives, and occasionally in the opposite direction as well, since 1965.
Links of this kind are most useful for transmitting renewably-generated energy from remote areas to population centres. Our HVDC link, which has been upgraded since 1965, is colloquially known as the Cook Strait Cable, though in reality there are several cables and it also runs overland, on pylons, for most of the length of the South Island as well.
There is also considerable potential for local solar generation in the North Island. The North Island does not have so many arid areas as the South Island, but it is closer to the equator.
An abundant wind energy resource, which has led us to be dubbed the ‘Saudi Arabia of Wind’ in some circles, is most easily tapped in the North Island and its shallow offshore seas, especially those that lie to the north and to the south of the Taranaki peninsula and its regional city, New Plymouth.
Moreover, each island has a massive, interconnected system of hydroelectric lakes, rivers and canals, of similar complexity in each case to mainland Australia’s Snowy Mountains Scheme, along with many stand-alone dams and power stations.
Here is a fly-through of the biggest hydro system in the South Island, the Waitaki system.
And here’s a fly through of parts of the North Island equivalent, which extends from Lake Moawhango (850 m above sea level, ASL) on down through Lake Taupō (356 m ASL) and a daisy chain of dams on the Waikato River, to the sea.
The total generation of our electricity system is currently around 43 to 44 terawatt-hours (TWh) a year, meaning 43–44 trillion watt-hours or, in more familiar units, 43–44 billion kilowatt-hours.
Our existing hydroelectric system, which produces most of that electricity, is capable of storing and releasing about 4 TWh, or in other words a bit over a month’s worth of power on average. This is more than enough to serve as a ‘battery’ for an expanded system of 100% renewable electricity, even one that has expanded several times over.
So, you might think that ‘powered by Aotearoa’ would be a done deal as well.
An Age of Stagnation?: Origins of the Present Inertia
But if so, you would be overly optimistic, because nobody is taking anything like this into the current general election.
Not even the Greens, whose chief worry seems to be the energy embodied in solar panels and wind turbines and thus speak, as of the time of writing, and in the more detailed, downloadable fine print of their energy policy, of an “energy descent framework”:
While energy conservation and efficiency should generally be prioritised, there needs to be a substantial increase in new renewable generation to decarbonise transport, electricity generation, and essential industries. Because renewable energy development still relies on fossil fuels and mining, contributing to further ecological overshoot, more renewable energy must be achieved with energy sufficiency and equity as the goal. Cognisant of the lower energy density of renewables compared with fossil fuels, a planned energy descent would help to safeguard essential services and foster social well-being.
The fear of somehow making things worse by building more renewables seems exaggerated. According to a current (Sept. 2023) webpage of the International Energy Agency,
Today, electricity-intensive solar PV manufacturing is mostly powered by fossil fuels, but solar panels only need to operate for 4–8 months to offset their manufacturing emissions. This payback period compares with the average solar panel lifetime of around 25–30 years. (source emphasis deleted)
On typical sites wind can take a bit longer, sometimes just a few months but sometimes as long as two years. Still, this is much less than the projected lifespan of a wind turbine as well.
As to the wider idea of voluntary simplicity and less emphasis on stuff, we could probably all do with a nature cure and with less of some of what Mark Twain called the modern inconveniences and Ivan Illich the instruments of counterproductivity, from cars in an urban traffic jam to social media.
Many famous 1960s critiques of urban traffic, consumer society, and GDP as the measure of all things, all of which fed straight into an emergent 1960s counterculture and from there into Green politics in the 1970s, remain as true as ever and worth studying if one has not heard of them.
That the automobile is the destroyer of cities has been known for decades, as we seen in the 1968 film The City’s for Living In.
There are also many who have criticised consumer society for creating itches that it cannot scratch.
On top of that, readers may also be familiar with Robert F Kennedy’s famous polemic against GDP, once more from the same era.
And it is also true that much of the energy we use is used wastefully, on things like urban commuting and attempting to heat houses that should have been built better.
But I do feel, nevertheless, that appeals to the virtue of the simple life can often serve as a way of literally running away from the issues that beset our largest cities and retiring to the country, in something like the manner of the short 1972 film Start Again and The First New Zealand Whole Earth Catalogue from the same year, both classic products of their day:
Indeed, it can sometimes appear as though our entire political system is somehow dominated by those beset by dreams of retirement and escape to the country, dreams they have perhaps harboured ever since watching Start Again or flicking through the Whole Earth Catalogue back in the day.
This is the same mentality that Bill Pearson charged us with in his 1952 essay ‘Fretful Sleepers’ (“lassitude is a drug for most New Zealanders”): and yet we were more go-ahead and less sleepy in those days than now.
Even as Pearson wrote of fretful sleepers, he inhabited an era in which one highly conspicuous breakthrough had followed another for decade on decade, such as the transition within just a few decades from the barnstorming biplane to the ocean-spanning turbofan, an game-changer for long-haul aviation that the Australian airline Qantas’s management of the 1960s branded the V-Jet.
A time in which electricity and tarsealed roads were coming to all manner of former backblocks such as Taupō, which only got got grid power as late as 1951, and probably its first tarsealed road connection at about the same time.
A time in which the world and certainly the Aotearoa of only a hundred years before had been almost unimaginably different.
Of course, to suppose that a future age of lassitude might follow a burst or blip of progress was by no means a great stretch of imagination, if we suppose that everything must sooner or later revert to the mean.
In the June 1953 issue of Landfall, the literary magazine he had founded not long before, Charles Brasch feared that a founding charge of energy with which modern New Zealand had been kickstarted would not last:
Such colonies begin as crudely broken-off fragments of the parent body; the impulse behind their foundation generally includes an urge to realize more fully some implicit ideal purpose of that society. The effort of settling new country, however, usually exhausts the urge and the colony once established easily drifts into a stagnating existence as a dull provincial reflection of the parent society, with its own comfort as its chief concern.
Again, in 1975, less than three years after the publication of the MIT study The Limits to Growth in 1972, and two years after E. F. Schumacher’s Small is Beautiful in 1973, the Anglo-German expert David Eversley predicted a coming ‘Age of Stagnation’ in an article that was influential in this country, to the point of a favourable mention by the head of planning at the Auckland Regional Authority at the time, Malcolm Latham.
It is likely that Eversley’s idea of a coming Age of Stagnation helped to secure the cancellation of the then-proposed Auckland rapid rail scheme popularly known as Robbie’s Rapid Rail, after its chief political sponsor, the long-serving Auckland City Mayor Sir Dove-Myer Robinson.
Robinson predicted that metropolitan Auckland might one day have 1.5 million inhabitants, or even 2 million, and that we certainly would not want to be making do with the bus by then.
Making these predictions at a time when the city had a metro population of between half and three quarters of a million, Robinson was, however, widely disbelieved by a rising stagnationist faction that included Latham.
If Auckland was destined to stagnate and not grow any larger, as the geographer Kenneth Cumberland also insisted on screen and in the book of his influential 1981 TVNZ series Landmarks, who would be needing rapid rail?
We could, indeed, make do with the bus under those circumstances. And make a bonfire of many other future-proofing schemes as well, in ways that even extended to the selling-off, in the 1980s and 1990s, of a colossal public land bank, amounting to nearly seven square kilometres on Auckland’s North Shore alone, on the grounds that it was no longer needed to provide for future urban expansion.
Thus revealed is one of the perils of indulgence in the more speculative or wishful forms of degrowth thinking, as opposed to the intelligent sorts that have been described just above.
That we need to be wary of a scenario outlined by the American urbanists Andres Duany, Elizabeth Plater-Zyberk and Jeff Speck in their 2001 book Suburban Nation, whereby:
No-growth movements, when successful, last for only one or two political generations, and often serve as an excuse to avoid planning entirely. When they are eventually reversed, as they inevitably are, growth quickly resumes in its worst form.
Amen to that, says the Aucklander stuck in the traffic of today’s metropolis of 1.7 million: adding, as a rider, ‘If only they’d listened to Robbie …’
The curious move toward a pervasive expectation of future stagnation in a formerly more go-ahead country, a move which lies behind Rogernomics as one of its deepest cultural explanations and which indeed persists to the present day (even though we have since grown by two million) probably also accounts for the common denominator among the policy offerings of most of our parties today.
Namely, that they do all seem calculated to appeal to those with a bit of land already and contemplating retirement to the countryside, with no big visions that might upset the applecart.
It is as if we are now ruled by a cross-party committee of landlords approaching retirement, either literally as old fogeys or in their heads as ‘young fogeys’.
In that regard, it is worth noting that, a bit over ten years ago, a self-described investor of forty years’ standing named John responded to an article by Bernard Hickey with the retort that:
Land, land, land is the only long term holding. It is not subject to fashion, styles and renovation.
(John’s comment don’t seem to be on the Herald’s website anymore, which only now holds the article to which John responded; but I definitely noted it at the time.)
This was, by implication, the new realpolitik.
Not surprisingly, younger urban voters with jobs and families and often living in overpriced rental accommodation are feeling unrepresented in this election: ‘Where’s the vision?’, they ask.
The Nation-Builders
Compounding this issue is the fact that, ironically, New Zealand used to pursue a very vigorous developmental thrust. As mentioned in the introduction, this development thrust was intended to overcome what Hamer had called the potential “superfluousness and precariousness” of a growing urban population in a country otherwise mostly dependent on rural exports at the time and, indeed, still today.
Rural exports that were — as others pointed out — also rather limited in their value and potential for growth by the mountainous nature of our topography.
In a 1958 Ministry of Works flier called Town Planning Bulletin №1, we read, in a telling passage, that:
The old myth[s] that we had plenty of first-class land and that there were vast areas of un-developed land waiting for the plough have died hard. Most of us knew only what we saw from the main roads passing through the plains or the fertile valleys between the hills.
Topographical maps tell a different story; but the most revealing experience is to travel by plane on our inland air routes. . . . Here and there a narrow coastal flat — too small to be called a plain — the occasional green valley with a road snaking along the middle; for the rest nothing but hills, mostly bush and scrub covered, rising to the main rugged mountain chain.
This topography nevertheless also lent itself quite well to hydroelectric development capable of powering new industries in the cities, a point that is made explicitly in a government advertisement prepared for the New Zealand and South Seas Exhibition of 1925–1926, in which New Zealand is advertised as the “GREAT BRITAIN of the Southern Hemisphere and its Future Manufacturing Centre.”
The drive for hydro-industrialisation, as it is also called, lasted for eighty years, from 1904 until the coming of the Fourth Labour Government in 1984. It found its beginnings in an epic back-country journey by two engineer-explorers, much like the ones depicted in the Powered by Tasmania video.
In this country the two explorers were P. S. (Peter) Hay, a senior local public works engineer, and L. M. Hancock, an electrical expert from California. In places, they would have faced conditions like those in the preceding photograph of how you got from Whanganui to Taumarunui back then.
The expedition was sponsored by William Hall-Jones, the Minister of Public Works and later, for a few weeks following the death of Seddon, Prime Minister.
Glowingly, Hall-Jones reported to Parliament that Hay and Hancock had estimated New Zealand’s reasonably available hydroelectric resource as being in excess of the entire installed industrial steam power of the United Kingdom as of 1888, the latest date for which such statistics were available.
Both Hay and Hancock argued, in their respective reports, that an abundance of hydropower put New Zealand, which otherwise, as Hay added, faced a paucity of local fossil fuels, on the map as a potential manufacturing nation: a position endorsed by Hall-Jones.
In The Road to Wigan Pier, a 1937 account of a tour through a slummy and hazardous coal-mining district of England, George Orwell observed that its product was the “grimy caryatid upon whose shoulders nearly everything that is not grimy is supported.”
And yet for older industrial nations, there seemed to be no alternative. Musing on the suburbanisation of Woolwich, depicted as rural by eighteenth-century landscape painters but already, by 1873, swallowed up by the suburbs of London, the Victorian art historian Thomas Miller observed that:
To us all these changes are signs of progress and prosperity; and dearly as we love a bit of rural scenery, yet do we love our fellow-creatures more; and knowing that the ever-increasing millions cannot live upon song and sunshine, we rejoice to see all these means and appliances for their sustenance and comfort brought into operation, although they do disfigure the face of nature and defile her green garb with smoke and the stain of burnt bricks.
Only a few years earlier, in 1865, the economist William Stanley Jevons had posed what he called, in a book of that title, The Coal Question, namely, what would happen to industrial Britain once the coal ran out.
A debate as to which of two dooms might happen first, namely whether industrial society would be terminated by the exhaustion of fossil fuels on the one hand, or by unacceptable and rising levels of pollution on the other, and that if so, what would happen to its “ever-increasing millions,” has continued to the present day.
Well, we at least did not have to worry about either, it seemed. In contrast to a steam-powered Britain that was even then worried about running out of fossil fuels, and aware of their price in accidents, disease and pollution as well, we were blessed with a clean, inexhaustible, and comparatively safe source of industrial power of equal might that would serve us, in Hay’s words, for “as long as the climatic conditions and the mountains endure.”
Hay pushed for the total decarbonisation of all of our existing industrial systems and the electrification of our railways. It is interesting to see such policies being advocated as early as 1904.
Another little-known and curious fact is that Hay was also sufficiently perceptive to warn against any attempt to raise Lake Manapōuri by more than a small amount:
It is not likely, for scenic reasons, that a high dam would be build at Manapōuri. The present beauty of the lake is worth preserving to the fullest extent.
Later politicians and engineers intent on raising Lake Manapōuri in the face of public protests could have saved everyone a lot of trouble if they had gone back and read Hay’s original report!
The hydroelectric revelations of Hay, Hancock, and Hall-Jones seem to mark the true origin of our national myth of a ‘clean green’ New Zealand, though that myth would later be unhooked from an industrial agenda.
It also seems that our rejection of federation with Australia, and assumption of the status of an independent Dominion in 1907, the year we ceased to be a colony, may have rested in part on a newfound confidence bestowed by hydroelectricity, in the same way that the discovery of a large hydroelectric resource in Norway helped to embolden that country’s independence from Sweden in 1905, the same year Norsk Hydro was founded.
In that sense, the usual emphasis on our farming heritage and all the other rural aspects of New Zealand can be something of a red herring. Our nation’s story, as a nation rather than a colony of Britain or a state of Australia, is actually a story of urbanisation and hydro-industrialisation.
The joint expansion of our industries, energy supplies and cities was more successful than it has since been given credit for. In a book published in 1986, called The Quiet Revolution: Turbulence and Transition in Contemporary New Zealand, the Auckland journalist Colin James notes that:
… after the National Development Conference in 1969 … the government accorded manufacturers greater importance in the export drive. Tax incentives for manufactured goods and services were brought in during the 1970s, most notably the export performance tax incentive, introduced in 1980, under which export earnings were exempt from income tax. . . . Manufactured exports grew from 5 per cent of exports in 1965–66 to 19 per cent in 1980–81, including a narrowing of the trade gap with Australia from 3.4:1 in 1965–66 to 1.3:1 in 1980–81. The range of countries to which manufactured exports went also widened, as did the range of products.
There were other successes. New pastoral products from deer and goats found ready, if small, markets. . . . A range of new horticultural products, led by the New Zealand-developed Kiwifruit, scored smallish but important successes. . . . In the 1980s engineering companies began in a small way to export their services as consultants and there were successes in biotechnology, computer software and instrumentation. (p. 62)
The title of James’s book is usually thought of as referring to the policies of the Fourth Labour Government and the Rogernomes, which were just then starting to be branded as a revolution.
But, in reality, James was referring to social changes that had been snowballing over the whole of the previous generation, including the development of an export manufacturing economy that had barely existed as recently, as of the time of his writing, as 1960, and of which he regarded the Fourth Labour Government as being its embodiment, in a younger and more 1960s-influenced generation of politicians than the old soldiers of the British Empire who had run the country up to that point, who were often socially conservative but who had nonetheless unleashed all kinds of social changes by modernising the country on a material plane. In that sense, the quiet revolution of his title had exactly the same significance as that in which the phrase is used in Canada.
(Oddly enough, I cannot find the phrase ‘quiet revolution’ in the book’s text: perhaps it was chosen by James’s publishers at the last minute to replace a working title closer to the author’s subtitle: and very well chosen it was, if so!)
In his 2001 history of twentieth-century New Zealand, Paradise Reforged, James Belich records that New Zealand’s manufactured exports actually quadrupled as a percentage of the total during the 1970s, admittedly from what was still a low base in 1970. (p. 455)
The same policies were continued with even greater urgency in the days of Rob Muldoon’s controversial term of office as Prime Minister, from 1975 to 1984. Those were the days of the 1970s oil shocks, which, in parallel with falling terms of trade for traditional rural exports, hit New Zealand especially hard.
As such, in March 1975, some eighteen months to two years after the shocks of 1973, we were running a current deficit of 13.4 per cent of GDP, a record that still stands though we are closing in on it once again.
In 1980, a Massey University agricultural economist named Eric M Ojala wrote that “The cost of petroleum imports is currently about equal to the foreign exchange earned by the entire meat industry.”
A formerly fast-growing population, with an incredibly youthful median age of only 24.6 in 1970, began to emigrate en masse from 1975 onward: for the young are not only fecund but footloose. This led to something of a flatlining of population growth for the next fifteen years, until 1990 or so.
The 1970s were also the time when much of the epic Waitaki hydroelectric system in the South Island, apparently in its day the largest hydroelectric construction project in the world, was being built.
Along with the Waitaki scheme, Muldoon’s government also pursued a suite of additional energy projects collectively termed Think Big, some of them ill-conceived in hindsight, others now viewed more favourably, but all of them understandable in the light of what the keepers of trade statistics and people like Ojala were saying.
In a recent book called Power Surge by John Boshier, a deputy energy secretary in the 1980s, we read that:
National’s 1981 election campaign was based on the proposition that the path to prosperity was through economic growth. Its Growth Strategy wanted to achieve a diversified and prosperous future after several decades of total reliance on traditional products and markets. New export industries in agriculture, forestry, fishing, horticulture, manufacturing and tourism were described in detail. . . . (pp 88–89)
By this stage, however, all such schemes and their associated vision were starting to be conspued by environmentalists, whose anthem was surely John Hanlon’s 1973 hit Damn the Dam.
In a memoir called Family Silver, the public servant Richard Shallcrass recalled, of his time at the government’s Commission for the Environment in the mid-1970s, that:
Our enemy of choice was the Ministry of Works and Development, an infrastructure agency that used economic analysis to support projects that often seemed to entail bulldozing the countryside into a sterile playground suited to engineers with no aesthetic values. (p. 110)
One detects a bit of what C P Snow called ‘the two cultures’ here, of aesthetes versus the engineers: though in reality the decisions that lay behind Shallcrass’s complaints — such as the 1950s decision to flood Ōrākei Kōrako, a volcanic wonderland that would be even more of a tourist attraction than it is now and all still of great cultural significance to the Māori to boot, if two thirds of it were not now at the bottom of a hydro lake — were, of course, political in origin.
It was in the cabinet, if anywhere, that the true philistines were to be found, and perhaps never more than during a certain period during the fifties when, unfortunately, Ōrākei Kōrako’s number came up.
Goosman was the sort of politician satirised in the persona of the fictional tourist resort mayor Bill Heslop in the 1994 Australian film Muriel’s Wedding, a man fond of the expression ‘You Can’t Stop Progress’.
Muriel’s Wedding was set in a fictional town called Porpoise Spit on Queensland’s Gold Coast, an area doubtless quite nice in the days before it became overcommercialised.
A more recent local personification of the Bill Heslop type, complete with a much closer if accidental physical resemblance to boot, was — of course — Rob Muldoon.
In any case, the philosophy of energy-based industrialisation, with all its inherent ambiguities, would be entirely overturned by the Fourth Labour Government and its influential first Finance Minister Roger Douglas, who held that office from July 1984 until December 1988, when he resigned after falling out with Prime Minister David Lange over a proposal for a flat rate of income tax that Lange saw as regressive.
In a 1980 personal manifesto called There’s Got To Be A Better Way!, Douglas contended that farming was “the only way out” and “still the key to our economic future.”
In a 1987 rejoinder called Rogernomics: Is There a Better Way?, the New Zealand Herald’s economics correspondent Simon Collins noted that:
Douglas is our first finance minister since the Depression with little or no commitment to our traditional methods of providing jobs for everyone. (p. 21)
And that:
. . . He [Douglas] believed we had been using our skills, our labour and our capital to produce things like clothing and television sets inefficiently for our small domestic market. We could have been much better off by using these resources to produce more kiwifruit or venison for the world market, buying, with the proceeds, more clothing and television sets than we could afford to make ourselves. (p. 39)
A crucial and deeply ironic point of difference seems to have lain with differing expectations of future population growth.
The irony here is that much of the rhetoric of the neoliberal revolution emphasised the idea of making a society that was sleepy and sclerotic into one that was more dynamic by getting the state off our backs.
As we have seen, there was little evidence of actual sclerosis in a society in which manufactured exports quadrupled in percentage terms during the 1970s, supposedly the most sclerotic decade of all. But that was the official story at any rate.
In reality, and as the actual agrarianism of the Rogernomes also suggests, the idea that deregulation would make New Zealand more dynamic seems to have been a superficial gloss on a deeper logic that actually ran in the opposite direction, whereby we could shrink the state because our population was no longer growing as fast as before, would not achieve the population required to make a manufacturing economy truly viable, and therefore did not need high levels of state investment anymore.
In round terms, between 1975 and 1990, New Zealand’s population grew from 3.1 million to 3.3 million.
Cumberland, who looked forward to a future of deserted urban canyons and a repopulated countryside, insisted in the book of the series of Landmarks that “The face of the land as the next century unfolds will be shaped and fashioned by no more than three-and-a-half-million New Zealanders.” (p. 299).
As late as 1985 the New Zealand Official Yearbook argued that:
By world standards New Zealand’s population is small — 3.3 million at the end of 1984. New Zealand’s first million of population was recorded in 1908, 68 years after the signing of the Treaty of Waitangi. In 1952, 44 years later, the second million was reached, and the third million late in 1973. Recent predictions are that the fourth million will not be reached until well into the twenty-first century.
Although the population grew strongly over the thirty years that followed the end of World War II, population growth had almost entirely levelled off thereafter, for the reasons given above.
The result was to entrench what Bernard Hickey has lately dubbed a:
… post-1989 consensus that New Zealand had over-invested in infrastructure in the past and faced a flat to falling and ageing population where inefficient investment would be a bigger problem than under-investment.
Ironically, it was at precisely the date the new consensus took hold that New Zealand’s population began to grow strongly again, toward its current level of 5.2 million.
But now that the consensus had solidified, it had to be upheld. A good illustration of this upholding is an official communiqué issued by several ministers in Helen Clark’s cabinet in 2003, which argued that:
The population is unlikely to reach five million in the next 50 years. The New Zealand population is projected to grow to 4.4 million by 2021, grow further to 4.6 million by 2051 and fall back slightly to 4.2 million by 2101.
Just as the idea that animal farming is in the gun has been officially denied of late, so the idea that maybe the earlier population trends would return, and that we should therefore have persisted with energy-based industrialisation, was officially denied back then.
And this leads on to a further point concerning the prevalence of dogma and denial and general political groupthink in this country.
For one thing that clearly distinguishes today’s Aotearoa from an Australia that otherwise has a similar history in many respects, is the relatively much greater degree of political and economic polarisation of the economic planning debate on our side of the Tasman.
This problem began in the 1980s, with the way that Rogernomics, as the policy of the Fourth Labour Government, was introduced, in ways that were characterised both by speed and by stealth.
Instead of having a bread-and-butter debate about population trends and the right balances to be struck between industry and farming, or between hydroelectric dams and the fantails or pīwakawaka of which Hanlon sang, not to mention a denizen of the Waitaki called the kakī or black stilt, which in the 1970s dabbled in places that were shortly going to be at the bottom of a lake, the new policy of the 1980s was introduced without debate and represented, both at the time and thereafter, as a revolution of the virtuous against an evil and disastrous industrial system, a self-serving public service, and a tyrannical state.
Typical of the sorts of neoliberal apologetics to which we were exposed, if perhaps a trifle at the extreme end, was an address called New Zealand’s Remarkable Reforms by the then-serving Reserve Bank of New Zealand Governor and subsequent, unsuccessful National Party candidate for Prime Minister in 2005, Don Brash:
First of all, the decline of New Zealand after World War II displayed the baleful logic of Hayek’s road to serfdom. In the late 1930s, New Zealand was, as now, an object of international interest; but then it was as a pioneer of `cradle-to-grave’ welfare. In addition, New Zealand erected protective trade barriers and price, wage and capital controls in an attempt to insulate itself from changes in the world economy and to suppress inflation. But each intervention created distortions that spawned new interventions. By the early eighties, almost all prices, interest rates, rents, wages, and dividends were controlled by government — to say nothing of the import controls and the foreign exchange controls. The result was a sort of serfdom, not the police-state and concentration-camp variety that dominated Europe as Hayek was composing The Road to Serfdom, but the bureaucratic kind that was described with startling foresight by Alexis de Tocqueville in Democracy in America (published in 1835), whose vision of democratic totalitarianism so impressed Hayek.
Another of the defenders of the 1980s economic counter-revolution, Michael Bassett, would also claim, in a subsequently-anthologised 1999 lecture called ‘Politics versus the Economy, 1940–1975’, that the industrial prosperity of the post-war decades was artificial and unsustainable:
Ministers soon found that it took more than symbolic gestures to quell a generation of rising expectations. . . . The politics of rising expectations were getting completely out of hand. . . . Invariably, rising expectations moved at a faster clip than growth. . . . The point to remember is that once the electorate had the taste of what could be achieved by a big spending government, it never let its politicians forget. . . . The problem was that believers in the Santa Claus state were not ready to forgo any of the presents they believed they were entitled to. Since the 1930s the voters had paid little heed to any economic difficulties facing the country; they always demanded action on promises.
Part of the reason for this ideological doubling-down against the old hydro-industrial regime was that subsequent de-industrialisation hit newly-urbanised and fast-growing Māori and Pasifika populations, which had migrated to urban New Zealand in search of work after World War II, especially hard, in ways that had to be subsequently rationalised by claiming that there had been no choice.
The scale of the great urban migration, for Māori, is is captured by an entry in the online official encyclopaedia Te Ara:
The urban migration of Māori has been described as the most rapid movement of any population. In 1945, 26% of the Māori population lived in the towns and cities. By 1956 this had increased to 35%. Mass migration continued into the early 1960s. The urban population grew to 62% in 1966, and reached nearly 80% by 1986. As a result, many rural villages were depopulated.
Elsewhere in Te Ara, we read that:
In 1945 most Māori workers were concentrated in primary industry, but by the 1970s most were in manufacturing jobs. Meanwhile, the non-Māori labour force had increasingly moved into higher-paying, higher-status jobs in the tertiary sector.
It was, as far back as 1959, the subject of a special cover issue of the bilingual government magazine Te Ao Hou/The New World.
Māori and settler had formerly fought one another over small patches of dirt, the surprisingly limited areas of fertility that can be seen on the topographical map. But for a time at least, its seemed that the old divisions and resentments were being overcome by a modern, industrial, urban prosperity.
In Paradise Reforged, Belich quotes a statistic by an older colleague, Keith Sorrenson, to the effect that “In 1961, the average income of Māori males was 89.8% that of non-Māori males.” Belich then goes on to comment that:
Historians sometimes cite such figures to demonstrate persisting Māori disadvantage, but they surely represent a massive improvement on the situation 30 years before. Added to this, Māori from 1945 at last became fully eligible for the benefits of the welfare state. They were quite generous at the time, and you did not have to be unemployed or sick to get them. In the 1950s, the family benefit must have been a real boost to large Māori families, increasing incomes by around 50 per cent. In terms of cash if nothing else, the period 1945–75 was something of a golden age for Māori. The era of Māori protest and activism that began around 1970 did so at a time when Māori were economically better off than they had been for a century. (p. 474)
The statistics were much the same for a growing Pasifika population as well.
(In older print sources such as Belich’s Paradise Reforged, and even some more recent texts, Māori words appear without the tohutō or macron that signifies long vowels. I have corrected sources I quote that do not have the tohutō by including it, so that they match the more accepted spelling of today.)
There was still a lot of casual racism and over-policing of minorities in mid-century New Zealand, as a recent film makes clear.
But it seemed as though the economic roots of what was known, in the time of the former wars, as the ‘fire in the fern’, were being stamped out. A greater degree of cultural respect would surely follow.
From the Quiet Revolution to the Quiet War
However, Rogernomics upended all that former economic inclusiveness, along with the wider policy of hydro-industrialisation. In an essay called ‘The Purpose of Social Policy’, the eminent scholar Ian Shirley wrote that:
Investment in New Zealand manufacturing declined by almost 50% between 1985 and 1989 and by 1991 registered unemployment represented 11% of the total workforce. Long-term unemployment became a serious social problem with the unemployment rate for Māori aged 15 to 24 years approaching 40%. . . . . As a consequence government became exposed to relatively high levels of welfare expenditure. In 1981 almost 115,000 people were in receipt of a welfare benefit — by 1985 that figure more than doubled and by 1992 it had trebled. The very policies that were designed to cut welfare expenditure created the largest pool of beneficiaries since the Great Depression.
More surprisingly still, at a time when joblessness would soon rise to a quarter of a million in a New Zealand that still only had a population of 3.3 million at the time, the Fourth Labour Government then proceeded to cut back on apprenticeships and job retraining as well. In a 2012 book called Workers in the Margins, Cybèle Locke quoted some disturbing statistics regarding the rollback of schemes designed to minimise labour force ‘scarring’ amid mass redundancies that were otherwise increasing the need for them:
Those being assisted by job creation or training programmes peaked at 51,965 people in January 1985 and would decline to 18, 725 by October 1988; the Department of Labour budget for people on programmes was cut by almost two thirds while registered unemployment almost tripled during this time. (p. 133)
According to a 2023 official report called The State of the City: Benchmarking Tāmaki Makau Rau’s International Performance, on the basis of international comparison between Auckland and a number of peer cities overseas, the homeownership position of Māori in Auckland is now the worst among that of all indigenous minorities among a series of comparison cities:
Auckland places joint last — alongside Vancouver — for the share of indigenous population who own their home (18% in Auckland vs 32% peer average) (local census data, share of Māori who own or part own home).
The Māori home ownership percentage is also described (p. 29) as lagging farther behind that the non-indigenous population of the city, by more than 50%, than in any other comparison city.
A homeownership rate of 18% is also only about half that of the Catholics in late-1960s Northern Ireland on the eve of the Troubles, an era in which demonstrators were marching under the slogan ‘Jobs and Houses for All’ and when, in the recollection of one activist, “The most crushing handicap of working-class Catholics at that time was the housing shortage.”
Though kept out of the suburbs in their most affordable era by ‘redlining’, the African-American population of the USA also has a much higher percentage of homeowners today, at around 44%, than the Māori of Auckland.
Many feel that there is trouble ahead on this score, all the more so as Auckland was once a favoured site of Māori habitation, Tāmaki-makau-rau, meaning ‘place desired by many’, from which, and from the environs of which, most Māori were driven in the nineteenth century by a mixture of tribal wars, colonial wars, and chicanery —
— only to filter back after World War II in the days when houses and union jobs were still plentiful.
Certainly, today, there is a dangerous mood of hopelessness abroad, a feeling of a redoubled betrayal, most obvious among those without land and the younger generations who would have been the greatest beneficiaries of the policy of the years of New Zealand’s quiet revolution,
From the most optimistic years of the quiet revolution, we have since descended into a condition that Anya Satyanand, at the time Executive Officer of the youth organisation Ara Taiohi (‘path of youth’), was, in 2016, to dub the “quiet war”:
There is a quiet war going on in New Zealand, and it is being waged on our young people- not through drone strikes or chemical warfare, but through policy logic that has produced a property crisis, an education system that perpetuates the reward of the privileged, a health system that’s struggling to cope [with] an ageing population, let alone the increasingly complex needs of a youth population, and a justice system where you’re way more likely to end up in jail if you’re brown.
A mood of hopelessness is exacerbated by climate change issues, in regard to which neither of the two main parties seems to have a plan to match the scale of the challenge.
A responder to a July 2023 Reddit thread on rising school violence and indiscipline in New Zealand thus contends that such nihilism is understandable among the young people of today:
I’m not surprised. Ask any teenager today, even younger children, and they’re already steeped in the belief that the world is shit and there’s no future for them.
They’ll never buy a house, they’ll never be able to save money here, rich people run everything, the waitlist for mental health support is years long, going out and doing things costs too much money now so aside from the internet, they’re always bored. The world is heating up and there’s nothing they can do about it and they’re all going to die in the climate wars anyway, so why bother? Get high, fuck around, laugh at painful things that shouldn’t be laughed at because what else do you have? Everything is nonsense, everything is absurd. One look at Gen Z humour is all you need to prove that. Why respect authority when “authority” in the sense of the world has done nothing but fuck your future?
I know that’s how people felt when I was in highschool years back, at least. And I know from my younger siblings that it’s only getting worse, extremely rapidly, with every new year that comes through. They really don’t care. And why should they? What possible reason could they have to be invested in their own lives or the lives of others if that’s the way the world looks for them, corrupted far before they even had the chance to build anything worth investing in? :(
Perhaps this also explains why, in a 2009 Auckland-noir thriller Cut and Run, Greg McGee, writing as Alix Bosco, includes the following passage:
I once saw a woman, now living in Australia, who told the television interviewer that she’d left New Zealand because she thought it was ‘about to explode’. She wasn’t talking about volcanoes: she’d been a social worker in South Auckland. (pp. 27–28)
Writers, artists, and social workers do tend to have more sensitive antennae than the politicians, who are more likely to double down on past mistakes. Perhaps this also explains why, in addition to defending the Rogernomic legacy, both Bassett and Brash would also, subsequently, go into bat for the idea that subsequent cultural assertiveness and revival of land claims among an increasingly embittered Māori population, somewhat akin to the revival of the Gaelic language and culture in late nineteenth-century Ireland, amounted to something unreasonable, to which the Labour Party was allegedly capitulating excessively even if it did little to reverse underlying neoliberal policy settings.
A growing focus on a bilingualism reminiscent of Canada or the Irish Republic in a New Zealand that had formerly been much more of an English mini-me, was a particular affront to some.
Brash would fight the 2005 general election largely on those terms, before going on to co-found an organisation called Hobson’s Pledge. And Bassett ending up being banned from NZME, the publishers of the New Zealand Herald and many other newspapers, for his alleged drift toward far-right opinions, not just neoliberal ones.
And so to pull everything in this section together, it seems that a feeling on the part of the powers that be that if we admitted that post-1984 Rogernomics and de-industrialisation had been a mistake that it would open a ‘can of worms’ — an immense demand for redress and reparations and the disgrace of those guilty of a double standard — is actually working to keep the lid on our policy imagination, even though by keeping the lid down in those terms we are making it more likely that the country will explode.
As with animal farming, we are doubling down on a discredited neoliberalism, founded on erroneous population projections, when in fact we should be heading in the opposite direction: to once more embrace a policy of industrialisation based on the expansion of renewable energy capacity.
The Settler Contract
A double standard and a betrayal of youth, indigenous youth in particular, is all the more palpable when we consider that the older policy of hydro-industrialisation, and a coinciding generosity of the welfare state of which the Family Benefit was an important aspect, and of housing policy whereby housing was kept far more affordable than today as well, were also directed at attracting British and European settlers to this country.
This was a wider policy regime known variously as the ‘concordat’ (Harvey Franklin), the ‘populist compact’ (James Belich) and, perhaps most precisely, the ‘settler contract’ (John E. Martin).
The settler contract, to use Martin’s expression, was based on the idea that, since New Zealand lay at the very antipodes of Britain and Europe, the best way to encourage would be migrants from Britain and Europe to stay on the boat all the way, and thereby sustain the levels of population that a growing industrial base required, it was necessary to represent New Zealand as a comparative workers’ paradise.
A sort of Sweden of the South Pacific where the government was so solicitous of workers’ welfare that instead of trying to bust unions, it actually insisted that all non-supervisory workers belong to one.
This was an important function of the National Film Unit: and quite a lot of its propaganda was true.
Thus, in addition to compulsory unionism, we also had the Family Benefit, a child benefit available to low-income non-Māori from 1938 to 1945 and to all ethnicities and income groups until 1985 when it began to be means-tested once more. It could, from 1959 until its eventual abolition and replacement by other benefits in the 1990s, be capitalised to meet the deposit on a house.
A house that was also fairly cheap in the 1960s, perhaps the best-ever decade to have been a wage and salary earner in New Zealand, as the government was continually building new houses and underwriting additional private-sector development on land-banked estates acquired at rural values.
To the south of Auckland, the city of Manukau was founded on municipally owned land. This was in contrast to the North Shore land bank which was owned by the central state. But either way, the intended results were much the same.
Clicking on the following image of the brand-new Manukau Centre of 1976 standing in lonely, splendid isolation among fields that are built up now, will lead to a more detailed, zoomable version of the same aerial photograph.
The Austrian capital of Vienna, which has a metropolitan-era populaton of 2.9 million, attracts much international praise these days for having a large public land bank, on which it has developed masses of affordable yet high-quality housing.
And yet 1970s Auckland had a much larger public land bank than the area developed, since 1984, by the Viennese social housing agency, wohnfonds_wien.
All these facts are the object of a nearly total amnesia today. Amnesia born, in part, out of a mixture of endless public service restructuring and the parallel undernourishment of our universities.
And, on top of those problems, the curious belief — which you run into all the time in New Zealand and perhaps most of all in Wellington — that nothing of any great interest happens in Auckland, despite the fact that it is our largest city and the one with the most pressing urban issues.
With regard to an already-dimming recollection of the way we used to do things, and the causes of this dimming, the Massey University town planning lecturer Caroline Miller wrote, in a 1998 paper called ‘New Zealand’s Planning History — Quo Vadis?’, that:
Planning as a clear intervention by the State is difficult to justify and sustain in an economy and society wracked by over a decade of ‘economic chemotherapy’ and endless restructuring. In such a milieu it is often hard to see value in the now, deemed inappropriate, interventions of the past. (p. 261)
In case it is not clear from a short quote, Miller did not approve of the way that the history of town and country planning in New Zealand was swiftly vanishing into a neoliberal equivalent of what Orwell, in another of his books, called the memory hole.
By way of another example, Auckland University Press, founded in 1966, is yet to publish a book focused on contemporary Auckland urban issues, though Auckland has gained more than a million inhabitants since 1966.
Even so relevant and timely a book as Natacha Gagné’s Being Māori in the City: Indigenous Everyday Life in Auckland turns out to be the work of a visiting anthropologist, the product of research funded from Canada and published, in 2013, by the University of Toronto Press.
Being Māori in the City was not co-published by any New Zealand university press, neither in Auckland nor down the line. About all we contributed to Professor Gagné’s investigation of an Auckland otherwise acknowledged to be the largest Polynesian city, and the largest city in Polynesia, was to stamp her passport.
It is indeed curious to think that in some countries they have to jail or shoot all the intellectuals to produce such a degree of amnesia or absence of critical comment, and yet, in New Zealand, it seems to come more naturally and by way of neglect. Very much the sort of thing Pearson was on about in Fretful Sleepers, I am afraid.
In any case, it is a fact that until the 1970s, the expectation of rapid population growth was firmly established as the basis of government policy. Predicting, in a 1953 essay called ‘The Next Million’, that the next million New Zealanders would arrive by 1983 (in fact they came by 1973), the chief town and country planner of the Ministry of Works at the time, John W. Cox, insisted that the New Zealand of the coming decades would have to be at the top of its game:
We can make the next thirty years a period of high adventure, positive, constructive, exciting. It is a great opportunity. Shall we take it or shall we drift on dully, without objective, from crisis to crisis, constantly surprised at the results of our own mistakes and lack of foresight. If we do, the increased export of one commodity is certain — our native brains and initiative.
By native, of course, Cox meant locally-born. Though the same n-word had been used as a synonym for the Māori in earlier decades it was already, by 1953, considered bit naff in that sense.
A typical government newsreel from the same era insists that “Only an intensive building programme now can provide for the future! Children, the citizens of tomorrow, must also have their chance!”
Entire new towns for the homeless and house-hungry, and new railways for the new towns as well, were built almost overnight, as in the first story of the following 1945 issue of Weekly Review.
Much of this sprang out of the experience of World War II, a conflict that naturally spurred a certain sense of solidarity, as we see in the first-ever production of New Zealand’s National Film Unit, a low-key propaganda movie called Country Lads, filmed in a downtown Wellington dockside area that has changed remarkably little in the 82 years since.
Country Lads, with its emphasis on “our army,” not that of the king but ours, was soon followed by Homes for Free People.
And then, in 1946, the classic Housing in New Zealand.
We also invested in dams to supply emerging industries with cheap and renewable power, the aforementioned high voltage DC link, and a second form of renewable energy, geothermal power, which currently supplies 14% of our electricity needs.
So effective were these policies at creating social harmony, alongside near-full employment in the booming industries of the time, that a conspicuously unarmed police service, dressed in uniforms that looked like business suits, shot no-one dead for more than twenty years between 1949 and 1970.
A small number of officers did lose their lives on duty in that period.
But the continued absence of fatal shootings by the New Zealand Police for two decades and, indeed, for most of the twentieth century is still very striking, especially when compared to the USA or even, regrettably, the New Zealand of today.
(As the old line from Monty Python has it, you try and tell all that to the young people of today and they won’t believe you.)
At the dawn of the seventies, another government film, This is New Zealand, depicted the New Zealand of that time as immensely buoyant.
As large numbers of Māori and Pasifika began to be attracted to the cities, so debate broke out as to the degree to which their incorporation into the terms of the settler contract amounted, in effect, to assimilation or not: an issue addressed with some intelligence in another government film of the time, The Māori Today, from 1960.
This issue was by no means as straightforward as one might think, for some of the most zealous upholders of traditional Māori culture thought that Māori had no place in the city, while many of the Māori protestors to whom Belich refers, even as they agitated for Māori to be made an official language and demonstrated against over-policing, were actually suspicious of too much traditionalism, themselves, on precisely those grounds.
In the June 1959 issue of Te Ao Hou which was concerned with Maori migration to Auckland, Sorrenson, of of Auckland University and Ngāti Pūkenga, wrote that:
The idea grew up that the city and city life was not for Maoris — they should stay in the country at their settlements. As late as 1935 the Auckland mayor Mr (later Sir) Ernest Davis was stating the ‘Maori is a child of nature, and it is better both for him and the pakeha that he should live in the country and not in the town.’ The Maori was being considered as a museum piece of the countryside, little of which he now owned. It was good for tourism to show him off to visitors. Rotorua, not Auckland, was the best place for this.
Much, indeed, as in the following classic tourist photo of Miss New Zealand 1962, Maureen Waaka, née Kīngi, the second Māori to win the title, cooking food the old-fashioned way next to a small child in a Rotorua hot spring; one of the few neither lately submerged by Stan Goosman in the belief that you can’t stop progress, nor robbed of its vitality by the over-drilling of modern geothermal wells (which have since come to be regulated more tightly).
There was a time, I believe, when just about every New Zealander was familiar with this photo. Those familiar with it seem to have included Tama Poata, the founder of the Maori Organisation on Human Rights (MOOHR) and a future founder of Ngā Tamatoa, who in December 1970 wrote in an issue of his MOOHR Newsletter that:
WE ARE GOING TO SPEAK OUT ABOUT THE MAORI WAY OF LIFE
The Maori Way of Life is on the freezing works chain, in the shearing gangs, on the waterfronts, driving trucks and bulldozers, working in mines and construction sites, in forestry gangs and lumber mills, in factory and farm and food processing and now in offices too…
The Maori Way of Life often means living in substandard accommodation and ghetto-like areas, getting the rough end of the stick from the law…
THIS MAORI WAY OF LIFE is not the FAIRY WAY OF LIFE shown on the tourist brochures. [18]
A 1968 planning map expresses po-faced sociological concern at a growing non-European population in the Auckland inner city, mostly of Pacific Islanders (Pasifika) and Maori from rural Aotearoa. Perhaps by no coincidence, a colossal motorway junction would shortly be built on the same spot, with the so-called Dawn Raids of the 1970s further encouraging the locals to disperse.
The Dawn Raids are the subject of a 2005 documentary behind the following clickable thumbnail.
An anti-immigration drum was banged loudly by Rob Muldoon’s National Party in the 1975 general election. An inflammatory cartoon, doubtless approved by Muldoon, is followed by a more reasonable live-to-air by deputy leader Brian Talboys, whose job was always to smooth things over after Muldoon had said something outrageous.
With this sort of good cop/bad cop routine, the National Party of the time strove to cast its net as wide as possible, a strategy that worked in electoral terms but at the expense of the gradual ratcheting of New Zealand in the direction of a somewhat nastier sort of a place than it had been in the 1950s and 1960s.
But the real hammer-blow for the earlier and more inclusive social policy fell in the 1980s in the form of Rogernomics, its consequences for indigenous peoples — not only Māori, but Pasifika too — very much as described above by Ian Shirley and Cybèle Locke, and which in time extended to the creation of a class of poor whites as well, and indeed many poor people of every sort; though a widely-encountered rule of thumb is that every socio-economic indicator is nonetheless three times worse for 21st-century Māori and Pasifika than for Pākehā, as a whole.
As such, the settler contract was ultimately torn up rather than to have its tōpuni or protective chiefly cloak — a well-known metaphor for inclusion — permanently cast over urban Māori and Pasifika as well.
Such was the imperfectly egalitarian society that the Rogernomes subsequently condemned and, in a sense, withdrew after it came to be applied to a multicultural urban society, in a manner that was arguably even more structurally racist than anything that ever happened in the 1970s, and ultimately very disadvantageous to ordinary wage-and-salary-earning non-Māori and non-Pasifika, and youth in general, as well.
We still have a chance to get its best bits back: though not, unfortunately, the land banks, which were sold off in the Rogernomic era and thereafter in the 1990s.
In an article I wrote for the June 2011 issue of Auckland’s Metro, I described how 127 hectares of Albany, on Auckland’s North Shore, passed from the hands of the government into those of private-sector developers for $21 million, or the equivalent of $16,500 for an old-fashioned quarter acre section, in 1994. It goes without saying that it went for a lot more than that once developed.
As Paul Goldsmith, currently the National Party’s spokesperson for Justice, Regulatory Reform, and Workplace Relations and Safety wrote some years ago in a book called Serious Fun,
Real money is often made at the point of discontinuities: when seismic shifts occur in the economy, such as from a regulated environment to a deregulated one, or from state enterprise to privatisation. Such conditions provide the opportunity for a few smart entrepreneurs who are in the right place at the right time to prosper extraordinarily. (pp. 203–204)
Goldsmith went on to add that “as the purchasers of New Zealand Steel, the Bank of New Zealand and the Central North Island Forest discovered,” not every privatisation turned a profit under new management. But some of them did.
Perhaps this, too, is another reason why the present Establishment also continues to rally against any return to the policies of the hydro-industrial era and the settler contract, permanently broadened to include Māori and Pasifika this time. It seems that there is more than one can of worms to be spilled in doing so.
Nostalgia for the Future
Another thing that is worth noting, as a factor contributing to a certain rigidity, is that the New Zealanders have for a long time been perhaps the most heavily propagandised people in the Western world.
In the days of the settler contract, which depended on representing the country as a comparative workers’ paradise, the propaganda was primarily social-democratic. It was accompanied even in commercial artwork by all manner of images of progress as well, such as this product of the Timaru Milling Company, which appealed to children, in those days, by way of a character called Peter the Pilot.
On the other hand, since the 1980s, we have faced an equal and opposite lustration of the hydroindustrial-cum-settler contract past, which even extended to the wholesale taking-down of government murals from the old days and either storing them away or, just as often, losing them, while at the same time spreading an official story about how bad things were before 1984 and how good they are now: the ‘revolution of the virtuous’ to which I referred above.
In the place of former images of progress, it has often since been noted how a “refusal of the city and . . . worship of rurality” has since, in the words of the critic Francis Pound, writing in a 1990 issue of Art New Zealand (#55), to constitute the “genre of the advertisement . . . the corporation and the state.”
In other words, a system not just of neoliberalism on the economic plane but of neoliberalism with an actual whiff of cultural reaction against the modernists and modernisers, as in the following passage from the book of Cumberland’s Landmarks series:
In New Zealand, affluence and security have tended to soften people. Machinery, gadgetry and comforts have relaxed them, made them flabby. Today’s New Zealanders seem not nearly as self-sufficient as their pioneering forbears, Polynesian or pakeha. Were they not also resilient, one might despair . . .
But in the post-war years of overfull employment and affluence, the effort of New Zealanders slackened and the country’s attainments have slipped. The pioneering ambition and drive to secure better conditions and to develop the country have weakened. As a result New Zealand has been relegated from the first division of nations. . . .
It is perhaps relevant that since 1936 the proportion of New Zealanders employed in agriculture has fallen from 30 per cent to 10 per cent and the numbers in tertiary service industries have jumped from 40 to 63 per cent. . . .
New Zealanders will change their attitudes again — when they have to. Their response to falling standards and less satisfactory conditions of life will no longer be complaint, but resolve and self-reliance. A rekindling of the vigour of the past is already being fostered among the new generation. (pp. 274, 275)
In other words, our neoliberalism has been served with a glass of Vichy, as one might say.
Having said that, there has been a renewed interest in finding the older, more utopian stuff: an interest that arguably began with Stella Brennan’s 1999 exhibition ‘Nostalgia for the Future’, which prominently featured the former government muralist and sculptor Guy Ngan’s 1973 artwork for the Newton Post Office, which had been taken down some years earlier.
Another mural by E. Mervyn Taylor, which once decorated the government’s trans-ocean cable station in Takapuna on Auckland’s North Shore, depicts the demigod Māui hauling on a cable by which, in legend, he fished up the North Island. Thought to have been lost for decades, it has now been re-installed in the Takapuna Public Library.
The habit of steeping the nation in propaganda images, a habit that survived the so-called revolution of 1984 and merely changed sides from social democracy and progress to neoliberalism and reaction, is another factor that has probably made it harder to realistically evaluate what worked in New Zealand’s past and what didn’t, and to change course in any flexible sort of a way as opposed to merely doubling down on the current wisdom on the grounds that the alternative would be anathema.
The Onslow Diversion
I mentioned, above, how the storage capacity of our hydro lakes was about 4 TWh, or a tenth of total annual electrical generation from all sources in this country.
Although this level of storage is more than enough for the hydroelectric system to serve as a ‘battery’ for an expanded system of renewable generation in which most of the future capacity might come from wind and solar sources, the present government is nonetheless strongly in favour of a proposal to build the world’s largest pumped storage facility at Lake Onslow, a facility which will have 8 TWh capacity.
The logic of the Onslow scheme is that hydroelectricity will continue to supply the dominant part of New Zealand’s electric baseload, and that as we decommission coal- and gas-fired power stations, this baseload will become more and more vulnerable to seasonal droughts, conventionally known as ‘dry years’ though in reality they only last about three months, during which the present solution is to burn more coal and gas.
The Onslow scheme has been repudiated by National, perhaps because its costs have lately blown out by several hundred per cent from the initial estimate, quoted in the video above, of four billion dollars.
The underlying problem seems to be much the same as with a similar but smaller project in Australia, Snowy 2.0: namely, the construction of tunnels of unprecedented length, tens of kilometres long, to convey the water and an accumulation of related engineering difficulties.
But in the meantime, that such a scheme is the present government’s Plan A for the replacement of coal- and gas-fired generation shows to what extent the idea of what I have called Powered by Aotearoa is not on the government’s agenda.
In fact, there is a huge irony in the case for Onslow in that a so-called “overbuild” of wind and solar was initially considered as the solution to the dry year problem, but rejected on the grounds that it would be too expensive and would generate a lot of power at times when it wasn’t needed, such as the middle of the day from solar.
It seems that the idea of using the overbuild to actually re-industrialise the country was not considered. And one also suspects that the existing gentailers would not have been too happy about something that had the potential to flood the market with additional low-cost (technically, low-marginal-cost) electricity, as well. Certainly, there seems to have been a massive degree of lobbying against the idea of the “overbuild,” regarding which the main concern actually does, indeed, seem to have been that of a potential glut on the market.
As the Ministry of Business, Innovation and Employment (MBIE) explains,
To solve the dry year problem through overbuilding renewables alone, we would need to build a lot of renewable energy resources to ensure we could maintain supply to consumers despite the deficit in hydro generation that occurs in a dry year. As overbuild would need to cover this deficit — of between 3 and 5 TWh — in years when the lakes are full we would have a lot of wasted energy.
Relying solely on overbuilding renewables is also problematic as a dry year solution because it is not stored energy. The energy from wind, solar and run-of-the-river hydro needs to be used as it’s generated. Solar and wind are susceptible to calm and cloudy periods, which will likely increase the volatility of the electricity market. Also, there may be limited commercial incentives to build generation whose output will often be ‘spilled’ and hence receive no revenue for it.
And, similarly, from the government’s recent Climate Change Commission, which argues that on the one hand we have to save the planet and on the other hand to avoid the risks of ‘over-investment’:
The challenge is delivering a timely, reliable and affordable build out of the electricity system, while managing the opposing risks of under or over-investing in the system.
As Matt Burgess of the think tank The New Zealand Initiative, successor to the New Zealand Business Roundtable, wrote in 2019, when the present government’s target of 100% renewable electricity by 2035 (now 2030) was changed from a firm goal to one that was “aspirational,” that:
New Zealand has avoided a policy disaster by only the narrowest margin. … Without the assertive actions of the interim committee, New Zealand would have almost certainly been stuck with the sort of counterproductive policy that will continue to plague countries like Germany, Britain and Australia for the foreseeable future.
In other words, no dash for wind and solar of the kind that is becoming increasingly the accepted approach in so many other countries.
Bluntly, it seems that a spectre is haunting official Aotearoa. Not the spectre of running out of energy or somehow getting left behind in the renewable energy transition but in fact the opposite: the spectre of a potential glut of renewables coming on stream at zero marginal cost on days that are especially windy or sunny.
This sort of thing actually does happen from time to time in comparatively isolated electricity markets like that of Finland, even now. And of course our market is even more isolated.
As such, the decision was made in 2019 — by a further irony the same year that Garnaut’s Superpower came out — to go for Onslow instead. Not for any reason of technical superiority but actually, in fact, to prop up our commercialised gentailing model.
A model more commercialised than in Australia, where electricity is still viewed, to some extent, as a tool of national and state development, whence Superpower, Powered by Tasmania, South Australia’s bipartisan commitment to renewable energy, the Queensland Energy and Jobs Plan, and so on. Whereas, we went for Onslow and a go-slow on wind and solar.
However, over the last year or two, it has become apparent that Onslow is by no means the cheaper option, either: that instead of costing $4 billion, it might cost $15 billion, or perhaps even $28 billion.
Indeed, the difficulties, cost over-runs, subsequent identification of alternatives and general controversy surrounding the physically comparable Snowy 2.0 scheme in Australia are so great that it now seems much less likely that anyone would embark on a similar scheme.
And all the more so for us, as Snowy 2.0 is intended to support an expansion of wind and solar, an outcome seen as strategically important for Australia even if the costs and completion date have blown out to a horrifying degree. That project is also now so far down the track that there seems to be no choice but to keep going.
Whereas Onslow was adopted in 2019, on more strictly commercial grounds, as the supposedly cheaper alternative to an ‘overbuild’ of wind and solar. Except that we now know it won’t be, even though we have not yet turned the first sod.
And so, ironically, we may well be forced into adopting something more like Powered by Aotearoa by the sheer fact of having to give up coal and gas and not being able to afford Onslow either, in the manner of the old joke about being forced to do the right thing after having exhausted every conceivable alternative.
Thus far, we have only lost about four years of progress by going down the Onslow diversion from 2019 instead of going down the track recommended in Garnaut’s Superpower, a track initially dismissed as an ‘overbuild’. But let us not waste any more time.
Banking on Scarcity, or Investing in Tomorrow? From a Developmental Society to an Extractive One, and Back
The arguments of the preceding sections have admittedly been wide ranging, but there is a common thread to them. The common thread is that from the 1890s through to the 1980s, New Zealand was run as a developmental state, with a focus on investments that would increase its human carrying-capacity.
There was little expectation that market forces alone would achieve the necessary expansion: indeed, the opposite applied, a belief that in our small and isolated market, within which the regional markets of Auckland, Wellington, Christchurch and Dunedin were even more isolated, a purely commercial order of things would simply result in a jacking-up of the cost of living and screwing-down of wages as the cities grew.
Though I have not mentioned it so far, a watershed moment in the construction of this philosophy was a development called the Exodus, when, during the late 1880s and early 1890s, roughly one-eighth of the settler population departed for Australia (sounds familiar, right?)
Thereafter, for almost the whole of the next century, all classes of New Zealand settler society united, however imperfectly and with occasional, indeed regular, outbreaks of conflict, behind the idea of a pump-priming and land-banking state.
Earlier, I mentioned a parallel between our history and that of Norway, with regard to the link between hydroindustrialisation and national independence. And for that matter also between our still-inadequate levels, thus far, of industrialisation and solar power investment and those of a less favoured Denmark.
Well, with regard to the development of a cross-class alliance behind a pump-priming and land-banking state, there is another Scandinavian parallel and that is with Sweden, which in the early 1900s was regarded as perhaps the most conservative of the three Scandinavian nations in Europe, but in which a continuing population outflow from a rather cold and infertile landscape eventually forced the country’s ruling class to back the strong welfare-state of the Swedish Social Democrats, as well as a programme of hydroindustrial development, more ambitious than that of the Norwegians, which helped to pay for everything.
This vision of pushing forward, of hydroindustrial nation-building is captured in the anthem of the Swedish Social Democrats Vi Bygger Landet, which means ‘We Build the Nation’.
It is a party song, but most of the local capitalists supported the idea as well, in much the same way that Fletcher Holdings built Labour’s state houses in the 1930s and 1940s in this country (for more on that and its wider political context, see Astrid Baker, ‘Governments, Firms, and National Wealth: A New Pulp and Paper Industry in Postwar New Zealand’.)
The 1987 film Pelle the Conqueror describes one group of Swedish emigrants in the earlier, dismal pre-hydro days, seeking a new life in Denmark. Other Swedes emigrated to such places as Wisconsin.
Basically, the Swedes of all classes were under fewer illusions than us as their dismal prospects under a regime of stagnation and reversion to agriculture and mining.
This is probably why the idea of everyone pulling together to develop the nation survived in better shape in Sweden than here, and for that matter the whole of Scandinavia and Finland, the latter one of the poorest countries in Europe right up to World War II, its former agricultural condition captured in a locally famous 1893 painting called Under the Yoke (Burning the Brushwood) by Eero Järnefelt.
Despite the otherwise strong parallels between New Zealand and the Scandinavian or Nordic countries (Nordic = Scandinavia plus Finland), perhaps the main point of historical difference is that we have been more susceptible to the idea that an urban, civic and industrial nation-building project is somehow unnecessary, that we can prosper on the basis of extractive industries, natural resources, and a more generally ‘finders keepers’ approach to the economy.
In a widely discussed 2012 book called Why Nations Fail, the economists Daron Acemoğlu and James Robertson thus a distinction between ‘inclusive’ and ‘extractive’ socio-economic regimes, the former in the spirit of nation-building and the latter in the sense of the country as a big farm or mine.
Acemoğlu and Robertson contend that nations, perhaps especially so those that are small and weak, cannot rely on market forces alone, or a purely opportunistic and privatised outlook, to deliver development.
This is not only because market forces are more suited to the simplest sorts of industries, requiring little organisation or upfront investment, but also because real-life societies , with large firms and hierarchies as opposed to the clouds of social atoms that are assumed, for the sake of argument, by many other economists, are too easily corrupted into a condition in which a ruthless few prey on the rest of society.
The extractive regime, the idea of the society as a farm or mine writ large, in turn contributes to a scaling-back of investment, loss of forward momentum, and the failure of all but the simplest sorts of industries.
The extractive regime also contributes to the failure of the cities: to their transformation into a generally dystopian condition.
Indeed it could be said that in many ways this is the problem, namely, that the extractive regime applies the simple life of the countryside to the cities, in ways that are deceptive and dishonest and actually intended to turn the cities, themselves, into analogues of a farm or a mine, in which the workers are the livestock and windfall profits and mortgage-interest the chief products of the mine.
Along with a tendency to over-idealise the simple life of the countryside on the plane of rhetoric, real-life contributors to the emergence of an extractive regime in the cities include imperfectly competitive markets dominated by ‘big fours’ or even, in our case, ‘big twos’; the unearned windfalls of the real estate market; and the fact that practically all lobbyists and political donors represent, in one way or another, a status quo threatened by the forces of change. Or, even, sociopathic grifters who don’t want their predation upon the small, weak, poor, and desperate investigated too closely.
Such is the extractive condition, which in many ways also rests on the principle of a growing population in a landscape in which the basis of profit now rests on the actual failure of investment to keep up with growth. The alternative is the inclusive condition, in which there is more civic engagement and public spirit, of a kind that ensures a sufficiency of pump-priming investments: the ‘inclusive’ society, which is also more progressive.
More progressive, not just in the sense of being less unequal and thus ‘progressive’ in that sense, but also, in the sense of looking forward to the future in terms of growth (of the right sort) and scientific and technological positivity, rather than fearing a future dystopia and harking back to a simpler and more agricultural past, in the survivalistic terms that have grown so widespread lately.
It is, of course, not merely Acemoğlu and Robertson to whom such ideas have occurred over the decades. Among economists, to speak of investment pump-priming as a prescription for getting out of a slump is to conjure up images of John Maynard Keynes and the original New Deal, as well as the quite similar policies of our own First Labour Government:
In more recent times, a similar duality has also been explored in a book by the British author Robin Blackburn, Banking on Death: Or, Investing in Life, which asks whether the massive pension funds behind so much of today’s capitalism could be invested more creatively, rather than merely chasing the highest returns in ways that often squeezing the young and the poor for as long as the elderly owners have left to live on average. The title of the present section, as well as some of its argument, is loosely inspired by Banking on Death.
The idea of a contrast of the two social orders, extractive and inclusive, is also one that we see in the under-rated 1946 film It’s a Wonderful Life, a kind of forerunner of Sliding Doors or such series as The Twilight Zone (‘do not adjust your set’), as well as the two alternate Hill Valleys in Back to the Future Part II.
As you might have guessed, the plot of It’s a Wonderful Life revolves around the predicament of a man, George Bailey, who finds himself in two parallel universes.
In one, Bailey’s home town is named Bedford Falls, a wholesome sort of a place in which everyone looks out for each other and pays it forward.
In the other universe the town is entirely dominated by a misanthropic monopolist named Old Man Potter, whose business model is to offer the desperate fifty cents on the dollar, take it or leave it. There, the town is is named Pottersville. It is also a town that is as sleazy as Bedford Falls is wholesome (or at any rate, about as sleazy as could be allowably depicted onscreen in the 1940s, of course.)
A similar prevalence of sleaziness, absence of business ethics, exploitation of the desperate and general feeling of ‘anything goes’, also seems to be an aspect of our present condition, as described for instance in recent revelations of the condition of the migrants of today, as opposed to those of yesterday. Or for that matter Matt Nippert’s unfortunately paywalled New Zealand Herald article ‘From Penthouse to Prison Cell: The Downfall of Eric Watson’ (4 January 2021), which may be summed up by the observation that Watson prospered in this country throughout the so-called ‘Wild West’ years following the deregulation of our economy in the 1980s only to wind up in jail in the UK, where they are still a bit stricter about certain things.
To pull it all together, a neoliberal revolution that was supposed to deliver cheaper electricity and a return to agricultural prosperity, and to make an allegedly sleepy and sclerotic society more dynamic by getting the state off our backs, has in reality taken the Bedford Falls of 1950s/1960s New Zealand, which was not without its faults but where there was a surprisingly small economic gap between urban Māori and urban Pākehā, and where the police never shot anyone dead, and turned it into Pottersville.
At the same time as our society has become less progressive in that sense, it has also become unprogressive in the sense that it can no longer unlock desperately needed investment for the future, as opposed to offering the desperate fifty cents on the dollar in the present. As such, the neoliberal revolution has failed even in its own propaganda-terms of an allegedly increased dynamism, which were always at odds with an underlying expectation of stagnation.
The Present Interregnum
And so, our politics today has something of the character of an interregnum, in which the neoliberal order of the last forty years is dying, basically because it is failure, but in which nobody is as yet willing to revive the hydro-industrial policy and the age of the settler contract in an updated form.
In a recent article, the former Green MP, Gareth Hughes, has called time on the neoliberal experiment in this country. According to Hughes,
Enough time has passed that we can now state that poverty, inequality and pollution aren’t bugs — they are in fact features of the system. . . .
Successive governments saw their role as guaranteeing low government spending, low government debt and low taxes, without upsetting an economic apple cart built on high house prices, high migration and high emissions.
Likening neoliberalism to a faulty operating system in a computer, Hughes argued that New Zealand needed a “reboot.”
The feeling that the policies of recent times have failed has also been joined by more conservative commentators. The leader of the National Party, Chris Luxon, complains that New Zealand has lost its ‘mojo’, with the National Party also employing the slogan of getting New Zealand ‘Back on Track’: ideas that may have originated with the pundit Oliver Hartwich of the centre-right think tank, the New Zealand Initiative. In Hartwich’s words, from 2022:
All in all, the picture that emerges is that of a country in precipitous decline. That would be alarming enough. What makes it even more so is a perception that the core private and public institutions lack the understanding of the severity of the crisis or the ability to counteract it. . . .
New Zealand needs to be careful not to turn into a failed state. That does not mean it should expect civil unrest, but a period of prolonged and seemingly unstoppable decline across all areas of public life.
The only way to reverse this process would be for New Zealand to regain its mojo: its mojo for serious economic and social reform. It has happened before. And it must happen again.
While this unease has grown of late, it is not new. As we have seen, Cumberland expressed something similar as far back as 1981, though it actually seems to have been the nation’s pace of modernisation that bothered him back then. In 2009, the conclusion of the first report of the 2025 Taskforce began in similar terms:
Sometimes it can be easy to despair of New Zealand’s prospects. For a long time, New Zealand was one of the richest countries on earth. But that time is now far in the past, and in the intervening decades so many of our people have left for better prospects abroad. There has been too little sign of any sustained change of direction that would allow us to return to the first rank of developed countries. The great exodus of New Zealanders seems not to be sufficiently recognised as a mark of serious and sustained failure as a country, or as a reproach to successive governments.
This passage was highlighted in a recent article by Damien Grant, who deserves a hat tip for reminding us of the 2025 Taskforce, a taskforce established by the newly-elected National Party Prime Minister John Key with the intention of “Closing the Income Gap with Australia by 2025.”
“Our vision is to close the gap with Australia by 2025,” declared Key. This version of his early agenda, not specifically focused on income and capable of being read as covering other metrics too, is also cited in the report.
Great hopes of fresh ideas were reposed on the 2025 Taskforce at the time, hopes that went largely unfulfilled. The Key government was content thereafter, to forget about New Zealand’s transformation and to preside over a housing bubble instead.
On the official plane at least, there have been no fresh ideas in the nearly fifteen years since and the gap with Australia has continued to widen, on more metrics than one.
And yet there is a big idea for closing the gap with Australia that is staring us in the face now, at any rate, even if the latest renewable energy technologies were not yet fully mature in 2009.
As I have suggested in the preceding sections, the solution, of a Green New Deal, ‘Powered by Aotearoa’, is obvious, even self-evident, under today’s conditions.
It is just that the coordinated and planned expansion of renewable energy and renewably-powered industries is politically awkward as a strategy for domestic transformation and closing the gap with Australia, since so many of the unquestioned verities of the Rogernomic era will have to be walked back in ways that will, indeed, open many a can of worms.
And so, no party that I am aware of has gone into the current general election offering a Green New Deal of its own.
This perhaps explains the surprising collapse in support for Labour, which spent the last six years promising transformation, that has been observed lately among younger voters: a collapse analysed at length in a 12 September 2023 column by the pollster Peter Stahel.
Jacinda Ardern’s famous 2017 promise via that year’s Speech from the Throne of a “government of transformation” eventually fizzled out by 2019 in much the same way that John Key’s early vision of a plan for closing the gap with Australia by 2025 also fizzled out. In fact, the parallels are striking.
And it would now seem that Chris Hipkins is no Bernie Sanders among the young folks either, a “bread and butter” approach offering little to get enthused about.
Though, if Labour did have a transformative idea for closing the gap with Australia to offer younger voters contemplating emigration, it is fair to say that Hipkins — who, like at least some of his predecessors, resembles an able performer let down by an indifferent script — would surely do a good job of fronting it.
Mentioning Ardern and Key in the same breath reminds us that this issue is not a party-political one, either. After all, the old hydro-industrial regime was pursued both by Labour governments on the one hand and on the other, more conservative ones, first of the Reform Party and then National.
Likewise, the absence of such a coordinated industrial and energy policy right now is similarly bipartisan. And as I have noted, it is not being vigorously championed by the Greens, either.
With some irony, it seems that a country once regarded as a go-ahead place, in which it was good to be young or to move to if one had a young family, has now turned into its opposite, a repelling-pole for young people, in ways that were seen in the 1970s and 1980s but more seriously now: though the problem is masked by a far more liberal immigration policy than in those days, when it was possible to point to overall population stagnation as a sign that things were going wrong.
(Instead of trying to actively reel in Britons and Europeans on a very long line with images of a workers’ paradise in the ‘Great Britain of the Southern Hemisphere and its Future Manufacturing Centre’, in ways that would be also considered unduly selective and racist these days, our net is now cast much wider and also more passively: those arriving under fewer illusions save for those cases where they were promised a job that did not materialise, by some crooked migration agent in a current system that verges on state-sanctioned people-trafficking and indentured servitude, some say, above all through the widespread current practice of bonding migrants to a single employer. In any case, the inefficiencies inherent in such a population-churn should be obvious all the same.)
Now that the Australian government has agreed to no longer treat New Zealanders in Australia as a helot underclass with few roads to citizenship, we can expect to see an even greater exodus of what Cox called our “native brains and initiative,” one that may accelerate further as Australia’s various schemes of renewably-powered re-industrialisation kick in. I don’t think bushfires, droughts, and snakes are going to be enough to drive people back, in the circumstance.
The danger is that by the time we wake up to what needs to be done to transform ourselves and close the gap with Australia, Australia will be so far ahead of us on the project of renewably powered re-industrialisation that we will have no choice but to become one of their states, after all.
Conclusion: No More Missed Chances?
Even a hundred years ago, it was understood that an increasing and ever more urban population spelled doom for clichéd and colonial notions of a nation of farmers. In 1921, a pseudonymous New Zealand writer with the pen-name of Dionysus contended that:
Pre-eminence in Rugby football and dairy products is not enough. I want to see our scientists, our artists, our writers (when discovered), encouraged so that they might put New Zealand’s name on the map as a country which produces ideas as well as butter-fat, as a nation that has spirit as well as population and area.
Ouch! For that is indeed the image of New Zealand to which we have returned.
The passage from Dionysus might have been forgotten, had it not been dug up by the historian Keith Sinclair and reprinted in his last significant scholarly work, A Destiny Apart: New Zealand’s Search for National Identity, published by Allen and Unwin in 1986.
In the following year, another eminent historian, Bill Oliver, wrote a biographical essay called ‘A Destiny at Home’ in which he contended that Sinclair had been primarily concerned with a two-steps-forward-one-step-back form of national progress, from an agricultural colony full of people fighting over land to a proper modern nation with a high level of urbanisation, education, and industrial development, free from older ills.
The trend was broadly progressive, but there was a lot of backsliding. According to Oliver, Sinclair’s New Zealand was therefore a land in which:
… people are free to decline the invitation of the new. When it is declined, when the forces of the old prevail — the imperial troops of the 1860s or the imperial ideology of the 1920s — history becomes an account of missed chances.
This elegaic note, indeed, is often struck in Sinclair’s prose as well as in his verse. Māori lose; Reeves fails; Nash dwindles; Kirk dies. There is a deal more promise than fulfilment.
It would be most unfortunate if, in an age of potentially abundant renewable energy, we were to decline the invitation of the new once more.
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(Note: this essay has been slightly updated in the interests of further clarity, including the addition of the section called ‘Banking on Scarcity, or Investing in Tomorrow?’)