Inequality: A New Zealand Crisis

InequalityGayaal Iddamalgoda reviews Max Rashbrooke (ed.), Inequality: a New Zealand Crisis (Bridget Williams Books, 2013). You can find out more about Inequality here.

The title of this book is a compelling challenge of one of the great myths of New Zealand capitalism; that being, that real poverty and inequality exists elsewhere. It is an honest, clear and easily readable account of the fact that New Zealand has a severe problem of social and economic inequality.

The book is divided into 17 chapters; each chapter is contributed by a different academic or commentator and offers a broad set of perspectives, economic, sociological and political on the facts of inequality in New Zealand. Punctuated between the chapters are a series of ‘viewpoints’ collected by editor and contributor Max Rashbrooke, based on interviews with various people from various walks of life.

The most valuable resource contained in this book is the information it presents to substantiate its claim, that New Zealand is facing a crisis of inequality.
The early chapters of the book, particularly the two written by Max Rashbrooke, illustrate inequality with a rich presentation of empirical data. In chapter 1 Rashbrooke plainly outlines his thesis stating that based on OECD statistics:

  • New Zealand now has the widest income gaps since detailed records began in the early 1980s
  • From the mid-1980s to the mid-2000s, the gap between rich and the rest has widened faster in New Zealand than in any other developed country
  • The average household in the top 10 per cent of New Zealand has nine times the income of one in the bottom 10 per cent
  • The top 1per cent of adults own 16 per cent of the country’s total wealth while the bottom half put together have just over 5%

In chapter 2 of the book, Rashbrooke explains that while 10% of the population own over half the wealth in terms of combined, individual wealth. For the lower 50% “the picture is not of wealth but of debt: the 200,000 poorest (in wealth terms) owe a combined $4.7 billion. No one in the poorest fifth of New Zealand owns more than $6000 in assets.”

This raw data is backed up with clear lists of source material and is extensively referenced. The information collated in this book provides excellent tools for anyone seeking to answer the claim that New Zealand has no inequality.

Rashbrooke makes it clear from the onset that the kind of inequality being measured in the book is limited to disparities in income and wealth. The book and its many perspectives treat this measure as an indicator of a social, economic and political system that sharpens the distinction between the wealthy few and the rest of society.

The book argues effectively that this growing trend of inequality is no accident, that public policies of aggressive neoliberal capitalism are to blame and that these policies are designed expressly to benefit the wealthy at the expense of everyone else. As society becomes increasingly run for the benefits of the wealthy few and as the gulf between them and ‘ordinary New Zealanders’ becomes more stark so too does the sense of victimisation and alienation felt at the lower rungs of society.

Another commendable feature of the book’s analysis is a frontal challenge that it presents to those who make the insipid argument that New Zealanders should be grateful that we don’t live in a ‘third world’ country. While it is true that we don’t see the kind of inequality that exists in ‘third world’ slums, the extent of the gulf between rich and poor is what is significant in defining New Zealand as an unequal society, a country for the rich, where everyone else is increasingly excluded from in stake in the country’s material wealth.

The book does not shy away from discussing the marginalising effect that inequality has on women and minorities. Again; the book provides ample empirical evidence to show that poverty in New Zealand disproportionate impact on groups that are traditionally affected by sexism, racism and other forms of discrimination that go hand in hand with capitalism.

However, it lacks a coherent theory behind why inequality has these effects and fails to effectively demonstrate how these various forms of oppression are inherent and systemic to the functioning of capitalism.

An exception to this failure is found in Evan Poata-Smith’s analysis on Maori inequality where the process of colonisation with its destruction of Maori society; its alienation of indigenous people from their land and resources and its transformation of Tangata Whenua into an underclass, has been fundamental to the establishment and ongoing existence of New Zealand capitalism.

Yet, the book’s general failure to pair the capitalist oppression of minorities, indigenous peoples and women with the intrinsic nature of capitalism itself means that these forms of oppression are shown as mere symptoms of inequality and not tools capitalism as a system of inequality is dependent on. Ultimately the book considers capitalism to be capable of existing in a ‘benign’ form and does not affirm that socialist contention that capitalism is by its nature a system of class exploitation and oppression.

In the final section of the book, where the question of what can be done to combat inequality is dealt with, contributors essentially argue that ordinary people should have increased social and political rights within the current capitalist system. The book’s solution to the present crisis of inequality is to seek increased reforms; in such areas as social welfare, health care and schooling.

The subtext of the book’s analysis of how inequality should be fought is an appeal to the current ruling class of New Zealand capitalism. This is illustrated in some of Rashbrooke’s ‘viewpoints’. For example there is one perspective that is derived from the director of a successful company, who chooses to pay himself less than the average company executive (though it should be noted that perspectives from working class people with experience of inequality are also included).

Ultimately therefore, the book can be criticised for presenting an academic appeal to those privileged individuals who benefit from the current system in the hope that these people can see error of their ways. It ignores the fact these very people are the ones who created the system that exists today and, that they continue to attack the working class in order to maintain it.

The book’s purpose is not to empower the oppressed mass of society to struggle to claim their rights and should be criticised on that basis. However as already discussed it presents an excellent repository of factual information and some timely observations about the growing impact that inequality in having on New Zealand society. For these reasons, it should be widely read on the left.

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