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Class Struggle 98

Class Struggle 98

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Published by: davebrownz on Feb 15, 2012
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Class Struggle 98 November 2011 / February 20121
Class Struggle 98 November 2011 / February 20122
NZ: Time for decolonisation!
The debate about foreign ownership is mainly about who owns and controls NZ’s economy. It islinked to another debate about rising social inequality. For the NACTs [National/ACT Govt] and theNZ comprador ruling class NZ’s growth had always been determined by its ‘dependency’ on Britain,the US and Australia. The best NZ can hope for is to be competitive in the global economy so that‘growth’ will enrich the compradors and buy off working class discontent. For the left the issue hasalways been economic independence; how to become self-sufficient and egalitarian in sharing thenational wealth. But it is a myth to say that NZ has been decolonised, egalitarian and even‘imperialist’. NZ was always foreign owned and controlled since its European settlement. Inequalityin NZ cannot be understood unless you understand why NZ is acapitalist semi-colony. The colonialinstitutions have become semi-colonial institutions. NZ is formally a sovereign nation yet its semi-colonial dependence is even more obvious today than any time in its history now that China looms asan emerging imperialist power. NZ’s decolonisation is still ahead of us. Our task is to fight for thatindependence, not as a capitalist nation, but as asocialist republic. 
Simon Collins series of articles in the
provides plenty ofevidence for the social effects of rising inequality in NZ. Weget first hand information about the extent of poverty and itsimpact on health, education and on the lives of the poor. Thefirst article reported Dr Fiona Cram’s research that showsthat, despite the ravings of Michael Laws about ‘feralfamilies’, poverty and discrimination are the main causes of‘Maori Child Abuse’. Collins claims that inequality is recent.This is the result of historical amnesia. The post-war boomrevived the myth of NZ asegalitarian, founded bythe liberals in the 1890s.Fabian reformers like WPReeves Labour Minister infirst Liberal Governmentof the 1890s andsocialists like HarryHolland, leaders of theFirst Labour Governmentin the 1930s, are cited asthe epoch-making giantsof social democracy thatallowed NZ to abolish theevils of social classes.In reality, NZ was alwaysan unequal society and the 1890s and 1930s were but shortbursts of social reform in an otherwise bleak history of racialand class inequality. It has taken the period since the 1970sto reawaken NZ to the existence of classes, and the continuedimpoverishment of many working class families. This isbecause crises are the norm in NZ. The first was the LongDepression of the 1880s which brought the colony to virtualcollapse and a Liberal Government backed by workers andlandless farmers stole millions more acres of Maori land tosettle the landless and expand the mines. The second was theGreat Depression of the 1930s that saw the realunemployment rise to30
and thousands of poor farmerswalk of the land. This brought the Labour Party togovernment for 14 years on a program of economic regulationand protectionism. The current crisis began in around 1973during the Third Labour Governments term with the oil crisis.This brought the post-war boom to an abrupt halt and provedyet again that the booms were hot air balloons in the longdownturns in NZ history.
End of the Postwar Boom
But this time the downturnwas more permanent. NZhad exhausted its ability todevelop behind tariffbarriers to protect localmanufacturers fromoverseas competition.Local firms like Wattiesand Fletchers were nownational monopolies andhad to expand offshore ordie. Foreign branch plantslike Borthwicks, ICI andLever Bros were dominantin their sectors anddemanding the right torepatriate profits to theirmultinational headquarters. The global downturn in pastoralexports now converged with the demand by capital to openup the economy to the global market. NZ manufacturing hadoutgrown the local market and to survive had to competeinternationally. The National Party under Muldoon had trieddesperately to insulate the economy from the global crisisand globalisation. Then as if to prove that the Labourite‘classless society’ was a myth, it was the Labour Governmentthat was forced to undertake the shock therapy of killing offits own protectionist heritage. This proved that historicallythe ideal of class equality was always dependent upon thecapitalist class profitability. Equality was a luxury that onlythe bosses could afford.
Class Struggle 98 November 2011 / February 20123
The rise in inequality that resulted from Rogernomics,Ruthonomics and the return of National to office in 2008,proved beyond doubt that NZ remains essentially a semi-colony in which the imperialist powers plunder raw materialsand labour power to extract their super profits. NZs economyis devoted to ‘rip, shit and bust’ - ripping out raw materials,depositing shit across the rest of society, and going bust as itgets deeper in debt. Its role is as a provider of raw materialsand food for the imperialist countries. The period between1935 and 1970s when NZ was a ‘rich’ country is an aberration.Economic nationalism was always a temporary refuge inresponse to depression and war. The 100 years before 1935and the 40 years since the oil shock of 1973 proves that in thelong run NZ is a weak, dependent semi-colony on Britain, theUS, Australia and now China. That’s the story. It explains why‘protectionism’ was short-lived so that since 1973 NZ hasrapidly slid down the developed OECD countries league intoso-called ‘third world’ status.
Semi-colony inequality
The definition of a semi-colonyis a country that is owned andcontrolled by imperialism butwhich is politically sovereign orindependent. But what doespolitical sovereignty amount towhen the key sectors of theeconomy are foreign ownedand controlled? It means thatthe nation state is nothing butthe agent of imperialism andthe national capitalist class acomprador class of agents ofimperialism. That means thatforeign capital owns the keysectors of the economy. Thevalue that is created by the working class is largely exportedas profits. The biggest drains are the Big four Banks owned byAustralian banks which made$32billion in profits in 2011.Brian Gaynorreports:
“The Bank of New Zealand was sold toNational Australia Bank (NAB) for $1.5 billion in 1992. Since then BNZhas distributed $5.2 billion in dividends to its Australian parent and isnow worth an estimated $7.2 billion based on its 2010 net earnings of$602 million and a price/earnings ratio of 12. Thus NAB paid $1.5billion for BNZ and the latter has delivered total shareholder value of$12.4 billion to its Australian owners since late 1992. .. Telecom wassold to overseas interests for $4.25 billion in 1990 and since then hasmade distributions to shareholders, in the form of dividends andcapital repayments, of $14.6 billion... an estimated $8.8 billion ofthese $14.6 billion distributions went to overseas shareholders.”
Gaynor summarises the situation
“A prosperous free enterpriseeconomy is based on a high domestic savings rate and a strongproductive sector that is well governed and mainly domesticallyowned. Australia and other above-average growth countries havethese characteristics but New Zealand doesn't. Our low savings rateand under-investment in productive assets have hindered long-termstability and growth. For example, almost all the assets owned by the10 largest ASX listed companies at the end of 1987, which had BHP inthe top spot and Westpac at number 10, are still Australian-owned,whereas our largest listed companies at the end of 1987 were asfollows: Fletcher Challenge (paper, forest and energy assets inforeign ownership), Brierley Investments, NZI (Australian-owned), NZForest Products (Graeme Hart-owned), Bank of New Zealand,Petrocorp (bought by Fletcher Challenge and on-sold to overseasinterests), Lion (Japanese-owned), Carter Holt Harvey (Graeme Hart),LD Nathan (merged with Lion and now Japanese-owned) and RobtJones Investments (Hong Kong-owned). Almost all of the assets ownedby the next 10 largest NZX companies in December 1987, with thenotable exception of the pre-split Fisher & Paykel, are also overseas-owned. These include Magnum (with its major operations DominionBreweries and Countdown supermarkets now foreign-owned),Progressive Enterprises (Australian-owned), Wilson & Horton(Australian-owned) and INL (assets sold to Fairfax).”
So it’s this foreign ownership that determines the relationsbetween classes in NZ. Income or wealth inequality is asymptom of this. The ruling class wealth increases in relationto its role as agents of international capital which requires NZto be competitive. This means cutting costs, at all costs. Theold class of national industrialists like Fletchers, Watties, LionBreweries, Fisher and Paykel etc have been replaced as thedominant fraction of the ruling class by the upstart vulturecapitalists, notably Brierley, Fay and Richwhite, Bob Jones,Alan Gibbs, Infratil’s Morrison, and CHH’s Hart, who haveasset stripped uncompetitive firms and restructured them asinternational corporations. The second rank comprises thefinancial and property parasites who speculate on alreadyproduced value. Most of their combined wealth is investedoffshore and is part of NZ’s biggest exports – profits. So whileNZ industry has beenrestructured it is mainly atthe expense of the workingclass.Jobs, wages, taxes, socialspending all have to be cut.As industry is restructuredplants are closed down andmany jobs are lost.Government legislates forreforms to implement thesecost cuts. Thus since thederegulation of the economyunder Labour in the 1980s wehave seen these policiespursued by every government, cementing in the ‘openness’ ofthe economy. None of this was a surprise and waspredictedby Marxistsin the 1970s and 1980s. Today, it is an indictmentof the lack of any serious political left in this country that a
NZ Herald 
journalist Simon Collins has to rediscover thecolonial causes of inequality in a series of articles. Yes it iscolonisation that is the structural cause of poverty anddiscrimination andMaori child abuse. 
Social Democracy bankrupt
That the Labour Party is now a Blairite party is evident inDavid Cunliffe’s comments on Collin’s articles. He criticisesCollins for not coming up with solutions.Cunliffe’ssolutionsare a tame recycling of Blairite reformism. It boilsdown to NZ becoming more ‘competitive’ which means thatworkers have to be even more exploited. This is a recipefor increasing inequality as theshare of value expropriated by the capitalists compared to that retained as wages bythe working class constantly increases.Revolutionary communists argue that social democracy isbeingexposed as bankruptby the global economic crisisand will split as the left leaves the bankrupt Labour Partyto join a new revolutionary Workers Party. Workers of theworld are ready for revolution. All we need is therevolutionary party and program that opens toroad tosocialism.

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