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Eco-Economy: From Socialism To Usury


The New Zealand Left's Journey From Socialism To Usury

By Les Hunter

Around the world, the political scene is remarkable because of the proliferation of parties of the right.

Polls suggest that the National Party is being squeezed and is unlikely to gain sufficient political traction to displace Labour as the 'natural' government of New Zealand. Concurrently, a political vacuum has come to exist on what has traditionally been seen as the radical left committed to thorough reform.

Within the democracies, the social democratic parties that evolved as the radical political force in an industrial socio-economic environment have transmuted to become the predominant conservative force of a quite different system - the usurious.

The New Zealand Labour Government led by Helen Clark and that of Tony Blair in Great Britain provide examples. Like its New Zealand counterpart the National Party, the British Conservative Party is facing an identity crisis.

Historically, whenever there has been a transmutation from one socio-economic system to another, what constitutes the established political left and right has had to change dramatically. Something akin to a polar magnetic reversal occurs.

Such applied when the slave and serf-based economies collapsed and an aristocracy collecting land rents took control. Particularly in Europe, another political reversal occurred when the industrialist - from the mid 18th century - progressively wrested socio-economic power from the landlords.

As the left of industrial society, the core concern of those happy enough to be identified as socialists is industrial profits. By and large, industrial profit is no longer the significant source of income of the powerful and privileged.

Beginning in the late 1960s, New Zealand has been on the cutting edge of change from an industrial to the usurious. The structure of the GDP indicates the extent of change.

The proportion of New Zealand's GDP designated as finance is now much greater than that attributed to manufacturing and four times that assigned to agriculture. If it were possible to tease it out, the key indicator would be the extent to which true profit income has been exceeded by the passive income from interest and as the consequence of cashing in on asset inflation. Of course, income to be had from renting agrarian land is now virtually zero.

In New Zealand, the blurring of the political line between the industrial left and right became increasingly evident after the Second World War. Labour abandoned the Marxist objective of nationalising the means of production, distribution and exchange. National - as an amalgam of pre-existent parties of the industrial right - first fought the 1938 election and in accepting the Keynesian (1936) demotion of classical economic doctrine, moved more to the (industrial) political centre.

Keith Holyoake, Prime Minister of New Zealand between 1960 and 1972, described the Keynesian policy of his conservative National government as 'steady as she goes'. The perception remained that any call for fundamental change to the prevailing industrial order would come from the socialist left, represented in the New Zealand parliament by the Labour Party.

However, as an opposition, Labour had nothing of a radical nature to say. Any difference between the two parties became more one of perception as to which could best fine-tune what was clearly enough an evolving industrial system. For some forty years, National succeeded in projecting itself as New Zealand's 'natural' government. Social Credit offered something of a challenge but eventually failed because of a lack of credible theory to underpin the policies of monetary reform it claimed to espouse.

Today, New Zealand's Labour government's conservative commitment is virtually identical to that of the National Party in its post Second World War heyday. However, Labour's conservatism relates to the quite different socio-economic system deregulated by David Lange's Labour government elected in 1984.

Ironically, the monetarist and free-market policies promoted by Roger Douglas as Labour Minister of Finance were indeed radical - but at the opposite end of the political spectrum to that believed to be occupied by his Party. His policies removed the restraints denying an emerging Establishment (at the time, accurately enough labelled the New Right) from exploiting the opportunities increasingly made available by market driven interest rates and cashing in on asset inflation. Labour remains politically committed to maintaining the status quo.

The New Zealand 2002 election consolidated what in fact was a revolutionary shift to the political right facilitated by the 1984-90 Labour government. Today, Labour occupies the centre right; Act the extreme right with National squeezed 'somewhere' in between.

New Zealand First attracted attention as a right-wing opportunist party. The United Party could in no way be called socialist and yet, somewhat unexpectedly, garnered a sizeable radical vote - the result of those dissatisfied with the status quo concluding they had nowhere else to go. The Greens are difficult to categorise since those whose major concern is the environment are to be found on both the political left and the right of any practical political alignment.

As the recognised conservative force of the day, Helen Clark continues to convince electors that Labour has superseded National as the natural government of New Zealand.

Into the 21st century, any meaningful political left must be committed to monetary reform. The present dangerous vacuum that exists on the left cannot be filled until this happens. Paradoxically, the radical left of a usurious system will come out of what continues, erroneously, to be seen as the industrial centre right over which National predominates.


- Les Hunter is a member of the Committee on Monetary and Economic Reform and author of the book Courage to Change - A case for monetary reform (available at Email:

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