Interview by Trevor Burnard - Part 1
Michael Bassett discusses his new book The State in New Zealand
1840-1984
Reprinted from History Now
Michael Bassett has had a rich and varied career, both in politics and
history. After completing undergraduate and graduate degrees at the
University of Auckland, he finished a PhD at Duke University.
Returning to
New Zealand in the mid-1960s he combined an academic career with
political
office. His achievements in both history and politics have been
considerable. Elected to Parliament in the 1970s as M.P. for Te
Atatu, he
was a prominent member of the Labour Government of 1984-1990, becoming
Minister of Internal Affairs and Minister of Health. Both before,
during
and after political service he wrote history. He has written books on
the
1951 Waterfront Strike, the Third Labour Government, and the
Department of
Internal Affairs and political biographies of Sir Joseph Ward and
Gordon
Coates. His most recent book is The State in New Zealand
1840-199
(Auckland University Press).
In your new book,The State in New Zealand 1840-1984, you
argue that
New Zealanders have always been receptive to the idea of an
interventionist state and suggest that this willingness to have an
activist state differentiates us from other countries. Why do you
think New Zealanders have liked the State so much?
Donald Denoon argues in Settler Capitalism: the Dynamics of
Dependent
Development in the Southern Hemisphere (Oxford 1983) that new
societies formed largely in the nineteenth century (most, with the
exception of Canada, in the southern hemisphere) showed early
willingness to use the State for experimental purposes. In New
Zealand a degree of planning came with the first settlers. The
Wakefield settlements were designed to replicate a slice of English
life. Because of the prevailing British thinking of the late 1830s
the Wakefield settlements were bigger and bolder in New Zealand than
in South Africa and in South Australia, but like all such social
engineering over time, no more successful. What really drove state
experimentation in each place was the fact that settlers had so little
capital while the infrastructural challenges before them were so
enormous. Only the State could order things as well as have the
capacity to borrow for essential development. Once public authorities
proved their ability to borrow and construct roads, bridges, hospitals
and schools and also to run services such as railways, why stop there,
especially when depression closed in towards the end of the 1870s?
Helping industries to develop, finding jobs for settlers who had been
led to believe they would get them, and assisting with access to farms
and housing followed naturally. Only a small minority of early
politicians had any fixed ideas about the boundaries between public
and private activity, and any reservations were pushed aside in the
rush towards the pragmatic use of the State's powers. Soon a culture
that relied on politicians and put as much faith in the efficacy of
public endeavour as it did in private enterprise had emerged.
What was not understood was that the State could profitably undertake
only limited things when economic times were bad and returns from
exports fell. The public enjoyed the good times (1895-1920;
1936-1966), and supported spending to the hilt. They then could not
understand why it was so difficult to continue such spending when the
world economy turned down. Demands for state intervention always
increased during bad times, ironically at the very time when the
Government's capacity to borrow was reduced, and therefore its ability
to do much that was useful was hobbled. Like many a household or
business, the Government found itself shouldering high overheads and
reduced income. Yet New Zealand's fiercest election campaigns - 1890,
1931, 1935, 1975, 1984 (and 1999?) have always followed economic
downturns when the State's inability to produce miracles was clear.
Re-adjusting one's overheads is always necessary in personal and
commercial situations, but voters have seldom seen it as appropriate
when it comes to the State's obligations. Historically, New Zealand's
voters have always wanted a change of government to make the State
their saviour once more. Lucky governments, such as the Liberals in
the 1890s, and Labour in the 1930s, coincided with a return of good
times and were able to satisfy expectations. They were rewarded with
long terms in office. Others have not been so lucky.
You subtitle your book Socialism without Doctrines. This
suggests
that New Zealanders have had very limited ideological commitment to
theories about the State. Instead, New Zealanders tend to be
pragmatic interventionists. Why is there such a strong
non-ideological bent to New Zealand policy making? Do you think that
State activity has not been driven by any underlying ideological
concerns?
So far as I am aware the term "socialism without doctrines" was first
applied to New Zealand in 1901 by Albert Metin. Others such as Andre
Siegfried writing a few years later also noticed the lack of
doctrinal debate about the use of the powers of the State. Little
has changed since those days. No substantial philosophical
justification for State activity has ever emerged in New Zealand, and
I doubt whether it would have helped matters much if it had. I
confess that I myself have little interest in theory. In my earlier
political days I thought that the State could usefully intervene in
many aspects of the economy and society. Witnessing the lack of
success that resulted from such interventions has caused me to reduce
my belief in the usefulness of the State. If I were asked to define
where the boundary line between state and private initiative should
be drawn it would be rather nearer to the minimalist end than it once
was. But that conclusion results from experience, some of it at
close quarters, rather than from any philosophical belief. Speaking
personally, I would add a moral dimension: it is wrong, even wicked,
to go on promising and doing that which the evidence shows will
almost certainly be costly and futile. If this mixture of
motivations adds up to a philosophy, then so be it. But it is hard
to elevate it to the grand status of a doctrine!
In my view the pragmatism of New Zealanders is one of their most
enduring features. The danger comes from the fact that it has been
easy to intervene; to draw back once an intervention has been proven
foolish is much more difficult. Many peoples' careers can be
adversely affected, if the State changes direction. Such changes
happen all the time in the private sector as industries and commercial
concerns change direction, adopt new priorities, and adapt to the
market place. But the State has proven to be a much less flexible
animal because we feel that it can and ought always to fix problems.
Sometimes, sadly, it can only make things worse: State Mines (1901),
the Government Tourist Bureau (1901), Railway Road Services buses
(1926), many of the activities undertaken by New Zealand Rail itself,
and the establishment of the New Zealand Shipping Corporation (1973)
and Supplementary Minimum Prices for farmers (1978) spring to mind.
With the benefit of hindsight we can see that most or all these
interventions were doomed to failure from the beginning. Has the New
Zealand public learned from these experiences? Sadly, I doubt it. A
willingness to use or misuse the powers of the State seems to be alive
and well.
You stress that while state intervention was necessary and
effective
in the nineteenth century, the state became overly intrusive and state
activity became socially and economically counterproductive in the
twentieth century. Why do you say that? Are your views on the
historical importance of state activity different from other
historians?
The socially obtrusive state accompanied big economic and political
interventions. Liquor, gaming, and censorship laws were tightened
during the First World War when soldiers were overseas, and were kept
in place when peace returned. At first, busybodies wanted to ensure
that those who stayed at home were, like the soldiers, denied good
times. Once passed into law, such controls acquired a wider band of
supporters, some of them the controllers themselves who resented any
thought of change. The recipients of pensions beginning with Old Age
in 1898, Widows in 1911, the Blind in 1924 and Child Allowances from
1927 always wanted more. Striking a fair balance between society's
responsibility to help those in need, and leaving the individual with
a responsibility to make some effort on his/her own behalf, has
always defeated governments. They have simply found it easier to
extend the range of benefits and the level of payment with the result
that the costs of social welfare have gone on increasing steadily
while the Government's income enabling it to pay has fluctuated,
sometimes moving along a steady downwards trajectory.
Introducing
the Domestic Purposes Benefit (DPB) 1973, non-earner benefits under
Accident Compensation Corporation (ACC) 1974 and National
Superannuation (1976) at a time when New Zealand's terms of trade
were adverse was foolhardy. Huge extra costs were piled on to
taxpayers at a time when the country's income was ebbing. Not
surprisingly, inflation took off, something that has always been the
enemy of poor people with small savings. Economic growth slowed.
These days economists argue that when the State's share of economic
activity in a country exceeds 25 per cent of Gross Domestic Product
(GDP)
there is usually a decline
in economic growth which is needed to pay the bills. Since World War
Two the New Zealand State's share of GDP has always exceeded 25 per
cent .
It was 28 percent in 1950, 41 per cent in 1982, and hovers today
around 37
per cent. Not surprisingly, New Zealand's economic growth keeps
falling
behind what
is needed to sustain even a reduced level of state activity.
Consequently our standard of living does not increase as fast as it
should.
In saying these things, my views of state activity are significantly
different from those of most New Zealand historians who seem to
regard the health of the economy as a secondary consideration to the
desirability of keeping everyone in state-provided comfort. Keith
Sinclair, our best-known historian, was unabashedly a welfare stater
who watched the wind-down after 1984 with increasing incredulity.
Many others have written about New Zealand history as though the
steady march forward by the State equated with progress. In some
areas such as the provision of public goods - roading, railways,
electricity production and reticulation, state housing - the State
was an engine for progress. In other areas its interventions have
been much less successful (State Mines, Government Tourist Bureau,
Railway Road Services), and in the cases of the Shipping Corporation,
the introduction of Supplementary Minimum Prices, and the Think Big
energy schemes of the late 1970s and early 1980s, downright
disastrous. Far from New Zealand's history of state intervention
being one of steady upward progress, it has been one of successes and
failures, much like the record of many a private company out in the
market place.
Has your experience as a high level cabinet minister given you any
special insights into the functioning of the state? Has your
political service changed how you write history?
Yes, my fifteen years in Parliament including nearly six as a Cabinet
Minister, three of those in the major social portfolio of Health,
certainly gave me insights into the functioning of the State. I
concluded that many historians and political scientists have an
overly simple and romantic view of the political process. For
several years I was Minister of Health and my wife was an elected
member of the country's biggest hospital board. I was in a unique
position to witness what happened to the money which the minister
passed on to the board. I realised that in all too many cases the
money was being wasted. Understanding that from every million
dollars given by the Government to a public hospital board about
$900,000 of it was paid out in salaries to providers with little
guarantee that the patient for whom the services were designed
received any tangible benefit, convinced me that the State had lost
sight of its basic health goals. With the assistance of an
uninquiring media, the deliverers of many state services had taken
over much of the welfare state from the intended beneficiaries. The
political process had been perverted. Moreover, many politicians
came to believe that they were helping patients, students or
beneficiaries, when in reality they were helping the providers of the
services and allowing these providers to make policy - often in their
own interests. My optimism about the potential for good in state
action revealed in my book The Third Labour Government (1976), and in
some of my essays in Getting Together Again (1979), has been
gradually replaced with a much greater cynicism about the ability of
the State to produce beneficial outcomes for the public. While the
State must always set standards and ensure that those who can't
afford good education and health care get it, that doesn't mean that
governments and their employees are the best providers. History
shows us they are unlikely to be.
Read NZine next week for Part 2 of this interview in which
Michael
Bassett discusses the effect of his involvement in the 1984-1990
Labour
government on his view of the state in New Zealand, the interactions
of
Maori with the state, the impact on New Zealand history of important
impulses in American history, and his choice of topics for his books
on New
Zealand history.
