Suppose a person, Bob, is recipient of a sudden windfall. Suppose he wins Lotto. He has choices concerning how he spends the money. He might fritter it all away on a trip to Santiago, Chile, expensive restaurants, parachuting, ski lessons. In this case the money dissipates in forms of goods and services that lose their value almost immediately after being purchased, when used. He might alternatively buy a car or two. In this case he owns assets that will only gradually depreciate in value – if he sells a car after a couple of years, he will receive less than he spent on it but he will still get some money back. However, Bob might want to invest the money somehow, make a return on it. He might start up a business that processes venison, a meat works. In this case he spends the money buying the land, premises, and equipment, and then makes arrangements with local farmers that raise deer to supply his factory. He will employ people to work in his abattoir. Money is going out but soon, if he is lucky, if the consumers at the supermarkets and restaurants he is selling venison to like his product, money will start coming in. Perhaps he eventually starts making a profit. In this case it seems probable that the asset he has built, the business, will appreciate in value. His net worth will not reduce but expand. Money sometimes makes money. And, arguably, he is doing something good. He is paying wages to his employees and, furthermore, by entering the venison market, he may be making venison cheaper overall because supply of it has increased, benefiting consumers. (At least this is what is supposed to happen.) The only negative economic repercussion is that other venison sellers will receive a little less in earnings. Bob has at least one other option to spend the money he has. He could buy property, houses or apartments. In this case, he has assets that will always appreciate in value and a guaranteed source of revenue from the tenants he is now landlord over. This last option is obviously the safest but the only person who benefits from such arrangements is the landlord, Bob himself. Because there is only a limited amount of real estate in a country like New Zealand, a decision made by Bob to invest in property, together with the decisions of many others to act similarly, forces up the prices of houses and apartments, putting them ever further out of the reach of those not lucky enough to have won Lotto. Importantly, the more venison producers there are, the less each individual venison seller will make – but the opposite is true in property speculation. The more property speculators there are, the more the prices of properties increases – as more and more people try to get into the property market, the more the net worth of existing landlords goes up.
And herein lies the problem. When we think of capitalism, we form idealised pictures in our minds of entrepreneurs, people who take risks to bring unusual new products into the marketplace. Perhaps they have acquired the startup funds from other businesses they own or from loans from banks prepared to take risks. But such people are rare. In the real world, there is monetary inequality to begin with and the few who have both a large amount of excess capital and the willpower needed not to fritter it all immediately away are usually neither capable enough nor daring enough to take a risk starting a whole new business, a business which might fail as most do. The safest bet is property speculation. So we have a class of people who make a whole lot of money without contributing anything to society. All they do is occasionally visit the properties they own to ensure the tenants are keeping them clean and tidy. Money makes money. Brett Weinstein, when I once watched his show, often spoke about "rent-seeking elites" and I see in this class of people a kind of new-born feudalism. Presumably decades of economic policy in this country has allowed this new feudal class to emerge but the details of its history is something I know little about although generational wealth is involved and the processes that brought this class of people into existence presumably began after the Second World War.
The thing about this class of people, rent-seeking elites, is that they are in the main invisible. They have their homes in St Helliers and occasionally visit their properties to ensure the upkeep of their cash-cows. It seems that our current government and sometimes Auckland's local rag, the Herald, are lackeys to their feudal lords. In the case of the government and perhaps the Herald, a part of the reason for this is a worship of capitalism, pure unadulterated neo-liberal free market capitalism. They venerate the great god Mammon. Because landlords have acquired their wealth and wealth-making assets through a permitted exploitation of the capitalist system, their wealth is regarded as legitimate. But, more than this, our elected representatives are if not part of this class then adjacent to it. Recently the Herald published details concerning a number of MPs, from all parties, who owned multiple properties but had failed to declare them all. Rather than trying to help all New Zealanders our elected representatives, particularly those now in Government, side with their mates and their donors, the landlords.
Earlier this year, I became acutely aware of all the evil in the world. I wandered a lot around Auckland, particularly the CBD, in the middle of the night, and for the first time in my life was struck by the number of enormous buildings to be found towards the bottom of Town. I think many of them are empty or mostly empty. Some of them may be mostly vacant apartment buildings but usually I think they are empty office buildings. It is a secret in plain sight, somehow invisible to all the people wandering around Fort Street or lower Queen Street because they are all half-asleep, because they never look up. And yet we are constantly being told that we need to build new constructions. I see cranes around the corners of every second road. An issue that has been with us New Zealanders for at least twenty years is that, to use the phrase commonly employed, "first home buyers are shut out of the market". The solution? We need to build lots of new houses they tell us. I would like to suggest though that the problem is not that New Zealand lacks places for people to live but that prices have been forced up by property speculators and this is the reason young salaried couples cannot buy homes in which to raise children. It is a conspiracy by the construction sector, by real estate agents, by property developers, by the landlords, and by the banks who finance them. In my view this unholy alliance is keeping afloat the economy but only by diverting huge sums into pockets of the landowning class and those who enable them. A simple solution to the housing crisis would be to convert the empty buildings in the CBD into apartment buildings containing large enough apartments that families could dwell in them, assuming we are comfortable with the idea of children living in the buildings around Fort Street. Instead though we seem to trapped in a cycle where monied elites invest through real estate agents and real estate developers in newly built or still being drafted apartment buildings that, in a culture of rampant property speculation, can only increase in value.
Although I am focussing on New Zealand, there is a similar problem in the United States. I watch CNN enough to know that there has been for a long time a problem there too of prospective first-home buyers being similarly shut out of the market. The root cause of this evil is again a devilish alignment between construction firms, real estate agents, property developers, banks, and landlords. Donald Trump made his fortune as a property developer. MAGA faithful like to imagine that the riches of their hero evince his acumen as a businessman but, as I have already pointed out, if you have a little bit of money to start with, a certain flexibility of moral character, and a little luck, it is easy to make money as a property developer. Trump's wealth does not prove that he has the slightest intelligence, taste, or judgement. All it proves is that, given a little capital to begin with, capital he got from his father, property development is the simplest way to become a billionaire.
When I first started noticing all this evil in the world, when, as I like to put it, my Third Eye was opened, I was wandering around Broadway in Newmarket a great deal. I suddenly noticed that every second store was empty, for lease. Those stores that still seemed to be open were, I suddenly realised, fake stores. Sometimes they were Pop Ups. Sometimes they were stores which might have been subsidised perhaps by the Newmarket Business Association to maintain the false impression that Broadway was not in serious decline, that the Westfield Mall at one end of Broadway hadn't sucked away the commerce from the rest of the strip. All the foot traffic had been diverted through its electric doors. I cannot believe that even the stores in the mall are really prospering. I do not know how three quarters of the shops I see in Newmarket, in Karangahape Road, in Queen Street, are managing to survive. Unemployment is at over 6 percent in Auckland and this does not take into account all the people who are in fake jobs. The depression had been invisible to me and then it was as if some God-like power told me, "Open your eyes!" and suddenly I saw. I saw the most hypocritical, most pusillanimous, face of capitalism. Rather than let people see the evidence of a serious depression civic authorities had decided to make stores that otherwise would have been empty into dressed stage sets. When my Third Eye opened I saw something else that had been invisible to me, the fact that the vast majority of people in Newmarket were now Mandarin Chinese who preferred speaking Mandarin to each other rather than English. This is something I shall come back to later in this essay because it is important to the claim I wish to make.
One night, at around 1AM, I wandered along Greenlane West Road past Alexandra Park and found the premises of an important real estate firm. I heard a voice that said, "This is ground zero." I had stumbled on one of the premiere real estate agencies in Auckland. In the windows of the real estate agency, there were pictures of some of the apartment buildings they were selling off piece of piece. There was a picture of a just being built apartment building at the top of Khyber Pass that I pass twice a day every day on the way to and from my mother's house. There were pictures of many sometime enormous apartment buildings. The pictures of the real estate were always accompanied by the pictures and names of the real estate agents entrusted with selling the sites, people who given the fever to buy property must be making money hand-over-fist. The face of corruption, of graft, is quite visible if you know where to look. Over half of them were Asian with Asian names. As I walked around the complex I found myself in a space with a Lone Star restaurant on my right and a Chinese restaurant on my left. I felt like I was New Zealand caught between the hammer of the United States, the billionaire Republicans now often based in Houston, and the anvil of China. I had already formed the belief that rich Americans had taken advantage of the recession in New Zealand to buy properties and businesses here and then to sell them on to newly arrived immigrants from China or to Chinese still based in their own country. The symbolism of finding myself right between a Chinese restaurant and a symbol of Texas only reinforced my frightening suspicions concerning all this my eyes had been opened to. Our whole nation is being asset-stripped. Of course, you might say that I have no real evidence that this is occurring. However a couple of months ago I read in the Herald that a restaurant in K Road, a labour of love built up by its owners over decades and considered one of the best in the city, had been bought out and that the new owners had decided to replace it with yet another American style fried chicken fast-food outlet as if Auckland doesn't have enough of them already. I was told by a friend of the family that the owners had been made an offer so large that they couldn't refuse it. Game Theory, as invented by John von Neumann, shows that in certain situations if all the participants in a game act out of self-interest the overall outcome is worse then if they all acted altruistically. If you were offered ten million dollars for your small business, would you not consider taking the offer? It seemed to me that rich investors were buying up New Zealand businesses with the sole aim of making them worse, of destroying New Zealand culture and undermining our sense of national identity.
But this is not the worst scenario we can imagine unfolding. I have a conspiracy theory that I cannot be confident in but which is worth setting out if only as an eventuality we should all be prepared for in case some country attempts it. First though, I need to say something about the nature of money.
From around 600BC until the late nineteenth century, currency in all western countries was based on silver or some mixture of silver and gold. In the late nineteenth century, in Britain and the Commonwealth, the Gold Standard was adopted – all British pounds should in theory be exchangeable for gold. This ended in New Zealand in 1914. From 1944 until 1976, the international monetary system was based around an arrangement known as the Bretton Woods Agreement. All capitalist nations guaranteed that their currencies would be exchangeable for US dollars while the United States guaranteed that US dollars would be redeemable for gold. I believe this is why Fort Knox has always been supposed to have tons and tons of gold bullion. In 1976, though, the Bretton Woods system was abandoned and currencies in the US and around the world became fiat currencies. Money is issued by particular governments, and laws and regulations establish how these promissory notes, this paper money, is to be used as legal tender in their respective countries. Paper money only has the values it does because all the people in a particular country agree that it does. Today of course money is binary code in the computing systems of banks both private and public which we access through debit or credit cards. The printing or creation of money and its management is handled by central banks and reserve banks, institutions directly answerable to the government, the state.
Now, one might wonder why when the government of a particular country, say New Zealand or the United States, finds itself short of the funds it needs to pay for the functions and services it provides it does not just get its central bank to print a whole lot of money and spend that. The reason this is considered bad economic policy is that it leads to inflation and currency instability. If suddenly a whole lot more money were to appear in New Zealand today it could be massively inflationary, pushing up the prices of goods and services, reducing the relative value of assets such as property, and eventually forcing the bosses to pay their workers more. The massive printing of money led to hyperinflation in Weimar Germany and has for decades been causing unmanageable inflation in Argentina. So when governments need money and don't want to increase taxes, they borrow. They issue government bonds. In buying bonds from governments, other countries, private corporations, and individuals are effectively lending money to the governments, loans that theoretically could or should be repaid at some time. I might digress to say that there seems to be some logical error in this thinking somehow, some kind of ideological chicanery involved here, because selling bonds brings in liquid cash and so should cause inflation in exactly the same way that simply printing money would. It may be that the threat of bond buyers asking for their vouchers to be redeemed to some small extent dampens inflationary pressures.
Think, now, of China, a state that is secretive, capitalist, and totalitarian all at once. Imagine that the government of China is secretly printing money and funnelling it to Chinese aligned private equity firms and supposed venture capital companies, companies 'investing' in countries such as New Zealand. These firms might buy assets and then sell them on to Chinese nationals. This would be a very effective way of waging economic war on another country so long as it remained unnoticed, invisible. First, it would involve the transfer of asset ownership to immigrants who may have more loyalty to their nation of birth than to the parasitised host country or to people still living in mainland China. Second, the new owners could undermine or hollow out the host country's sense of collective national identity by taking it over culturally. Third, if any inflation occurs, it does not occur in China even though these practices arise from the creation of Chinese currency. Rather because it is New Zealanders inside New Zealand who are recipients of the cash injections inflation occurs here rather than there. This would make any recession here worse and further reduce the value of property and businesses relative to the Chinese currency, the yuan or renminbi, making it even easier to continue aggressively buying out the whole of New Zealand.
When walking around Newmarket, I found near the door of a newly built building near Broadway, home to Mercury Energy, a plaque or sign that reads "Infinity Capital". Doesn't this sound like the name for a company that has unlimited financial backing, for a company that is a front for the Chinese Central Bank? Doesn't it sound a little evil, a little diabolical or Satanic? Especially to those of us suspicious of modern capitalism? The fact that the owners of this company could hint at its agenda in its very name gives a hint of their chutzpa, their devilish genius. They are relying on people walking past not thinking very deeply about the name of the company housed in the building, on a kind of magic that has made them invisible. I really felt this year that many things in Auckland are wrapped in magic spells that stop people seeing them. It was only when the voice said, "Open your eyes!" that I began to notice them. A little later in the year, I was watching CNN and there was an item about the US government's use of drones to police the border between the United States and Canada. There was a shot of one of the drones and I saw that it had "Infinity Capital" stamped on it. So a little later I looked up Infinity Capital on Wikipedia. Looking it up again just now, I found that the entry concerning it had disappeared but there is an entry for 'Infinity Group'. Infinity Group is a private equity firm backed by the China Development Bank, the government owned bank that funded the Three Gorges Dam among other things. Infinity Group has offices throughout China and Hong Kong. Its only offices outside China are in New York – and in Tel Aviv. In fact its Tel Aviv office is its head office.
The fact that the head office of Infinity Group is in Tel Aviv has a perverse kind of fitness to it. If China wanted to create a puppet company to give invented money to, to extend its influence overseas and to degrade the culture of other countries, having a head office in Israel, a head office that is protected by both the Israeli state and the forbearance of the international community towards Israel, is a genius move. Historically the Jews were the money lenders, the usurers, but today any talk of a Jewish conspiracy to control the banking sector is seen as antisemitic. Therefore if anyone were to suggest that Jews in Israel were accomplices in a scheme orchestrated by the Chinese Communist Party to deploy financial instruments in order to degrade and then take over smaller countries, the person might be charged with repeating and recycling ancient ant-Jewish stereotypes and tropes. If some scheme such as the one I outlined is being implemented, we cannot be sure if Israel and China are in cahoots or if Israel is just being used, perhaps with the consent of unscrupulous actors within the Jewish state. There is something here that I find very difficult to articulate. In the previous essay, I discussed magic and it seems to me that some kind of symbolism with thaumaturgic consequences operates in the world sometimes. The Jews as a people have a strange relationship with Western civilisation because, on the one hand, the Old Testament is a Jewish document and Jesus Christ was a Jew but, on the other, the Jews have historically been despised and ostracised, accused of being Christ's murderers. The shadow of the Holocaust also hangs over everything and is much of the reason Israel is given a blank cheque today. By acting through a headquarters in Tel Aviv, the Chinese government may be exploiting a paradox that has supernatural implications. It is a secret undermining of Western civilisation.
There seems to be a secret undermining of New Zealand identity going on certainly. New Zealand's sense of national identity has for a long time not been the strongest thing, based, among other things, on the national sport, rugby union, on national beer brands like Steinlager and Lion Red, on indigenous flora and fauna such as the kauri, the kiwi, and the kea. Traditionally New Zealand culture, by which I am thinking of distinctively New Zealand art and literature, has been preserved and perpetuated by the universities, academic institutions, but for a long time the University of Auckland has been a willing worshiper of the money god, Mammon, perhaps Pluto. (Pluto was the Roman God of both the Underworld and wealth because the Underworld was where gems and precious metals like gold could be found.) An orientation towards the pursuit of profit by both the universities and young people has had a couple of noticeable effects. Because degrees in subjects like English and Philosophy do not lead directly to jobs, both departments are if not now dead then almost dead. Ideally the universities would be custodians of our national culture but now this mission has been outsourced to, if anyone, the advertisers who, because they are not always competent and because they are also chasing the dollar, are not always the best people we can imagine handling the stewardship of New Zealand's national identity. Another even more obvious consequence of neo-liberal ideology is that the University of Auckland has come to rely on foreign students to make money, foreign students who do not always speak English and often remigrate back to East Asian countries when their degrees are finished. This is no way to assist in the forging and maintenance of a national identity. A couple of months ago, I decided to wander down the side street near the University where New Zealand's most prestigious fine arts school, Elam, is located. As you might expect, Elam is a magic secret – you have to have known students who had attended it to know where to find it. I found, almost next door, a couple of enormous buildings designed as student accommodation for all the many University of Auckland students from China who had decided to learn English and take Commerce Degrees here. These buildings don't even try to hide the fact that all the students domiciled inside them were from China and probably spoke Mandarin (not Cantonese) as their first and only language. However the fact that these buildings are hidden down the same side street where we can find Elam makes them as almost invisible as Infinity Capital.
The gradual undermining of our national culture is apparent in other ways. The national drink of New Zealand is not anymore Lion Red or Steinlager but the 'flat white'. Some disputatious Australians think they invented it but I take it on faith that New Zealand got there first. A few cafes in Auckland not only serve expresso-style coffees like flat whites but also chai lattes. What I noticed this year, though, quite suddenly, is that all the cafes in Newmarket and the central city have started serving matcha lattes and had even started giving matchas priority over the Kiwi one-third expresso, two-thirds steamed milk. Matcha lattes are made from steamed milk and powered green tea. It may be that all of these cafes are catering to the huge number of recent immigrants from China and Chinese students or it may be that there is a kind of concerted campaign going on to demote the flat white and make matcha lattes the national hot beverage. I do not think this campaign is deliberate, organised, but rather a kind of group-think. I hope I don't appear racist in pointing all this out. I do draw a distinction between individual immigrants from China and a kind of Chinese cultural force, a dissemination and inculcation, a force that is acting only partly through these recent immigrants and temporary students, and mainly through systems and structures set up around them and for them. It is a force that is working mostly through the buy-up of New Zealand businesses by, I suspect, people from mainland China. I am aware, of course, that many Asian immigrants do not come from China but from other south-east Asian countries such as South Korea and Malaysia – I have even met a few that I think have come from Hong Kong and these immigrants may well hate the Chinese government more than anyone else apart from the Taiwanese. What I am trying to discuss is a cultural change that is a result of capitalism itself and possibly pseudo-capitalist practices. The sudden appearance and promotion of matcha lattes as the drink of choice for consumers both Asian and European is just one indicator of a sea-change in New Zealand culture that had been occurring invisibly for many years and only abruptly became visible to me this year.
I want to bring the essay back to the ideas I have been discussing in the previous couple of posts. How can we relate these economic developments and the conspiracy theory I have posited to a war between Good and Evil? It relates to identity, personal and collective. That which threatens one's identity can be considered Evil. If New Zealand culture as I knew it is being changed, and often it seems for the worst, at the behest of actors outside New Zealand, this threatens me as a New Zealander. The recession threatens me as a New Zealander because it degrades the society in which I participate. The shifting of ownership of New Zealand assets, properties and businesses, into the hands of outside investors threatens me as a New Zealander because I would prefer New Zealand to be owned by New Zealanders. The zealots who have inherited the neo-liberal mantle bequeathed by Roger Douglas may scoff at me for this squeamishness because they regard the sloshing of capital around the world as always good – it always benefits the rich, their benefactors. The purest neo-liberals are quite non-racist. They'll like you so long as you're rich and as long as money is being made by someone. It is conceivable I will be scoffed at by people on the left because they might possibly interpret this essay as anti-immigrant and so I want to clarify my position. I have no problem with poor immigrants coming here from China or elsewhere, working in the sectors where the country needs labour, and then gradually, over a generation or so, integrating into New Zealand society. The immigrants from China I like are the ones who hate the Chinese Communist Party. I have great sympathy with the Falun Gong practitioners I see demonstrating in Newmarket or Aotea Square. What I am worried about is the purchasing of New Zealand by wealthy Mandarin-speaking Chinese who are friendly with the Chinese Communist Party, the Chinese who when they do move here are not interested in integrating into New Zealand society but rather want to change it.
I recognise, and this is a very important admission, that there is a little hypocrisy in my position. When I talk about New Zealand identity, I mean primarily a Pakeha New Zealand identity. In the same way that Chinese immigration and investment is making New Zealand more Chinese, the British suppressed the people and culture who existed here before them, the Maori, for something like a hundred years. Many think they are still being suppressed today. Maori culture may have come close to being eradicated. In my ideal world, I would like a New Zealand that combines the best of both English and Maori culture. I would like there to be a place for Shakespeare as one of the fathers of the English language and of English literature as well as a place for Maori customs, huis and tangis and karakia. There would be a place for Chinese culture too in our universities if our universities had their priorities straight. Ideally there would be a place where Chinese culture would be visible, talked about and taught, not a kind of secret malign sorcery gnawing away at the foundations of the country I try to love. However, in my darker moods, I sometimes wonder if there might not be some justice in British colonisers being replaced by Chinese ones as the most powerful people in New Zealand society. Perhaps I should just accept that the yellow peril might win the battle.
Given what has been discussed in this essay, is there anything a prospective Labour-Green government can do about it? Christopher Hipkins plans to campaign on introducing a Capital Gains tax which should dampen the property market a little. But it might not go far enough. Perhaps there should be laws limiting the number of properties landlords can own. But this is a dramatic prescription – I admit I have not thought it through and it would perhaps be far too dramatic to be feasible. There certainly seems to be a need to have some kind of governmental body to scrutinise large planned investments in New Zealand to see if they are in the national interest. Is it really beneficial to New Zealand for dairy farmers to sell Fontera to the French dairy giant Lactalis? Winston Peters opposes this sale and I find myself in agreement with him. However our government seems mainly to be in ideological cloud cuckoo land. Neoliberalism right-or-wrong. Luxon has talked about the need for foreign investment in New Zealand but people forget that when someone invests in a company or business or apartment building, it is not a charitable donation – some ownership passes hands. It feels, in fact, as though the steering of our country is no longer under our Prime Minister's control. The blindness, the sleep walking, the mass hypnosis, doesn't just affect pedestrians wandering around Fort street, it has afflicted our leaders. It is possible we have already been annexed by China. Early this year, the Chinese Navy performed exercises in the Tasman sea between New Zealand and Australia and a few of us were frightened briefly that China was going to literally invade New Zealand. Perhaps this exercise had symbolic significance. In the tariff war between the US and China, New Zealand may have been forced to side with China. Perhaps the subjugation of New Zealand to China is a fait accompli, a done thing. Perhaps we have already become a vassal state to China. Of course, all this occurred to me while my Third Eye was open and it has closed again now. But it was open long enough for me to notice and pay attention to a sign by the door of a very large, very new, and very costly building in Newmarket that reads "Infinity Capital."
