Our previous blog about the Treaty of Waitangi Sovereignty Debate spurred much comment on social media sites. Many readers insist that they know "the truth" - the truth about why sovereignty was ceded - or the truth as to why it was not ceded (which is why these "truths" have become more like "beliefs", in my view). I challenge those holding strong views - on both sides - to consider their answer to the following puzzle, which I can't figure out myself:
If I strike a deal whereby the other party promises me that I will retain possession & ownership of my existing assets & treasures, and in exchange I promise to grant that other party powers of Sovereignty, of Statehood, of Government, where does that leave us? Here's the puzzle: a sovereign authority / state / government, has the power to tax. That's the distinguishing feature which defines such entities (together with a monopoly over the use of violence). Once I act as your Sovereign/ State / Government, I am empowered to pass laws. Those laws can include asset taxes, which mean I can slowly - or quickly - take the property you were promised, back from you. I only need to introduce a tax on assets at, say, 2% of their value, annually. In a few decades, most of your assets can be appropriated back to me.
What this means to an economist is that guaranteeing to one party they can hold onto their assets & treasures, in exchange for granting sovereign, government, or state powers to another party, creates a contradictory, paradoxical quagmire. Whether your prefer the English or the Māori version of The Treaty, it makes no difference - there remains the same unresolvable murkiness concerning what both parties thought they were signing up to.
Though Opposition Leader Hipkins thinks he may have cleverly wriggled out of this debate by arguing Sovereignty / Statehood / Powers of Government were not ceded in the Treaty, but have been since, he cannot have it both ways. Why? As just one example, we know he wants to introduce capital & asset taxes in NZ and also know he won't levy such taxes on Māori Authority / Iwi assets. What that means is he unambiguously does not accept the NZ Parliament - right now - holds the key power defining what it is to be the sovereign / state / government. That power is the right to levy taxes on all assets, including those promised to be retained by others in Treaties. Therefore, Mr Hipkins does not accept the ruling authority of his own Parliament. To make matters even more contradictory, he has reserved the right, and is openly discussing it, of confiscating the wealth of hard-working Kiwis through the capital / asset taxes he's lining up for the next election, thereby asserting his full powers of Sovereignty / Statehood / Government over non-Māori assets, but not of Māori assets.
My interpretation of this situation is that the Treaty, from the viewpoint of an economist, is a self-contradictory document. It was drawn up by folks who, on both sides, did not much, for whatever reason, contemplate the paradoxes it created. It is simply impossible for me to be given the rights to hold onto what I consider to be "my assets" in perpetuity, while at the same time handing you powers to govern over those assets - which means you can take them back through taxation. Its looking to me like the Treaty was not the deal it pretended to be. The economics of it is opaque. What the parties agreed to baffles this economist. That's why we may need to start over again, and stop having endless arguments trying to interpret the uninterpretable.
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
7 comments:
Robert, if you take an economist’s view, then you should recognise the good that was provided in return for the land. For the Maoris, that means everything they now have, from the food they eat, the clothes they wear and the houses they live in, to the devices they thumb, the cars they drive and the internationally used language they speak and can now write. Compare that to what the Maoris had before 1840 and measure it by their life expectancy and population growth.
I call this the pakeha taonga. The chiefs took it into consideration when they signed the Treaty and the Maoris acquired it as part of the deal. It has been acquired by Europeans after thousands of years of hard work including the building of this country by the colonists. Our philosophy, science and technology are seldom recognized. Why? You have a paradox because you select your data.
You would be right to say that beliefs in the Treaty are not as important as the facts of colonization. Instead, you implicitly denigrate the colonists when you should venerate them. Break out of the Orwellian, progressive, authoritarian (woke) zeitgeist.
By the way, I watched a clip recently in which Chris Hipkins said he learned what he knows about the Treaty from what he was taught at school. The mind boggles at the irony.
The Treaty doesnt say Maori land is theirs in perpetuity... It says its yours now...establishing a baseline and thereby preventing wildcat claims by Europeans... And then said you can sell your land if you wish to the crown....
Parliament is soveriegn. Ngata made this clear and he would know a hell a lot more about that than anyone alive today
First of all Robert, and as Barrie has indicated, you’re attempting to analyse it from a single economics perspective, and one firmly grounded more in the 21st than the 19th Century.
It’s perhaps ironic you raise this today, precisely 147 years to the very day that the then Chief Justice, Sir James Prendergast, determined the Treaty “a simple nullity.”
And nearly a century and a half later, here we are still arguing over something that should have been consigned to the museum long ago. Today, it should be even less relevant, given that none of the original parties are still alive; those that descended from them are quite different in both their physical and genetic make-up; and, neither ‘party’ now operates under the same culture or modus operandi that existed in 1840.
We all now appreciate there are two certainties in life - death and taxes. Maori, certainly well understood the first, and if they weren’t acquainted with the precise terminology of the second, they were well acquainted with its brothers - pillage and plunder, which are akin to taxation, but usually involve a little more physical tikanga, as opposed to legal force per se.
Yes, the Treaty gave Maori (and, incidentally, all the people of Nu Tirani) tino rangatiratanga of their property and possessions and Article the Third specifically gave Maori (only) the same rights as British subjects, but to indirectly suggest that those undertakings wouldn’t involve some ongoing responsibilities, or costs, is naïve. Both in tribal existence, and in economics today, the concept of ‘something for nothing’ (especially something that is very tangibly beneficial), is surely neither sustainable nor credible?
As you point out, with sovereignty or the right to govern and make the rules, comes certain benefits and one of those is the right to tax. Regrettably, in the 21st century, the right to tax is far more significant, given that society is now much more advanced. Consequently, we have considerably more to fund today than what prevailed in the 1840s. But just on that, since we’re talking in today's economics, I assume you will well appreciate that Maori are the beneficiary of considerably more of the tax dollars generated than they contribute and, should Chris Hipkins and his fellow Marxist travellers have their way with targeted CGT, that will only get amplified?
Was the Treaty a good deal for Maori in the knowledge that some tax would eventually be coming their way? Well, let’s put aside the aforementioned and all the many other benefits that civilization has brought including the end of slavery and inter-tribal warfare etc. and just concentrate on life expectancy, alone. Even you, Professor, whom I expect is likely past halfway on the normal life expectancy front, how much would you give for a few extra years, yet alone in the order of a doubling of that expectation from the outset?
So, without doubt, Maori did a pretty good deal and reverting to the sovereignty cession question - IF they had it to cede - then they most certainly did but, in any event, things have moved on and as far as recent narratives and those woke individuals and organisations that claim, inter alia, to be ‘Treaty centric’ and committed to “the (undefined) principles of the ToW”, I’d suggest they’re really are deluded and overdue some reflection and circumspection.
Robert, a more specific way of putting it is to say that taxes – including those paid by Maoris and the profit from pre-emption – were used to build the first world country which we all now enjoy. That is the purpose of tax, is it not?
I note that the popular economic histories of New Zealand dwell on reparation for what the Maoris lost and omit what they gained; for example, Catherine Comyn, The Financial Colonisation of Aotearoa, 2023. But this will not do.
By considering only the negative side of the equation, you folk have constructed a misleading history which is the basis of civil unrest in New Zealand today. I suggest that you need to redo the sum to include the benefits of the pakeha taonga. I am not sure specifically what the answer will be, but I expect that it will be nett positive for the Maoris.
For the benefit of our country, I urge you to collectively rethink your position before it is too late.
To reinforce the Barrie Davis comment above, the book by Adam Plover “New Zealand: The Benefits of Colonisation” (Tross Publishing, 2020) is a useful reference. Based on the written accounts of eye-witnesses of the time rather than unreliable oral history or the claims of the revisionist thinking, it “describes the way of life of the Māoris before colonisation and the changes that came about with the introduction of British sovereignty, British law and British people as a result of the Treaty of Waitangi in 1840.”
Well summed Barrie, and if anyone doubts the nett positive for Maori, never mind all the significant benefits as noted by the likes of Adam Plover in his book "The Benefits of Colonisation", just consider the population that was reputedly circa 100,000 and most certainly declining, with where it is today; the life expectancy improvement I've mentioned; and, also that for generations Maori have received more back than they have ever contributed in tax. And that's without even considering the vast majority of reparations paid (often more than once) for past reputed wrongs (like the confiscations), which more often than not were the rightful outcome of the acts of sedition on their part and them actively breaking the Treaty. Even Sir Apirana Ngata noted that back in the early 1920's in his commentary on the Treaty and addressed again more recently by John Robinson, in his book "Who Really Broke the Treaty".
Robert, it occurs to me that you may not have Tross publications in your University library, such as the books by Adam Plover and John Robinson mentioned above. You can view their catalogue and purchase Tross publications here:
www.trosspublishing.com
In Twisting the Treaty: A Tribal Grab for Wealth and Power, Peter Creswell writes on “Property Rights – A Blessing for Maori New Zealand” (pp. 52-8).
Regarding the pakeha taonga you might like Sweat and Toil: The Building of New Zealand by John McLean. McLean also wrote The British Empire: A Force for Good.
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Scoop also report “Iwi assets swollen by tax loophole” (23 January 2018).
https://www.scoop.co.nz/stories/PO1801/S00081/iwi-assets-swollen-by-tax-loophole.htm?form=MG0AV3
"The New Zealand Taxpayers’ Union says the rapid growth of iwi assets is driven by special tax treatment."
“Taxpayers’ Union Executive Director Jordan Williams says, ‘The corporate tax rate for Maori Authorities is 17.5%, compared to 28% for other businesses. And because of their ‘charitable’ status, many iwi-run businesses don’t even pay income tax.’”
That contradicts and negates your paradox.
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