Encyclopedia of Anti-Revisionism On-Line

New Zealand: imperialist or semi-colony?

Issued: The Spark 12 March 2002
Transcription, Editing and Markup: Sam Richards and Paul Saba
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Confusion still exists in some left circles over the question of whether New Zealand is an imperialist country or a semi-colony. In the 1960s and 1970s a clique in the leadership of the Communist Party of New Zealand (now defunct) wrongly pushed the line that this country was semi-colonial and needed a two-stage revolution; first a democratic stage of national liberation, then a socialist revolution. The late Ray Nunes (who in 1991 founded the Workers’ Party of New Zealand) had been ousted from the CPNZ’s leading committee at this time and was not in a position to overturn this line until 1976. It was then that he presented a thorough analysis of the historical development of this country which compelled the party to drop its claim that New Zealand was not an imperialist country. Part 1 of his analysis was published in The Spark 19 February 2002; this is the concluding part which has an additional section by Daphna Whitmore bringing the analysis up to the present day.

Fourth Period 1945 to 1976: Whereas up to World War II New Zealand had clearly been an economic dependency of Great Britain’s, such was the relative decline of Britain between 1940 and 1950 that the United States had by then taken over from Britain in the military and the political spheres, although less so in the economic field. Generally the change was summed up in Holland’s statement: ’We will follow America, right and wrong’. Britain had been forced to sell a large proportion of its foreign assets to the United States and place itself heavily in debt to US imperialism in order to finance its war. The United States was by far the strongest imperialist power, the boss of the imperialist camp in the cold war, whereas Britain had been vastly weakened.

The emergence of a socialist bloc in Eastern Europe followed by the victory in People’s China, together with expanding national liberation struggles in Asia, Africa and Latin America, frightened the bourgeoisie in all capitalist countries. Generally speaking, they united under the aegis of US imperialism – whether or not they were directly under United States’ economic domination – in order to ’roll back’ or ’contain’ communism, to use the US cold war terms for its reactionary policies.

New Zealand subservience to US foreign policy is often wrongly portrayed as a simple matter of being the direct outcome of complete US economic domination of New Zealand. But even in this period Britain was still the principal owner of foreign investment and the main recipient of income from this, while at the time of the New Zealand shift in foreign policy from following Britain to following America, US capital investment here was relatively a much lower percentage than it is now.

This is an important question. If because of foreign imperialist economic domination the national bourgeoisie had no control at all, or influence over its affairs, foreign or domestic, how was it possible for the New Zealand bourgeoisie to make such a decided shift in its alignment? Economically, British capital was still dominant in New Zealand; Britain was still its principal market by far; the New Zealand pound was tied to sterling. Politically New Zealand was (and is) a part of the so-called British Commonwealth which had succeeded the Empire. Formally speaking it was – and still is – a self-governing Dominion owing allegiance to the British Crown. Yet the Prime Minister could say: ’We will follow America, right and wrong’. Did the British imperialists instruct him to say this? We could hardly think so. Quite obviously the New Zealand bourgeoisie – and particularly its dominant section of which Holland was the foremost representative, had sufficient ’independence’ to take a public step which marked a big weakening in Britain’s formerly pre-eminent position.

As a matter of interest, the idea of strategic reliance on the United States was not new. Gordon in his book, New Zealand Becomes a Pacific Power, refers to a Dominion editorial of 11 January, 1936 which pointed out that the British fleet could not be everywhere at once. He goes on: ’That same editorial has then added that one of New Zealand’s alternatives was to look across the Pacific to the United States’. (p. 83). A year later the Christchurch Press carried a similar article. The question came up in various forms before the war, including at the Pacific Defence Conference in April, 1939, as a possibility in case of British limitations. So at that time the question was already under consideration by bourgeois policy makers even though there was very little direct economic or political US influence in New Zealand.

As far as the bourgeoisie’s post-war position was concerned, two questions arise: 1) What were Holland’s policies in this period; and 2) What stand did the various sections of the bourgeoisie take up towards them?

The following is a brief summary of the main lines of Holland’s policies.

1) Externally: Full support to the US imperialist strategy of aggression and war against the socialist camp, pursued under the heading of the cold war and under Dulles’ slogans of ’containment of communism’, ’roll-back’ etc. Maintenance of New Zealand’s force in Asia for use by Seato or Anzus.

2) Internally: First, strengthen the state machine for the dual role of war abroad and suppression of the working class within. These were the motives for suppression of the militant trade unions in 1951. Essentially they cleared the way for a possible big war; encouraged foreign monopoly investment; gave employers a generally stronger hand vis--vis the workers in relation to holding wages while increasing profits.

Second, remove import licensing and control to assist foreign monopolists to increase exports to New Zealand.

Third, remove or weaken other Labour legislation such as the Land Sales Act, Tenancy Act, in order to assist the landlords and financial oligarchy.

What were the bourgeoisie’s reactions? The monopolist section gave full support to all the above policies, which were executed in the interests of the imperialist bourgeoisie of which they formed part.

A substantial part of the middle (i.e. the non-monopolist) bourgeoisie were also in support, including large and middle farmers. Their fear of the growth of socialism brought them in behind the United States which they recognised as the main pillar of world capitalism. However, a section of the manufacturers within this grouping still sought to follow British rather the US imperialism. In foreign affairs they supported the British rather than the US line, which meant that they were less belligerent, less prepared to fully back Dulles’ brink of war tactics.

While fully supporting Holland’s strengthening of the state forces and internal anti-working class measures, they were less keen on the reduction of import controls, which meant reduced protection against foreign competition.

Their standpoint found some reflection in the Labour Party and in papers like the Auckland Star. The Labour Party, by its role in regard to Southeast Asia (Malaya, Seato, eg), had already clearly shown that it was far from anti-imperialist. Its attitude towards Holland’s policies showed merely that in the contradiction between US and British imperialism, it supported the latter.

As to the petty bourgeoisie, most of them had been conditioned by some years of relative prosperity and were too frightened of the class struggle and socialism to do more than follow the big or middle bourgeoisie. This was shown by the extent of Holland’s election victory in 1951.

Thus, once again it was not a question of the national bourgeoisie – or any part of it – being anti-imperialist, but a question of which imperialism it supported.

Since the 1950s there has been a continued erosion of Britain’s former exclusive economic dominance, shown by its reduced percentage of the total in the statistics of foreign investment and income derived from it. This has run parallel to a further growth in secondary industry and consequently of the national bourgeoisie. These two factors (competition between a number of imperialisms instead of dominance by one, and a stronger local bourgeoisie), in this period gave rise to the possibility of more independence in New Zealand policy – even under bourgeois rule – than formerly. For instance, Britain’s entry into the European Economic Community, which was an aspect of its weakened international position compelled a search for alternative markets and brought some policy changes (eg China recognition and trade) in its train. At the same time there was a growing reliance on US military might for ’defence’ resulting from Britain reducing its Far Eastern defence forces.

Despite a somewhat greater freedom of action for the local bourgeoisie, it follows from the above that in view of the long-standing role of US imperialism as the main pillar of world imperialism and reaction, it is clear in this period that the increase in its economic and military influence in New Zealand must inevitably lead to steadily growing political reaction all along the line.

Fifth period 1976-2001: This period was marked at a local level by the growth of the New Zealand financial oligarchy, its assertion of dominance through the New Right reforms of the 1980s and 1990s, the opening up of the country to international markets and the weakening of the working class movement. In foreign policy this period saw the continuation of New Zealand as a junior partner in the imperialist bloc headed by the United States which by 1989 was the sole world superpower. Even while New Zealand took a step against US imperialism by banning nuclear ships in the 1980s, the imperialist alliance continued with New Zealand giving support to US military operations in the Middle East, the Balkans and Central Asia.

This period starts with the continuation of protectionist policies and overseas borrowing to fund ’Think Big’ state-funded investment projects, designed to conceal the depth of the economic crisis of the mid-seventies. Unemployment was rising and was accompanied by a government-sponsored racist campaign against Pacific Island workers, who had been brought to New Zealand to provide cheap labour when the economy was expanding. There was a growing push from the big business sector, the financial oligarchy, for ’free market’ reforms. Muldoon, the Prime Minister at this time, was prepared to end interest rate controls and tinker a little, but he was not willing to wholeheartedly embrace monetarism which was rapidly becoming a new orthodoxy taken up by Thatcher and Reagan.

It was the Labour Government of 1984 which openly ushered in the period of the New Right monetarism, spearheaded by Finance Minister Roger Douglas. With backing from the financial oligarchy – organised in the Business Roundtable – Douglas and co. began a privatising frenzy. In 1987 a list of the richest people in New Zealand revealed that the combined wealth of the 75 individuals and 25 families on the list was almost $9 billion, enough to pay off 43 per cent of New Zealand’s national debt. This was, without a doubt, New Zealand’s financial oligarchy.

Nearly all the big state assets were sold off in just a few years with well-known monopoly capitalists overseeing the sales. During the late 1980s and early 1990s Hugh Fletcher of Fletcher Challenge chaired Air New Zealand, Alan Gibbs of Gibbs Securities, Freightways and Ceramco became chairman of Forestrycorp, and Ron Brierley chaired the Bank of New Zealand. The assets were sold at fire-sale prices to members of the Business Roundtable and foreign multinationals.

The Business Roundtable comprises the dominant section of the monopoly capitalists and although not numerous, some, like Fletcher Challenge, were able to invest their capital abroad as well as in New Zealand and compete with foreign monopoly capital in different parts of the world. Because they could foot it with international capital – although not on a grand scale – their own interests were more in line with big foreign capital too, so they favoured opening up New Zealand. Some of the biggest monopolists have now moved offshore, such as Doug Myers who shifted his Lion’s headquarters to Australia.

Big business made the most of the collapse of phoney communism in the USSR and Eastern Europe in this period. Anti-worker laws were passed, with the government and monopoly capital well aware that the trade union leadership would only put up a pretence of resistance. Decades of compulsory trade unionism had created a whole breed of armchair officials who could sit back while compulsory fees rolled in, collected by the employer and paid automatically to the union. The last time there had been a class struggle was in 1951 with the watersiders’ lockout which involved a big section of the working class.

The notorious Employment Contracts Act, introduced by the new National Government in 1991 was really just a continuation of the Labour Relations Act brought in by the Fourth Labour Government. The Employment Contracts Act turned the clock right back to the nineteenth century in terms of workers’ rights. Trade union numbers were halved, the number of strikes plummeted, dropping to a 70-year low in 2000. The top union leadership were thoroughly class collaborationist and although the workers were waiting for the call for a general strike, no call came.

The domination of the financial oligarchy was evident throughout this period. The other sections of the capitalist class went along with its dictates, although many smaller manufacturers went to the wall with the lifting of tariff barriers. Other industries moved offshore to countries where labour and raw materials were even cheaper. Yet concentration of capital in industry can still be seen. In 1955 just over 33 per cent of the labour force in factories were in work sites with more than 100 workers. By 1970 this had risen to 44 per cent and by 1981 it was 59 per cent. In 1997 factory workers in sites of over 100 workers still predominated numbering 51 per cent of factory employment. What this shows is the concentration of production, a typical feature of monopoly capitalism. While there were still tens of thousands of small workplaces, monopoly was and remains king.

The New Right reforms were a gigantic transfer of wealth from the public sector to private hands. Before long many of the privatised assets were sold or taken over by foreign monopolists.

The Labour-Alliance government which came into office in 1999 hinted that it would reverse the course set over the past 15 years. In fact it has continued down the same path, introducing more anti-worker laws, curtailing civil rights and sending troops to support the US-led war against Afghanistan. The Government showed it was just as pro-imperialist as any National Government.

What does the above historical sketch show?

1) In New Zealand’s history, the national bourgeoisie never has been revolutionary. In its attitude towards the working class it has always been hostile to socialism and to militant trade unionism, consistent with its position as an exploiting class.

2) In regard to national independence, unlike the bourgeoisie in the heyday of bourgeois revolutions in Europe and of national liberation movements in the third world today, the national bourgeoisie has never carried on a struggle against imperialism. Apart from a little kite-flying by Vogel and a half-hearted dab at opposition on a few foreign policy questions between 1935 and 1937 – resulting much more from working class pressure than from bourgeois sentiment for independence - the national bourgeoisie fully supported British imperialism up to World War II. (See part 1, The Spark 19 February, 2002).

3) Since the end of World War II it has moved between support for British and support for US imperialism, but at no stage has it moved towards an anti-imperialist position.

4) For most of New Zealand’s history, on basic questions of defence, independence and foreign policy, the other sections of the bourgeoisie have supported the dominant section. Initially, the latter comprised the big landowners; from the turn of the century to the early 1930s it consisted of the big farmers in alliance with the big urban capitalists; from then on it comprised the monopoly capitalists.

In big class struggles – 1913 and 1951 – all sections of the capitalist class rallied to support the dominant section. The contradictions within the capitalist class (between the monopoly and non-monopoly capitalists, eg) have always been secondary contradictions; the contradiction between the capitalist class and the working class has been the main contradiction and it still is.

New Zealand has never needed a bourgeois-democratic revolution, the national bourgeoisie has never been revolutionary, nor radical, nor even anti-imperialist. As part of a world-exploiting system of imperialist states sharing in super-profits, New Zealand, even though it had earlier been an economic dependency of imperialism, is in a very different situation from a semi-colonial country where the national bourgeoisie can take a revolutionary position.

Within the domestic capitalist class there is a definite monopolist section – the most powerful section being in the Business Roundtable. These monopolists have close connections with major foreign monopoly concerns and comprise the dominant section of the ruling class.

It is erroneous to consider the ruling class as something outside New Zealand, even though many enterprises are owned or part-owned abroad. The point is that the execution of class economic and state policies rests with internal forces. It is these forces which have to be overthrown in the first instance in any successful revolution. Neglect of this aspect leads to an underestimation of the counter-revolutionary side of the national bourgeoisie and consequent danger of defeat for the revolutionary forces, even where the national bourgeoisie – or a section of it – has carried on anti-imperialist struggles in the past, as for example, in Indonesia. How much more does this apply in New Zealand where no part of the bourgeoisie has taken an anti-imperialist stand!

Where feudalism had to be brought down, as in Europe in the 19th century or as in China, where it combined with foreign imperialism to stifle bourgeois-democratic development, there a section of the national bourgeoisie gravitated towards revolution. By contrast the New Zealand bourgeoisie has not had to struggle against feudalism in order to develop as the ruling class but instead has profited by hanging on to the coat tails of imperialism.

In conditions of the decline of imperialism on a world scale and of sharpening internal class struggle arising from the growing economic crisis, the bourgeoisie’s main concern will assuredly be to suppress the working class in order to ensure the preservation of capitalism. Not for nothing did Lenin write as far back as 1907: ’The “radical bourgeois” cannot be courageous in the epoch of highly developed capitalism. In such an epoch the bourgeoisie, in the main, is already counter-revolutionary’. (The Agrarian Programme of Social Democracy in the First Russian Revolution).

Since the Wakefield settlements of the mid-nineteenth century the capitalist mode of production has been firmly established. Industry and agriculture both developed marked by the concentration of means of production in the hands of a relatively small number of capitalists and displacing small-scale production by large-scale production employing wage-workers. New Zealand is an integral part of world capitalism, earlier closely tied to Britain in the subordinate role of a favoured supplier of farm products such as meat, wool, cheese and butter.

New Zealand has for more than a century had a well developed bourgeois-democratic political system with no entrenched feudal system to overcome. There have been no IMF-World Bank imposed economic programmes, no coup d’etat, no death squads, none of the typical features necessary for the extraction of super-profits from a semi-colony. New Zealand for years had one of the highest standards of living was ranked among the top OECD countries. New Zealand today is ranked 19th out of 162 countries on GDP per capita and standard of living criteria. (UN Human Development Report 2001).

Far from extracting super-profits from New Zealand, the high standard of living here has been from the monopoly capitalists sharing in the imperialist spoils of super-profits from real semi-colonies.

The reality in New Zealand is that state monopoly capitalism exists, with a monopoly capitalist section playing a comprador role for foreign imperialism and heading a capitalist class no part of which is revolutionary. The most likely ally of the workers is the petty bourgeoisie; but this is the middle class and not part of the capitalist class proper. On the basis of capitalist production relations there is a relatively large class of wage workers led by a sizeable (for New Zealand) industrial proletariat. These conditions require a struggle for socialism, with the dictatorship of the proletariat (working class rule) as an immediate task, and with special prominence given to the socialising of foreign and domestic monopolies.

What is lacking is the subjective factor – the ideological-political preparation of the working class for revolution. But this is directly bound up with the long period where social democracy dominated thanks to New Zealand’s participation in imperialist super-profits.

Determining the nature of New Zealand society can only be done on the basis of a thorough examination of its historical, economic and social development.

The question of what sort of country New Zealand is, semi-colony or imperialist, is an important one because it is decisive in establishing the type of revolutionary strategy needed. In fact, New Zealand lacks all the main features of a semi-colony and like Australia and Canada, its path as a settler colony was dramatically different to the colonies in Asia, Africa and Latin America. Any serious thinker who looks at these real semi-colonies will soon see that New Zealand is not one.