Wakefield's land development theories & that 'restless, nervous energy; that dominant individualism’

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.

Wakefield and 'The Art of Colonization'

THE JAILBIRD DREAMS OF A COLONIAL SHRIGLEY PARK

So let’s continue our exploration of New Zealand’s earliest economic history, starting with a run-through of some flickering black-and-white frames of the dubious life of our first land agent, property speculator and founding father Edward Gibbon Wakefield.

As we have seen Wakefield spent three years in Newgate Prison from 1826 to 1829. Here he used his imagination and propagandizing talents to develop a new line of business.

In his cell, under the nom de plume Robert Gouger (a subliminal slip here?) and never having at that point visited any British colony, he wrote ‘A Letter from Sydney’ in 1829.

In this he argued that policies could be devised that would transplant British society without incurring the social evils evident at home.

The policy involved selling colonial land sold at a high, uniform price that would produce sufficient revenue to pay for the immigration of free settlers. Newcomers unable to afford land would constitute a laboring class.

In some miraculous way economic growth would result, and by concentrating settlement, a civilized society capable of self-government would evolve - albeit of course, a society within which the vote was tied to the ownership of property and the laboring classes knew their place.

Wakefield explains the problems faced by the ‘pioneers’ in New South Wales in the following terms:

“I did not, you know, intend to become a farmer. Having fortune enough for all my wants, I proposed to get a large domain, to build a good house, to keep enough land in my own hands for pleasure grounds, park and game preserves, and to let the rest, after erecting farm-houses in the most suitable spots.

My mansion, park, preserves and tenants, were all a mere dream. I have none of them.

When upon my arrival, I talked of these things to some sensible men, to whom I was recommended, they laughed in my face.

I soon found that a house would, though stone and timber were to be had for nothing, cost three times as much as in England. This was on account of the very high wages required by mechanics … the whole colony did not contain as many masons, carpenters, glaziers, painters, black and whitesmiths, and other mechanics as I should have required”.

His ideas had of course the great advantage that they appealed immediately to the English aristocracy and upper middle class.

For two centuries they had suffered the annoyance of religious dissenters, labourers, peasants, paupers and convicts disappearing over the horizon to the colonies, only to see their sons and grandsons return to London with wealth, swagger and unfortunate accents.

With the possible exception of the Cavaliers who settled in the Southern States and the West Indies on plantations as slave owners, the rich and established in England had gained little in terms of profits on land from the colonies. Wakefield finally offered them an opportunity to clip the ticket.

EMBEDDING THE THEORY TO MAKE MONEY

WAKEFIELD MEDDLES WITH AUSTRALIA

On his release from prison Wakefield returned to London and founded the Colonisation Society to spread his ideas, which appeared to be borne out by the disappointing results of the Swan River colony, founded with Government support in Western Australia in 1829.

Wakefield's influence on Lord Howick, Under-Secretary for the Colonies, was largely responsible for the introduction of sale as the sole method of disposing of land in New South Wales in 1831.

The Ripon Regulations (1831) discontinued free land grants in Australia, and a land fund was put in place to encourage a better class of immigrants. But when the price of land was raised from five to 20 shillings an acre, pastoralists began to squat farther afield, and settlement became more dispersed.

In 1833, he published another tract ‘England and America’ having argued 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.’

Wakefield then became intimately involved in many private schemes to promote new colonies. In 1834 the South Australian Company secured a parliamentary act whereby control of a proposed colony was shared by the Colonial Office and a board of commissioners responsible for land sales, immigration, and public finance.

Settlement began in 1836, but the decision of the commissioners to fix the price of land at 12 shillings per acre, which Wakefield thought too low, caused him to break with them.

However overall, Wakefield was less than positive about the future of Australia. In his 'Letter from Sydney' he comments on the early settlers that:

'Some generations hence, their descendants will probably be as uncouth, and ignorant, and violent as the great mass of North Americans', with the potential for them 'remaining equally barbarous till the year 3000, and becoming afterwards equally civilized - if the world should last so long'.

WAKEFIELD IN CANADA

Canada was cited By Wakefield as an illustration of the effects of bad land policy, on the evidence largely of Robert Gourlay’s Statistical account of Upper Canada. . . (1822). Gourlay had written that dispersed settlement in Upper Canada produced a people “who retrograded in civilization and moral worth.”

Wakefield’s solution was concentrated settlement achieved through the sale of land at a sufficient price. He was aware, however, that the system would not work so easily in Canada because an increased price for land would simply divert settlement to the United States.

In May 1838, Wakefield finally left England to actually visit one of the colonies, as an aide to an investigation of Canadian grievances by Lord Durham.

Before he left Canada on in October 1838 Wakefield had completed an evaluation of public lands and emigration policy, subsequently attached as Appendix B to Durham’s Report. He attempted here what he earlier had said could not be done: to fit his system to British North America.

Past policy, he argued, had alienated vast tracts without any comparable advance in settlement, thus undermining the market whatever the price of crown lands.

Wakefield’s answer was a tax of 2d. an acre on 'wild' lands, and a programme of public works financed from the proceeds. He believed crown lands could be sold at $2.00 an acre although American lands were available at $1.25.

Reform of the old system, he argued, should be the responsibility of the British parliament, the imperial government having created the problem. His recommendations bore no fruit.

Although Wakefield became increasingly interested in New Zealand from 1839 onwards, his interest in Canada did not lapse completely. In 1838 he had visited the Beauharnois seigneury of Edward Ellice (a Whig politician and father of Durham’s private secretary) and in 1839 he negotiated its sale as agent for the North American Colonial Association of Ireland, a joint stock company.

His connection with this company took Wakefield to Canada briefly again in 1841 to lobby for Beauharnois as the site of the next section of the St Lawrence canal system and plot and scheme in land development and French Canadian politics.

Wakefield’s activity in Canada had embarrassed some and antagonized others, but it had produced a tidy income for himself: between 1841 and 1844 his agency on behalf of the North American Colonial Association of Ireland earned him £20,000.

WAKEFIELD AND NEW ZEALAND

In 1837 the British government had refused to charter the New Zealand Association because New Zealand was not then part of the Crown's dominions and because missionaries sought to protect Maori land rights.

Though he did not become a director until April 1840, Wakefield took up his residence at the Company's headquarters and devoted his energies to organizing the preliminary expedition, under his brother William, which sailed in May 1839.

Thus prior to the signing of the Treaty of Waitangi in 1840, the reformed ‘New Zealand Land Company’ managed to establish settlements, after acquiring land on easy and unscrupulous terms and dispatching immigrants without parliamentary sanction.

When its land titles were subsequently questioned by the government, Wakefield and his brothers campaigned for local self-government, a proposal which the governor, Sir George Grey, successfully opposed.

Wakefield was active in England in 1844 in preparing evidence for the Select Committee on New Zealand following the death of his brother Arthur Wakefield in the Wairau Affray of June 1843. The majority report of the chairman, Lord Howick, was favourable to the Company and critical of Government policy; but the Colonial Secretary, Lord Stanley, held it would be dangerous to act on this report.

A fierce controversy then raged over settler and indigenous rights and the role of government, in which Wakefield undoubtedly had a hand.

In January 1846 Wakefield suggested to Gladstone that the Company’s settlements should be granted local self-government and that the Company itself should be entrusted with the entire business of colonizing New Zealand and the right of the Crown in its soil.

In July 1846 Earl Grey (the former Lord Howick) became Colonial Secretary. Early in August he and Wakefield had an interview which clearly disappointed Wakefield, though according to Grey it was “very amicable”.

However, on 18 August Wakefield, overstrained and ill, suffered a paralytic stroke.

During this illness Earl Grey and Wakefield's close friend and associate, Charles Buller, came to terms with the New Zealand Company, but Wakefield, even after his recovery, took no further responsibility for the management of the Company's affairs, resigning his directorship in 1849. He retained a sense of grievance against Lord Grey.

He made a new friend, however, in J. R. Godley, whom he met while taking a cure at Malvern Spa in the autumn of 1847. Together they elaborated the plan for a Church of England colony in New Zealand, which took shape as the Canterbury settlement.

Wakefield's other main interest after his recovery was the preparation of the book published early in 1849 as 'A View of the Art of Colonization'. The book restated Wakefield's principles and bitterly but unfairly attacked Lord Grey's policy.

Towards the end of 1849 Wakefield organized the Society for the Reform of Colonial Government to agitate in Parliament and the press for colonial self-government, accompanied by self-defence and a delimitation of imperial and colonial powers.

The Liberal colonial policy announced by the Prime Minister, Lord John Russell, early in the session of 1850 placated the colonial agitators and their attempt to secure a statutory demarcation of Imperial and colonial powers in the Australian Colonies Government Bill was unsuccessful - but the Society probably helped to convince British opinion of the need for eventual colonial self-government.

When the Canterbury settlement had been founded in 1850, Wakefield turned to agitation for self-government for New Zealand. As soon as the Constitution Act of 1852 became law Wakefield, who had been living at Reigate in Surrey (see English Census image for 1851 below), left England for New Zealand. He arrived at Lyttelton on 2 February 1853.



A month later he proceeded to Wellington and offered Sir George Grey his help in bringing the constitution into operation on the ground that “my experience in this sort of work … is greater than any other man's”. Sir George Grey declined the offer.

The “cheap land” regulations issued by Grey in March were denounced by Wakefield.

But when he became a candidate for the Hutt, a constituency of struggling farmers, he declared that “exceptional circumstances demanded exceptional remedies – viz. free grants of land to workers”.

He was elected in August both to the House of Representatives and to the Wellington Provincial Council. But exposure to a cold wind after a densely crowded meeting in December brought on an attack of rheumatic fever and he never recovered his health. He retired from the House of Representatives at the general election of 1855 and from the Provincial Council later in the year.

He took some part in the provincial elections of 1857, but afterwards lived quietly at the house built by his brother Colonel William Wakefield in Wellington, where he died on 18 May 1862.

Credited by conventional historians as a flawed hero, he nevertheless receives some harsh words from them:

‘Doctrinaire and uncompromising, Wakefield frequently quarreled with his disciples. Lacking firsthand knowledge, he often had impracticable ideas’.

‘His love of power was almost pathological; more than once he sacrificed principle for power's sake. He was jealous of those who held the positions he could not gain’.

His one incontrovertible merit from the settlers' viewpoint was that he was a dedicated proponent of self-government (with a franchise tied of course to land holding).