The article below first appeared in the left-wing fortnightly paper Socialist Action, vol 7, #16, 1975. While 40 years old, it certainly retains its relevance as ‘kiwi nationalism’ remains hegemonic on the NZ left – even the author of this excellent critique of it eventually succumbed himself. While Keith is now a Green liberal-nationalist, his 40-year-old article remains a solid critique of NZ left-nationalism in its political and economic forms.
by Keith Locke
The question of nationalism has traditionally caused a great deal of confusion in the radical movement, and it is easy to see why this is so. Almost from birth we are bombarded with NZ chauvinism. We are taught to look up to the flag, sing songs like ‘God Defend New Zealand’, and to identify with other New Zealanders (be they businessmen, farmers or workers) as opposed to people from other lands. And if it comes to war, we are automatically expected to fight on the same side as the NZ government. NZ is a great little country, our rulers tell us; an egalitarian country where the economy functions for the benefit of all. Building it is a team effort, they say, and we should all pull together and think twice about goibng on strike. We are brainwashed that pakeha New Zealand culture and ways are superior to those of other ethnic groups in NZ – be they Maoris, Pacific Islanders, Chinese, Indians or British.
NZ radicals have generally learnt enough about the true state of affairs to reject at least some of this chauvinism, and to understand to some degree its function as an ideological prop for the privileged rulers of this country. But most radicals still retain some nationalism, particularly in the form of a feeling that something is wrong with foreign capital; that it is somehow worse than New Zealand capital. This inclination has been reinforced by the example of revolutionary struggles in the under-developed world (most recently in Indochina) in which national demands have been very prominent.
I wish to explain why nationalism was, and is, a p[rogressive force in the neo-colonies of Asia, Africa and Latin America, and yet is a reactionary force in a developed capitalist country like New Zealand.
Nationalism vs feudalism
We should look at this question historically. Nationalism did play a progressive role at the beginning of the capitalist epoch, when the rising capitalist class was fighting to displace the feudal order in Europe. As Lenin said in 1915, “One cannot be a Marxist without feeling the deepest respect for the great bourgeois revolutionaries who had the historic right to speak in the name of ‘bourgeois fatherlands’, who aroused tens of millions of people of new nations to civilised life in their struggle aganst feudalism.” In order to succeed, emerging capitalism needed to establish unitary states, with a common monetary system and a common language. This required the ideology of nationalism.
The new capitalist nations also required political democracy, through parliaments in which the overall interests of the capitalist class could be hammered out. They also needed land reform. The feudal or more parasitic forms of land ownership had to be overcome if agricultural productivity was to be increased, to create a larger national market for industrial production, and to ree up money and labour for capitalist development. To achieve these taks was the progressive function of bourgeois nationalism in the world historical sense. But with the completion of the last bourgeois revolution in Japan in the 1880s, bourgeois nationalism changed from a spur to social development into its opposite.
The logic of capitalist competition was such that these new capitalist states became imperialist states, their industries grew in size, became monopolies and extended their operations throughout the world. To maximise return on overseas investment, it was in the interests of the imperialist countries to prevent the more backward countries going through the process of a classical bourgeois revolution.
For many years these poorer countries were prevented from obtaining even formal political independence, and some have not yet obtained it. Even when independence was granted, foreign investors continued to play a determining role in the country’s economic and political affairs. To maintain this hold, the imperialists could not allow the full flowering of political democracy. This is why there is not one stable parliamentary democracy in the under-developed world, despite the fact that it is the norm in the imperialist countries.
Under imperialist control the economic growth of the neo-colonies is stunted and distorted, with foreign investment concentrated in areas bringing the best short-term return. The foreign investors have been in league with opponents of land reform because it means they can maximise exploitation on their own plantations and farms, and because they are not oriented to developing a national market within the country for their products. The nature of the foreign investment is to produce raw materials (or sometimes finished goods) for sale in the imperialist metropolis. Also, for those trying to hold a people down and keep wages low, the forms of rule favoured by the landlords and oligarchs are most useful. Commonly, this involves the suppression of the national language and culture of the people.
In the neo-colonial situation I have outlined, it is progressive to wage struggles for national demands: for real independence and political democracy, for land reform, and for language and cultural rights. It should be borne in mind, however, that because of the chronic weakness of the native bourgeois forces in these countries and their close ties with the imperialists, these national demands cannot be fully realised within a capitalist framework, but only through a socialist revolution.
Now to come back to New Zealand, I think we can clearly establish that NZ is an imperialist nation, not a neo-colonial one. Its local capitalists exercise clear control over the state through stable parliamentary institutions. The ecponomy has not been distorted as in an under-developed country (which is not to say that NZ is a typical industrial country either). Land reform has not been held back: in fact NZ agriculture is more modern than European. New Zealanders are not super-exploited. Until fairly recently, they had abut the highest standard of living in the world outside North America. The majority language and culture are not suppressed. To the contrary, the pakeha rulers use kiwi nationalism to denigrate Maori and Island language and culture.
New Zealand plays an imperialist role, both politically and economically, in the Pacific. And in Asia, NZ acts as a supporter of world imperialist interests. We saw it in Vietnam, and we see it today in Malaysia and Singapore. In summary, NZ is an imperialist and oppressor nation, and any ideology which says its capitalists have some positive features (and nationalism is such an ideology) is reactionary. It acts against the interests of the people being oppressed and confuses workers as to their real class interests.
Now I want to reply to some of the common arguments on the extent of ‘foreign control’ over NZ, and its dangers. Statistics show how foreign interests have significant holdings in this cluntry’s banks, finance houses and manufacturing establishments. About 30% of company income in NZ comes from foreign-controlled firms (these being officially defined as having 25% or more foreign shareholding).
But these statistics do not mean that the NZ capitalist class is not in control of its state, or that it is even challenged for such control. The simple fact is that within an imperialist state like NZ there is no basic conflict of interest between NZ and foreign investors. They work harmoniously together. Recent figures show that of the top 63 companies in NZ, only 4 have no foreign ownership – half of these 59 have a predominant NZ shareholding and half have a predominant overseas shareholding. The reason for this prevalence of joint shareholding is simply that NZ is a small clountry and its caitalists are smaller fish than those in other lands. They need foreign technological and capital assistance if they are to set up the most efficient and profitable ventures.
Successive capitalist governments in NZ have understood this reality, and have often combined with foreign investors to help out the local lads – as was the case with Tasman Pulp and Paper, for example. Within this harmonious relationship, the foreign investors are quite happy for local capitalists to control the state. The locals know the NZ situation, they reason, and are better placed to ensure a good and stable climate for business. As an independent country, NZ does have certain conflicts with other imperialist countries (over meat quotas etc) but this is different from a conflict between investors here in NZ. For example, all the NZ meat works (be they British or locally-owned) want easy access to the Common Market.
Is New Zealand losing out?
Some people say that New Zealanders are losing out because of all of the money leaving the country in the form of profits for foreign investors. However, if we look at the national figures from 1950/51 to 1970/71, we find that the net capital loss was only $58 million, orless than $3 million a year. This is minuscule in the scale of the NZ economy and in comparison, for example, with the interest paid on the government’s overseas loans. This shows that foreign investment in NZ is not of the same type as in the under-developed world, where it is predominantly for a large gain in the short term.
Even if the figure for net repatriation of profits was higher it would not mean much to NZ workers. Under capitalism profits simply flow to wherever the capitalists happen to reside. Workers are being skinned the same way, whether the profits go from the South Island to Auckland, from NZ to the USA or from the state of Tennessee to New York City.
Another criticism is that multinational operations cause economic instability in countries like New Zealand. That is, money, and even whole plants, can be shifted out of the country during an economic downturn. Of course, it can’t be denied that this occurs to one degree or another. In an interdependent capitalist world, if the NZ economy weakens relative to others, then money tends to flow out in the form of import payments, interest on government loans, and private capital. The extent of foreign capital in the economy has little to do with the size of this flow. And are foreign capitalists really more likely to shut down plants? A recent nationalist publication, Foreign Control Watchdog #1, correctly points out that multinationals usually have greater credit resources, and can ride out a bad period that might have sunk a locally-financed company. We can see this in NZ today where the compabnies folding (and potentially putting people out of work) are NZ groups like Cornish, JBL and Matai.
Another myth is that overseas interests get a better deal from the government, the case of Comalco commonly being cited. But if Comalco had been NZ-owned it would have got the same deal, the reason being that the NZ government is obsequiously pro-business. To see this you just need to look at the huge sums NZ businessmen get in the form of export incentives and regional assistance. Watties gets a handout for building a pea factory in Gisborne and NZ Forest Products gets trees from the NZ Forest Service at absurdly low rates – and they will be handed the West Coast beech forests too if the environmental movement is not strong enough to prevent this happening. An additional form of assistance is provided through the bogus foreign control regulations, the main function of which is to give the local businessmen a cut in new foreign-financed ventures. That is, to give them a share of the loot.
Are foreigners worse employers?
Another myth is that NZ workers get a worse deal from foreign businesses. This came up when a North American firm wanted to take over the processed cheese industry. A radical monthly, The Paper, opposed the takeover on the grounds that Kraft was greedy and had poor union relations. That is really miseducating workers, to say that some caitalists are preferable to others. It betrays a lack of understanding that any capitalist is in business simply to get what he can out of it. In fact, it is the smarter capitalists who have good industrial relations, and who are therefore able to get their workers to produce more.
According to figures provided by economist R.S. Deane, foreign-owned firms in New Zealand actually pay higher wages than locally-owned ones. This is not because they are more benevolent. Foreign-owned firms are usually more modern with a more skilled workforce, or they are larger in size and have a more organised body of workers that can extract higher wages.
Some critics of multinationals actually favour smaller businesses. Thisn is reactionary because it means turning the clock back to a situation where the workforce is more fragmented.
Another unfortunate argument, for which no proof is offered, is that NZ’s pro-imperialist foreign policy is due to, or at least helped along by, the presence of US and British companies here. This covers over the fact that New Zealand fought in Vietnam because its own capitalists saw the need for an international imperialist offensive against the Vietnamese revolution. They didn’t need their arm twisted by foreigners.
Others have argued that NZ nationalism is progressive in that NZ is at least partly colonial, because it relies heavily on agricultural exports. In fact, NZ originally developed as a colony of Britain, not as a region for super-exploitation, but as a settler-based extension of the British economy. This economy was based upon modern agriculture and a workforce more highly-paid than the British workforce. (And NZ is now almost as urbanised as Britain).
It is true that New Zealand is having, and may continue to have, problems with the terms of trade for its agricultural products. But the solution is not what some nationalist economists like Wolfgang Rosenberg and Brian Easton have advocated, to cut down on foreign capital and imports and move rapidly in the direction of self-sufficiency. The proponents of such a course admit that it would require sacrifices by NZ workers, and the Campaign Against Foreign Control in New Zealand (CAFCINZ) concedes in its programme that “the development of NZ by the NZ people may be slower than when foreign companies are involved”.
Peter Lusk, writing in the December 1974 issue of The Paper goes even further. Regarding the export of Mt Davey coal he comments, “we should work towards lowering our own material standard of living and keep most of the coal in the ground.” I think the Mt Davey issue also demonstrates how easily NZ nationalism can become chauvinism. Some radical publicaations have said that the coal should not be used by Japanese but by New Zealanders and they reinforce their argument with racist cartoons of Japanese with big teeth etc.
Not our economy
As far as working people are concerned, the NZ economy is not ‘our’ economy. As long as workers have profits made from their labour, and have no real say in planning economic decisions, they should not be expected to take responsibility for the economy. They should not accept any cuts in their living standards, regardless of how this is said to affect the health of NZ business, the balance of payments, or the amount of capital available for investment.
It’s not the job of socialists to go around giving advice as to how New Zealand could develop into a self-sufficient capitalist society, with socialism somewhere in the never-never. NZ society contains a lot of injustice, but it won’t be lessened or eliminated if we give ground to those who are mainly responsible for the situation – that is, our local capitalist rulers.
Further reading: New Zealand – neo-colony or junior imperialist?