Revisiting the 1930s, Tony Simpson

The Broken Decade: Prosperity, Depression and Recovery in New Zealand 1928–1939
Malcolm McKinnon
Otago University Press, $50.00,
ISBN 9781927322260

In 1968, I left my home town of Christchurch and came to Wellington to work as a producer in radio in what was then the NZBC. I mostly spent the next three years writing and producing talks and historical radio documentaries. One thing that struck me as curious in retrospect was that, although I had spent six years at Canterbury University studying history (among other things), no-one had ever mentioned the 1930s Depression or WWII. It was only when I began talking to older New Zealanders that these two sets of events came into focus as the principal markers by which they measured the significance of their own lives. I therefore began collecting both written and oral recollections of the 1930s (mostly the latter); in 1974, these were published as The Sugarbag Years. I then waited for someone to follow my lead and publish a narrative history of the same events which placed the lives I had recorded in their economic and political context, but no-one did and so I did it myself, as The Slump in 1990. This second book made little impact, the world moved on, and those with personal experience of the 1930s have now almost all passed away.

But the era has begun to exercise a growing fascination, and Malcolm McKinnon has published in this book a comprehensive, and probably definitive, narrative account of the decade leading up to WWII, which encompasses the Depression as a social and economic disaster. In doing so, he has understood two important features of the task of a historian.

The first of these is that no-one ever sees the significance of the events contemporaneously as a coherent package, no matter how its future chroniclers may do so. Politicians, in particular, did not wake up one morning and cry: “Yikes, this is the Depression; I’d better do something about it.” They dealt with it as a series of unrelated events which required a response day by day by day, and they did so in terms of what they perceived to be common sense, and what they had been taught to believe was the orthodox way to deal with such circumstances. Mostly, you just sat them out. J M Keynes, who thought that was the wrong way to go, was wont to say that, whenever he heard a businessman appeal to common sense, he knew that the person in question was in thrall to some long-dead economist. That was absolutely true of the Great Depression, not only here but all around the world. The truth was that almost nobody knew what to do, and this partly explains the failure of our governments of the day to master the situation in which they found themselves.

John A Lee once told me, in the course of an interview, that one of the responses to events had been to reduce government expenditure, including halving the allowance for milk for public service cats (kept to keep down the mice in what was an entirely paper-based operation) as the tax take fell. The point he was illustrating was the failure of austerity as a way to do so. “You can balance the Budget with the country flat on its back,” he remarked pithily, “but you can’t solve your economic problems by starving cats.” McKinnon’s narrative carries the sense of that failure very well.

The second and even more important task is to explicate what happened prior to the disaster (ie the Depression itself), which is the main subject of the book. This entails an understanding of the vulnerability of a small dependent, agricultural trading economy. The historian of an earlier generation, and one of the first to locate our past in its economic context as the driver of events, Bill Oliver, several times refers in his published works to the fact that, whatever our social ambitions, New Zealand ultimately can’t control its own destiny; we can never prevent a banker from going sour, a shipowner ramping up their charges, or a market from contracting – and so it was in the 1930s. From that point of view, our problems were, and remain, insoluble.

Most of the by-then elderly people to whom I spoke for my book were convinced that the resolution of the Depression was down to the Labour governments of 1935 and 1938, which had new and original solutions to our problems and a comprehensive plan to deal with them in an overall socialist context. McKinnon shows in detail that this was not the case. The notion of socialism in New Zealand has always had more meaning in the mouths of its enemies than in the philosophies of those who profess it. Mostly, the Labour governments of the 1930s included a majority of non-socialists, even by their own lights. Quite a number were social creditors, and others would today be regarded as highly conservative, not to say reactionary, in their social politics in particular. More importantly, their leading figures, especially Walter Nash, Peter Fraser and Arnold Nordmeyer, were thoroughly conversant with the theories of Keynes (at that time highly unorthodox) and how these might be used to ameliorate the social distress that the 1930s had brought in the wake of our economic downturn, but that didn’t help them to find any ultimate solution to our problems. It was their good luck that, from 1934 onwards, the economy was showing signs of recovery, and successive goverments were able to take advantage of that.

But, by 1939 we were in trouble again. There were still more than 10,000 workers on relief (albeit on proper wages), inflation was climbing, and the Bank of England had imposed punishing conditions on the renewal of our international loans. Nash, then Finance Minister, probably spent the journey home from London worrying about how he was going to explain to his cabinet colleagues that the terms of the loan renewals were going to mean dismantling our nascent welfare state. But, again, fortune was on our side. It is not an exaggeration to say that Hitler saved our bacon by invading Poland: Britain was in a much more accommodating mood now that she needed our food; the unemployed were quickly absorbed by the industrial needs of the war economy; and we emerged from the war in much better economic shape than we went into it. That still didn’t solve our fundamental economic problems, of course; but it gave us the space to try if we had a mind to do so.

So has McKinnon succeeded in his task of explicating what he calls our “broken decade”? Pretty much, but with one caveat. Since our historians discovered the economy, they have sometimes felt the need to describe it and its impact on policy formulation and application in highly technical terms. These include many expressions which are meaningful to anyone trained in economics, but which are a bit impenetrable to even those, such as myself, who have spent much of our adult lives hanging about with Treasury mandarins, trying to make sense of their nostrums and prognostications about our future and the policies required to get us there. These terms aren’t a fatal flaw in this book by any means, but they do make it hard going sometimes for the general reader.

That aside, The Broken Decade is the book I was hoping someone would come up with when I compiled The Sugarbag Years. It has only taken four decades for someone to do so (which is about par for the course, I have come to understand), and it was well worth the wait. I dedicated my earlier oral history to my father, who saw the events it described, and to my son who, I glumly concluded, “would probably never hear about it”. But, if he should be seized with a desire to do so, this is his best chance to date.

Tony Simpson is the author of The Sugarbag Years and The Slump, the first an oral and the latter a narrative history of the Great Depression in New Zealand.

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