The New Cold War
America, China, and the Echoes of History
UNIMPORTANT as New Zealand is today in world affairs -- only a million and a half people sharing less than one percent of the world's trade -- there was a time when sociologists came to investigate our institutions. For a quarter of a century New Zealand prided itself on leading the world in extending state social services and giving equality of opportunity by means of legislative action; today New Zealand has not merely retrenched and economized, but has lost much of her faith in the governmental institutions and social services which so amazed André Siegfried, H. D. Lloyd, the Webbs, Ramsay MacDonald, and many other foreign observers.
New Zealand was the first country to attempt to settle industrial disputes by the legal processes of a Compulsory Court; the present Coalition Government, part descendant of the Liberal Party which made New Zealand "a land without strikes," has scrapped the compulsory arbitration system in industrial relations. The Liberal Party rose in the eighties of the last century as a revolt against the "Skinflints," whose one remedy for an economic crisis was to economize and reduce wages; the Liberal Party in the next great depression has set up a National Expenditure Commission, which has peered into every pigeonhole of state assistance to the people and has proposed to settle the crisis by discontinuing, among other things, free books to primary school children in necessitous cases, abolishing local administration boards, making more difficult the training of teachers, raising the minimum age of ad mission to primary schools, abolishing all grants for adult education, abolishing family allowances, cutting down old age pensions, and so on. Except for protests from the interests concerned, such economies are being accepted willingly, sometimes almost joyously, as a proof of the determination of New Zealand to adjust herself to the depression by doing without "frills" and "luxuries." The government set up a committee of economists who found that the national income had fallen from £150,000,000 in 1928-29 to £110,000,000 at the beginning of 1932. They advocated a second cut of 10 percent in wages and salaries of civil servants, a lowering of interest and rents, and a special impost on the rentier class. The government adopted these suggestions in an attempt to adapt the national expenditure to the falling national income and to assist the primary producer to compete on the world market.
It may be that economy and retrenchment are necessary, but the contrast between the reactions of the people in the nineties and their reaction today -- between their belief then that legislation could remove the crisis, and the acceptance now of the necessity for adaptation to a crisis -- raises questions of universal interest. Does the extension of social services by a democracy bring a loss of faith in those social services? Do democracies sooner or later give up the task of molding economic life so as to avoid depressions?
Why was it that the New Zealand electorate from 1891 to 1912 returned a Liberal Party (the popular party) pledged to progressive legislation, when today the Labor Party (claiming to be the new popular party) can win only 24 seats in a House of Parliament of 80 members? The common answer is that the Liberals were "sane" and "moderate," unlike today's allegedly "irresponsible" and "extreme" trade-union-ridden Labor Party. But all the epithets now hurled at the Labor Party were attached to Premier Seddon and his Liberal followers. "The Seven Devils of Socialism" they were called, while a large minority kept repeating that "the workingman's Socialistic ministry" with their "revolutionary notions and ideas" would undermine New Zealand's credit and hold the country up to ridicule. The Liberals set up the Arbitration Court in an attempt to settle all disputes between employers and employees without recourse to strikes. They compulsorily subdivided large estates and assisted in the redistribution of them among small landholders. They granted old age pensions. Such acts were regarded as being as dangerous to property holders as today the nationalization of land and industry are regarded. Today the criticisms are believed, whereas Seddon was returned as Premier until his death in 1906, and became a national hero. The nineties had still to try democracy and state interference. Have we tried them and found them wanting?
The immigrants who came to New Zealand were in search of a New World. The horrors of Great Britain still fresh in their minds, they were aroused to a sense of their own danger when there was an exposure of sweating conditions in the colonial clothing trades. Was it for this, they asked themselves, that they had escaped from the Old World? And having already found it necessary to build railways under state control (for there were no capitalists large enough to lend money or to guarantee loans), as well as to own and administer all land in the colony, they prepared to extend the franchise and to meet economic difficulties by state assistance.
Thus from the beginning New Zealand politics were written in terms of state paternalism and state intervention in industry. It is difficult to find any other binding thread. Social philosophy we have none, for we have repudiated any theory by our legislative acts. An hereditary class we have not, although we are said to have the largest number of knights proportionately to our population of all the British Dominions. We believe only in the state, which we may criticize, attack and repudiate, but from which, whether Reform, Labor or Liberal, we cannot escape. It was partly economic conditions, especially the scarcity of capital, which forced the state to build railways, irrigation schemes, telephone systems, harbors and other public works; partly it was because the immigrants were independent of the restraints of Europe and susceptible to the ideas of change. During the eighties and nineties the news of the successes of German socialism filtered in. The victory of the London dockers' strike, made possible by Australian and New Zealand assistance, presented a happy augury to the colonists, who were reading avidly Bellamy's "Looking Backward," Henry George's "Progress and Poverty," and the writings of John Stuart Mill, H. M. Hyndman and the Fabians. Falling prices for exports intensified a depression that had begun locally with the collapse of a too extensive system of borrowing for public works. Large tracts of sparsely cultivated land were held by a few individuals; this irritated the unemployed, who desired nothing better than the opportunity of becoming yeomen farmers. Parliament was dominated by the sheep kings and English conservatives. It was not that even they were opposed to state intervention, but that they were out of touch with the desires of the people. As shown later, they were willing to modify the theories of laissez-faire which they had brought from England, but at the time they were unaware of the awakening of a democracy that wanted land and opportunity. Far more sensational than a Labor victory would be today was the Liberal victory of 1891.
Seddon, who became the Premier of the Liberal cabinet in 1893, based his political creed on a broad and vague humanitarianism. Like most colonials, he was impatient with social philosophy and distant aims, concentrating on the immediate issues (such as manhood suffrage, factory legislation and land subdivision) that seemed to him to offer a solution of some pressing problem. He had a bias towards state action, but would not generalize on the need for complete nationalization of industry. When he wanted to hinder the growth of a monopoly he supported the purchase of a state mine and the setting up of state insurance, but he was not prepared to give the state a monopoly of activities that were already in private hands. He went to the assistance of the leading bank in the colony, and although the government obtained representation on its directorate he was not prepared to carry out the demand of some of his followers and establish a state bank. The sufferings of the people made him a Liberal, but he did not like labels, and he did not argue that sufferings could be ameliorated only by state action. Some of the Liberals were really Socialists, but they were willing to use the state if the need arose rather than anxious to seize a chance to apply state action. So they brought in their pioneering legislation which gave the people what they wanted -- the Land and Income Tax Act, franchise to women, local option on the liquor question, financial aid to settlers, assistance to workers buying their homes, a Public Trust Office, a state mine and state insurance. Every act interfered with private property in the interests of the small farmer or the artisan.
The separatist, interested, immediate needs of New Zealand voters have dominated all parties since they found their ideal in Seddon, whose only qualification for statesmanship was that he could put into legislation the passing needs of the people. When the Liberal Party was short of an election bait, he could find a new desire to be fulfilled, and as long as the government could get the money to carry out the new promises it seemed that the Liberal Party would control New Zealand forever. The fundamental reason why the Liberal state interference and state paternalism failed was that the policy developed into a type of bribery which seldom fitted the particular interest which was being served into a social ideal or a general plan of reconstruction. New Zealand democracy learned first, what all democracies have realized since, that a candidate for their votes is willing to promise much and will try to carry out his promises in order to remain in their good graces. The main test of most schemes of government interference was not the general benefit to the country which would follow, but the circulation of money in the electorates. Seddon died in 1906. His party was defeated in 1912.
The Liberal Party lost office partly because the Conservatives learnt also to give the people what they wanted, and partly because Liberalism itself became more and more conservative. The trade unionists, disappointed by Liberal performances, consolidated by the years of prosperity, and ambitious to find a more important place in the Party, fell away and formed a Labor Party just at the time when the small-scale farmer, having received the freehold for the land which the state had assisted him to obtain, felt that it was no longer necessary to support state intervention or progressive legislation. The Conservatives remained in power, under changed political labels, until 1928. They were succeeded by the remnants of the Liberal Party, led by Seddon's lieutenant, under the name of the United Liberal Party. Labor was the third party. With the coming of the depression, the Reform and Liberal Parties united to keep out Labor, and won the election in 1931.
We have traced the political history of New Zealand from an oligarchy of Conservatives to a coalition of Conservatives (the Reform Party) and Liberals. We have seen the electorate, in one depression, putting into power a Liberal Party which introduced radical and progressive legislation. We have seen that Liberal Party losing its inspiration and its energies to a Labor Party. But that Labor Party is unable to obtain power because the people have lost the faith, supreme in the nineties, that it is possible to mold a new world by legislation. The state still interferes, but only those who are supposedly benefiting from that interference are prepared to defend state activity.
The difference between New Zealand political life in the nineties and today may be summarized as a swing to the right, a weakening of the political influence of trade unionism, a disillusionment with social reforms, and a growing apathy and cynicism towards politics. The prosperous small-farmer bias brought conservatism, and the present depression seems to have hardened it instead of producing the progressive farmers' movements of the United States and Canada. (There are, however, a few signs of an interest in currency schemes such as characterized the United States in the past.) The reasons for these changes are: the comparatively wide spread of prosperity among the people before the depression; the fears aroused by the Russian Revolution and the unrest in Europe lest a movement to the left would mean the destruction of private property; the failure of Australian Labor to fulfill its promises; the disillusionment with state interference; and the coming to fruition of the earlier methods of Liberal democracy without the discovery of any new men, ideas or methods to take their place.
Democracy destroys its own supporters. The social reforms of one party must be accepted by all if votes are to be won. Elections in New Zealand were a process of one party's catching another bathing and acquiring the one set of clothes of social reform which covers the nakedness of all parties alike. Seddon drove out a party who made "economy a vice and retrenchment a nightmare." The Conservatives returned because they were able to persuade the people that they fitted the clothes better. They renounced stern economy, free trade and individualism, borrowed millions, lent money to the farmers on whom they were chiefly relying for their support, bought and subdivided great estates, and regulated private trading in a way that, according to a Liberal historian, "might have made the conservative New Zealanders of the eighties turn in their graves." New Zealand learnt to use the vote to satisfy interests earlier, more consciously and more completely than other democracies. There is no motive for taking the plunge to give the Labor Party an opportunity to administer the affairs of state if the other parties are able to persuade the electorate that they are granting as many reforms as Labor could or would grant. When old age pensions were introduced in 1898 they were surrounded by a number of restrictions and qualifying conditions which in subsequent years were struck out, while the amount of the pension was increased. Was there any limit? It was certainly not a political one, for the Conservative leader in 1905 put forward a proposal for a universal pension. The Reform Party (the Conservatives by tradition) stole another reform when it introduced a child endowment system just before the slump. Labor said that the amount of two shillings a child was not enough. The Reform Prime Minister agreed, and promised to give more when financial conditions improved. The proper adjective therefore to be used to explain the intervention of the state in New Zealand is not "socialistic" but democratic, for all governments have been compelled to interfere in order to win votes.
The New Zealand experience has been that to make people prosperous and secure is to make them apathetic and self-satisfied. Every person who obtains a house through the State Advances Department becomes less sensitive to the sufferings of others and more susceptible to the suggestion that the return of Labor would mean the confiscation of his garden. The state increased the area of Crown Lands, and established on them small holders, whose main political interest for a decade was the agitation for the freehold, much to the disillusionment of the single taxers and the socialists, who had hoped that the opposition to the squatters might be directed into land reform channels. The nineties had still to see tried the schemes which we since have found wanting. Equality of opportunity and freedom of expression, economic security and progress without strikes, were dreams that inspired the people in the same way that the Russians are today being inspired; the practice of those ideals has left us tired and disillusioned. We are no longer enthusiastic about leading the world. When social ills are pointed out, we find satisfaction in the belief that other people are just as unfortunate. We have sucked democracy dry. Lord Bryce and Lord Passfield drew attention to the "vulgarity of ideas and absence of refinement among the politicians, which is the result of the pioneer life that they have led." Recent observers declare that the type of politician has declined. Although there is some research being carried out in industry and agriculture it has had little result beyond improving the yield of butter-fat. One of the first measures of economy was the decision not to carry out the regular taking of the census. In the cities, leading business men occupy the main municipal and social posts, but they show no more understanding of economic and social problems than do the politicians themselves. The worst form of mercantilism has been revived by local manufacturers; the main hope of recovery is in some form of Imperial Preference for our primary products. While the English Labor Party is belittling the idea that the Ottawa agreements will widen the market for English manufactures, the New Zealand Labor Party is declaring that local manufacturing will be destroyed. "Buy New Zealand Goods" has become not merely the highest form of patriotism, but the highest form of Christianity as well.
New Zealand has suffered so much from interested state intervention that it will probably be the last country to plan economic development. The worker is jealous of the civil servants, who until the depression were given more security, higher pay and superannuation privileges, and were accused of wasting the money of the taxpayers. Since state intervention was seldom defended by an appeal to the economics of socialism, "socialism" today to the majority means railways which do not pay and which run late, postal officials who sometimes are short-tempered, inspectors who are worrying the farmer to clean his land or are putting restrictions on the individual in hundreds of different ways. The state is a gigantic purse out of which we would take endless aids; a thief that seizes our savings; a pleasant old lady that is taken in by every beggar she chances to meet; a diplomatist who is able to reconcile free trade, imperial preference, laissez-faire and state industries. The metaphors are mixed, but not more so than New Zealand ideas about the state. Road transport is hindered, licensed and taxed, because it competes with the state railways, but as yet we are not prepared to coördinate all forms of transport under the state. A policy advocated by a responsible journal of cutting down the number of civil servants by a fixed proportion every year might be a burlesque of the average man's attitude to state enterprise. The coal miners are able to rally the Labor movement for a policy of using New Zealand coal only, the seamen attack the American shipping lines, and the doctrine spreads that if everyone is assisted the injury done to the whole by sectional interference will be avoided.
New Zealand is a study in isolation. The Old World supplied the Chartists, the gold miners and the trade unionists who took advantage of the favorable conditions to apply their theories. Hatred of the Old World provided the leaders and the incentives. Streams of immigrants kept alive the sense of wrongs done at home and maintained some contacts with the thought and outlook of Europe. A very large percentage of the Labor leaders and trade unionists came from Australia or Great Britain. Then the make-up of the population changed. More and more the local born is dominating the outlook, and the local born grows more and more homogeneous. We take pride in the fact that we are 98 percent British, but we have no melting pot to keep us alert and to produce new ideas.
The war intensified our imperialism. We have no desire for a new status. Only once have we sent delegates to the International Labor Office, and then our official representative returned to sneer at the work being done there. According to an analysis made in 1931, only five of the 26 I. L. O. Conventions could have been immediately ratified by the New Zealand Government without the introduction of any further legislation. Of the remainder, 7 required merely formal changes in the local law, 5 would involve substantial improvements in the New Zealand standards without raising issues of major importance, while 9 involved both an improvement in standards and important changes in the law. Responsible public opinion has declared that the League of Nations is dominated by Catholics, that it has interfered with missionaries, and that it had no right to criticize New Zealand's administration of Samoa. Our Prime Minister applied to the League the commonplace criticism of our own civil service, that the number of permanent salaried officers seemed to be "growing like a snowball." Isolation has thus intensified the complacency of a prosperous democracy. When we could no longer keep up the pretense that we were independent of world events and ideas, we hoped that deliberate isolation either of New Zealand or of the Empire would keep us safe from the machinations of communists, Americans or Jews. One of the formative influences in the nineties was Edward Bellamy's "Looking Backward;" recently the customs authorities banned his "Parable of the Water Tank." A university lecturer was criticized for writing an introduction to a pamphlet on Soviet Russia. The Minister for Education has attempted to interfere with the expressions of university staffs.
Few of the politicians and business men are able to appreciate the fact that an improvement in world trade is the only method of raising the standard of living even of New Zealanders. Referring to the whaling industry, a Member of Parliament revealed our typical approach to such problems when he said that the foodstuffs being produced from whale oil were a serious menace to New Zealand produce. He considered that it was a matter for the League of Nations to stop the indiscriminate slaughter of whales and make the industry one that would last for all time. If the League could be persuaded to interfere on behalf of New Zealand industries in some such direct way as this, instead of the more remote and more permanent method of raising the standards of all peoples, we would be persuaded that it was worth the £13,000 which we begrudgingly contribute. Otherwise we shall look to the Empire still in an idealistic way, but more and more with a narrow economic squint as to what we can get out of it. Empire trade is the ideal; a tariff against foreign foodstuffs the immediate desire.
Only education and contacts with the world could have saved us; but education we began to despise, and contacts we considered dangerous or unnecessary. Bureaucracy tended to stifle all experiments. A dull mud of uniformity and convention has spread across the land of the nineties that seemed so fertile for young and varied growth. Dr. Condliffe, in his "New Zealand in the Making," writes: "Largely because of the failure of the university to develop even a minority which shall be critical, skeptical and eagerly inquiring, and acutely conscious of ideas, the concepts of social behavior remain nebulous, conservative and largely negative. There is little real freedom of opinion, public opinion is intolerant, and the rebel or even the radical tends to have an uncomfortable time. There are many evidences of failure to evince any real trust in freedom of thought and expression." We expected miracles from education; and when the slump came we blamed education, so that a member of the University Council declared: "I think we are pretty well over-educated as it is. It would not do any great harm if we did without a professor of education." The men who set the standards in culture are the business men, and their main standard is tradition and convention.
And so we drift along, benumbed by former years of prosperity, hopelessly lost amid economic changes, panic-stricken by the depression, afraid of all activity or else losing ourselves in futile currency schemes. We will be the last country to experiment, because we are so dissatisfied with past experimentation.