Decolonise Aotearoa!

The debate about foreign ownership is mainly about who owns and controls NZ’s economy. It is linked to another debate about rising social inequality. For the NACTs [National/ACT Govt] and the NZ comprador ruling class NZ’s growth had always been determined by its ‘dependency’ on Britain, the US and Australia. The best NZ can hope for is to be competitive in the global economy so that ‘growth’ will enrich the compradors and buy off working class discontent. For the left the issue has always been economic independence; how to become self-sufficient and egalitarian in sharing the national wealth. But it is a myth to say that NZ has been decolonised, egalitarian and even ‘imperialist’. NZ was always foreign owned and controlled since its European settlement. Inequality in NZ cannot be understood unless you understand why NZ is a capitalist semi-colony. The colonial institutions have become semi-colonial institutions. NZ is formally a sovereign nation yet its semi-colonial dependence is even more obvious today than any time in its history now that China looms as an emerging imperialist power. NZ’s decolonisation is still ahead of us. Our task is to fight for that independence, not as a capitalist nation, but as a socialist republic.


Simon Collins series of articles in the NZHerald provides plenty of evidence for the social effects of rising inequality in NZ. We get first hand information about the extent of poverty and its impact on health, education and on the lives of the poor. The first article reported Dr Fiona Cram’s research that shows that, despite the ravings of Michael Laws about ‘feral families’, poverty and discrimination are the main causes of ‘Maori Child Abuse’. Collins claims that inequality is recent. This is the result of historical amnesia. The post-war boom revived the myth of NZ as egalitarian, founded by the liberals in the 1890s. Fabian reformers like WP Reeves Labour Minister in first Liberal Government of the 1890s and socialists like Harry Holland, leaders of the First Labour Government in the 1930s, are cited as the epoch-making giants of social democracy that allowed NZ to abolish the evils of social classes.

In reality, NZ was always an unequal society and the 1890s and 1930s were but short bursts of social reform in an otherwise bleak history of racial and class inequality. It has taken the period since the 1970s to reawaken NZ to the existence of classes, and the continued impoverishment of many working class families. This is because crises are the norm in NZ. The first was the Long Depression of the 1880s which brought the colony to virtual collapse and a Liberal Government backed by workers and landless farmers stole millions more acres of Maori land to settle the landless and expand the mines. The second was the Great Depression of the 1930s that saw the real unemployment rise to 30% and thousands of poor farmers walk of the land. This brought the Labour Party to government for 14 years on a program of economic regulation and protectionism. The current crisis began in around 1973 during the Third Labour Governments term with the oil crisis. This brought the post-war boom to an abrupt halt and proved yet again that the booms were hot air balloons in the long downturns in NZ history.

End of the Postwar Boom

But this time the downturn was more permanent. NZ had exhausted its ability to develop behind tariff barriers to protect local manufacturers from overseas competition. Local firms like Watties and Fletchers were now national monopolies and had to expand offshore or die. Foreign branch plants like Borthwicks, ICI and Lever Bros were dominant in their sectors and demanding the right to repatriate profits to their multinational headquarters. The global downturn in pastoral exports now converged with the demand by capital to open up the economy to the global market. NZ manufacturing had outgrown the local market and to survive had to compete internationally. The National Party under Muldoon had tried desperately to insulate the economy from the global crisis and globalisation. Then as if to prove that the Labourite ‘classless society’ was a myth, it was the Labour Government that was forced to undertake the shock therapy of killing off its own protectionist heritage. This proved that historically the ideal of class equality was always dependent upon the capitalist class profitability. Equality was a luxury that only the bosses could afford.

The rise in inequality that resulted from Rogernomics, Ruthonomics and the return of National to office in 2008, proved beyond doubt that NZ remains essentially a semi-colony in which the imperialist powers plunder raw materials and labour power to extract their super profits. NZs economy is devoted to ‘rip, shit and bust’ - ripping out raw materials, depositing shit across the rest of society, and going bust as it gets deeper in debt. Its role is as a provider of raw materials and food for the imperialist countries. The period between 1935 and 1970s when NZ was a ‘rich’ country is an aberration. Economic nationalism was always a temporary refuge in response to depression and war. The 100 years before 1935 and the 40 years since the oil shock of 1973 proves that in the long run NZ is a weak, dependent semi-colony on Britain, the US, Australia and now China. That’s the story. It explains why ‘protectionism’ was short-lived so that since 1973 NZ has rapidly slid down the developed OECD countries league into so-called ‘third world’ status.

Semi-colony inequality

The definition of a semi-colony is a country that is owned and controlled by imperialism but which is politically sovereign or independent. But what does political sovereignty amount to when the key sectors of the economy are foreign owned and controlled? It means that the nation state is nothing but the agent of imperialism and the national capitalist class a comprador class of agents of imperialism. That means that foreign capital owns the key sectors of the economy. The value that is created by the working class is largely exported as profits. The biggest drains are the Big four Banks owned by Australian banks which made $32billion in profits in 2011.

Brian Gaynor reports: “The Bank of New Zealand was sold to National Australia Bank (NAB) for $1.5 billion in 1992. Since then BNZ has distributed $5.2 billion in dividends to its Australian parent and is now worth an estimated $7.2 billion based on its 2010 net earnings of $602 million and a price/earnings ratio of 12. Thus NAB paid $1.5 billion for BNZ and the latter has delivered total shareholder value of $12.4 billion to its Australian owners since late 1992. .. Telecom was sold to overseas interests for $4.25 billion in 1990 and since then has made distributions to shareholders, in the form of dividends and capital repayments, of $14.6 billion... an estimated $8.8 billion of these $14.6 billion distributions went to overseas shareholders.”

Gaynor summarises the situation: “A prosperous free enterprise economy is based on a high domestic savings rate and a strong productive sector that is well governed and mainly domestically owned. Australia and other above-average growth countries have these characteristics but New Zealand doesn't. Our low savings rate and under-investment in productive assets have hindered long-term stability and growth. For example, almost all the assets owned by the 10 largest ASX listed companies at the end of 1987, which had BHP in the top spot and Westpac at number 10, are still Australian-owned, whereas our largest listed companies at the end of 1987 were as follows: Fletcher Challenge (paper, forest and energy assets in foreign ownership), Brierley Investments, NZI (Australian-owned), NZ Forest Products (Graeme Hart-owned), Bank of New Zealand, Petrocorp (bought by Fletcher Challenge and on-sold to overseas interests), Lion (Japanese-owned), Carter Holt Harvey (Graeme Hart), LD Nathan (merged with Lion and now Japanese-owned) and Robt Jones Investments (Hong Kong-owned). Almost all of the assets owned by the next 10 largest NZX companies in December 1987, with the notable exception of the pre-split Fisher & Paykel, are also overseas-owned. These include Magnum (with its major operations Dominion Breweries and Countdown supermarkets now foreign-owned), Progressive Enterprises (Australian-owned), Wilson & Horton (Australian-owned) and INL (assets sold to Fairfax).”

So it’s this foreign ownership that determines how the relations between classes in NZ work. Income or wealth inequality is a symptom of this. The ruling class wealth increases in relation to its role as agents of international capital which requires NZ to be competitive. This means cutting costs, at all costs. The old class of national industrialists like Fletchers, Watties, Lion Breweries, Fisher and Paykel etc have been replaced as the dominant fraction of the ruling class by the upstart vulture capitalists, notably Brierley, Fay and Richwhite, Bob Jones, Alan Gibbs, Infratil’s Morrison, and CHH’s Hart, who have asset stripped uncompetitive firms and restructured them as international corporations with head office offshore. The second rank comprises the financial and property parasites who speculate on already produced value. Most of their combined wealth is invested offshore and is part of NZ’s biggest exports – profits. So while NZ industry has been restructured it is mainly at the expense of the working class.

Jobs, wages, taxes, social spending all have to be cut. As industry is restructured plants are closed down and many jobs are lost. Government legislates for reforms to implement these cost cuts. Thus since the deregulation of the economy under Labour in the 1980s we have seen these policies pursued by every government, cementing in the ‘openness’ of the economy. None of this was a surprise and was predicted by Marxists in the 1970s and 1980s. Today, it is an indictment of the lack of any serious political left in this country that a NZ Herald journalist Simon Collins has to rediscover the colonial causes of inequality in a series of articles. Yes it is colonisation that is the structural cause of poverty and discrimination and Maori child abuse. 

Social Democracy bankrupt

That the Labour Party is now a Blairite party is evident in David Cunliffe’s comments on Collin’s articles. He criticises Collins for not coming up with solutions. Cunliffe’s solutions are a tame recycling of Blairite reformism. It boils down to NZ becoming more ‘competitive’ which means that workers have to be even more exploited. This is a recipe for increasing inequality as the share of value expropriated by the capitalists compared to that retained as wages by the working class constantly increases.

Revolutionary communists argue that social democracy is being exposed as bankrupt by the global economic crisis and will split as the left leaves the bankrupt Labour Party to join a new revolutionary Workers Party. Workers of the world are ready for revolution. All we need is the revolutionary party and program that opens to road to socialism.

Class Struggle 98 Dec 2011 Feb 2012

Class Struggle 98 December 2011-February 2012

Defend Iran Against Imperialism and Zionism!

Western imperialism, and the United States in particular, are in an unrelenting crisis. In the bloody game for world domination, US imperialism has just lost Iraq, which is aligning closer to Iran. It has also practically lost Pakistan—all in one mere year!—and it will likely lose Afghanistan as well, despite 9 years of occupation and war.

This is not an accident, but a reflection of the economic decline of US imperialism. As we are seeing, the military decline of the US has finally started to catch up with its economic decline. In a nutshell, the latest aggression of western imperialism against Iran is an attempt by the US to reverse its own economic decline by overthrowing the present regime in Iran and replacing it with a US puppet regime. Why? Controlling Iran is critical for controlling oil, both because of Iran’s plethora of land-based pipelines, and because of its strategic position next to the Strait of Hormuz, the world’s most important shipping route for oil and gas.

Of Course It’s About Oil

Iran sits in the middle of the world theater when it come to oil and the plundering of the natural resources of southern and central Asia. Everything that passes by sea from Iraq or Kuwait, or through Iran from western Asia, to anywhere else in the world, and vice versa, must pass through the Strait of Hormuz, which is essentially part of Iran’s territory. This includes 80-90% of the world’s oil. Thus, any imperialist country that controls Iran also has its foot on the transit of world oil. One does not need to be Einstein or a Marxist to understand that the latest stiff embargo and sanctions against Iran is not about its nuclear program, but about overthrowing the present regime of the Mullahs and putting a pro-American puppet regime in its place.

Iran is a semi-colony. If the US does attack Iran, either directly or via its Zionist muscle, revolutionaries must defend Iran, and call for Iran’s victory, despite its reactionary regime. A victory for Iran in such a conflict would shake up the entire imperialist/capitalist world order. It would encourage the struggle of the working class and the oppressed throughout the world. In particular, it would encourage the Palestinians in their struggle for liberation from the Zionist yoke.

We don’t know whether Iran is actually developing nuclear weapons, as western imperialism and the Zionists claim. But even if it is, its stock of missiles is a joke compared to the thousands of missiles in the hands of the US and Europe, not to mention the unknown number of nuclear weapons that Israel refuses to admit are in its possession. The US’s nuclear arsenal alone is large enough to destroy all life on Earth a million times. What we do know is that a Pakistani scientist sold the Iranians some of the technological know-how needed to build a nuclear weapon. Specifically, Iran got the plans for the kind of centrifuge that can refine nuclear materials to a weapons-grade concentration, as well as the plans for constructing bombs.

This illustrates that for the right price, plans and possible materials for nuclear bombs can leak from Pakistan and possibly other countries. In addition, countries and organizations can get the parts and material for nuclear weapons for the right price, as an unknown quantity of these was stolen or smuggled from the former Soviet Union. Thus, one problem that imperialism faces is the trend of proliferation of nuclear weapons to many semi-colonies. Such proliferation is inevitable in the coming decades. India, Pakistan, North Korea (which is technically still a deformed workers’ state), and Iran are just the beginning. With today’s technology, one can put an entire nuclear bomb in a suitcase. Thus it is inevitable present and future technology will bring upon us wars that will become nuclear wars. If western imperialism does not start it, the country under its attack will do so. Then many countries will push the button, and it will be bye-bye to civilization, and possibly the human race. Only a socialist revolution can prevent this horrifying development.

Of course, the US accusations against Iran are nothing but hypocrisy. It was the US that gave the Shah of Iran the secrets and material for the bomb in the first place, so he could build two nuclear plants to provide electricity for his country—all while Iran was sitting on top of one of the largest reservoirs of oil in the world! (Asia Times, Jan. 19, 2012.) The point is that for the right pro-imperialist regime (Israel, Brazil), US imperialism has no problem with supplying the material for the bomb.

The Imperialist Bloc of China and Russia Is Also a Target

Behind the embargo and sanctions against Iran looms the conflict between US imperialism and the imperialist bloc of China and Russia. While formally Iran is considered an “independent” country, in reality it is falling into dependency on China, and thus it is becoming a Chinese semi-colony. This is what is really alarming the US. China’s trade with Iran reached $30 billion in 2010. China is also heavily buying oil from Iran. Around 22% of China’s total oil imports consist of Iranian oil. China has clearly told the Americans that they can go to hell with their sanctions. According to Asia Times (Jan. 18, 2012), “Washington taunted Beijing on Thursday by slamming sanctions on Chinese firm Zhuhai Zhenrong Corp for allegedly selling refined petroleum products to Iran. But China voiced ‘strong dissatisfaction and firm opposition’ and expressed its intent to carry on ‘normal cooperation with Iran in energy, the economy and trade.’ China has also reached a deal in regard to Iran’s largest oil field, Yadavaran. China has an oil pipeline that starts in the Caspian Sea next to Iran. The pipeline extends to Kazakhstan and then to Western China. China already gets 15% of its oil and natural gas from Iran. In addition to oil and gas, China has automobile and fiber optics factories in Iran, and it is working on expanding the Tehran subway. Anyone who thinks that China will let go of any of this is crazy.

Not only is the strategy of Chinese imperialism to have Iran as its semi-colony, but China has also recently firmly planted its feet in the neighboring Gulf countries, just as the fortunes of the US are declining there. Saudi Arabia supplied 45.5 million tonnes of crude oil to China in 2011—a 13% increase from 2010. Qatar and other Gulf kingdoms are also shifting their exports from the US to China. According to Asia Times, “Qatar is a major supplier of liquefied natural gas (LNG) to China, and in the first 11-month period in 2011 it shipped 1.8 million tonnes, an increase of 76%. Trade with the UAE exceeds $36 billion and the sheikhdom is emerging as a major trans-shipment point for Chinese exports to Africa and Europe.”

While the US was imposing sanctions on Iran, Chinese Premier Wen Jiabao was touring the Gulf states. That is, China’s answer to US meddling in Iran was to consolidate its grip not only on Iran, but also on the Gulf countries. Indeed, Saudi Arabia was eager to bring Wen into the country despite China’s relationship with Iran. This was a huge snub to the US by Saudi Arabia. The list of Wen’s achievements is impressive, as the Gulf states rushed to make record-breaking deals with China. As Asia Times reported on January 21, 2012: “Wen witnessed in Saudi Arabia the signing of a contract between China Petrochemical Corporation (Sinopec) and Saudi Aramco to build an $8.5 billion refinery with 400,000 barrel-a-day capacity in Yanbu on the Red Sea coast by 2014, with the two sides holding 35.5%-62.5% stakes respectively.” And in Qatar, Chinese accomplishments were just as impressive. On January 24, 2012, the same source reported that “Chinese Prime Minister Wen Jiabao, who visited Doha last week, disclosed at a press conference on Friday: a) China proposes to invest in the manufacturing of ‘downstream oil products, which are most urgently needed by Qatar’; b) China and Qatar signed an agreement to jointly build a refinery in Taizhou, Zheijiang, in China; c) Chinese companies propose to participate in infrastructure projects in Qatar; and d) China and Qatar are discussing a ‘long-term, stable and comprehensive cooperative partnership’ in natural gas.”

The Isolation of Iran Is a Myth

What we are seeing is that the US and Europe are getting weaker because of their economic crisis. That is not to say that China can avoid the deepening crisis of global capitalism. But while the US and its meek allies in Europe can only scream “sanctions and embargo,” China is strengthening its economic grip on Iran and the Gulf states. This is the real history. The declining powers talk war as the ascending imperialist power (China) takes control over the disputed areas. Even Afghan President Hamid Karzai announced in front of 2,000 tribal leaders that he plans to get closer to Tehran. The reality is that the road from Tehran to China is getting shorter by the day as China increases its influence in Central/South Asia. That means that when US leaves Afghanistan, China will get in there in a big way. It already has projects in Afghanistan, such as copper, while the US wastes its resources fighting “terrorists” there.

Similarly, as Pakistan increasingly snubs the US, the Chinese are taking over. Historically, Pakistan was allied with Saudi Arabia against Iran, i.e., against the Shiite regime that was perceived as a threat to the Sunni elite in Saudi Arabia. In 2011, however, Pakistan largely broke from the US sphere of influence and joined the Chinese-Russian economic web. Today, Iran and Pakistan are lining up together against the U.S. in the world trade war, and the Iran-Pakistan natural gas pipeline is a done deal—with the blessing of the Chinese. Thus, Pakistan is another country that is going to ignore the sanctions against Iran.

In short, it is a total myth that Iran can be crushed by the embargo and sanctions. It is surrounded by “friends” who need its oil, while to its north, Russia is watching out for its interests. Russia recently engaged in a revealing exercise in self criticism in regard to Libya. It announced that it was a bad mistake for Russia to abstain when the UN Security Council voted to allow NATO to bomb Libya. That will not happen again, said the Russians. This is a signal that Russia will not tolerate NATO bombing of Syria and Iran, because these countries are under the influence of the Russian-Chinese imperialist bloc.

Bye Bye Petrodollars

The Western imperialist aggression against Iran only brings Iran closer to Russia and China. Iran trades with Russia now in rials (Iran’s currency) and rubles. Now all Iran’s new deals with China are made with yuan (renminbi) and rials. Iran is making similar moves in oil deals with Japan and India. The reality is that less and less Iranian oil is traded with petrodollars.

That also means that the Gulf countries in general are trading less and less with petrodollars. For example, the yuan has started to make itself known in Doha. “The China-United Arab Emirates (UAE) currency swap deal which was signed during Wen Jiabao’s visit to Abu Dhabi last week already brings the yuan to the Emirates. The deal with the UAE is worth US$5.5 billion and the Chinese central bank statement said that it aims at ‘strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability.’ ” (Asia Times, Jan. 24, 2012.)

India is also snubbing the US by spending around $12-14 billion for oil in Indian rupees which “would subsequently be converted into a separate designated currency.” Tehran’s ambassador to Moscow, Seyed Reza Sajjadi, summarized the new emerging petrodollarless world order when he stated recently that Iran’s trade with Russia “is based on our national currencies. We started this work long ago. Iranian businessmen are buying products in Russia and are using the rouble as [payment] currency. . . . The US dollar has no [economic] support base. . . . There is a similar interest on the Russian side.”
We are in the center of a trade and currency war between Western imperialism and the Chinese-Russian Eastern imperialist bloc. Iran is the big prize. Right now it is in the hands of the Eastern imperialist bloc. Anyone who thinks that this bloc will drop Iran because of the embargo and sanctions needs to wake up. What we are seeing is that the petrodollar is losing to the ruble and the yuan. The sanctions and embargo will only strengthen the position of China in the Middle East and the Gulf countries.
Iran indeed feels protected to the point that it can laugh at the European sanctions. Europe (read Germany, England and France) wanted to delay the start of the embargo until July 1 in order to allow the weak links in the South to find an alternative oil supply. Iran answered by saying, in effect, “We don’t care about supplying Europe. We are locking Europe out by starting European sanctions against us now!” Iran said that there are anxious clients who will buy the oil that Iran supplies to Europe.
(Financial Times, Jan. 26, 2012.)

If Iran stops supplying oil to Greece, Italy, Spain and other countries in southern Europe that have no alternative source of supply, these countries will slide even deeper into economic depression, and the European crisis will fly through the roof along with oil prices.

We are not saying that the dollar and US imperialism have been beaten. Weakened is not the same as beaten. The US is still the most powerful imperialist power. It will take time before the dollar stops being the main international currency. Thus, the sanctions will still hurt Iran. The rial is sliding dramatically against the dollar, causing significant inflation in Iran. The ruling class and the Mullahs are not seriously affected. They can find alternative oil buyers, and they can trade in yuan and rubles. But the Iranian working class has no escape from the inflation. The Iranian workers are pawns in the increasing tension between Eastern and Western imperialism. They are the ones who will pay the price of the global crisis of capitalism, which is ultimately the cause of the embargo and sanctions.

The Way Forward for the Working Class

As China’s global influence increases, and it attempts to use the broken backs of its workers as a stepladder to the height of imperialist world power, the workers and villagers are fighting back and confronting the state and its cops. Their Iranian brothers and sisters can follow their example. They can fight inflation by striking for a sliding scale of wages pegged to inflation. They can take over the oil industry and the oilfields, nationalizing them without compensation. That means overthrowing the reactionary, capitalist Mullah regime and replacing it with a workers’ government. The best way for the Iranian workers to confront US imperialism is to fight it without hindrance from the oppressive regime of Ayatollah Khamenei and company.

In the US and Europe, workers must take action to smash the embargo and sanctions against Iran. As sanctions are an act of war, the working class in Europe and the US has a class duty to fight to defeat their own ruling class’s imperialist war machine! They should combine their own class struggles with actions against the imperialist sanctions and embargo. The main enemy is the banks and the ruling class at home. This means that workers must fight against the racism and chauvinism employed against Muslims, which is used to poison the mind of the workers and pacify them while imperialism carries out the embargo and sanctions. Down with all anti-Muslim propaganda, government spy programs, and anti-immigrant laws!

The ruling class in the US is using nationalist chauvinism and racism not only to develop support for a possible war against Iran, but to hurt the workers in the US as well. They are using the threat of “terrorism” from Iran and the Arab world as an excuse to curb workers’ rights in the US. Under the new law signed by Obama, the FBI can grab anybody, including any American citizen, and incarcerate them indefinitely for having a “loose” connection to “terrorists” and to the “enemy” behind them—Iran, for example—without filing charges or producing any evidence to back them up. This means that the US is becoming a dictatorship under the cover of the “democratic” two-party system.

We, the American working class, must fight this and other reactionary laws that curb democratic freedoms, such as the right to assemble and protest in public places, the right to express our political opinions, and the power of organized workers to go on strike. By defending Iran against imperialism, we also defend the democratic rights of the workers and anyone who fights this reactionary Congress and President. Down with the new American dictatorship! For a fighting workers’/labor party that fights for a workers’ government! For a militant, worker-led mass struggle to overthrow the dictatorship of the Democrats, the Republicans, and Obama. They are the ones who conspired to allow the police and the FBI to detain anyone permanently without trial. They are the ones behind the brutal repression of Occupy and the indiscriminate killing and incarceration of Black and Latino youth. The main enemy is at home—not in Tehran and Beijing!

Adopted by HWRS January 29, 2012