Finlay Macdonald reviews Max Rashbrooke’s penetrating examination of the wealth gap

My mother was born at the end of the 1920s in St Helens in Lancashire, a working-class town near Liverpool best known as the home of Pilkington Glass and a famous rugby league team. If you can remember the original opening titles of Coronation Street, you can visualise her childhood world: sooty terraced houses, back alleys and smoking chimneys. By her teens she had lived through the Depression and World War II, found her way to London, and eventually in the 1960s onto a ship bound for New Zealand. She never looked back.

She wasn’t bitter, it was just that her new home offered something she cherished more than any memory of the old country – the lack of obvious class divides. Having retrained as a teacher once her own children were old enough for school, she was genuinely amazed she could find herself at a barbecue with the principal, or that we would end up playing at the houses of people whose parents clearly had more money than us. My sister and I took it all for granted. Mum never did.

This isn’t to say she wore rose-tinted glasses and believed she’d washed up in some egalitarian utopia. She was too much of an old lefty to be blind to inequality and unfairness, and she wasn’t one for clichés much, either. She knew this settler society was built on the alienation of Māori land and sovereignty, and that snobbish class consciousness was still alive and thriving in the nicely appointed homes of Remuera and Fendalton. It just didn’t compare with the rigid and unbreachable fault lines of wealth and “breeding” she’d grown up with in England.

Inevitably, I thought of my mother while reading Too Much Money, Max Rashbrooke’s penetrating examination of how the yawning wealth gap in Aotearoa New Zealand threatens to turn the country into the kind of crassly class-ridden society she thought she’d escaped. In particular, his decision to put the rich and their world views at the centre of his thesis would have made a lot of sense to her – the dismay she felt at what David Lange’s fourth Labour Government did to her adopted society having never really diminished.

Indeed, if I had a dollar for every time the words “since the 1980s” were used to preface a description of the damage done to New Zealand over the past decades, I’d probably be wealthier too. Rashbrooke nails the impact the free-market revolution has had on equitable wealth distribution and makes a compelling case that “nearly a century of progress post-1890 was put into reverse by Rogernomics”. From 1985 to 2005, he reminds us, income inequality in New Zealand rose faster than in any other developed nation. In the 1980s, the richest tenth earned roughly five times as much as the poorest tenth. Today, the ratio is nine to one.

Class, Rashbrooke shows, is about more than money

In the process, he provides a nuanced debunking of the country’s self-image as a largely egalitarian society. While not entirely a fantasy – as my mother’s experience bears witness – it involves ignoring how the mechanisms of the welfare state excluded or marginalised women, Māori and non-earners. He quotes historian Melanie Nolan’s nice description of this pseudo-egalitarianism as “a rich amalgam of truth and myth”. But his potted history of the historical ebb and flow of inequality, depressingly compelling though it is, really just sets the scene for Rashbrooke’s more ambitious purpose, to describe and analyse what class now means in modern New Zealand.

Class, Rashbrooke shows, is about more than money. He bundles it up with broad definitions of wealth and well-being to explain why looking at contemporary society through a class prism “allows for subtle investigations of social fractures and fissures that go well beyond those created simply by wealth”. There is wealth of opportunity and choice, as well as the financial kind, which contribute to non-material forms of well-being. Of course, money can buy these things, but one needn’t necessarily be a multi-millionaire to enjoy them. The social divides opening up in New Zealand cannot be mapped by extreme income or asset wealth alone.

Take the hyper-inflated property market and resulting inter-generational wealth transfer taking place on the back of it. It may be true, as Thomas Piketty famously laid out in his landmark Capital in the Twenty-First Century, that passive income from capital wealth outstrips wage growth over time. And it may also be true, in the words of local economist Shamubeel Eaqub, that New Zealand is seeing the “return of the landed gentry” because of this. But as Rashbrooke points out (quoting Piketty), the original British gentry was minsicule in number compared to the “Bank of Mum and Dad” that is currently assisting its offspring onto the property ladder. Instead, he argues, it might be better to think of New Zealand as having “multiple upper-middle classes” rather than a single “one percent” skewing the socio-economic picture.

“New Zealand has … an increasingly powerful upper stratum who could be described as opportunity hoarders”

Borrowing Piketty’s description of the global elites as belonging to both the “Brahmin left” (rich in educational and cultural capital but not without financial means either) and the “merchant right” (plain rich), Rashbrooke dubs the local variant the “Kelburn left” and “Remuera right”. (As an aside, my mother would have been part of a “Remuera left”, a vanishingly small demographic in the 1970s and possibly invisible now, but the broad point still stands). Members of these various elites might differ in their political or aesthetic views, but they undoubtedly share things in common – chiefly, perhaps, what Rashbrooke calls their ability to “enjoy multiple, self-reinforcing goods or capitals” that across generations entrench stable social hierarchies.

Right or left, the net effect is largely the same. As Rashbrooke puts it, “New Zealand has … an increasingly powerful upper stratum who could be described as opportunity hoarders.” In turn, this leads him to a particularly incisive debunking of the main correlative of the egalitarian myth – that the ideal of everyone having a “fair go” is guaranteed by our supposed meritocracy. Not only do the “nametags in corporate boardrooms and private member’s clubs” tend not to be refreshed very often, but the poorest households are held back by a “tangle of forces” that no amount of individual effort or talent can easily overcome. We tend to accept the inevitability of a social mobility “ladder”, Rashbrooke says, without accounting for the distance between some of its rungs.

In that sense, then, ideas of meritocracy and the ladder to success are nothing more than cheap rhetorical camouflage for what has really happened since Roger Douglas and his cronies drank the Treasury Kool-Aid in the 1980s. In Rashbrooke’s words, “Political debate came to be dominated by a world view tolerant of increased inequality.” Nor is this necessarily confined to those upper-middle classes who hoard the opportunity, but is shared among broad cross sections of society where a “hyper-individualistic mindset encourages people not to see social class, because everything is about personal choices, not structural forces”. Paradoxically, the persistence of the egalitarian myth – a central tenet of which is the moral value of rugged individualism – tends to confirm just how embedded free market beliefs have become.

Remarkably, Rashbrooke manages to stay optimistic in the face of so much evidence

The fact that class and how it operates has been so under-studied in New Zealand is reason alone to commend Rashbrooke. Avoiding the potential for what is essentially a potted history and critique of late-stage capitalism to blow out into something altogether denser and more difficult is also testament to his abilities as a writer and his value as a public intellectual. Most remarkably, perhaps, he manages to stay optimistic in the face of so much of the evidence he marshals, and offers new ways of thinking about wealth, well-being and class that might inform any practical efforts we make to escape the spiral of inequality.

Naturally, this would involve taxes on wealth, and spending more on health, housing and education so that equality of opportunity becomes more than just an empty buzz phrase. Not politically easy, maybe, given the bipartisan consensus that aims only to ameliorate the worst excesses of market capitalism. But the alternative is worse. New Zealand’s wealth inequalities are already “essentially indistinguishable” from those of Britain. If we seem less class ridden, Rashbrooke suggests, it might only be because we are younger and those class distinctions haven’t had time to properly congeal. “New Zealand,” he writes, “may be running down a reservoir of social connectedness built up in its egalitarian past.”

If things keep going the way they are, he writes, “that reservoir may be run dry, and New Zealand may come to more and more resemble its former colonial master.” Mum would have shuddered at the prospect. That wasn’t the kind of future she contemplated when she stepped off the ship in 1966, but she certainly knew what it looked like and why it was worth leaving behind.

Too Much Money: How wealth disparities are unbalancing Aotearoa New Zealand by Max Rashbrooke (Bridget Williams Books, $39.99)

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