SOME MORE GRIPES ABOUT EDWARD GIBBON WAKEFIELD
As even the most casual reader will easily deduce, I am not exactly a fan of Wakefield. He was a parvenu toff, a property developer and a real estate agent. Well that’s a pretty good start. But he was also an abductor (and potential child abuser) who believed that the law could be bent by fraudulently obtained signatures and that ‘possession was nine tenths of the law’.
Beyond these basic imperfections, I also have some serious concerns about the errors and consequences of his land development theories, his views on working people (or ‘mechanics’ as he preferred), and his total disregard for native land rights. In all of these areas, there were consequences for New Zealand that continue to play out today.
I’ll deal with the second two issues in a subsequent post, and concentrate on land development and Wakefield’s invisible and dead hand on New Zealand society in this one.
WAKEFIELD’S LAND & SOCIAL DEVELOPMENT THEORIES
As I showed in my previous post, Wakefield believed that it was dangerous to let a colonial society evolve naturally on an open frontier, noting that:
‘An abundance of land produced a people, like what the Canadians will be, and in the United States Americans are – a people who, though they increase in number make no progress in the art of living.’
His answer was to restrain the allocation of land, impose a threshold price, and release land in limited quantities to wealthier immigrants who brought capital with them.
Regardless of his apparent objectives, it was always clear that he had no understanding of practical farming, of the importance to farmers and pastoralists of variations in land quality or of the very different challenges posed to agriculturalists in environments as varied as those of Australia, Canada and New Zealand.
Like many a good bureaucrat, he plucked regulations and charges out of his hat.
In New South Wales, he successfully promoted raising the price of land from five to 20 shillings an acre but pastoralists began to squat ‘illegally’ farther afield, and settlement became more dispersed. In South Australia, he argued for a price of 12 shillings per acre and resigned when his recommendation was overruled.
In Canada, he opined that crown lands should be sold at $2.00 an acre although alternative American lands were available at $1.25.
Beyond that, his theories are of course nonsense in economic terms. So let’s pay a brief visit to a real economist – and one of my great heroes – Johann Heinrich von Thünen.
A REAL LAND ECONOMIST AND THE VIRTUES OF AN OPEN FRONTIER
Johann von Thünen (24 June 1783 – 22 September 1850) was a Mecklenburg estate holder and practical farmer who had also studied at Göttingen university. He is credited with being the first in the field of spatial economics but he also developed the essence of marginal productivity theory (i.e. that successive increments of inputs are beyond a certain point met with successive decreases in unit outputs).
As if that is not enough, his ideas also have a serious claim to being one of the wellsprings of empirical econometrics (testing theories mathematically using statistical evidence).
In his book The Isolated State (1826), drew on the work of the English economist Ricardo and suggested that land development could be analyzed by assessing the respective influences of:
1. basic land productivity (what Ricardo termed the ‘original and indestructible powers of the soil’)
2. the combination of labour and capital in the form of a ‘production function’ for a commodity (that represented the most appropriate form of cultivation).
3. variations in effort, technology and management (what we can call for the purposes of this assessment ‘non-factor productivity’)
4. net received / farm-gate prices (that is the prices that famers actually receive)
Von Thünen then proceeded to develop a theory of what would happen during the settlement and development of a uniformly fertile and otherwise undifferentiated plain, if influences 1-3 were held constant but net received prices were allowed to vary as a consequence of the cost of transporting commodities to a single central market / city.
This state of affairs was not completely unrealistic in an era when the frontier of settlement in North America was continuing to move forward into open land that was suitable for cultivation using European techniques.
In the original Isolated State the model generated four concentric rings of agricultural activity:
1. Dairying and intensive farming lying closest to the city, as high value and recurrently demanded but weighty and perishable products like vegetables, fruit, milk and other dairy products had to be delivered to market quickly
2. A second ring producing timber and firewood for fuel and building materials. Wood was a very important fuel for heating and cooking and is very heavy and difficult to transport so its production was located as close to the city (an arrangement that still applies in many cases in the Third World)
3. The third zone consisting of extensive fields crops such as grain. Since grains last longer than dairy products and are much lighter than fuel, thereby reducing relative transport costs, they could be located further from the city.
4. Cattle production / ranching was forecast in the final ring. Animals can be raised far from the city because they are self-transporting and can walk to the central city for sale or for butchering.
5. Beyond the fourth ring lies the ‘wilderness’, which is too great a distance from the central city for any type of agricultural product.
Now it doesn’t take much imagination to see that as the population of the Isolated State grows, the frontier will be pushed back at first by the ranchers (as is currently happening in the Amazon Basin) and then by the cultivators.
And von Thünen went on to argue that the availability of virgin land would determine the ‘natural wage’ of the community. That is the floor wage that would have to be paid to prevent landless labourers from upping sticks and moving to the frontier to build their own log cabin or bough shed and knock down the Backwoods or the Bush or run some cattle or sheep in the wilderness.
A process which, despite the machinations of Wakefield, is still evident in New Zealand in the form of roads named after the ‘lines’ that the pioneers first cut to mark their boundaries.
So here we have a land development situation where enterprise can be rewarded and economics alone shapes the development of society. And we can now splice in the ideas of Frederick Jackson Turner (November 14, 1861 – March 14, 1932).
Turner was an influential American historian who is best known for his book, ‘The Significance of the Frontier in American History’, the basis of which is generally known as the ‘Frontier Thesis’.
It argues that ‘the existence of an area of free land, its continuous recession, and the advance of American settlement westward explain American development’ ...
‘and that coarseness and strength combined with acuteness and acquisitiveness; that practical inventive turn of mind, quick to find expedients; that masterful grasp of material things... that restless, nervous energy; that dominant individualism’.
And Turner goes on to explain that:
‘the American frontier is sharply distinguished from the European frontier -- a fortified boundary line running through dense populations. The most significant thing about the American frontier is that it lies at the hither edge of free land”.
“The Atlantic frontier was compounded of fisherman, fur trader, miner, cattle-raiser, and farmer. Excepting the fisherman, each type of industry was on the march toward the West, impelled by an irresistible attraction. Each passed in successive waves across the continent.
Stand at Cumberland Gap and watch the procession of civilization, marching single file-- the buffalo following the trail to the salt springs, the Indian, the fur trader and hunter, the cattle-raiser, the pioneer farmer --and the frontier has passed by. Stand at South Pass in the Rockies a century later and see the same procession with wider intervals between.
The unequal rate of advance compels us to distinguish the frontier into the trader's frontier, the rancher's frontier, or the miner's frontier, and the farmer's frontier. When the mines and the cow pens were still near the fall line the traders' pack trains were tinkling across the Alleghanies, and the French on the Great Lakes were fortifying their posts, alarmed by the British trader's birch canoe.
When the trappers scaled the Rockies, the farmer was still near the mouth of the Missouri.”
So there we have it really, Wakefield not only wanted to rule out free enterprise and the Kiwi battler at the stroke of a bureaucratic pen, he also would have been happy to snuff out the pioneer spirit. Whether this has inflicted any permanent damage on the New Zealand national psyche, I leave the reader to judge.
POSTSCRIPT
I will add a couple of things though. It is ironic but perhaps all too predictable that we as a nation are preoccupied with buying and selling property – such that we have borrowed upwards of $150 billion from foreigners to fund the buying and selling of houses and farms among ourselves. And that we constantly struggle to involve ourselves in more productive activities and to earn our way in the world through innovation and enterprise.
As I have commented elsewhere, there is an old saying to which I was introduced when I arrived in Wellington, which is that ‘if you want to run a small business in New Zealand, you had better start by buying a big one’.
So it was with considerable surprise that I found out, during PD Soccer one Saturday morning with Theo, from the Scots grandfather of one of the players, that he spent the better part of his retired life cruising the world on luxury liners.
He had made some money as a butcher in Silverstream and had begun to build up businesses that he then sold on. This led him into property investment and property development and a relatively opulent old age.
The trick he told me was simply to ‘buy and sell property in New Zealand’. Well, I have no doubt that Edward Gibbon Wakefield would pout a malevolent smile at this point if he were around to reflect on the society that he helped to procreate.
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