Honouring the Contract
John E Martin
Victoria University Press, $50.00,
In his new book, John Martin takes a step back in his exploration of the genesis and nature of the role of government in New Zealand labour relations. In the grand tradition of British television’s long-running archeology show Time Team, he digs deep to uncover the foundations of a “social contract” in the expectations and experiences of the early migrants and, more explicitly, in the promotional activities of the New Zealand Company.
Among other things, the company contract guaranteed work for migrants if they could not find work for themselves. It was a bold and confident promise that the short-lived company could not keep, but the promise itself set a precedent, and the company’s failure to honour it influenced the nature and extent of state intervention in citizens’ lives from the early 1850s.
In Martin’s view, the “kernel of a contract between labour and the state had been established”. From the earliest days, settlers, including wage-earners, looked to the state for support and to protect their interests, and to a large extent, they do so still.
The “social contract” has been interpreted and reinterpreted over the years as the social and economic context has changed, but the challenges both workers and the government have faced in agreeing on its content and implementing its measures are all too familiar to a 21st-century reader. For 150 years, debates have raged over the appropriate balance between capital and labour, and between the privatisation of profit and the socialisation of costs, including social support in times of economic hardship.
In the early days, the focus was on providing settlers with land, so that they could support themselves by both producing food and earning an income. Needless to say, it was not long before the lack of affordable and accessible productive land, lack of credit, high interest rates and the growing number of migrants who lacked the skills and capital to develop the land led to a growing acceptance of the need to cater for a wage-earning population.
And even though the early wage-earners were a self-reliant group and did their best to help themselves through union activity and welfare cooperatives, then, as now, the economy was subject to the vagaries of the international economy.
The early establishment of self-help groups like friendly and building societies, co-operatives and savings banks would have brought cheer to the heart of recent National governments – Jenny Shipley’s promotion of community solutions to intractable social problems spring to mind.
These provided welfare payments and helped families into homes and businesses, but in an unstable society, with a population that was growing larger and living longer, there was a limit to what community-based organisations could achieve or afford. The welfare societies hadn’t planned for superannuation or annuities, or for ongoing health costs; they weren’t equipped to cater for wide scale unemployment or rising costs.
As the depression of the 1880s took hold and workers became more politically active, the “panacea of land and limited state intervention” was no longer sufficient. The “social contract” was at risk.
The rest, as they say, is history and has been well documented by numerous historians and sociologists – the ongoing struggle to improve or protect working conditions for wage-earners and to develop an equitable tax base with shifts from land tax to customs duties to company and income tax to sales tax; the persistent arguments over the pros and cons of contributory benefits and superannuation; anxiety about benefit dependency and dole bludgers – all of these are in effect, negotiations about the “social contract”.
The biggest changes in recent times, which Martin touches on only fleetingly, have been the emergence of women as independent earners and the decline of the family as an economic unit. This is very much a book about men, and although it is around 100 years now since the family wage and family allowances were introduced, and nearly 40 years since equal pay legislation was passed, the new social contract between the country’s male and female citizens, its families, Maori, migrants and the state has not yet been resolved.
As Martin notes, the shift in emphasis towards market relationships and individual interest has diminished the state’s role and destabilised this important relationship. If this well-illustrated book, full of political cartoons and dreadful doggerel, rekindles interest in the nature and extent of the social contract, its contribution will be valuable indeed.
Alison Gray is a Wellington social researcher.