Coming Apart Down Under: the decay of New Zealand capitalist society from the 1970s to 1993

Posted: 23 June, 2011 by Admin in capitalist crisis, Economics, Labour Party NZ, National Party NZ, New Zealand history, New Zealand politics, Workers Rights

The article below was written at the end of 1993 and deals in particular with social, economic and political trends in New Zealand over the previous couple of decades. It has been slightly edited and added to for publication here. The time it was written is reflected in the somewhat optimistic ending. The early 1990s was a time in which mass protests were still taking place, most especially the huge demonstrations against the Employment Contracts legislation, the struggle against the mother of all budgets and also student protests. After 1993, however, New Zealand entered a period of protracted and deep political downturn, creating highly unfavourable conditions for party-building attempts.

by Philip Ferguson, January, 1994

The November 1993 election and referendum on proportional representation marked a turning point in New Zealand politics, both reflecting and deepening the process of disintegration in the country. This process is taking place on the economic, political and social levels.

Although many New Zealanders, deeply imbued with insular prejudices, like to think of the country as unique, this process is taking place across much of the western world. It has two main causes: the international capitalist slump and the collapse of the Soviet bloc.

Ever since the second world war, the main factors holding together western societies were the existence of what was put across to be a powerful external threat (the Soviet bloc/international communism) and a general improvement in living standards due to the long postwar boom.

Effect on popular consciousness

The effect of the postwar boom on popular consciousness in New Zealand is accurately summed up by prominent journalist and writer David McLoughlin in his recent book Undeveloping Nation:

Most New Zealanders grew up in a country that was steadily improving, always and immeasurably. . . Our modern welfare state expanded constantly; if we fell ill, couldnt afford a house, had an accident, lost our job, grew old or were deserted by our spouse, the benevolent, increasingly munificent state was always there. . . new generations of New Zealanders growing up in the 1950s, 1960s and into the 1970s came to believe the golden years could never end.

Those of us born and growing up during that period had it drummed into us constantly by politicians, the education system and the media that New Zealand was a classless society and the only truly non-racist country in the world.

At the same time the New Zealand capitalists invented a threat from the Soviet bloc, Maos China and the Vietnamese national liberation movement in order to promote anti-communism as a powerful conservative force in society. Anybody who opposed the status quo was dubbed a communist and isolated from the main body of society. The New Zealand ruling class sent troops to Malaya and Vietnam in order to fight national liberation forces accused of invading their own countries.

The physical isolation of New Zealand from much of the rest of the world also cut the country off from much of the progressive thinking taking place in other parts of the globe. Marxist ideas never formed any part of intellectual thinking in New Zealand, and the country never had anything which could be described as a Marxist movement.

End of the golden weather

By the early 1970s the postwar boom, which had only been made possible by the massive destruction of the second world war, had run out of steam. Capitalisms inherent crisis tendencies began to reassert themselves. A key element in the stability of New Zealand society began to unravel.

One of the most stable, prosperous, welfarist and according to the official line, anyway racially and socially egalitarian states in the western world, in the mid-1950s the country had the eighth highest standard of living in the world; by the mid-1980s it had plummeted to 23rd. Demands on charities for food and clothing reached

their highest levels since the Great Depression of the 1930s. The country has plummeted in all areas of economic performance; is increasingly marked by political instability in the form of wild electoral swings between National and Labour and the rise of significant new opposition parties; the growth of racial antagonism; increasing social disintegration; and a lack of any coherent national identity.

Because there was no coherent Marxist critique of New Zealand capitalism, and no determined anti-capitalist movement, the ruling class were able to manage the crisis. This required increasingly repressive measures such as legislation against the trade unions and the state onslaught on the mass militant anti-apartheid marches around the 1981 Springbok tour, where protesters were viciously attacked by riot police making their appearance on New Zealand streets for the first time in decades.

Short-lived booms - based on credit extension, property and share market speculation and the shifting around of paper money with little relationship to real production were possible, but there was no protracted boom. The general conditions of life of much of the working class deteriorated.

While in 1994 there is much talk from the establishment about economic recovery, the reality is that slump conditions prevail in New Zealand as in Britain and the United States. With the most dynamic western economies Japan and Germany also in increasing difficulty, it is unlikely that a minor capitalist economy like New Zealand will defy international trends towards slump.

Clearly, it is the end of the golden weather.

Collapse of Soviet bloc

In the late 1980s, just after the October 1987 international share market crash, the Soviet bloc began to disintegrate. Marked by hopeless inefficiency, antiquated technology and plant, bureaucratic corruption and mismanagement, and working class alienation, these societies and economies lacked any momentum whatsoever. They began to implode.

Their rapid collapse revealed their massive inherent weaknesses and proved that they had never really been any serious threat or rival to the imperialist powers of the west.

Although western leaders welcomed this collapse, they soon realised that it presented them with major (and so far unresolved) new problems. Many of the major institutions of the west, and much of the legitimising and cohering ideology of the capitalist countries, were the inventions of the western ruling classes during the cold war. The whole framework of relations between western powers, with the United States at the apex, was also a product of this.

Additionally, the political repressiveness and the economic backwardness of the Soviet bloc had made western capitalism look relatively good by comparison (even though their economic backwardness actually had its roots in the inability of capitalism to ever develop eastern Europe).

Today, anti-communism is no longer effective as a means of cohering western capitalist societies. Capitalism has to stand on its own merits. Internationally, it is stuck in slump. In the former Soviet bloc and China, the restoration of capitalism is a far from inspiring spectacle. The whole world can see that capitalism is completely unable to bring any dynamism to the former Soviet economies, while the dynamism in China, achieved through repression and intense exploitation of the working class there, has actually sparked new paranoia in the West.

Throughout the western world, meanwhile, the institutions which were created or strengthened by the cold war are suffering problems of identity and legitimacy. Traditional political parties are falling apart; traditional sources of authority are in decay.

And, as a weak and small capitalist power, New Zealand has been hit particularly hard by the problems of economic slump and the collapse of a cohering national ideology.

Economic decline

For years New Zealands relationship with Britain provided secure markets for its predominantly agricultural exports and a source of funds for industrial expansion. The economy was highly regulated by the state, with manufacturers benefiting from direct state assistance, high import tariffs and other protectionist measures. Farming also received substantial subsidies. New Zealand capitalists never had to fight for a place in

the world capitalist economy. This bred a particularly complacent and unimaginative brand of ruling class who obviously believed this state of affairs was going to go on forever.

The world capitalist recession of the early 1970s came as an abrupt shock to New Zealand. The situation was worsened because it coincided with Britains entry to the EC. The golden years of domestic capitalism and its welfarist and protectionist state were over.

Since the beginning of that recession in 1973 New Zealand has been among the wests worst performers economically. The countrys traditional balance of payments surpluses disappeared; every year since has been marked by a deficit. Today the foreign debt stands at well over $50 billion, the vast bulk of it being built up over the past two decades. The debt amounts to nearly three-quarters of annual gross domestic product(GDP), a figure comparable to impoverished third world countries like Indonesia and three times that of the biggest third world debtor nation, Brazil.

Over the past two decades the GDP has grown by roughly one percent a year, and actually declined some years. By the early 1990s nearly a third of export earnings were being spent on servicing the debt. The internal debt reached $40 billion by the early 1990s, with annual interest payments of $4 billion accounting for 15 percent of all government spending.

Wage rates fell from 97 percent of the OECD average in the mid-70s to 75 percent today, although the business sector still claims that workers are pricing themselves out of jobs. Between 1974-87 consumer prices rose by 432 percent, compared to 183 percent in Australia, 118 in the USA, 75 in Japan and 244 in Britain.

Unemployment shot up from a few thousand in the early 1970s to almost 200,000 today. From 1985-1990, when Labours free market reforms were in full swing, the manufacturing sector lost 70,000 jobs. Today pakeha unemployment is around 7 percent for women and 8 percent for men, whilst amongst Maori it is 26 percent for women and 28 percent for men. Among Pacific Islanders it is 25 percent for women and 30 percent for men. Over half of Pacific Island and Maori youth are unemployed. A third of the workforce has no educational qualifications.

Between 1988-1991 New Zealand imported 186,400 used Japanese cars 40 percent of all vehicles registered during that period. It also imports second-hand tyres from Asia and used clothing from the United States and Australia.

New Zealand capitalism, which once cast its own ambitious eye on South-East Asia and the Pacific, today sends government ministers off to plead with Hong Kong, Singaporean and other Asian capitalists to invest in New Zealand.

The economic decline is so marked that the government has difficulty dealing with basic problems such as plagues of wasps. Even impoverished Pacific Islanders are increasingly reluctant to enter New Zealand. In 1991 only 212 western Samoans applied for entry under the quota system allowing 1100 entries a year. Not without some foundation, Samoan community leaders advised illegal immigrants that they would be better off at home where theyd at least be guaranteed food and shelter.

New Zealands economic decline was pointed up in the weakness of the NZ dollar. In 1973 it was worth American $1.48; today its worth about 55 American cents.

Ruling class response: holding the line

In November 1972 Labour swept to power with a huge majority. After twelve years of National rule, and the rise of new protest movements (against the Vietnam War, for the rights of women, Maori, gays etc), many people had expectations of major progressive change. But the Labour Party is committed to the preservation of capitalism with a human face where good times allow, but without when necessary. The Labour government coincided with the 1973 recession and soon began attacking the working class. Any progressive reforms were few and far between.

In 1975 there was another landslide victory, this time with National back in power.

Although, after the sedate gentlemen politicians who led National in the 1960s, the much more aggressive and domineering Muldoon seemed like a virtual fascist to many impressionable radicals, he was actually very conventional. His personality simply coincided with the need for a tougher style of government in order to hold the line.

Muldoons main aim was to maintain the New Zealand he, and the ruling class, had known most of their lives. This involved not only moral conservatism and anti-communism but also a highly state-regulated economy and a commitment to a relatively high level of welfarism. In fact one of the major elements in Muldoons electoral triumph in 1975 was that he came up with a far more generous pension scheme for workers than the Labour Party!

As the international capitalist crisis struck New Zealand, a minor fish in the international imperialist ocean, particularly hard, Muldoon was forced to pursue an increasingly autocratic and state interventionist line to hold the country together.

On the economic level, his government embarked on a huge set of energy-based developments known collectively as Think Big in order to insulate the country from the effects of rising prices for oil and o ther imported resources. In the early 1980s he also imposed a two-year price and wage freeze.

Holding the line also necessitated a tougher stance on social and moral issues. In 1977 parliament passed one of the most reactionary abortion laws in the world, the Contraception, Sterilisation and Abortion Act. Male homosexuality remained totally illegal during the Muldoon years, making New Zealand virtually alone in the advanced capitalist world in this area. And the country was turned into a virtual police state during the massive civil unrest provoked by the 1981 Springbok tour. The repression during that tour was not a result of any particular enthusiasm of Muldoon for the apartheid regime in South Africa, but a reflection that in its weakened position the New Zealand state had an essential need to assert its authority in the face of widespread dissent.

But Muldoons efforts to freeze society were incapable of keeping the lid on forever. The tensions simply built up below the surface until they could no longer be contained. Muldoons attempt to freeze social relations in the context of the historical weakness of a small and vulnerable capitalist power like New Zealand simply guaranteed that when the dam burst, as it inevitably was going to, change would be particularly dramatic and rapid.

Ruling class response: business switches allegiance

By the early 1980s an important section of the business class particularly those involved in the most parasitic areas such as asset-stripping, property speculation, money markets etc were turning against Muldoon. Although he was forced towards the end to move towards some deregulatory measures, for these

sectors it was too little and too late. Leading property speculator and former Muldoon enthusiast Bob Jones set up the libertarian New Zealand Party which took 12 percent of the vote in 1984, ensuring the election of Labour. In 1987 Jones and similar capitalists supported Labour.

A section of the newer, most aggressive and rapacious capitalists some of whom were ex-1960s radicals had already established a relationship with key Labour parliamentarians.

Treasury, dominated by people educated in American universities in monetarist principles and the free market views of Freidrich Hayek, provided the blueprint for an economic revolution which Labour leaders agreed to oversee.

A sizeable layer of the Labour Party and key members of cabinet such as Finance Minister Roger Douglas were won to this programme, which Labour actually had begun implementing even before it was officially sworn into office. (This economic policy became known as Rogernomics, after Thatcherism and Reaganomics, even though Douglas was its instrument rather than its originator. The other fallacy assisted by its name is the idea that it was actually some dynamic new policy. Like its US and British counterparts, it was essentially a desperate response to the inability of traditional counter-crisis measures, Keynesianism, to alleviate let alone stem the economic decay and stagnation setting in across the capitalist world for the first time since the 1930s.)

Knowing that the Labour government, following Treasurys advice, would devalue the dollar, a section of New Zealand business began speculating against the dollar during the 1984 general election campaign. They bought huge amounts of foreign currency with the aim of reconverting it into NZ dollars after devaluation. In a matter of weeks they precipitated an economic crisis as the countrys foreign exchange reserves were wiped out . (Of course, the fact that this culd happen indicated the general weakness of the NZ economy, not simply the weakness of the NZ dollar.)

Muldoon was prepared to take on the speculators, but lost the election. Labour, however, was in bed with the speculators and, before formally taking power, devalued the dollar by a dramatic 20 percent and abolished interest controls. These measures set the pattern for the Labour government, as it ditched the tradition of consensus politics and welfarism and became pretty much the undisguised instrument of free market capitalists.

Free Market Labour

Whereas in the late 1800s and the 1930s, New Zealand was seen as a laboratory for social engineering of a Fabian/welfarist variety, 1980s New Zealand became an experiment in free market economics.

Right-wing free market institutes began popping up from apparently nowhere. A country which lacked much of an intellectual tradition suddenly sprouted an aggressive free market intelligentsia. Even Hayeks Mont Pelerin Society organised an international conference in Christchurch. Ex-radicals and liberals of the 1970s and early 1980s such as environmentalist Guy Salmon and Maori separatist Donna Awatere were among those in attendance.

Free market enthusiasts began arriving to observe first-hand the reforms of the Labour government. For the purposes of these people NZ was ideal. Capitalism here developed in a purer form than in Europe because it had no feudal rubbish to contend with. Also, previous experiments in extreme forms of free marketism had been conducted in underdeveloped countries with military dictatorships (Chile). Conditions in western Europe and north America resembled New Zealand more than Chile, so this country was a more useful laboratory.

Under Labour, industry after industry was deregulated, a programme of privatisation was launched and free reign allowed in the finance sector. Even public transport bus routes were sold off to private companies.

Hundreds of post offices were closed down. The user pays principle was introduced into public services such as health and third-level education. University fees, often less than $50 per annum in the early 1970s, shot up to $1300 a year under Labour in the late 1980s. A steep goods and services tax was introduced, most affecting working-class consumers. Those state enterprises not sold off at knock-down prices were transformed into being run along private enterprise lines.

With huge amounts of paper money and credit being available in the international money markets, the new breed of capitalists went on a huge binge. Corporate raiding, takeovers, mergers and speculation sent share prices skyrocketing in 1985-86, bearing no relation at all to any new production of real value. A small layer of rich cleaned up.

Whereas in the past, NZs capitalists had tended to be publicly anonymous and discreet about their wealth (in fact the official line was that they did not even exist), Labours capitalist friends flaunted their wealth everywhere. Carried away with themselves, these parasites embarked on a course like something out of the last

days of the Roman Empire. They erected useless mirror-glass tower blocks in the main cities. On a personal level, they engaged in an orgy of conspicuous consumption, built palatial homes and even embarked on a mad pursuit to win the Americas Cup.

David Fay and Michael Richwhite, of Fay Richwhite merchant banking, spent $100 million in two attempts to win the cup. Television New Zealand even turned over one of its channels to live coverage of the soporific yacht races and attempts were made to get the population swept up in the fervour for these parasites yacht. During the first Americas Cup challenge, their shares increased 25-fold.

An obvious programme was launched by major elements of the establishment to turn the population into unquestioning admirers of these capitalist values

of greed and unapologetic parasitism. Journalists, for instance, fawned over Labour prime minister David Lange and the new rich and their antics.

Labours relationship with a sector of the most rapacious capitalists was particularly close. A layer of them, typified by Ron Brierley whose asset-stripping placed him outside the pale for traditional pro-National capitalists, were handed positions on the boards of state enterprises. A number of them were knighted.

A number of Treasury figures who had played an important role in evolving the new free market policies left the department to set up business in the deregulated financial sector.

Product of capitalist decline

While much of the traditional left threw their hands up in moralistic horror at the performance of this section of capitalists in the mid-late 1980s and waxed nostalgic about an idealised (and equally capitalist) past, these new capitalists were really no worse than the ones who had traditionally dominated the country. What happened in the 1980s was the typical behaviour of sections of a ruling class whose system has become historically obsolete and who are no longer able to further develop the means of production and take society forward.

By the 1970s New Zealand capitalism had run out of possibilities for development. The real economy was stagnant. In this situation it was inevitable that a section of the ruling class would move in the direction they did.

It was the complete failure of any section of the labour movement, or what passed themselves off as left-wing groups, to develop a real understanding of the limits of NZ capitalism and an analysis of the state as a weapon of the ruling class, which led to the disarray of any potential opposition. Being largely a product of the postwar boom era and spurning the need to develop Marxist theory and analysis in this country, the left was unprepared for the end of the golden weather and the social, economic and political ramifications this would have.

No popular capitalism

The ideologues of the right tried to present the policies of the 1980s as popular capitalism. They argued that anybody could buy shares and become a capitalist. the reality was, as in Britain, quite the opposite. While a number of ordinary people bought shares, the person in the street does not have access to the funds needed to buy any significant amount of shares and whatever shares they bought would have ended up being sold on to already wealthy investors. Moreover, as well as borrowing on the international money markets, the big capitalists also used the savings of masses of small shareholders for their takeovers, mergers and speculating sprees. Popular capitalism NZ-style simply led to the concentration of more wealth in fewer hands than ever.

This process was intensified by the international stock market crash of October 1987, with New Zealands artificial boom disintegrating literally in minutes. Companies crashed left, right and centre. From the height of the share market mania in 1985-87 when 370 New Zealand companies were listed on the Stock Exchange with their share market value totalling $44 billion, only 144 companies with a share value of $24 billion were left in the post-crash shake-out. Even then, more than a fifth of that amount was constituted by Telecom shares, most of which were held abroad.

As in Thatchers Britain, high-flying capitalists and so-called success stories of the supposedly wondrous market economy, disappeared or desperately struggled to get some stability. The Bank of New Zealand twice had to be bailed out by the Labour government to the tune of hundreds of millions of dollars of taxpayers money, demonstrating yet again that in any free market economy the capitalists ballyhoo against state intervention bears little relation to the reality of their relationship with the state.

The crash of these high-flyers, upon whom the left concentrated much of its fire, has also meant that NZs traditional capitalists, although badly hit by the effects of the slump and the collapse of much of the artificial economy of the 1980s, are still in place.

Additionally, traditional capitalists actually improved their position through their relationship with the state. For instance, the $9 billion borrowed by Muldoon for the Think Big schemes effectively ended up in the hands of private enterprise. The massive synthetic petrol plant at Motunui cost $1.8 billion, but the Labour government actually paid Fletcher Challenge, the countrys biggest company and most successful multinational, several hundred million dollars to take it off their hands. The giant NZ Steel Works at Waiuku, which cost $3 billion, was sold off for $327 million.

NZ capitalists have always been the recipient of state hand-outs, and the free market reforms, far from ending this state of affairs, continued it albeit in new (and even bigger) forms.

Disintegration of Labour

In the 1987 Labour increased its majority and even came close to taking several of the richest National constituencies. But in a number of the most hard-hit working class areas, votes swung to National. At the very time Labour seemed strongest, and some Labour figures were talking about it becoming the natural governing party with National declining to a rural-conservative rump, the share market collapse precipitated the disintegration of Langes government.

Although Douglas and his business friends wanted to carry out further free market reforms, including deregulation of the labour market and introduction of a flat tax rate of 23 percent (under Muldoon top earners paid 66 percent), Lange declared it was time for a cuppa before any new reforms.

War erupted between the Douglas faction and Lange and his supporters. A third group in the Labour Party, consisting largely of the remains of its working class members, espoused traditional Labourite views which by this stage were regarded as virtually ultraleft. (This latter group were increasingly alienated and marginalised and followed Jim Anderton out of the party, launching the NewLabour Party (NLP) on May Day 1989.)

In December 1988 Lange sacked Douglas, having already removed one of his key supporters, Auckland Central MP Richard Prebble, who had overseen much of the privatisation of state enterprises.

Prebble, Douglas and their faction launched a public struggle to topple Lange who was eventually forced to bring Douglas back into the cabinet and then resign himself. Lange was replaced by QC and law professor Geoffrey Palmer as Prime Minister. But the government had already fallen completely apart, trailing National in the opinion polls for two years before the 1990 election. National not only regained its middle class and upper class urban seats but also captured a number of traditional working class seats, reducing Labour to a mere 28 seats in the 93-member parliament. Jim Anderton held Sydenham, now for the NLP.

Problems for National

Within months of routing Labour, the National government was riven by similar divisions. Finance Minister Ruth Richardson, an ardent advocate of the free market, declared that her first budget would be spine -tingling and the mother of all budgets. She intended to continue Labours free market reforms by selling off remaining state assets and deregulating the labour market. Government spending was also to be slashed.

Its cuts in welfare, as well as inflicting misery on tens upon tens of thousands of beneficiaries, alienated a section of her own backbench MPs, a number of whom now represented deprived working class constituencies. Nervous backbenchers crossed the house and voted with Labour and the NLP; two of them left and set up the Liberal Party. Richardson and Social Welfare Minister Jenny Shipley openly clashed with the more traditional-minded prime minister, Jim Bolger.

In the run-up to the July 1990 budget nervous money market dealers made daily calls to both Richardsons and Bolgers offices to see who was winning.

In December 1990 the government cut the dole and widows, sickness and single parents benefits, some by up to 25 percent. The family allowance was abolished altogether. Rule changes made it harder to draw the dole. New fees were instituted for hospitals and some other public services.

Attempts to cut pensions were met with mass protests by pensioners, many of them retired National voters. With 500,000 pensioners on the electoral roll and large numbers signing a pledge not to vote for

National if the cuts went ahead, the government was forced to back off. However, it has been partially successful in setting different groups of beneficiaries against each other, scapegoating unmarried mothers for instance.

At the same time there has been an ideological attack on the welfare culture, from the government, right-wing lobbies such as Business Roundtable and in a number of books such as Thomsons and McLoughlins.

Employment Contracts Act and decline of unions

In the absence of any real opposition in parliament or on the streets, National also managed to push through the Employment Contracts Act, effectively a deregulation of the labour market and one which other capitalist governments are looking towards. The Act abolished employment practices, penal and overtime rates, and trade union organisation, which have existed for up to six decades.

The working out of this Act can be seen from the example of a particular food factory in Wellington.

Management called a meeting of workers, gave them a talk about the general economic situation and the alleged position of the company and then hand-picked four workers three toadies and a demoralised former union rep) to negotiate for the workers. They presented to these negotiators a contract in which overtime rates were abolished and flexible working conditions including hours were introduced. No-one from the trade union showed up during this process. Seeing no alternative, all but 10 workers of a 150-strong workforce voted to accept the contract.

Apart from drastically altering their wages and conditions, the workers also lost their union membership.

Similar events have taken place across whole sectors of employment, with the weakest sections of the workforce especially those in part-time work, atomised areas such as shops, supermarkets, service industries etc being hardest hit.

Completely enmeshed in class collaboration and support for the capitalist system, and built largely on paper memberships guaranteed by the compulsory union membership introduced by the first Labour government of

1935-49, the trade union movement was effectively sidelined by Labours reforms and unceremonious shattering of the consensus framework of New Zealand postwar politics.

With a massive decline in membership and little access to the corridors of power, the trade unions traditional policy of seeking reforms within the capitalist system is no longer viable. For many workers, particularly youth, the organised labour movement means little. Like its British counterpart, the NZ trade union movement resembles a dying old beached whale whose tide is not about to return.

Disintegration of social movements

The long decline of NZ capitalism and the lack of any revolutionary Marxist tradition in New Zealand has also taken its toll on the social and sectoral movements which emerged in the late 1960s and early 1970s, such as feminism and the gay movement.

The early womens liberation movement, which emerged at the end of the 1960s and start of the 1970s, had demanded equal pay and opportunjity, legal abortion, and free 24-hour childcare facilities and opposed sexist representations of women. The Socialist Action League, which had emerged at the same time and contained a layer of the womens liberation activists, launched a campaign focussed on repeal of the abortion laws. This campaign gave birth to the Womens national Abortion Action Campaign, probably the most active expression of the womens liberation movement during the 1970s.

Womens liberation ideas also spread into sections of the working class and unions. Elements of the trade union bureaucracy related to this development by forming the Working Womens Council, which was organised around a charter of demands that dealth with issues such as pay, childcare, and abortion, among others. Once the charter was adopted by the Federation of Labour that was largely the end of it. Far form mobilising working class women, the Council became a tool of advancement for its founder, Sonja Davies, within the union hierarchy. More socialist-inclined women formed groups such as the Womens Union in Christchruch and the Working Womens Alliance in Christchurch. These were closely linked to Maoist groups in the two cities.

While both the WU and WWA attempted to organise women on a class basis, their fates were closely linked to the problems of the left groups with which they wree connected and they faded away.

Working class women also organised spontaneously, perhaps the most dramatic example being the Housewives Boycott Movement. The HBM was begun in 1977 by Kathy Himiona, a housewife and former clothing worker in Wainoni, Christchurch. It rapidly spread across the country, with meetings of hundreds of working class housewives taking place in major centres. The HBM boycotted various products whose prices were rapidly escalating and which were mainly made by NZ companies, most notably Watties. Long-term boycotts are, however, extremely hard to sustain and without being taken up by organised labour, the boycott petered out.

In the meantime, the womens liberation movement itself was in a state of acute decay. It proved incapable of even mounting any street opposition to the draconian anti-abortion law of 1977. Many feminists, far from challenging womens oppression under capitalism, sought refuge in unworldly theories of patriarchy, in nudism, lesbian lifestyles and even witchcraft. The massive United Womens Conventions which had drawn thousands of participants in the 1970s had to be abandoned as various factions of the sisterhood came to physical violence with each other. An attempt to address the problems facing the movement was made by the calling of a special Womens Liberation Congress at Piha in 1978. The Congress ended up more like a nudist camp and featured vicious red-baiting attacks on socialist-feminists present. The womens liberation was over, although its main publication, Broadsheet, staggered on until the late 1990s.

A layer of feminists also made careers for themselves in the Labour Party or found niches in the state apparatus and/or devoted themselves to writing books about their favourite cycling trips and nature walks, capitalistengendered oppression bears down more and more intensely on working class women.

The need for a working class womens liberation movement, meanwhile, is more urgent than ever as new Zealand continues to have a particularly draconian anti-abortion law, women continue to occupy a second-class postion in the workforce and the 1991 mother of all budgets slashed the Domestic Purposes Benefit and other benefits that are disproportionately depended upon by women.

The gay liberation movement, which emerged at the start of the 1970s, had an even shorter life than the womens liberation movement. The original Gay Liberation Front groups that formed in Auckland, Wellington and Christchurch had ceased to exist as activist, liberation groups by the mid-1970s. An original, radical liberation movement with an anti-capitalist focus, was replaced by gay businesses and counselling services. The gay

liberation movement was replaced, over time, by the gay community, an entirely different proposition. The
community was based on identity politics and the stressing of the need for merely respecting difference within

capitalism, rather than liberation through struggle against capitalism. The shift away from an emphasis on liberation helps explain why male homosexuality remained illegal in New Zealand well after such laws had been reformed in many other western democracies. In 1986, when law reform finally took place, the campaign for change was dominated by respectable liberal politics which largely got in behind Labour MP Fran Wildes bill and treated the bill as a single-issue campaign. While significant mobilisations of progressives, gay and straight, took place around the bill, the single-issue focus meant that no new fighting movement for emancipation emerged; once the bill was passed the momentum was lost. In the seven years since then, progress has been limited.

Nationalism and the NZ nation state

The small size of capitalist New Zealand and its settler-state origins mean that it was always dependent on outside capital for development. Unlike oppressed countries such as Ireland, where foreign intervention held back development and reinforced archaic social relations and institutions which had already been largely swept away in the metropolitan countries, foreign capital in New Zealand never ruled but was essential to economic progress and actually significantly developed the country. The historic weakness of New Zealand capitalism, which has always had to be propped up by the state, means that in a situation of international capitalist competition, monopolisation and crisis, foreign ownership will inevitably expand.

The period of the last Labour government was one in which foreign capital moved into new areas of the economy. Japanese capitalism bought into the retail trade and snapped up property; Bell, the US-based phone company bought up much of Telecom; foreign companies invested in the construction of hotels and office blocks, bought up forests and other natural resources. Recently US interests bought much of the rail network. New Zealand has become increasingly integrated into the world capitalist economy in the only way possible for such a small imperialist fish.

At the same time, the New Zealand capitalists remain the dominant class and hold state power. The NZ government is their government, not a puppet of foreign interests.

National identity

An area in which the growing foreign capital investment and ownership, the end of the old cold war and of the postwar economic boom was bound to create problems is that of national identity.

Nationalism had, throughout this century, been central to the ideological mixture which the ruling class used to cohere society under their rule.

It was under the national flag that New Zealand played its imperialist part in the Boer War, the two world wars, Korea, Malaya and Vietnam. It was under the national flag that NZs ruling class promoted anticommunism. And it was under the same flag that it exploited the people and resources of the Pacific islands, and used Pacific islanders as a cheap reserve pool of labour whose existence in New Zealand was controlled by racist immigration laws, deportations and other measures by the state designed to keep them easily exploitable, quiescent and terrified.

As the old fabric of society comes apart, the ruling class has to find new ideological means for holding things together under their control. Yet the crisis of the society makes it difficult to get agreement around concocting a single, new definition to replace the old stereotype of a horny-handed, laconic, ruggedly individualist and yet good neighbourly type.

In this setting, discovering what it is that makes a New Zealander has become an increasing obsession in intellectual circles. Films and novels romanticise the past, pursuing highly particularist themes.

One Maori writer who has come under fire for not writing about exclusively Maori themes has pointed out that universal themes are not popular with the critics and the new censors of the politically-correct brigade.

National disintegration is breaking national identity down into sectoral forms. So while one discussion pursues the fruitless quest for what constitutes the New Zealand character today, another centres itself on Maori or even tribal identity, womens identity, community identity, regional identity etc.

The simple truth is that New Zealanders arent much different from any other group of people living in an advanced capitalist society on this planet. But such a universalist conception is out of favour.

Impact of crisis on Maori

One of the most notable effects is on the Maori population. Even in its so-called welfarist golden age, NZ capitalist society was never able to provide equality for Maori. Despite an official policy of integration, and the

widespread nature of intermarriage, Maori were always second-class citizens, victims of state racism, overrepresented in the unskilled sectors and prison population (and war dead) and totally absent from the middle and upper echelons of society.

In the post-1945 period, Maoris became increasingly urbanised and a major section of the industrial working class. While issues like police harassment of youth were important, the major focal points in Maori political activity were the land question and the language, both reflections of past disposessions and repression.

In 1975 thousands took part in a land march from the top of the North Island to Wellington, culminating in a 15,000-strong march on parliament. In the next few years several major battles were waged around land, most notably Raglan and Bastion Point. The 17-month occupation at Bastion Point on Auckland harbourside was finally ended in May 1978 by a massive police/military invasion which resulted in the biggest mass arrest in the countrys history.

Demands for Maori self-determination, and later sovereignty, grew to become the framework of radical (and even mainstream) Maori politics.

With no forward-looking vision being provided by the labour movement or the left, both of which preferred to ignore racism in order not to alienate pakeha workers, it was not surprising that Maori politics came to focus frequently around defence and romanticisation of the past and issues of cultural identity rather than a revolutionary and liberating vision for the future.

As the capitalist crisis and Labours free market reforms devastated much traditional industry, in which the Maori section of the working class was largely concentrated, and as the old postwar consensus politics was destroyed, tendencies towards separatism have increased. Understandably, then, back-to-the-land and tribal solutions appear to a growing layer of Maori to offer more hope than existing New Zealand society.

Middle-class white liberals have welcomed this as if it is some spontaneous enthusiasm by Maori to get back to their roots. In reality it is a reflection of the way in which Maori are oppressed within capitalist society and an attempt to find a sanctuary from the vicissitudes of NZ capitalism rather than take on the task of overthrowing it.

Liberal panaceas

Affirmative action, biculturalism and the pursuit of a retreat into the rural and tribal past offer no solutions to the racism which Maori daily confront in capitalist New Zealand.

Affirmative action, for instance, is a classic middle-class liberal policy. Instead of targeting the system which oppresses Maori and women, and without whose overthrow all talk of ending gender and racialised oppression is simply hot air, affirmative action targets individual pakeha and men, including workers. It blames individuals for racism and sexism and says that if pakeha and male workers go to the back of the queue for a while, Maori and women could advance. Meanwhile capitalism stays in place and continues exploiting the whole working class and doubly oppressing Maori and women members of the class.

As the living conditions of the working class deteriorate under the present system, pakeha and male workers are hardly likely to respond to calls, largely from middle class people, that they give up their few crumbs for someone with less especially when they know that the people advising this course are themselves more comfortably off.

In a situation of capitalist crisis, acceptance of the bosses framework and calls on any section of the working class to make any sacrifices are particularly divisive and reactionary.

The way in which these sort of politically-correct schemes fit in with the capitalist offensive against the working class is increasingly obvious. An area in which it can be seen is the public service.

Jobs in the public service have been halved since the mid-1980s. At the same time the state has been perfectly prepared to sponsor networks based on sexual and ethnic identity. For far from establishing or fighting for real equality a task only the working class as a whole can achieve such networks have led to an atomisation of the workforce and helped prevent the establishment of a broad political and class consciousness. Without such a consciousness it is impossible to successfully challenge ruling class attacks on jobs and conditions or fight for real equality for women, Maori, Pacific IsIanders and homosexuals.

It is hardly surprising that free market governments have been prepared to go along with, and even promote and financially assist such politically-correct networks. While their employees are encouraged to sit around learning how to be culturally sensitive and discussing their individual differences, personal prejudices (real or

imagined) and human failures, the government can get on with the serious business of slashing jobs and conditions.

Similarly, as the New Zealand ruling class presides over a system breaking up beneath them, it is not surprising that they see some advantages in promoting, or at least tolerating middle class liberals in promoting, biculturalism.

The fact is that the development of capitalism destroyed forever the Maori society which existed here in preEuropean times. That society can no more be brought back into being than feudalism can in Europe. Therefore what biculturalism does is actually concoct something which they then call Maori culture. This concoction is essentially conservative and an important element of it is aimed at re-establishing social order, particularly by controlling Maori youth. Putting young Maori in the cities into schemes for searching out their genealogy certainly has its attractions for the ruling class and government.

Given that the white middle class is just as terrified as the ruling class and government are of Maori youth, whom they look down on as a potential underclass with no respect for capitalist property rights and their white middle class social betters, it is easy to see why this sector of liberals have set up the bicultural industry. Sticking unemployed, alienated, oppressed Maori youth in harmless courses where they can discover themselves keeps them from rioting in the streets and taking on the state which both oppresses them and which pays the salaries of the professional biculturalists.

Alongside the pakeha liberals, a number of Maori ex-radicals have made a good living and carved out comfortable positions for themselves, far above the Maori section of the working class, out of the bicultural industry.

All these programmes are a sham and the political outlook which lies behind them is totally dishonest and bankrupt.

They reflect the fact that NZ capitalist society is at an impasse and that no capitalist solutions traditional or trendy liberal offer Maori or any other oppressed section of society any future.

But the very crisis of NZ capitalism means that these programmes, while useful to the ruling class and being a dangerous short-term distraction for some layers of the oppressed, are unlikely to succeed. Even for the establishment they are a two-edged sword for while distracting the oppressed they also serve to exacerbate social disintegration.

What is needed is a militant movement and campaign which takes on the sources of racial and sexual oppression in this country capitalism and the state and which fights for social equality. Such a campaign would also have to take on the politically-correct middle class liberalism which is really nothing more than a cover for defending the status quo.

Mouldering bones

The great Irish working class revolutionary leader James Connolly, who was executed by the British after the 1916 Irish rebellion, used to berate many of the rebel republican leaders of his time for continually going on about what he described as mouldering bones. The mouldering bones in New Zealand are not only the injustices of the last century, but also the organisations and ideas which dominated the post-1945 period and the social movements which emerged in the late 1960s and early 1970s.

In the introduction to Alternatives: Socialist Essays for the 90s, its editors, left academics Steve Maharey and Mike OBrien, noted the exhaustion of the socialist tradition in New Zealand. Radical social democratic ideas no longer appear as the vanguard of a new beginning but as the dead weight of the past. What appears new and relevant is the talk of individual responsibility, the post-industrial society, user pays, free market forces and less government.

This accurately sums up mainstream politics today. And, as a Labour MP totally complicit in the actions of the Labour government which promoted these concepts, Maharey is well-placed to know. Drowned out and booed off the platform of an Auckland student demonstration in March 1992 against Nationals application of user pays to third level education, Maharey is a good reflection of the fact that left Labourism is just as politically bankrupt as the right-wing Labourism it always clings on to.

To the new generation, the labour movement, its organisations and ideas, mean little. That movement, in both its trade union and party forms, are virtually irrelevant. Even to much of the older generations, traditional

politics is increasingly irrelevant. Fewer people bother to vote than ever before and parties such as National and Labour have lost much of their membership. For the first time in sixty years they have been challenged by new political formations such as New Zealand First and the parties grouped in the Alliance. Together these forces took nearly 30 percent of the vote in the November 1993 election and with alienation from the traditional parties also being reflected in the victory for proportional representation, it is highly likely that the next election will see significant advances in terms of seats for both NZ First (mainly at the expense of National) and the Alliance (at the expense primarily of Labour).

Today, the Labour Party has little real or meaningful connection with the working class. Such parties were described by Lenin seventy years ago as bourgeois workers parties; now they are virtually indistinguishable from traditional bourgeois parties.

As Bruce Jesson, now a leading figure in NewLabour and the Alliance, pointed out in the November 1984 issue of

Metro, Labours attitude to elections resembled the ratings battles of commercial radio. The idea is to identify a
target audience, carry out the appropriate market research, and produce a policy and campaign to suit.

The leadership squabbles and coups within the Labour Party show that the parliamentary party is simply a collection of unscrupulous careerists with no connection to the working class and no coherent political principles or framework. The formation of NewLabour and its success in attracting a relatively large membership and bringing together similar-minded forces to form the Alliance both reflects and further accentuates the old Labour Partys loss of a sizeable section of its traditional working class base.

The end of the cold war/collapse of the Soviet bloc and the end of the long postwar economic boom have shown up the exhaustion of both mainstream bourgeois and traditional social democratic politics. The especially weak position of New Zealand capitalism, as a minor player in the world economy, means that this international trend of alienation from traditional mainstream politics has taken a more pronounced form in New Zealand.

At the same time the fact that political alienation here has to a significant extent taken the form of a growth in new political parties means that there are more possibilities for political debate in this country than in places like Britain where the exhaustion of the old politics has simply led to mass apathy and disinterest in politics.

Dead left

For the remains of the old left, however, politics reduces itself to harking back to the old days in terms of calling on workers to defend their traditional organisations and rights and for the state to please play a mediating role again.

Unfortunately for the old left, the tradition of consensus politics is no longer viable in the context of international capitalist slump, political decay and social disintegration. The state, always the key instrument of capitalist rule, is not about to revert to the balancing act it could partly take on in more prosperous and stable times.

The lefts other fetish is its apparently permanent attempt to be even more nationalist than the ruling class. Today much of the old left is more nationalist than ever, retreating into little-New Zealander thinking, engaging itself in paranoid delusions that the country is in the grip of foreigners (as opposed to good NZ capitalists) and fantasising that it is possible to break out of the world economy and re-establish a welfare state.

While the best that the capitalists can offer are platitudes about an unreal future economic upturn and soporific televised screenings of their yacht races, even these seem mildly appealing compared to the prospect offered by veteran leftist and nationalist Bill Rosenberg in the May 1992 issue of Foreign Control Watchdog. Reflecting the dominant strain of what passes for left-wing thinking in New Zealand, he advocates the reactionary utopian notion of breaking away from the dreaded global economy, saying that this may mean a drop in our living standards but at least we would control our own resources. (For our read working class, for we read NZ capitalists.)

With such a poverty of ideas on the left, it is hardly surprising that free market ideas rapidly became the new orthodoxy.

Problems for ruling class

Given the ongoing slump and the lack of any agreed new national ideological glue to hold society together, the process of social and political decay and disintegration is likely to continue. Although no longer in full control of society, the ruling class will remain in the saddle as long as there is no real challenge. Given the collapse of traditional sources of opposition, they can muddle on for some time.

Yet the ruling class is still faced with the task of regaining their grip on society: to re-establish their political and moral authority, to restructure the economic and social landscape in their own interests and to pull a big enough section of society (especially the middle class) along behind them.

It is important to understand that however powerful the ruling class and their state may appear, this is not based on any inherent strength of their class and their system: it is the product of the collapse of the old opposition.

New Zealand capitalism is in a more fragile condition than at any time since the 1930s. In fact, in two important senses it is weaker.

Firstly, the economic measures designed to stall the inherent tendencies of capitalism to dive into crisis essentially pragmatic policies which went under the grand name of Keynesianism and the supposedly free play of market forces which became the vogue over the last ten years have both largely been used up. (Talk about a revival of Keynesianism, and the commitment of the Alliance and to some extent NZ First ignores the fact that it was the inability of these measures to overcome the recession of the 1970s and stagflation which led to the dusting off of antiquated free market ideas.)

Secondly, before 1935 labour reformism had never been in power in this country. Its domination of the working class was an essential element in enabling NZ capitalism to pull through the crisis of the 1930s and stabilise society in the interests of the ruling class. But today, after four Labour governments, the main institutions of labour reformism the official trade union movement and the Labour Party enjoy little real respect and engender no enthusiasm whatever on the part of the working class. To a large extent they are empty shells.

Reforging the working class

Marx argued that capitalism constantly remakes the working class. He also argued that the working class is revolutionary or it is nothing.

It is important to understand that the working class is not simply an economic category those who sell their labour in order to survive but is comprised of real, flesh-and-blood human beings. As the producers of all wealth, workers have the capacity and potential to transform society. But if they lack revolutionary political consciousness, this potential will not be realised.

Capitalist exploitation forces workers to resist. But such resistance is inevitably partial, and even the most militant economic struggles cannot impart more than a heightened trade union consciousness. In this situation, whatever gains may be made in the short-term can be rolled back. The dismantling of what once seemed to many a permanent welfare state in New Zealand is dramatic evidence of this fact.

Revolutionary consciousness and politics are, as Lenin and the Bolsheviks showed, brought into the working class by a revolutionary organisation which is able to analyse society as a whole. Left to itself the working class never advances beyond a reformist (ie still bourgeois) consciousness and, in periods like today, actually becomes reduced to a collection of individuals, brought together by a common exploitation and similar experience of life but with disparate levels of consciousness. Problems of existence are experienced on an individual level and each workers struggles in an individual way to keep their head above water. In such situations, other workers, foreigners etc can often be seen as the source of the problem rather than the capitalist system.

Without revolutionary consciousness, the working class continues to accept the capitalist framework of politics and economics. Workers remain susceptible to capitalist arguments even in relation to their own wages and conditions.

In New Zealand today, the working class is in terms of its consciousness and partly even in terms of its physical structure fairly atomised. There is widespread disillusionment about the prospects for change. Bad experiences of labour reformism have played an important part in undermining belief in collective struggle and collective solutions.

At the same time the decline of New Zealand manufacturing and other traditional sectors such as the meat works, the growth of unemployment, and the changing make-up of the working class, mean that the class itself is being remade.

This process is taking place in a situation of capitalist slump and the discrediting of traditional politics. This means that the ground for building a real anti-capitalist movement in this country is more level than at any time since the militant industrial struggles preceding the first world war.

What is to be done?

As capitalism remakes the working class in crisis conditions and outside the framework of traditional reformism, and as it forces sections of workers into defensive struggles, revolutionaries can actively intervene in this process. A Marxist organisation, with a revolutionary analysis of NZ capitalism and its place in the world, can actually be a factor in the political shape and consciousness of this reforged working class.

Although the project of revolution understandably appears today as unreal to most people, it is a more realistic project than the hopeless task of trying to revive New Zealand capitalism let alone trying to make it egalitarian.

And far from trying to breath life into the decrepit and bankrupt institutions of labour reformism or resuscitate the worn-out remnants of the 1970s social movements, the great need now is to set about the serious business of constructing a revolutionary Marxist organisation with its eyes firmly on the future. The goal of such an organisation is, equipping its members with a deep understanding of Marxism and creatively applying this to the concrete conditions in NZ, to set about politicising and organising the working class to lead the struggle to overthrow capitalism, smash the capitalist state, and build a new society in which all the forces of production and human potential can be unleashed and developed to help create a world of freedom and plenty.

Philip Ferguson