Trading Sovereignty For Investment Capital - Again: The suppression of local democracy is absolutely crucial to the success of the second “Great Tightening” exercise in New Zealand history. Unless the responsibility for making critical resource allocation and/or conservation decisions is taken out of the hands of elected local representatives and placed in the hands of unelected officials appointed by central government, then foreign investors will not feel sufficiently confident to risk their capital in major development projects.
ECONOMICALLY SPEAKING, it is difficult to define New Zealand
as anything other than a colony. Its biggest export earner, agriculture,
remains a price-taking not a price-making industry, and the other big foreign
exchange earners: tourism and education; are essentially extractive. The former
“mines” our spectacular scenery; the latter our status as a first-world,
English-speaking nation.
That New Zealand is able to classify itself as a first-world
nation is actually rather remarkable. A reliance on agricultural commodity
exports and tourism is an economic condition generally associated with
third-world states – most of which, only a century ago, were colonies of the
major European powers. Officially, these former colonies are now free and
independent states. But, if post-war history teaches us anything, it is that
winning political independence, and becoming economically independent, are two
very different things.
In order to grow and prosper, price-taking economies require
a patron. For most of New Zealand’s history that role was fulfilled by Great
Britain. It was British capital which financed the extensive infrastructure of
its far-off farm, and it was in British markets that the produce of that far-off
farm was sold. Without her capital and her markets, Great Britain’s
far-off-farm would have failed. Certainly, New Zealand’s home-grown capitalists
were too few and too poor to build a “Better Britain” in the South Pacific on
their own.
More recently, the role of New Zealand’s principal economic
patron has been taken over by China – which currently absorbs the lion’s share
of New Zealand’s agricultural exports. If its history as a British colony is
any guide, then the capital required to finance New Zealand’s future
development will, increasingly, come from the Peoples Republic.
Like their British predecessors, Chinese investors are
already attempting to secure control of the key supply chains to their domestic
market. Just as New Zealand lambs were once raised on farms financed by
British-owned banks; slaughtered in British-owned freezing works; transported
to Smithfield in British-owned ships; and their frozen carcasses sold to
British-owned retail outlets: New Zealand milk will soon be extracted from
Chinese-owned cows; raised on Chinese-owned farms; processed into infant
formula in Chinese-owned factories; shipped in Chinese-owned containers; and
sold in Chinese-owned supermarkets.
One of the most interesting themes developed by the New
Zealand historian, James Belich, in his 2001 book, Paradise Reforged, is what he calls “The Great Tightening”. In a
nutshell, this describes the ways in which New Zealand politicians bound their countrymen
ever more tightly to the British economy. New Zealand’s primary production went
out to Britain; British manufactured goods came back; and woe betide anybody
who got in the way (like visionary economic nationalists, socialist trade
unionists, and other assorted pests).
It is rapidly becoming clear that a very similar tightening
exercise is underway in twenty-first century New Zealand. In order to attract
the foreign direct investment it believes New Zealand must have to keep its
economy growing, the National Government of John Key is methodically emptying
the statute books of every legislative impediment to economic development.
The suppression of local democracy is absolutely crucial to
the success of this second “Great Tightening”. Unless the responsibility for
making critical resource allocation and/or conservation decisions is taken out
of the hands of elected local representatives and placed in the hands of
unelected officials appointed by central government, then foreign investors
will not feel sufficiently confident to risk their capital in major development
projects.
Stripping local politicians of their power to manage and
develop key infrastructure is an equally vital element of the same tightening
programme. It’s what lies behind the draconian provisions of the Local
Government Reform Bill currently before Parliament. Under this new law the
unelected Local Government Commission will have the power to force local
councils to hive-off key services, such as water reticulation, energy, ports
and transportation to so-called “Council Controlled Organisations”. These
Orwellian entities are, of course, anything but council controlled – as anyone
living in Auckland, where they have been operating since the creation of the
“Supercity” in 2010, will attest.
Auckland has not been the only laboratory in which the
anti-democratic elements of National’s tightening have been tested. The people
of Canterbury have been without democratic representation at the regional level
since the Government sacked Ecan’s elected councillors and replaced them with
appointed commissioners – also in 2010. With commissioners safely installed,
the irrigation schemes deemed essential to dairy intensification in Canterbury
could proceed without fear of democratic interference.
When most of the population of colonial New Zealand could
trace their origins directly to Great Britain; and when the patriotic mists of
Imperial Albion largely obscured the predatory commercial interests of the City
of London, the first Great Tightening proved broadly acceptable.
The second will be very different. Those wondering how it
feels to see one’s country subordinated to foreign interests should probably
consult a Maori.
This essay was
originally published in The Press of
Tuesday, 6 September 2016.
