The Development of Capitalism in New Zealand: Towards a Marxist Analysis

John Macrae and David Bedggood

First published in Red Papers, 3, Summer 1978/79


1.0 Introduction

In this paper we present the outline of a Marxist analysis of the development of capitalism in New Zealand. Given the circumstances under which we are working, it is obvious that much that will be covered requires further research and further thought. Nevertheless, it reflects a point in the evolution of our thinking. It also repre­sents therefore as much a project of research as a definite statement of progress.

We shall show that N.Z.'s "national development" has been determined by its role as a semi-colony (white-settler colony or "colony proper" as distinct from colony) within the world-wide division of labour under capitalism. In taking this approach, we are engaged in theoretical class struggle against bourgeois conceptions of the causes of "development" which focus on there appearances and 'isolated instances' which are taken to represent the total social reality.

The method employed is that of Marx and Lenin, together with some reformulations and extensions of their work, which seeks to understand the working of the Capitalist Mode of Production (CMP) in terms of certain "laws of Motion" which operate not in any vulgar deterministic sense, but as a complex "structural causality" determined under spec­ific historical conditions of class struggle. Adopting this method, we intend to demonstrate its power in explaining the development of capit­alism in N. Z. as a complex inter-relation of economic, political and ideological causes which are determined in the "last instance" by the historic expansion of the CMP into the lands of white-settlement in the nineteenth century.



1.1 Modes of Production and the Social Formation

In this section we set out the basic concepts used in our analysis, essential for the understanding of both the structure and evolution of N.Z. capitalism. The core element of structure which we adopt is Marx's concept of a Mode of production. A Mode of Production consists of an economic base or infrastructure, made up of two elements, forces of production - signifying the level of development of the technology of production, the extent of the division-of-labour in the production process, and the embodiment of scientific knowledge – and the relations of production - referring to the social circumstances of individuals who cane together in the process of producing and approp­riating use-values. Relations refer to relations of production in three senses: legal ownership (e.g. shareholding), real ownership (execut­ive control etc), and possession (e.g. physical operation of the process of production). Of the two elements comprising the economic base, it is the relations of production which are dominant in the form

of "class struggle" as the ''motor of history". Overlying the economic base in any mode of production is a superstructure comprising political, legal and ideological relations. Both base and superstructure make up the total structure of a mode of production (Marx, Preface, Marx and Engels, German Ideology, 41-62; Althusser, Essays, 201-8).

A mode of production is an abstraction. It is not directly observed; it is not an appearance. Rather it is the product of the Marxist abstraction of the' relevant' structure underlying the main features of the world is seeks to explain. The real world of human relations is not immediately given nor understood by simply observing everyday behaviour in the marketplace or the boardroom - were any 'social scientists' interested. It can only be reconstructed as knowledge of the laws which govern these relations. A Mode of Product­ion therefore does not describe any actual society existing in recorded history. As a concept its purpose is to abstract those basic characteristics common to all actual societies, and to show how any given society can only be understood by means of such a concept.

In applying the concept of a Mode of Production to actual societies, Marx put forward another concept, that of a social formation In contrast to the superficial and unscientific bourgeois concepts of 'nations', countries' or 'societies', a social formation is defined as a site of the concrete existence of one or more modes of production, under the dominance of the most' advanced' mode. In almost all cases, social formations will be made up of a complex articulation of modes representing a complex pattern of inter-relations expressed at the level of appearances as a 'unique' pattern.

Thus the contemporary N. Z. social formation as we define it can only be understood in terms of the articulation of various modes of production: the CMP in N.Z., together with the residual elements of the pre-capitalist Maori social formation (an example of a lineage mode of production), and the evolved form of the peasant-family sub-mode, but under the dominant influence of the world CMP mediated through its agents in N.Z., the national bourgeoisie. We insist that the concept of the N.Z. social formation has to be constructed as the end-product of the application of the Marxist method, and is not drawn out of the air as are the bourgeois figments of 'nation', 'N.Z. Society' or N.Z. population. We reject, in short, the method of political economy which starts from the outward form (e.g. the size of the population) and is forced to fumble into more and more meaningless generalities (the population's skills, its social composition, the concept of a family etc.). On the contrary, we begin from the abstract and use this to explain the meaning of the concrete level of appearances (Marx, Grundrisse, 100) .

[Note : The concept 'mode of production' is a highly contentious one. We use it as an abstraction capable of differentiating distinct 'social forms' of production according to "different forms of the appropriation of resources, or means of production, and of the product itself". Thus the concept is neither a schema emptied of historical content, nor an actual historical social formation. It is an analytic tool enabling us to look beneath the surface forms in any society and determine the 'organising principle' - that of the reproduction of the material means of existence (production) - of that society.]

Against the apologetic vision of the (political) economists, namely the harmony of interests, materialist analysis is dialectic; it insists on the primacy of contradiction built into the concept of structure. Now, the very existence of a structure presupposes the reproduction of that structure within a social formation. A mode of production (or any articulation in a given social formation) is not a stable equilibrium, but a system in which contradictory forces are constantly in opposition. The principal contradiction in any mode of production is between the forces and relations of production ­crudely between the forces of material progress and the 'class' appropriation of the materials produced - which generates 'class struggle'. The reproduction of a mode of production therefore is the reproduction of its conditions of existence, namely conditions which contain the class struggle, but which also constantly reproduce class struggle. It is in this sense that Marx describes the CMP as a "unity with contradictions" (Grundrisse, Introduction). It also signifies that class struggle necessarily takes place within the superstructure as well as at the level of productive relations.

In contrast to the fragmented and superficial approaches of the bourgeois writers, the concept of the underlying "laws of motion" we advance is that of a complex structural causation which signifies that the reproduction of any social formation will involve the complex interplay of historical and contemporary circumstances, and also the interplay between the base and political and ideological levels of the superstructure. Despite the complexity of these relations as they operate in the case of the N. Z. social formation, we propose to trace this process of complex structural causation in order to demonstrate the primacy of the economic base in determining in the "last instance" the relations at the level of the superstructure. It is important to recognise that the dominance of social relations as expressed in the concept of determination in the' last instance' is in the final analysis, that of class struggle. In this, we follow the position of Althusser:

The capitalist social formation, indeed, cannot be reduced to the capitalist productive relations alone, therefore to its infrastructure (economic base). Class exploitation cannot con­tinue, that is, reproduce the conditions of existence, without the aid of the superstructure, without legal-political and ideo­logical relations, which in the last instance are determined by productive relations.. .and since the production relation is a relation of class struggle, it is the class struggle which in the last instance determines the super-structural relations, their contradiction, and the over-determination with which they mark the infrastructure (Essays, 203-4).

In other words, while the superstructure has a 'relative autonomy' from the base, this is determined within the limits set by the need to reproduce the conditions of existence of the dominant mode of production. Once these conditions begin to weaken or breakdown, we enter the whole new question of the transition from one mode of production to another (Bettleheim, Class Struggles).

What we shall be attempting to illustrate is new this pattern of structural causality, including the relative autonomy of the superstruct­ure within limits determined in the 'last instance' by the base, operated in the case of the N. Z. social formation. This means first, determining the specific economic form in which exploitation occurs, and how this relates to the corresponding form taken by the state etc. Marx has stated the logic of this approach very clearly (cf. Althusser, Essays. 175-187).

The specific economic form in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows directly out of production itself, and in turn, reacts upon it as a determining element. Upon this however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of prod­uction to the direct producers - a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity - which reveals the innermost secret, the hidden basis of the entire social formation, and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. This does not prevent the same economic basis - the same from the standpoint of its main cond­itions - due to innumerable different empirical circumstances, natural environment, racial relations, external historical influences, etc., from showing infinite variations and gradat­ions in appearance, which can be ascertained only by analysis of the empirically given circumstances (Vol. III, 791-792).

By taking the "facts of development of capitalism in (one) country" (Lenin, Russia, 67), we shall show how in the case of N.Z., any analysis of the "innermost secret" of the "hidden base of the entire social structure" has to take into account what has been said above i.e. natural environment - climate and fertility of new lands in the colony; racial relations - the destruction of Maori society; external historical influences - British Imperialism. Consequently, underneath what is usually taken to be a "unique" pattern of appearances, "the special case" (Blyth, 1973), there is the determination in the last instance of N.Z.'s semi-colonial role within the CMP.


1.2 Our Method of Procedure

Since the understanding of the history of the N. Z. social format­ion requires first an understanding of the CMP, we must begin with Capital. In Section 2 we assume that the reader is familiar with Vol. I on the production of surplus value, and the outline of the circulation process in Vol. Il. We use as our basic operational abstraction, the analysis introduced in Vol. Il, which we refer to as the 'circuit model'. This describes the reproduction of capital by means of an increasingly complex system of interlocking circuits of capital in its various forms, constituting the total social capital (Vol. II, 357). We then add to this analysis of the economic base, the analysis of the ‘superstructure’ of the state and its 'ideological apparatuses' to demonstrate their role in the reproduction of the conditions of existence of the social formation. We conclude this section by showing how the circuit model can be used to analyse the process of expanded reproduction of the total social capital on an international scale. Here we extend the analysis of the "internationalisation of capital" pioneered by the French school of Marxists including Michalet and Palloix. We then show how the internat­ionalisation of the circuits of central capital, into the peripheral or semi-peripheral social formations, such as N.Z., provides a significant extension of the basic model for our purposes. In the Note on Imperialism we argue that the use of the circuit model helps in explaining the partic­ular historic roles of core capitalist states in furthering the internat­ionalisation process by the use of force in establishing the CMP in 'new' lands and in setting up dependent client states in peripheral and semi-­peripheral social formations.

The circuit model is not the orthodox theoretical model used in Marxist economics and its adoption implies that we approach many of the standard issues of Marxist debate (e. g. the transformat­ion problem, productive vs. unproductive labour etc) from a different perspective (see the earlier formulation of this model in Macrae, The Neglect, Evolution). It is a 'dynamic value analysis' as opposed to a static one found in most standard approaches (Mandel, Desai, Balinky etc). We refer briefly to the implications of this approach for some of these debates in Section 2.

In Section 3 the abstract circuit model which provides the basis for our analysis of the internationalisation of capital and of imperialism, is used as a materialist framework for a brief history of the New Zealand social formation. Here we attempt to follow the complex causality at all levels -- economic, political and ideolog­ical, tracing the patterns of change from the British social formation, through annexation, the destruction of Maori society, the implantation of the CMP, and the subsequent semi-colonial form of extraction of surplus-value, all determined in the 'last instance' by the economic base, i.e. the interlocking circuits of capital established in N.Z. In doing so, we subject bourgeois "histories" which put causal primacy on super-structural aspects of the social formation, to the critique of a Marxist science of history.

In the concluding Section 4, we attempt to put forward some general observations and guidelines for the analysis of the current crisis, drawing together the main lessons of the foregoing analysis, and setting out areas requiring further detailed analysis.