New Zealand Economics/Importance Of Understanding These Interpretations

“Those who cannot remember the past are condemned to repeat it."			- George Santayana (1863 - 1952)

It is necessary to understand NZ’s changing economic landscape and its interpretations: not only do they shape our life chances, choices, and experiences, they influence politics and policy-making profoundly. Without an understanding of the collapse, without an empirically-supported interpretation of the resulting economic changes, we are doomed to repeat mistakes made by those before us.

Keynesian interpretation is used to contrast and critique monetarism, and although official policy debate centres around the choice between monetarism or Keynesian answers, the Marxist interpretation also provides criticism, focusing not only on monetarism’s damaging effects, but also on capitalism’s propensity to generate conflict, inequality, and crises.

To fully appreciate class conflict in NZ, one must understand the economic history. Without comprehension of increasing labour productivity in the 1950s and 1960s, one cannot appreciate the lack of industrial action due to employers’ economic growth ability to increase real wages, coupled with labour shortages. The cessation of rising labour productivity meant real wage increases could only be gained at the cost of declining profit rates. The industrial conflict of the late 1960s and 1970s is therefore intrinsically linked to changing economic conditions.

Similarly, with respect to female participation in paid employment, one must understand the way in which employment conditions have changed to in order to comprehend gender-specific differences in employment and the women’s movement that arose in the 1970s. Likewise, for a thorough understanding of current Maori affairs, one must be aware of the rapid urbanisation of Maori into predominantly-working class occupations caused by labour shortages in the 1950s and 1960s, and the amplified effect, therefore, of the neoliberal reforms.

Interest group activity, the basis of pluralist theory, changed markedly due to economic fortunes. Business associations and trade unions were content with Keynesian economics whilst it served their purposes, but as things soured, business associations heavily pushed a neoliberal agenda. The monetarist hegemony of the higher echelons of policy analysis and development led to the adoption of neoliberal ‘structural adjustments’, and has had a profound impact on policy and policy-generation. Treasury’s ability, along with business associations such as the New Zealand Business Roundtable, to generate and maintain neoliberalism as the prevailing economic school of thought is of concern to political scientists, and the pluralist political orthodoxy.

Changes in the economic landscape of New Zealand have had colossal effects, and an understanding of these changes, and the theoretical interpretations of them, are integral to understanding a diverse and expansive range of issues relevant to every person – today, and in the future. If we do not analyse and understand what has led our world to be what it is, future generations may themselves be condemned to repeat our mistakes.