Keith Rankin, 9 November 2026 – New Zealand’s MMP voting system is the old First Past the Post (FPP) system with a corrective proportional overlay. As time has passed, and fewer remember voting before 1996, it has morphed into a proportional party list system (primary vote) with a local electorate FPP underlay (second vote).

What happened – and was almost certainly going to happen in any election in which Labour and National were close to each other and both were below 35% of the total vote – was that the FPP underlay trumped what was meant to be a proportional election. This has led to an eleven-seat ‘overhang’.

This 29 October 2026 article on polling history – RNZ-Reid Research poll: View all results and charts – shows that New Zealand was in ‘significant overhang risk territory’ from late 2024, long before Finance Minister Nicola Willis made the decision to run ‘list-only’ in 2026. She made her choice in full knowledge of the polling trend. Further, it is clear that National Party support below 30% dates back to around April 2026, well before any campaign to get National Party supporters to transfer their party votes to Act or New Zealand First.

One part of the problem on Saturday was that the FPP election allocated 71 seats, leaving just 49 ‘list’ seats to make the proportional correction. In the first MMP election in 1996, it was 65 FPP seats and 55 seats to make the proportional correction. If, in 2026, there were instead 50 FPP seats and 70 proportional corrective list seats, the overhang would have been much smaller, though National would still have had few if any list MPs.

A better fix would be to go to MMMP: multi-mixed-member proportional, using multi-member electorates. I outline this below, noting that it’s easy to understand, using present voting as an example, how the overhang problems resolve under MMMP. A few other comments first, though.

The 20-Day wait for a result update!

This long wait is a complete nonsense. The election was on Saturday 7 November, and the final result is scheduled for a Friday 27 November three long weeks later. The election night tally is a provisional vote count. There is no reason why there cannot be additional provisional counts on Friday 13 November and on Friday 20 November. Such counts would facilitate the process of government formation, substantially minimising the uncertainty – the long vacuous vacuum, when mischievous narratives take hold – relating to the final count. We note that many past governments have been formed on the basis of statistically significant provisional results.

The Natural Gerrymander

One most important question to be asked today is: how can National win twice as many electorates as Labour, when both parties are equally popular? The answer is the natural gerrymander, which I discussed last week in my Gerrymandering and Dummymandering: USA and New Zealand, Scoop 2 November 2026. In that article I correctly predicted that the Wairarapa electorate could be pivotal to the final election outcome.

In the 2005 general election, the electorate vote totals for National and Labour were both about 900,000, and the electorates were split 31 each. This year is the next time after 2005 when National and Labour have been so close to each other; yet the two-party electorate lottery has swung very differently. This time has clearly been an election much more favourable to incumbent electorate MPs than was 2005.

2026 Provisional Results under Five electoral systems

One. The actual provisional result of the election, under MMP with 71 electorates, is: Right (67), Left (64); placing Opportunity as part of the Left bloc. This is made up of: N(42), L(36), G(16), A(13), NZF(12), O(7), TPM(5). Total Parliament of 131. Winning margin for the Right is 3 seats, which is 2.3% of 131. A narrow provisional win to the Right.

I have recast the provisional result under four other compatible electoral systems. The results vary from a narrow win to the Left to a ‘landslide’ to the Right, all with the same actual levels of popular support for the seven parties.

Two. Under a pure list proportional system, the result would have been: Right (60), Left (60). This is made up of: N(35), L(36), G(16), A(13), NZF(12), O(7), TPM(1). Total Parliament of 120. Winning margin to the Right is 0, which is 0% of 120. A Right-Left tie.

Three. Under an FPP single-member electorate system, the result would have been: Right (43), Left (28). This is made up of: N(42), L(21), G(2), A(1), NZF(0), O(0), TPM(5). Total Parliament of 71. Winning margin to the Right is 15, which is 21% of 71. A ‘landslide’ win to the Right.

Four. Under an SM supplementary-member electorate system – a tweaked version of FPP with some list MPs – the result would have been: Right (67), Left (43). This is made up of: N(56), L(36), G(9), A(6), NZF(5), O(3), TPM(5). Total Parliament of 120. Winning margin to the Right is 14, which is 11.7% of 120. A ‘tsunami’ win to the Right, about the same sale as the ‘blue tsunami’ in the United States last week.

Five. Under a multi-member MMP system (MMMP, see below), the result would have been: Right (60), Left (61). This is made up of: N(35), L(36), G(16), A(13), NZF(12), O(7), TPM(1). Total Parliament of 120. Winning margin to the Left is 1, which is 0.8% of 121. A tie-breaker win to the Left. (There is no Left-bias in MMMP; the Left advantage here relates specifically to Te Pati Māori.)

Description of the proposed multi-member MMP system. Call it MMMP.

Imagine a Parliament of 120 members, with 18 electorates (including two Māori electorates), normally with four-members per electorate, and 48 list MPs. There would be 72 electorate MPs and 48 list MPs; just as in a normal election today.

Parties choose up to four candidates per electorate. These candidates, 72 maximum per party, would also constitute the nationwide party list.

Each voter has a single party vote, and a single electorate vote (ie one electorate vote, for just one candidate, though ranked-choice preferential voting could be an option). The four candidates with the most votes are provisionally declared the election winners. Parliamentary representation is topped up by the party list, to ensure party proportionality.

If there is an overhang result, then each electorate only returns three MPs, and the number of list MPs grows to 66.

If there is still an overhang, then each electorate only returns two MPs, and the number of list MPs grows to 84.

If there is still an overhang, then each electorate only returns one MP, and the number of list MPs grows to 102.

If there is still an overhang, then that overhang is left in place, allowing the Parliament to be slightly above 120.

The nationwide party list would be required to be regionally balanced. There would be no list-only candidates. Each party would take one candidate from each electorate to be its top-18 on its nationwide party list. The next 18 on each party’s party list would also be one from each electorate. And so on. Within that constraint, parties would be free to rank the candidates as they please.

Application of MMMP to this month’s election.

There are two overhangs to contend with this year. The National overhang could be resolved by going down to three members per electorate, and 66 list MPs. But the TPM overhang would require going down to just one MP per electorate, and there would still be a rump overhang of one. This is because TPM’s party vote only entitles it to one MP, but it would have two out of the 18 electorate MPs. So there would be a Parliament of 121, with 18 electorate MPs, and 103 list MPs.

This would be a highly unusual result. Under MMMP, there would be every incentive to vote TPM on the party vote as well as the electorate vote. That way there could be as many as eight TPM members in Parliament – presuming TPM only stands candidates in Māori electorates – though almost always there would be less than eight, because of some non-TPM representation in Māori electorates. We also note that TPM could and should solicit general party list votes. (Indeed, during the 2010s, I party-voted TPM in every election. And I am not Māori. In 2011, I was the only TPM vote in the Avondale Primary School booth!)

On the matter of National’s senior MPs who missed out this election, this could no longer happen. First, all candidates would have to be listed in an electorate. And if they don’t make it to Parliament in that electorate, they would make it into Parliament via the party list. In general, in any situation whereby the number of MPs per electorate has to be reduced, most MPs who miss out would be returned as list MPs.

I have just described an excellent MMMP system, which tweaks MMP to remove the FPP wrinkles we saw this year, and works exactly the same from a voter perspective. One vote for one party, and one vote for one candidate. Split voting would be not only acceptable, but encouraged. The overhang loophole would be closed. And most MPs would, most of the time, be electorate MPs rather than list MPs.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 5 November 2026 – The most important policy of the Opportunity Party is its Universal Basic Income (UBI), which they call a Citizens Income (CI). Quite appropriately this is not a ‘bottom line’ policy. But it is a policy which Opportunity needs to push after the election; in particular they need to push for the public debate which they say they want. And not to be shut down the way Andrew Little’s Labour Party was ten years ago, when intimations of UBI surfaced.

UBI forms part of a counter-narrative – well-grounded in actual social science – which establishment narrators continue to push hard against.

In particular, Opportunity needs to push – for immediate consumption – the Basic Universal Income (BUI); a halfway-house tax and benefit reform which can stand on its own. Most importantly, the BUI is almost impossible to oppose – indeed is quite illogical to oppose it, once a person comprehends its simplicity and utility. A discussion on BUI can put-to-bed the ignorant partisan rhetoric used to push-back against public consideration of UBI. It then becomes possible to hold a constructive discussion about UBI, wealth tax, and economic citizenship.

(Refer to my Has the Opportunity Party missed some Opportunities to Talk Tax?, Scoop, 21 October 2026.)

The principal piece of pejorative rhetoric is the claim by National and Act candidates that the Opportunity Party’s CI policy is a proposal to ‘make everyone a beneficiary’. (See this RNZ 30 June 2026 article/podcast: Explainer: What is the Opportunity Party and what are its policies? The article sets up the policy incorrectly as “a universal basic income for everyone, funded by a new land tax”. In fact, CI is funded principally by a flattened income tax scale. In effect, the CI is a combo: a BUI funded by removing the bottom two tax brackets; and an extension to the BUI to be funded by a new land tax. A sensible public discussion needs to separate the CI – Opportunity’s UBI – into its two components.)

In a panel discussion about UBI in 2020 in which I participated – in Grey Lynn, organised by TOP (now Opportunity) – Don Brash, former leader of both National and Act – advocated a laissez-faire UBI to replace the highly targeted, inefficient and conditional welfare benefits that we have come to tolerate.

Note this from Sue Bradford “there have been members in times gone by who have promoted a minimalist position. Former ACT Leader Don Brash, for example, has in the past promoted a low UBI alongside an income tax of 30%, with no further top-ups, leaving most welfare claimants in a far worse position.” (Quote is taken from Progressive Basic Income in Aotearoa 2023, converge.org.nz.) A BUI we should note, while ‘minimalist’, leaves beneficiaries untouched; except that they get to keep their universal income when they move on into part-time employment.

My point here is that Don Brash – who has most recently been in the media for promoting an overhang strategy for National and Act – is (or was) a believer in an authentic economic liberal policy to do precisely what the present leaders of National and Act dismiss as a proposal to ‘make everyone a beneficiary’. Indeed, Brash has always been the authentic economic liberal; whereas Luxon and Seymour come across as grifters promising economic growth while pursuing and promoting fiscal and monetary policies which are known (to all economists, except the appeasers) to have the opposite (ie anti-growth) effect.

(Re Don Brash and the overhang, see RNZ’s Explainer: What is an overhang and how could it change NZ’s election result? 16 September 2026. And see National, ACT and NZ First at odds over vote-splitting campaign, TVNZ, 1 November 2026.)

Opportunity to talk

The biggest barrier to a decent public discussion in New Zealand is probably the corporate media rather than the politicians. Though the politicians’ minders are almost certainly to blame too.

I remember in 2015 when Andrew Little was Labour leader; he advocated some form of UBI as a part of his desire to launch a public discussion on the Future of Work, but was derailed by conservative interests. (Refer Labour leader Andrew Little promises debate on universal basic income, Stuff, 14 March 2016; Labour forced to clarify universal basic income ‘not party policy’, Patrick Smellie NBR, 23 March 2016; Delivering a future of work, Oliver Hartwich, NZ Initiative, 1 April 2016. The last mentioned item completes the hatchet job by not even mentioning a UBI while making new-tech productivity claims similar to those we are hearing today around AI.) The public discussion about the future of work died once the brief enlightenment around UBI was killed off by the grifters and the appeasing corporate media.

The Smellie article refers to the anti-intellectual “barking mad” comment made by John Key, another former National Party leader. May we infer that Key believes that Brash is ‘barking mad’? At least Don Brash is an authentic ‘intellectual’, a word few would apply to Key or Luxon. Andrew Little was weakly intellectual; he started something, but clammed up about UBI after receiving instructions – explicit or implicit – from somewhere.

AI and the Future of Work

Re the AI issue and the future of work – noting that AI-generated productivity can only maintain a degree of social cohesion and capitalist survival if accompanied by a UBI or at least a BUI – see this by Finn Hogan AI to bring short-term pain and a lot of job losses, says TOP, Stuff, 4 November 2026.

And this Australian piece (ABC) this month asks the question: With AI threatening jobs, is it time for a universal basic income? “A Universal Basic Income, or UBI, is a regular, obligation-free payment to everyone.”

Relating to the tech-bro community, see these: What Musk, Altman and Others Say About AI-Funded ‘Universal Basic Income’, Josie Reich, 14 August 2025; Forget Universal Basic Income: Elon Musk Envisions a Future Where Everyone Gets a High Income, Alex Barrientos, 30 October 2026; Elon Musk Giving Out SpaceX Shares As ‘Universal Basic Income’ Becomes A Major Proposal To Tackle AI, Alison Durkee, 19 October 2026. These promises of high productivity are of course just unfulfilled promises; they are the 2026 version of Oliver Hartwich’s comments in 2016, but with a more sophisticated realisation that capitalism itself will crash without a means in addition to wages of putting money in peoples pockets or digital wallets.

In the 1930s, John Maynard Keynes – economist and speculator – saved capitalism with his practical policy recommendations; policy insights informed by the conundrum about how machinery (as well as labour) becomes unemployed if there is no longer a mass-market for its outputs. (The late 1920s – just before the Great Depression – was another of those periods of intense political debate about machine-driven unemployment.)

In those days it was the new Social Credit movement which proposed a ‘national dividend’ to rechannel purchasing power into the pockets of those whose spending was most required; a policy that was both egalitarian and stimulatory. While Keynes did not oppose this Social Credit idea, his better remembered policy recommendation was to create working-class spending through increased government spending; effectively borrow-and-hire public policies. In New Zealand, Keynes’ prescription was followed – with great success, and with non-compliant monetary policy – to build state houses. (We in New Zealand could learn so much today by learning about the New Zealand economic history of 1925 to 1940.)

My BUI proposal is almost infinitely modest when placed beside the proposals of Elon Musk!

The argument for BUI is unrefutable; that’s why nobody ever tries to refute it

The conversation around a basic universal income only requires public engagement, in the same way that Universal Superannuation gained public engagement in 1938. The problem is the privileged political forces which suppress public engagement on the real issues.

(On this matter of contrived disengagement from the issues, the real issues concerning New Zealanders in the lead-up to Saturday’s general election are: the ‘balanced budget’ shibboleth, the contribution of unnecessarily-high interest rates to the high cost of living, the costly foreign wars which our government gives tacit support to, and the inequality-driven shortage of working- and middle-class spending in our communities. It is this kind of community spending that creates employment for young and non-young alike.)

The only credible argument against my BUI proposal is that it’s too modest. Too small to solve all! But that’s also its strength. What matters is that any nudge in the direction of sustainable democratic capitalism is a good nudge.

BUI is not the one ‘big-bang’ solution that some people are impatient for. It’s a solution which promotes liberalism, gradualism and a means to – over time, short or long time –put more spending power in the pockets of the people who most need it; and to do so without creating distortions (which require costly administration to alleviate), moral hazards, or giving big tax cuts to those who do not need them alongside small tax cuts to those who do need them.

On the basis of ‘negative income tax’ accounting – which is part and parcel of economic liberalism’s UBI, and which is essentially what Don Brash supported – a BUI is easily the most efficient kind of tax cut available to policymakers.

The BUI that I propose for immediate implementation is that outlined in my Has the Opportunity Party missed some Opportunities to Talk Tax?, Evening Report, 21 October 2026.

This is a basic universal income of $150 per week to all tax residents, funded by the removal of the 10.5% and 17.5% income tax brackets. For almost everybody, the only difference from now would be the fine-print on persons’ pay slips and MSD benefit contracts. For many people aged 18 to 24, however, it would make a significant difference to their quality and security of life; as it would for underemployed workers, and for recently unemployed people who have employed domestic partners. As important, as these security and mental health supports, is the benefit of knowing that one’s income can never fall to zero. Under my proposed BUI, every New Zealand tax resident would have an absolute minimum weekly disposal income of $150.

It would be a huge opportunity missed if the Opportunity Pary eschews the likely position of influence it will soon have; a position of influence which will enable it to promote the BUI – preceding a separate discussion on wealth taxes and CI – by requiring other-party politicians, the think tanks inside and outside of government, and the corporate media to engage with the Basic Universal Income policy concept.

BUI does indeed make us all beneficiaries; indeed public beneficiaries. We all should benefit from societal productiveness as well as our individual cleverness and hard work. We already are all beneficiaries – public beneficiaries – except for a few unfortunate people who fall through the cracks of bureaucracy. Unconditional benefits for all are built into the income tax scale that we take for granted; we are not brow-beaten by bureaucrats for paying lower tax on the first $50,000 of our annual incomes. That tax discount is an unconditional public benefit received by all but New Zealand’s very poorest individuals.

By linguistic definition, it is good to be a beneficiary; a benefit is ‘something good’. Just ask the shareholders of any company, such as Air New Zealand of which Christopher Luxon must have owned company shares, whether company dividends are something good.

This month’s politics

Opportunity may get more votes than New Zealand First this Saturday. If Mr Luxon can form a government with Opportunity and without New Zealand First, I reckon that he will be on the telephone to Qiulae Wong first thing on Sunday morning. Could she and Simeon Brown – the likely Minister of Finance under a National/Opportunity/Act governing arrangement – do political business together? I have never heard Brown use the ‘making everybody a beneficiary’ line of rhetoric; a line intended by Luxon to be pejorative, but avoided by politicians with better judgement. The young fogie and the slightly older Cinderella could become Aotearoa’s contribution to the youth wave in global politics.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 6 November 2026 – The New Zealand election took a dark turn last week with the campaign by New Zealand’s uber-elites – represented by Harry Mowbray – to try and engineer a result contrary to the public will; and, more significant, to undermine proportional democracy altogether.

New Zealand’s system of proportional representation is not perfect, and can under certain circumstances achieve a non-proportional outcome; but recognising this imperfection is not the same thing as trying to engineer a non-proportional outcome.

(Yes, Te Pati Māori has already walked this slippery slope; though we have understood from the outset that a Māori party would commonly have ‘overhang’ MPs. This was never a problem when the Māori Party was an authentic ‘centre party’. There are many who rue that party’s shift away form its former centrist position. There is nothing inherently Left about indigenous politics in New Zealand.)

Unfortunately Guyon Espiner made a hash of this interview: Harry Mowbray discusses his ‘Split Your Vote’ campaign, RNZ 30 October 2026. Mowbray tried to spill the beans on his anti-competitive anti-proportional agenda – a return to a tight elitist political duopoly – but Espiner overrode Mowbray, preventing him from fully exposing his less-than-democratic views.

Nevertheless, Mowbray made it clear that he wants people to vote Act and New Zealand First in order to make a case for New Zealand to abandon proportional representation. An end to proportional representation would of course then put an end to ‘minor’ parties such as Act and New Zealand First. He wants people to vote for these two parties – one a Labour breakaway, one a National breakaway – as part of an end-goal to collapse these two parties into National.

The problem with the excessive use by the media of the term ‘MMP’ instead of ‘proportional representation’ is that there are two reasons why some people oppose our voting system of 33 years; a ‘mixed-member proportional’ system which effectively became law on 7 November 1993. New Zealand adopted the German system. The German Federal Republic chose this particular system in 1949, with a high (five percent) representation threshold for parties; a threshold intended to create an entry barrier to anti-establishment parties on both the Right and the Left.

One reason for opposition to MMP relates to some aspects its mechanics (such as the 5% entry threshold); the other reason is that many people – typically people of a ‘ruling-class’ persuasion – dislike proportionality in principle. Mowbray’s main agenda was to undermine proportional representation, and not to create a temporary advantage for the Right. Espiner was oblivious to nuances around the white-anting of our very good but not perfect electoral system. When anyone speaks in a derogatory manner about MMP, it’s critically important to understand what they want in its place. Do they want less proportionality? Or more?

MMP in Germany

At least Guyon Espiner redeemed himself by getting a German expert on Radio New Zealand on last Tuesday: Sven Siefken on Germany’s experience with MMP overhangs, RNZ 3 November 2026. Although we should have started discussing Germany’s election result in 2017, or even earlier, more than nine years ago.

Actually, Germany had its first major-party overhang in 2005. Wikipedia says: “With polls remaining so close, speculation increased that (as in the elections of 1994, 1998 and 2002) a small number of overhang seats might significantly impact the election results.” It turned out that the 16 overhang seats then were almost-equally shared between the two major parties, in an election in which only 50% of all seats were electorate seats. Both major parties falling to around 35% of the party vote caused the overhang. An important difference with New Zealand was that each state – Germany has a federal system – had its own party list; this makes an overhang more likely.

In 2009 in Germany the overhang increased to 24, as the major parties became even less popular. So, for 2023 they fixed this by introducing ‘levelling seats’ to maintain proportionality. In 2013 the German parliament bloated by an additional 33 seats; overhang and levelling seats. In 2017, in an election held on the same weekend as the Jacindamania New Zealand election, Germany’s parliamentary bloat increased to 111 overhang and ‘corrective’ levelling seats. A red flag for New Zealand to see, if ever there was one! But nobody in New Zealand – pundits and experts alike – seemed to notice. The German overhang heavily favoured the CDU, which won 185 out of 299 electorates despite getting less than 33% of the party vote.

In 2021 the overhang increased again, with a bloat of 137 seats. The combined major party vote was less than 50%. The electorate seats were evenly distributed, because the two major parties were equally unpopular.

In 2023, the Germans decided to have a fixed 630 seat parliament with no overhang. Their solution was to disqualify some MPs who had ‘won’ their electorates; though the excluded MPs only won with a plurality of votes, not a majority. In the subsequent 2025 election, there were 23 exclusions of ‘winning’ electorate MPs. We should note that, in order to minimise electorate-winning exclusions, the number of electorate seats – or ‘mandates’ as the Germans call them – reduced to 44% of the total 630-seat parliament. In 2025, just 45% of votes went to the two major parties.

All of this should have been news in New Zealand. But it wasn’t. I find that New Zealand has adopted a somewhat more insular mindset than it had in the twentieth century.

Saving MMP in New Zealand from the ravages of its elite critics

1. Fewer Electorates

For New Zealand to have a minimum parliament-size of 120, with 40 general electorates and about 5 Māori electorates, the risk of an overhang would be small; unless, that is, New Zealand voters go to extremes to play the system. (See my third ‘extreme’ scenario in Strategy Scenarios for Voting in New Zealand in 2026, Scoop 29 October 2026.)

There need be no presumption of a fixed number of electorates in the South Island. Further, electorate sizes should become more flexible, focussing on not splitting communities. (Paraparaumu split down the middle in 2023 – half in Mana and half in Otaki.)

2. Multimember Electorates, equivalent to Wards

As an alternative or an addition to the proposal above, New Zealand could switch to multimember electorates – eg to five-member ‘wards’ – much as they use in Ireland. And these wards should be dynamic, meaning that each ward has a maximum of five MPs, not exactly five.

The Māori electorate could be one ward. Then there could be 10, 11, or 12 general wards. In the event of a zero overhang, each ward would elect its full complement of five MPs. In the event of a small overhang, wards could each lose one MP. The number of list MPs would then increase slightly. In the event of a large overhang (ie more than 11), then each ward would lose two electorate MPs, and there would be a further adjustment to the number of list MPs to ensure a total parliament of 120.

In the event of a maximum possible overhang – say an overhang of 65 MPs (noting that the present maximum possible overhang is 71 MPs) – then each electorate/ward would return just one MP. That very unlikely event would deliver a Parliament with 105 list MPs. That would create a disincentive for voters to treat any party as ‘electorate-only’.

This is an excellent reform option.

3. ‘Ranked choice’ preferential voting – Trifecta voting

To fine-tune the ward option listed above; I would advocate the used of ‘ranked-choice’ voting. I personally favour what I call ‘trifecta’ voting; each voter would number just three preferences only. (In Australia, where there is preferential voting, there is pressure to give every candidate a preference, even if they belong to the Rubbish Bin Party.)

I would favour using trifecta voting for both the party and the electorate.

For electorate voting, the result would be that each electorate (aka ward) would end up with electorate MPs from multiple parties. This process minimises electoral distortions arising from unranked voting (which we have in our local body elections in Auckland; there have been Community Boards in Auckland where every member was part of the same ticket). This would mean that electorate constituents would normally have a choice of local MPs from different parties to seek help from.

For party voting, the trifecta method would remove the problem caused by the five-percent threshold. Thus, I could vote for Te Pati Māori (1), Opportunity (2), and National (3). Because Te Pati Māori is unlikely to register 5% nationwide, my vote would then most likely transfer, in this case to Opportunity. And then if Opportunity only scores 4.99% of the total vote, in this example my vote would transfer a second time, in this case to National.

Prediction for 2026

Finally, here, my prediction for tomorrow. Last week my hunch was that the Right would get 51% percent of the party votes, and would win a greater percentage of seats, due to a greater overhang on the Right than on the Left. (And, for convenience here, I am counting Opportunity as ‘radical-centre, slightly left’). That would, therefore, have meant a Right government.

I think, now, that this has been a weak week for the Right. The Mowbray gambit might have backfired; National may get more party votes than Act or New Zealand First would like National to get. Further, I think that National will win fewer than the 40 electorates which Harry Mowbray is banking on.

My gut feeling now is that the Left will get 51% of party votes, and that there will be a larger – though not large – overhang on the Left than on the Right. That could be unwelcome news for Willie Jackson. Opportunity may get close to 10% of the party vote. Further, I think that there could be an opening for a National/Opportunity/Act government, without New Zealand First.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 2 November 2026 – Gerrymandering – partisan ‘redistricting’ of electorates – in the United States this year threatened to undermine that country’s demographic process. While ‘partisan gerrymandering’ – as opposed to ethnic gerrymandering – is legal in that country, there has clearly been an intent to undermine an already flawed democracy by exploiting the flaws in the ‘first-past-the-post’ plurality (FPP) voting system. (Refer US Midterms: The lines that shape America | Al Jazeera Explains, October 2026.)

Gerrymandering is a feature, principally, of FPP voting. In New Zealand, distorted electorate boundary lines determined the result of the 1978 and 1981 elections. The precise boundary lines haven’t mattered in New Zealand since the adoption of MMP in 1996, because the list-MP top-up has always countered any distortions arising from electorate boundaries.

This year may be different, because the critical factor in the final result may by the FPP contest for the electorate vote. (One to watch may be the inclusion of Ashhurst, a Palmerston North commuter town, into the Wairarapa electorate. This may give Kieren McAnulty, a potential candidate to be Labour’s next leader, a slight advantage. Wairarapa is definitely going to be a place to watch on Saturday evening. Refer this RNZ story, 27 October 2026: Ashhurst locals say they have no connection to their new electorate.)

Gerrymandering is an attempt to draw electoral districts – electorates in New Zealand – so as to either: get a result that significantly overrepresents the biggest party in that state or nation, or that sufficiently underrepresents the biggest party that the election is actually won by the second biggest party.

In an unbreachable two-party system, such as the USA, the second-biggest party is of course the least popular party. In United States presidential elections, the 50 states act as electoral districts. In the 2016 presidential election, the party leader who came last (second out of two contestants) was declared the winner. In this case, the state boundary lines were not drawn with the intention of creating a political advantage. Nevertheless, those boundary lines did give the presidency to the loser (the less popular candidate; Donald Trump) and not to the popular winner (Hillary Clinton). This was a case of ‘natural’ or ‘unintentional’ gerrymandering; lines drawn on maps without electoral intent.

Partisan – ie intentional – gerrymandering gets its name from the 1812 United States election in Massachusetts, when Elbridge Gerry created an electorate in the shape of a salamander. (Refer What are the origins of gerrymandering? PBS, 30 October 2026.)

In the United States, redistricting – which has usually involved a significant degree of gerrymandering, more in some states than others – has almost always taken place in the year after a population census; a year such as 2021. But redistricting has been rife this year, mainly in ‘Republican states’ such as Texas and Tennessee, but also in ‘Democratic’ California. Now it’s 2026, midway between the 2020 and 2030 censuses, so this latest redistricting is purely political and partisan in its nature.

The classic techniques are ‘packing’ and ‘cracking’. Tennessee’s congressional districts are a good example of both techniques. In 2022 and 2024, eight of the electoral districts chose Republican Candidates and just one chose the Democratic candidate. In 2022 and 2024 the Republicans got eight-times more seats, but only two-times more votes.

The one Democrat seat was Memphis, the Ninth District, which had a massive Democrat majority; Memphis was an example of packing as many of possible Opposition votes into a single electoral district. In 2026, that’s all changed. Memphis has been ‘cracked’ into three, which each of those three bits of Memphis being joined up with wide swathes of conservative rural territory. For 2026, the Ninth District has been redrawn; one-third of it is in Memphis, the rest is a ‘salamander’ of territory extending to the outer conservative suburbs of Nashville. Nashville is 340km away from Memphis; more than three hours driving.

The intent is to make the Tennessee score 9-0 to Republican, despite a clear indication that there will be a swing to the Democrats in the popular vote. Something similar happened in Texas where the already highly-gerrymandered congressional districts have been redrawn to give the Republicans an even bigger seat advantage in the face of a swing in the actual vote away from Republicans. The Democrat administration in California has done the reverse, to keep the number of districts going to Republicans to just a handful of the 52 seats. (Democrats already have 43 of the 52 seats in California.)

This congressional election may see a ‘backfire’ of this year’s gerrymandering, which they call dummymandering. (See US midterms 2026: Can the president’s party beat history?, Al Jazeera, 28 September 2026; especially the end of this discussion which looks at possibilities for electoral reform.) One of the discussants refers to the possibility of a “blue wave”. If a wave of popular support is strong enough, the semi-safe Government electorates start to fall like ninepins once that wave reaches a critical mass. The gerrymander protects a sitting Government from a small wave to the Opposition. With the dummymander – the backfiring gerrymander – the sweep of electorates switching to the Opposition is even greater than it would be had there been no gerrymander in the first place.

A gerrymander works by the ‘winning’ party having more electorate wins with on average significantly smaller winning margins. Those smaller winning margins make that party vulnerable to a large swing in favour of the other party. In the United Kingdom in 2024, Labour – in its weakest popular vote for 100 years – won a so-called ‘landslide’ by winning very many seats by small margins. The social scientists called this ‘efficient’; it means that, given credible opposition parties in 2029, UK Labour can expect to suffer the equivalent of a dummymander in its next UK general election.

New Zealand

In the United States, state partisan gerrymandering is not prohibited by federal law. In New Zealand such gerrymandering is lot legal; and certainly was not legal in the 1970s, when it happened regardless. Robert Muldoon, then Prime Minister, clearly ‘played’ the Representation Commission charged with setting up the 1978 election, using 1976 census data. My understanding is that the Labour Party representative on the Commission was Jack Lewin, retired Government Statistician, and best friend of the famous alleged spy; the economic historian and public servant, William Ball Sutch. (Refer What to make of new evidence in the notorious Bill Sutch spy case, RNZ, 7 April 2026.)

Re Jack Lewin, Sutch said “Lewin was an able, brash, determined and aggressive left winger who was “difficult to intimidate or subdue”‘. Lewin seems like the person least likely to have been intimidated by the very clever and intimidating Prime Minister. But, given the sensitivity of the then recent Sutch court case, Muldoon may have had something on Lewin; so it’s not out of the realm of possibilities that Lewin was blackmailed into making concessions on electoral boundaries.

(On the matter of Yes Prime Minister politics, I draw attention to this: 10 things we learnt from listener.co.nz stories this week, NZ Herald, 16 November 2024, “Former Prime Minister Sir Keith Holyoake insisted on getting letters of resignation from all cabinet ministers and keeping them in a top drawer in case they were needed, writes historian Dr Michael Bassett”. I also note that, when Sir John Key ‘invited’ the Māori Party to participate in his government – even though he did not need them to ‘sit at the table’ – a key policy of the Right in 2008 was to abolish the Māori electorates. Thus, the Māori Party had a clear incentive to ‘play ball’ with the new Prime Minister.)

In 1978, National won 51 out of 92 seats with just 49.6 percent of the vote. The gerrymander applied in particular to the Wellington electorates. Island Bay was packed, and the others were cracked. Another obvious gerrymander was the cracking of Gisborne, with Kaiti placed in East Cape. I suspect that Hunua, Winston Peters’ first electorate, was also a gerrymander, mixing solid Labour voters with their country cousins.

In 1981, there was a dummymander, but not sufficient to defeat the Muldoon National government. National’s vote went up slightly, though it lost several seats. Three Wellington seats switched to Labour: Kapiti, Central, Miramar. So did Hunua, defeating Winston Peters, who subsequently moved to Tauranga.

The Natural Gerrymander

In New Zealand’s FPP history, the ‘natural gerrymander’ has been politically significant; geographical and demographic circumstance worked ‘as if’ partisan gerrymandering had taken place. (In principal, natural gerrymandering can be offset by a political process of counter-gerrymandering; equivalent to positive discrimination. But I don’t know of any actual cases of this.)

In the elections from 1954 to 1969, Labour averaged 49.4% of the two-party vote, but only got into government once, and that (1957) – while a comfortable win on the popular vote – resulted in only a paper-thin majority in the House. In those years, it required 18% more Labour votes on average to elect a Labour MP than to elect a National MP. All elections in those years were either very close or quite close on the popular vote; but National almost always came out with more seats. The average winning margin of National MPs was significantly lower than the average winning margins of Labour MPs.

One important part of this was the four Māori electorates, which drew Labour votes away from the general electorates, meaning that the provincial cities in the North Island went National most of the time, even though the support for Labour of residents of those cities was probably more often than not slightly higher than the support for National. Elections were won and lost in the North Island provincial cities. Thus the ‘natural cracking’ of provincial city electorates, while the Māori electorates were packed.

The Māori electorates were only a part of the natural gerrymander in New Zealand. There was also a natural gerrymander effect in Auckland and Wellington, whereby working-class voters were more concentrated in particular suburbs, leading to few marginal seats in these cities, and to significantly higher winning margins in the smaller number of Labour seats than in the larger number of National seats. This was a case of ‘natural packing’.

While the United States does not have special electoral districts for ‘Blacks’ or ‘Native Americans’ – they have no equivalent of New Zealand’s Māori electorates – it does have high concentrations of working-class and underclass eligible voters in particular city suburbs; some of these districts might be called ghettos. The United States, even more than New Zealand, has ‘natural packing’, a form of unintended gerrymander.

Bigger Swings in New Zealand from 1972

In the last two decades of FPP in New Zealand, there were big swings back and forth between Labour and National, and also higher levels of ‘minor party’ support. (Although Social Credit did receive high support in 1954 and 1966; indeed it would be fruitful for us in New Zealand today to revisit some of those Social Credit policy manifestos.)

In 1972 Labour got 54% of the votes and 63% of the seats. In 1984 it got a slightly bigger vote share (54.5%) and 60% of the seats. In 1972 in particular there was a dummymander effect. (In 1972, National’s Ken Comber held Wellington Central by 27 votes, giving him the moniker ‘Landslide Comber’.) But it reversed in 1975, when National got 54.6% of the vote and 63% of the seats. 1975 was an almost exact reversal of 1972.

We should note the biggest swing of all in the popular vote – in the FPP era – took place in 1993. Yet National held on, in spite of the huge popular swing against the Bolger-Richardson government. The problem here was not a gerrymander. It was an FPP split vote between Labour and the Alliance; both Left. In 1993 the Left got over 60% of the Left-Right vote. (New Zealand First was also a contestant, but very much a party of the nationalist centre.) Yet the Left only got 48.5% of the seats. This anti-Richardson wave was easily the biggest voter surge ever for the Left in New Zealand; especially large in that just three years earlier National had gained 67 out of 97 seats in the parliament. It would be incorrect to call Labour ‘Left’ in 1990; 1990 was basically a contest between the already discredited Right and the soon-to-be-discredited Right. (If conducted under the Australian ‘preferential vote’ system, the Left would have easily won the 1993 New Zealand election.)

(We note that Rogernomics precipitated two major rifts in the Labour Party. The Left bloc departed first as NewLabour, and then merging with other Left parties as the Alliance in time for 1993; Jim Anderton was the Moses associated with this split. The other split from Labour was Act, which split in 1993, with Roger Douglas as Act’s Moses.) Act did not contest the 1993 election.)

Predictions for 2026

While this will not be my final conjecture on the result of this Saturday’s election, I note that the public’s aversion to right-wing policies is similar to what it was in 1993. But, as in 1990 – but not as it was in 1972 or 1993 – there is no clear left-wing alternative electoral vision. The Left won big on the popular vote in 1972 and in 1993. (And in 1984, because most non-elite people thought that Labour was Left then; though the elite view was that national under Muldoon was unacceptably left-wing, even consorting with the gangs!)

So, this is an election – also like 1931 – where there is a simmering mood for change, but no attractive new vision for change from the ‘major’ Opposition party. So those major parties themselves are cracking. Like 1993, 1984, and 1931 – this will likely be an election which frustrates the voter mood. And may yield – like 1993 – a substantially disproportional result.

There will most likely be an asymmetrical overhang; enough to steal the election for the Right. The principal reason for such an overhang will be the popular discontent with National, not so-called ‘strategic’ voting. Most of those who party-vote Act or New Zealand First will be voters who prefer the policies of Act and New Zealand First over the policies of National. It will be a ‘natural’ overhang, I predict. Not some kind of jacked-up partisan overhang perpetrated by the likes of Harry Mowbray or Paul Henry.

One feature driving voters to the smaller parties is the unremittingly negative campaign styles of both National and Labour. (See my Negative Campaigning and Strategic Voting, Scoop, 6 October 2026.) So it’s not inconceivable that there will be Labour overhang MPs as well as National and Māori overhangers.

Unintentionally gerrymandered electorate boundaries may have a significant impact on some electorates; sufficient to facilitate a Right-overhang outweighing a Left-overhang. For example, Ashhurst, in Wairarapa electorate, may be a close National win despite Ashhurst being more Labour.

United States

Re the ‘mid-term’ election for the US Congress, I see an FPP wave coming for the Democrats, and despite (maybe because of) the leaderlessness of the Democrats. I think it will prove to be a dummymander, in that some of the redistricted electoral districts will fall to the Democrats (though maybe only for two years) when they would have stayed Republican if they hadn’t been tinkered with. I would not be at all surprised if the Democrats win 300 out of 435 seats in the House (Congress). When the count is completed, I predict that there will be significantly more than usual very close congressional results; close enough for recounts to take place.

Repugnant Personality Politics

Re the US Senate, the elections there may not see such a large ‘blue wave’, because the way that repugnant personality politics influences the Senate rather more than it influences the House; in the United States. Though in New Zealand we are seeing more of this kind of negative politics – especially directed at the two authentically Left parties.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 29 October 2026 – Here I present four scenarios for this year’s New Zealand general election. The scenario we have become most used to is the semi-strategic one, and probably this will once again be closest to next month’s reality. Though the outcome of a semi-strategic election in 2026 may look more strategic than in the past, because of a genuine fall in support for the two ‘major’ parties Labour and National. In past elections the voting for the Right has probably been more strategic than voting for the Left, but disguised by the combined major-party vote being in excess of 60%.

I expect some pattern of strategising to continue, leading me to consider two extreme outcomes that are technically possible.

Strategic voting occurs under all voting systems. In the 2024 UK election – a plurality ‘first-past-the-post’ FPP election – there was much vote ‘lending’, especially between Labour and the LibDems. New Zealand’s electorate vote is also a plurality election; to win a candidate only needs a plurality (as in United Kingdom and United States), not a majority (as in Australia). In the recent electorate poll in Te Tai Tokerau, the leading candidate had just 24% support, enough to give her a plurality win, even if all the undecideds split their support among the other candidates.

(We note that in the Oscars, the ‘best film’ only needs a plurality win out of seven candidates all of which are in contention. So, it is technically possible for the ‘best film’ to win with just 15% of the vote.)

In New Zealand, the 2002 election was especially marked by both National and Labour supporters lending the centrist United-Future their votes. And in 2023 there was a degree of lending votes to New Zealand First (NZF), with centre-left voters preferring a CENTRE-Right government to a Centre-RIGHT government.

Definitions

I take purely unstrategic voting to be ‘two-tick’ voting. This would mean that people vote both for their favoured party and also for the candidate representing that party. (Yes, in a few cases there will be no candidate for the preferred party. But only one or two percent of cases.) In this unstrategic voting scenario, people planning to vote for a Te Pati Māori (TPM) candidate will also vote for Te Pati Māori.

In pure strategic voting – the extreme strategic scenario – the people divide the seven major parties into ‘list parties’ and ‘electorate parties’. For the 2026 election, the list parties would be New Zealand First, Act, Green, and Opportunity; with the first two being part of a ‘Right’ coalition and the other two being understood to be part of a ‘Left’ coalition. The electorate parties would be Te Pati Māori, Labour, and National. In this strategy, everyone votes for both a ‘list party’ and an ‘electorate party’; by definition of this strategic scenario, the two votes must be for different parties.

In the semi-strategic scenario, Labour and National supporters vote for their party, and – unless the sitting MP or a strong contender is from a third party – also vote for their Labour or National candidate. Te Pati Māori candidate voters in the Māori electorates would do as they have done before; about 35% for the Labour Party candidate and 65% for Te Pati Māori candidate. The party votes would fall about 30% TPM, 30% labour, 30% Green, 10% for the Right bloc. Voters for New Zealand First and Act would vote about 90% for the National candidate. Voters for Green would vote about 90% for the Labour candidate. Voters for Opportunity would vote about 90% for either a Labour or a National candidate; more Labour than National.

For simplicity, I am presuming that all other parties will be insignificant in this election; so in all scenarios I am assuming that other parties each get zero percent of the vote.

The Purely Unstrategic Scenario

The electorate seats would fall very much as they would for a first-past-the-post election; in those ‘olden days’ elections, the candidate vote (the only vote) was a de facto party vote. In my unstrategic scenario, the general seats split between Labour and National, and the Māori seats would split between Te Pati Māori and Labour.

The latest TVNZ Verian poll gave 29% support to National and 27% to Labour. The electorate percentages are generally amplified versions of major party support. If I give four electorates to TPM, that leaves 67 electorates to split between National and Labour; my best estimate is 37 of these to National; and 30 to Labour, including three Māori seats. Thus the 71 electorates would be 37 for National, 30 for Labour, 4 for TPM.

In the unstrategic scenario, 3% of the party vote goes to TPM, lowering Labour and Green by two percentage points compared to that Verian poll. Based on that poll, the Right parties would get 51% of the party vote (29% for N, 12% for A, 10% for NZF) and the Left 49%. To accommodate this Māori party support, Opportunity would stay at 6%, Labour would be 26%, Green would be 14%, and TPM 3%.

National would earn 35 seats in total, meaning an overhang of 2 seats. Labour would earn 32 seats, giving them two list MPs. TPM would have 4 seats, no overhang, no list MPs. Green would get 17, Act 15, NZF 12, Opportunity 7. 122 MPs in total. The Right would have 62, the Left 60. The Right could govern. But we note, based on the TVNZ Verian poll, the Right did have more Party support, so the overhang would not be problematic.

The Semi-strategic Strategy

In this strategy, the party percentages are 29(N), 27(L), 14(G), 12(A), 10(NZF), 6.5%(O), 1.5%(TPM) adding to 100%. On the basis of proportionality, this gives 61 seats to the Right and 59 seats to the Left. But TPM win five electorates, giving them an overhang of three, making it 61 seats to the Right and 62 to the Left. The Left wins, thanks to this overhang.

In this strategy, I will allow Green to win its three electorates, Act to win Tamaki, NZF to win Northland, and Opportunity to win Mt Albert. For these last two, semi-strategic voting would give us the 1999 Coromandel scenario, which had Jeanette Fitzsimons for Green winning Coromandel. This would mean that NZF and Opportunity would keep their proportionally allocated seats even if their party vote falls below 5% of the total party vote.

And I have Paul Goldsmith winning Epsom, and Chris Bishop winning Hutt South, on the basis that the voters will expect David Seymour and Ginny Andersen to be returned as list MPs.

On the basis of these smaller-party electorate seats, I predict no additional overhang under the semi-strategic strategy. This would leave the final result as 62 to the Left and 61 to the Right. Probably National would have zero list MPs, though.

There would be pressure on Opportunity to go Right, however, reflecting the higher party vote for the Right parties, and reflecting that National would have more MPs than Labour.

Extreme Strategic Scenario

Here I assume that three parties – National, Labour, TPM – receive only electorate votes. And the other three parties receive only party votes. Further, I will give all seven Māori electorates to TPM.

This situation would create 71 overhang seats; ie all electorates would be overhang seats. There would be 64 electorates contested by National and Labour, and 7 for TPM. There would be 120 list seats to be contested between Act, Green, NZF, and Opportunity. Parliament would have 191 MPs.

Based on the latest TVNZ Verian poll, I would transfer National’s 29% to Act and NZF. My prediction would be 27% party votes for Act (32 seats), 24% for NZF (29 seats). I would transfer Labour’s 27% to Green and Opportunity. My prediction would be 35% party vote for Green (42 seats), 14% for Opportunity (17 seats). As before, we note that the Right has a small edge in that Verian poll.

The critical factor would be the purely FPP election taking place in the 64 non-Māori (general) electorates. While I would be inclined to go 36 for National and 28 for Labour, some of these electorates could be a toss-up, largely determined by local issues within each of these electorates.

In this 191-seat Parliament, the Left would have 28+42+17+7=94. The Right would have 36+32+29=97. Christoper Luxon would be invited by the Governor General to form a government.

But imagine if the FPP ‘toss-up’ falls 34 for National and 30 for Labour. That would give the Left 96 and the Right 95. Mārama Davidson – the senior Green leader – would be invited to lead a Left coalition. Opportunity would be courted by the Right, most probably; but Qiulae Wong would probably be more comfortable with Mārama Davidson than Christopher Luxon. With the Green Party having a ‘winning’ plurality of seats, Wong’s first party to negotiate with would be Green.

We note that, with a 191-seat parliament, the debating chamber would have to operate like the House of Commons, without enough seats for every MP. There would have to be British-style ‘hot-seating’; something the Brits are well used-to. Extra office accommodation could easily be found in nearby buildings, given the present depressed state of the capital city. And the extra consumer demand from extra MPs and their staffs could revive the café scene in and around Pipitea, Wellington. Wellington could be saved from becoming one of Shamubeel Eaqub’s zombie towns.

Asymmetric Strategy Scenario

Finally, I consider the possibility that Labour, Green and Opportunity voters pursue an unstrategic strategy, and that National, Act, NZF, and TPM voters pursue a highly strategic strategy. In this case I am giving TPM 7 electorates (all 7 overhang), and Green 3 electorates, and Act one electorate (Tamaki). I would give Labour 20 electorates. That would mean 40 electorates to National (39 overhang, considering Epsom).

Further, National’s 29% support would transfer to Act and NZF. (Given rounding issues, I give Act 28% and NZF 24%.)

There would be 46 overhang seats, making a Parliament of 166.

My total seats for the Left would be 7+32+18+7=64, including 30 electorates.

My total seats for the Right would be 40+34+28=102, including 41 electorates.

A clear majority in the new parliament for the Right.

Solutions for 2029 or 2032

If either an extreme or asymmetric scenario happens, there would be an urgent public conversation on electoral reform. A decision to reduce the number of electorate MPs relative to list MPs might be enough to quell the reaction. And removing the fixed-electorate quota for the South Island, a bizarre relic from the past; a relic which incrementally reduced the number of list MPs from 1996 to 2023.

A more comprehensive change would be to switch to multi-member electorates, with an ability to allocate fewer MPs per electorate when the electorate vote is too different from the party vote. I call this ability ‘dynamic allocation’.

And trifecta voting. This is Australian-style preferential voting – remember the New Zealand flag referendum, which used this – but limited to just three preferences. Multi-member electorates with trifecta voting and dynamic allocation should completely solve the overhang problem.

We might note that, with MMP elections, trifecta voting could address the ‘wasted party-vote’ problem caused by the 5% threshold. If a voter’s first preference party didn’t reach the 5% threshold, then the vote would transfer to the second-preference party; or to the third-preference party if the second-preference party didn’t make it either.

Conclusion

The actual election results will reflect a mix of these less-strategic and more-strategic scenarios. Whatever that mix turns out to be, there should be no reason for panic. New Zealanders are good at adapting in the medium term, and accepting the legal result in the immediate-term.

Clearly, asymmetric strategising – which is what many fear – would give a distorted result. Once. We adapt, either by changing the rules or by encouraging strategising on all sides of the political spectra and accepting more MPs. (Ireland, with the same population as New Zealand, has 174 MPs; plus 60 senators.)

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 27 October 2026 – In the political debates so far, the three most important issues have been barely mentioned: fiscal policy (typically framed as ‘public debt’); monetary policy (‘interest rates’); and foreign policy (dealing with the global warmongering and sabre-rattling which has become ubiquitous). On the foreign policy matter, see my Interview Question the Commentators Ignored: NZ and the EU, 19 October 2026. It is on such matters of visibility and partisanship that I am commenting on here.

Just as New Zealand’s political class chooses not to connect the massive global cost of war and war-posturing with the predominant ‘cost-of-living’ election issue, the global political class appears to not see New Zealand at all. Except as a place for them to escape to!

I saw this short video on YouTube last week: What If Russia Used a Nuke Against Ukraine?. The initial event posited in the video is by no means unlikely; though I think the subsequent analysis is wrong. There is an ongoing assumption that if one nuclear weapon explodes in anger, that rational people responding (or reacting) to that event will choose global murder suicide as their response.

Euro-Nato already has Russia in a rhetorical bind, taunting Russia by showing that it does not fear the nuclear deterrence which has formed the mainstay of Russia’s defence since 1949. The Russian political class knows that Euro-Nato is trying to present Russia as weak, and eventually will submit to ‘The West’, sooner rather than later in geopolitical time.

Russia does not like looking weak; and, within that domestic Russian political context, Vladimir Putin is understood as a ‘dove’ rather than a ‘hawk’. (Indeed, both the global and the Iranian political classes understand that the Iranian president, in his domestic Iranian context, is also a ‘dove’.) The hawkish position in Russia is to restore deterrence, to re-instil the fear of Moscow that existed during the Cold War. The “use of a nuke against Ukraine” is an option very much on the Russian table; not a remote ‘out-of-left-field’ possibility to be discussed only by Princeton academics.

New Zealand as a Cold Wheatfield

New Zealand comes into this story, because the video starts like this (with a caption ‘South Island, New Zealand, Two Years After’). “It’s the middle of summer. The sun is a pale white disk behind a pale grey sky. It’s cold – colder than any summer that anyone here remembers – but the wheat is still growing.” The video mentions New Zealand again at the end, as the only Earthly survivor; other than Vanuatu and Solomon Islands which will be “too small” and get no ships. New Zealand – after the nukes – “isn’t paradise, [has] no imported fuel, no spare parts for tractors, and boats full of desperate people arrive from across the Pacific. But the farms still grow food, and the cows still give milk, and five million people are still alive. Which brings us back to where we started, the South Island, summer, a pale sun, wheat still growing, the last safe place on earth.” (Nobody told the makers of this video about New Zealand’s loss of capacity to refine its fossil fuels.)

This is the world’s geopolitical view of New Zealand. Somewhere on the verge of being off the planet; a green Shangri-La that is sufficiently remote that it can survive a global holocaust, albeit in a greyer shade of green.

For the most part, the elite world – especially Europe – doesn’t see New Zealand at all, hiding as it does on the far side of Australia. Not just as the bulbous tip of Southeast Asia – which is what Australia is – but a bunch of green rocks somewhere beyond Middle Earth. Far Earth.

In recent times, New Zealand has responded in tune; largely by tuning out. Consumer goodies arrive magically as cargo; New Zealand represents the ultimate cargo culture. And the tune-out is reflected in the lack of mainstream contested discourse about New Zealand’s place in the world. But we did have such discussions upto 2020.

We talk about the cost-of-living without discussing the costs of living on a shared planet. We have become – once again – eurosupremacist to the core; and despite our dependence on Asia and Asians. The ‘bad guys’ live in Asia (including Russia which is North Asia) – indeed as close as Indonesia – the world’s fourth most populous country. The Euro-American ‘good guys’, deeply flawed as they may be, remain ‘our’ good guys. We see New Zealand as sufficiently remote that we can depend for our ‘security’ on the most-distant Euro-American geopolity; while becoming distinctly frosty and transactional towards the much-less-distant Asian geopolities.

Jeff Rich: “Australia, A Little Nation Lost”

I would describe Jeff Rich as a non-partisan intellectual, with a moderate and conciliatory worldview, who is willing to explore issues many would prefer to be left unaddressed – preferably invisible, not addressable – issues in the zone of discomfort. His Substack blog and YouTube channel are called Burning Archive.

He wrote a recent article: Australia, A Little Nation Lost in the Time of Monsters, about “Australia’s Post-Colonial Polycrisis [as] the Story of the World”. New Zealand, of course, is a littler nation lost under the skirts of a lost Australia; Rich barely acknowledges New Zealand. He says: “Australia is a little nation of 28 million people, yet its leaders believe it can be a middle power. They are mistaken. Tragically, comically, they lead a little nation lost.”

One of Rich’s themes is that Australia’s post- British Empire identity is its role as a deputy-sheriff (not a ‘vassal’) to the United States, and that it has the United States military infrastructure on site to support that co-military relationship. Indeed, the above-mentioned-video – What if Russia used a Nuke? – suggests that Australia would be struck in the nuclear war scenario which it describes, on account of Australia’s militarisation that is too partisan towards its Far West(s) and against its Near North(s). Hence, that video argues, Australia would be no refuge from a nuclear holocaust; only New Zealand – Far Earth – could be a lifeboat for people, for tractors, and for cows.

To get a good perspective on Australia’s conundrum – or at least Jeff Rich’s well-argued version of it – go to What Australia Reveals About the US Empire, Neutrality Studies, 20 October 2026. This presentation is especially for people in the Global North/West who have been remiss in failing to adequately incorporate Australia into their discussions.

Rich states unequivocally that Australia is a “Russophobic” nation. More equivocally, and not in these words, he also noted that Australia has become hamstrung since the Bondi Beach shootings by a geo-moral position that is best described as ‘ProSemitic’. (It is important to note that if a person or nation is neither Russophobic nor ProSemitic, that does not make them Russophiliac or AntiSemitic. Critics of Europe’s martial policy towards Russia – such as Pascal Lottaz, host of Neutrality Studies – are commonly labelled ‘Putin apologists’.) For a man such as Jeff Rich, well qualified to participate in a Neutrality forum, it is appropriate to be neither pro- nor anti- lots of -isms. Neutrality is conceptually non-binary; if you are not for something, you should not be considered to be against it.

New Zealand, in light of ‘Australia, A Little Nation Lost’

Unlike Australia, New Zealand was close to being a genuinely neutral country in the years 1985 to 2020 – some years more neutral than others. New Zealand suffered a state-terrorist attack from ‘socialist’ France in 1985; an attack to which the United States and United Kingdom were reputedly complicit. That sinking of the Rainbow Warrior set New Zealand off on an exceptional path of neutral positioning; although the seeds of preference for a neutral foreign policy were already there. Indeed the presence of the Rainbow Warrior reflected those seeds. The ensuing legislative achievement was Nuclear-Free New Zealand.

Jacinda Ardern – Prime Minister 2017 to 2023 – in her later years of tenure made no secret of her affiliation to the ‘liberal Western’ ‘rules-based world order’; and as such was glad to be out-of-office in October 2023, when that ‘order’ came crashing down.

Neutrality sentiment in elite New Zealand frayed more generally after Joe Biden became United States’ president in 2021, and the ‘security’ (against China) of the ‘Indo-Pacific’ became a big thing. Biden went on to become an accessory to the world’s greatest security threats in my lifetime.

Before we got entangled in the geopolitics of Democratic America – and see The Great Betrayal: How the Democrats became the Party of War, Neutrality Studies with James Carden – the biggest threat to New Zealand’s ambiguous neutrality had been Don Brash’s offer to repeal the nuclear-free legislation, allegedly by ‘lunchtime’. Don Brash’s party lost the 2005 general election.

Conclusion

Aotearoa New Zealand should not be cowering behind a compromised and geographically out-of-place Australia. It should be proudly Pacific, neutral, and committed to the rights of nations and subject peoples to wage peace rather than to wage geopolitics; New Zealand can once again be a proud peacemonger nation. Much better than hiding in a cowardly manner behind the exceptionalism of the United States and Australia in particular and of the ‘good guy’ ‘Democracies’ in general. Just as meaningful ‘virtue’ is more than a self-ascribed label, ‘evil’ is a concept best left to cartoon fiction and not to the posturing of self-labelled ‘good guys’ re their real or imagined adversaries.

Foreign policy should be at the fore of the New Zealand election debates, and not just because foreign events raise the price of diesel fuel. New Zealand should make itself visible to the world, not as a lifeboat or latter-day Noah’s Ark, but as a committed non-judgemental advocate for world peace and diplomacy.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 23 October 2026 – The financial lobby tells us ad nauseum that we are all living longer, and that – if not already retired – we had better all save like crazy. (Note, by the way, that the cost of retirement is the resources that go into supporting retired people whether their money comes from a pension or from drawing down private savings. The biggest ‘burden’ is a country’s affluent retired, who draw resources away from everyone else.)

The other day I saw this on YouTube: Why Australians were so thin in the 1970s. The people shown would have been born between 1930 and 1955. One reason for ‘thinness’ not mentioned in the video is that people smoked more then; but Australasians born between 1930 and 1955 probably did not smoke as much as those who served in the world wars.

Putting the smoking issue aside, we note that the high life expectancy statistics for Australians and New Zealanders for the last fifteen years relate to the death rates of the people depicted in that video.

We know that people of subsequent generations have been more prone to obesity, and to type-two diabetes. I note from my own experience in 1976 (the only time that I was in the United States) that I was constantly aware that that country had a significant obesity problem compared to the countries I was familiar with (then, I was familiar with New Zealand, United Kingdom, and West Europe). And I note that official life expectancy in the United States today is three years less than New Zealand; and four years less than Australia.

One important but understated statistic from the Covid19 pandemic was the significant increased risk of death, worldwide, of people with diabetes comorbidity.

I heard this on RNZ this morning: Porirua research highlights scale of type 2 diabetes epidemic. We may add there is almost certainly a mental health epidemic which impacts on the same demographic discussed in that radio report; and which may to some extent be caused by poor physical health.

If we combine this very evident prime-age health deterioration with the Easterlin demographic hypothesis (which explains why relatively over-populated generations face worse life outcomes due to higher competition from both peers and the preceding generation) we can only conclude that people born between 1960 and 1975, and also people born between 1985 and 2000 are likely to die on average at significantly lower ages than people born in the 1930s and 1940s.

New Zealand has a particularly large demographic spike of ‘millennials’; ‘baby-blippers’ born between 1987 and 1997, augmented by immigration. The generation born from 1960 to 1975 is also very ‘numerically abundant’.

New Zealand’s healthcare system is today facing a substantially increased number of people in their seventies and eighties. But these are relatively healthy people. And who, in large part, have substantial capacity to spend on private healthcare. These represent a primary ‘concertina’, or compression of demand.

What New Zealand is facing is a demographic concertina effect – a concertina effect of morbidity which will lead to increased premature mortality – whereby people currently aged 50 to 65 (and there are many of them) are already placing unexpectedly high demands on New Zealand’s health care system; significantly higher than would be predicted by past age-specific death rates.

But that’s still only the third of it. A third compression is coming from those born either side of 1990; people in their thirties and early forties today who represent a significant demographic spike. The healthiest of these are our many overseas-born residents who were born around 1990. I fear that our New Zealand-born ‘millennial’ population – born in the late 1980s and early 1990s – will prove to be very much at the wrong end of this concertina.

The life expectancy statistics which we rely on are derived from past mortality, especially from people who were young in the 1950s and 1960s. Yet the concept of life expectancy is a conceptualisation of the future. We have no idea how long today’s younger people will live for. But there are some very worrying portents; today’s 35 year-olds missed out in the infectious diseases which centuries-ago took many young people. Rather they await onset of the more chronic conditions of twenty-first century middle-age; many are not in good shape to meet these challenges.

Too many peak-age adults – alive today – experience sedentary work and commuting, inadequate incomes, quality-compromised and barely affordable housing, private debt, time poverty, social isolation, and unhealthy imported diets. We have more varieties of foods available to us today; though the predominant experience is more food, much of it very fast. Quantity trumps quality; the reckoning is only starting to show in our healthcare and end-of-life statistics.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 21 October 2026 – On the Multi-Party Debate on 13 October (TVNZ), the first question asked by Tova O’Brien was to Qiulae Wong, about the policy for a Citizens Income (aka Universal Basic Income; UBI). In particular, Ms O’Brien asked whether it was appropriate for high earners such as millionaires to receive this payment, which is proposed to be $373 per week. Ms Wong partially fluffed her lines, by not saying that, for a millionaire, much of the weekly $373 tax credit would be offset by higher income tax on higher income earners.

A better-designed UBI would have people currently on the top marginal rate of income tax not receiving any income above what they receive already. The point is that these people already receive a weekly UBI of $402, courtesy of an average income tax rate which is significantly lower than their 39% marginal rate of income tax.

(If Christopher Luxon looked carefully, he would see that, by his concept of ‘beneficiary’, high earners such as himself are already beneficiaries. All taxpayers in just about every jurisdiction receive tax concessions, through the graduations of the tax scale. It is not a ‘bad’ thing to be a beneficiary; by definition it is ‘good’. If he receives any interest or company dividends, then he is a beneficiary.)

Opportunity’s proposed income tax scale should be controversial, but is rarely mentioned in debates or interviews. Opportunity proposes to eliminate the 10.5% and 17.5% lower rates of tax; and replace the 30% rate with a 28% rate, and the 33% rate with a 34% rate. They would also bring down the current $78,100 threshold to $50,000 and raise the current $180,000 threshold for the 39% top rate to $200,000.

It is not clear why they wish to do this tinkering with the income tax scale. And there are some important problems with the way that Opportunity combines its income tax scale with its Citizens Income. More about that below.

Nobody ever seems to ask Opportunity spokespersons about their income tax policy; critics and supporters alike seem to be only interested in their ‘wealth tax’ policy.

A simple Basic Universal Income (BUI), aka Negative Income Tax

The simplest way to initiate desperately overdue income tax reform is to drop the 10.5% and 17.5% lower rates of income tax, and replace them with a BUI of $150 per week; a negative income tax – or, in technical language, a refundable tax credit. (This amount is too low to be called a Universal Basic Income.)

(Or, we could be a little more ambitious, and remove the 10.5%, 17.5% and 30% lower rates of income tax, and offset them with a BUI of $195 per week.)

With this BUI negative income tax proposal, everyone earning $53,500 or more, would experience zero change; only the labelling of their benefit would change. Likewise beneficiaries would experience zero change, because the first $150 of their benefit would be relabelled, as their basic universal income. (However beneficiaries could never suffer a loss of this $150 BUI benefit component, whatever restrictions or conditions or reductions might be imposed on their benefit.)

That’s it, in a nutshell. A full monetisation of the benefits arising from those tax rates at the lower end of the scale.

Would there be a fiscal cost? Yes, but not a big fiscal cost.

And there would be two types of significant fiscal advantage. The first type would be a substantial reduction in the case workload of MSD (Ministry of Social Development), both in having fewer future cases, and in cases generally becoming less complex to administer.

The second type of advantage would be an equitable stimulus. This would represent the fiscal stimulus generally associated with tax cuts, though the beneficiaries of this stimulus would be those low income people who presently ‘fall through the cracks’; for example, students who don’t qualify for a student allowance, and domestic partners (eg spouses) who presently have minimal income of their own but don’t qualify for income assistance because their household ‘breadwinners’ are employed or self-employed. This would be a much more efficient stimulatory tax cut than the types of tax cuts we are used to; this would channel the money towards the poorer rather than the richer individuals in society.

Such a BUI of $150 per week could never be claimed as a ‘licence to loaf’; the amount is too low. A low universal income would facilitate labour supply rather than inhibit it. Jobseekers would not be completely out-of-pocket, nor subject to cruel conditions to retain their benefits; they would be able to focus on job-seeking – or training – instead of benefit compliance.

Further, almost all of this stimulatory negative income tax would be spent. So it would quickly generate new fiscal revenue, first as GST (goods and services tax) and then as income tax.

If Opportunity was offering this BUI as a first stage of tax reform, I reckon they would be at 20% plus in this week’s political polls. It’s a policy which is almost impossible to criticise. And, using the neoliberal framing of the BUI as a tax credit rather than a welfare benefit, there would be no new beneficiaries created by the policy. (We note that former National and Act leader Don Brash favoured something along these lines – probably closer to the $195 option rather than the $150 option – in 2020 when he spoke at a TOP political meeting in Grey Lynn. Brash is not a ‘communist’!)

I recommend that Opportunity actively promotes this option as an immediate transitional step – it’s now too late for them to make it a coalition ‘bottom line’ – on their way to further tax-benefit reform. As it stands now, the BUI represents an important missed opportunity.

This BUI not only represents an equitable and affordable tax-cut stimulus – less radical than what Labour was promising in 1935 – but also represents a new policy lever. Future fiscal stimulus – when required – could be easily achieved by raising the BUI amount a little. That would be far more equitable – and efficient as a non-inflationary stimulus – than any of the tax cuts that have been implemented in New Zealand in our lifetimes.

(And a BUI is liberal, especially in its NIT framing. This is not a left-wing policy; it is a policy that favours stimulus through private rather than public spending. This policy remains agnostic with regard to public-sector spending. The BUI is ‘distribution’ – a small social dividend – rather than ‘redistribution’.)

Combining a $150 BUI with Opportunity’s proposed income tax scale

A non-beneficiary today receiving zero income would be $150 per week better off.

A non-beneficiary receiving $15,600 before tax would be $97.50 better off. Currently, these are people largely dependent on a student-loan living allowance or on a domestic partner.

A person earning $50,000 – ie a fulltime minimum wage, and also the threshold for Opportunity’s 34% tax – would be $28 per week better off.

A person earning $78,100 – ie threshold income for the present 33% tax rate – would be $2 per week worse off. A person earning $180,000 – ie threshold income for the present 39% tax rate – would be $21.59 per week worse off. A person earning $1,000,000 – ie threshold income for an income millionaire – would be $2.36 per week worse off. This negative income tax policy would not be providing high income earners with additional disposable income.

My recommendation is that Opportunity immediately recognises the virtue of a $150 weekly BUI. If asked by Tova O’Brien or Paddy Gower why a millionaire should get this, Qiulae Wong would be able to say that the millionaire would actually face a weekly tax increase of two dollars!

She could then go on to say that the remainder of the Citizens Income – $373-$150 equals $223 – would be a longer term project, a UBI, to be financed through a wealth tax fund which the millionaires should be sustaining.

Creating a Universal Basic Income

If we are to ‘go all the way’ and create a UBI in New Zealand, the easiest way to do that would be to eliminate the 10.5%, 17.5%, 30%, and 33% concessionary marginal rates of income tax. That would yield a weekly UBI of $402.36, to be funded principally (but not only) by the removal of those concessionary tax rates, leaving a flat rate of income tax of 39%.

A UBI – payable to all tax-residents aged over 18 – would be sufficient to fully replace most categories of social security benefit, and to substantially replace the remaining categories. The remaining categories could easily be handled by Inland Revenue, which already pays out tax credits. This would mean that the Work and Income branch of the Ministry of Social Development (MSD) could be abolished; something attractive to neoliberals but not to those neoconservatives who favour the state exerting some control over poor people’s lives.

We note that, in a world which is substantially productivity-enhanced by artificial intelligence (AI), a UBI is essential to ensuring the economic sustainability of that world. While the argument for a UBI applies to the full range of productive societies, the present presence of AI raises the urgency of the public discussion. Nobody can honestly contemplate the advocacy of AI as a productivity-enhancing tool without advocating at minimum a BUI.

Note re the age of entitlement to a UBI, and proposals to extend the franchise to 16-year-olds

We note that there are various age-definitions for an adult. Presently 16-year-olds can leave school, and can get married. But most other criteria for adulthood focus on age 18.

If we do enfranchise 16- and 17-year-olds in the near future, this will raise questions about things like the drinking age and the age for military service; and the upper age limit for family tax credits presently paid on behalf of children.

Advocacy for a BUI or a UBI would need to factor in whether these should be payable to people aged 16 and 17; if so, clearly instead of present family tax credit payments such as ‘working-for-families’.

My general preference is to leave the ages as they are at present, with the focus on age 18. This keeps the whole ‘negative income tax’ issue more simple to negotiate. But it could mean that 16- and 17-year-old workers could only receive a BUI if they were no longer at secondary school and not ‘earning’ a family tax credit for their parent.

I favour restricting a BUI or UBI to people who have (or ‘would have’) completed five years at secondary school. Thus, anyone who entered Year 9 at secondary school in 2022 could become eligible for a UBI from 1 December 2026. Though there might be exceptional reasons for commencing payments at a slightly younger age.

Citizens’ Income excludes Denizens

The Opportunity Party’s Citizen’s Income would exclude many New Zealand tax residents. Indeed the use of the word ‘citizen’ becomes problematic in that it has different definitions in different contexts.

The present New Zealand labour force is unusual – in both domestic history and contemporary political geography – in that so many workers are either recent permanent residents or on temporary work visas.

A policy to raise income taxes – by removing the lower steps on the tax scale, as both Opportunity and myself require – could have substantial unintended consequences if the offsetting tax credit (BUI, UBI, CI) is not payable to these two ‘non-citizen’ categories of New Zealand taxpayers. Some people who Opportunity would exclude from a Citizens’ Income are eligible to vote in next month’s general election. These people – plus the many denizen tax-residents who drive our buses and work as nurses – could face substantial uncompensated tax increases.

The straightforward solution is to tax all tax-residents on the same basis (with the partial exception of persons aged under 18, as noted above). Even if there is a heightened fiscal cost, there is a greater benefit in having a workforce which is not some form of denizen underclass, unable to contribute as consumers, and unable to contribute to global wellbeing through their remittances to their countries of origin.

There’s also a logical problem. Imagine a world in which all countries have an income tax scale which offers at least a Basic Universal Income. Then, all workers – all economic citizens – in the world should have access to some level of BUI; but in practice people who are citizens of one country but denizens of another would miss out. My view is that the BUI should be paid by their country of tax-residency rather than their country of formal citizenship. (We note that there are something like 500,000 denizens of Australia who are citizens only of New Zealand.)

Finally

A Universal Income is also a Negative Income Tax, becoming a tax credit for those with incomes at the lower end of the income scale, and a tax concession for those higher up the income scale. A Basic Universal Income is an insufficient ‘social dividend’ in that it cannot be an adequate income to live on (except for a few ascetics) without other private or public means of support. This would seem to be the minimum social-income guarantee in any liberal society.

A Universal basic Income is generally understood as a universal income sufficient to support individual subsistence; it is a UI which meets an ‘adequacy’ criterion, just as New Zealand Superannuation – a UBI for seniors – has to meet such a criterion.

It is possible to criticise a UBI on the grounds that it disincentivises ‘working for a living’; although there are good arguments that its incentives for economic contribution to society outweigh its disincentives. It is not possible to criticise a BUI using this ‘labour-supply’ argument, however; it’s simply too basic. A BUI is a complement to paid work, not a substitute. (So is a UBI, I would argue, though this argument is less clearcut; New Zealand Superannuation is clearly a complement to labour force participation.)

A liberal Opportunity Party should have both BUI and UBI ‘on its books’; the BUI for immediate implementation, and the UBI as an aspiration in conjunction with additional streams of public revenue. (We note that, in a society with increasing productivity, a BUI can be expected to morph into a UBI.)

And Opportunity should be clear that by ‘Citizen’ they neither mean ‘passport-holder’ nor only persons who have been in the country for at least five years. Think of the denizens whose labour contributes so much to New Zealand.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 19 October 2026 – On Wednesday’s leaders debate (about 1 hour in), we got this question: “Should New Zealand join the EU?” Chris Hipkins said “yes”, if such membership was on offer. Luxon was more equivocal, though not dismissive. Overall there was remarkably little on international affairs (at a time when we may or may not be in World War Three), and no commentary afterwards. Hipkins’ Europhiliac answer disappeared into the crevices of the ‘elephant in the room’, possibly because much of New Zealand’s elite commentariat is Euro-supremacist at heart though not willing to come out as anti-Asian. Best to tiptoe.

(In that tiny segment of the ‘debate’ on foreign relations, there was some anti-Iranian sentiment relating to the IRGC, followed by strong pro-Ukraine sentiment. There was also irresponsible talk that China might invade Taiwan in or after 2028. Hipkins spoke about maintaining “peace in the Taiwan Strait”. Hipkins claims to favour a “morality-based” foreign policy on Ukraine and on China re Taiwan; this is code for favouring ‘good versus evil’ belligerent narrative over geopolitical realism. We are presented with a scenario of China, for no reason, suddenly deciding to invade the big island of Taiwan – no mention of the little islands of Taiwan such as those in Xiamen Harbour. And just as we face the relentless though unfounded presumption that Russia wants to conquer Europe.)

While the Euro-West is burning (literally) – and the rule of Macron, Merz, and Starmer became democratically untenable because of their prioritisation of Russophobia and Judeophilia over their own national wellbeing – the Euro-West establishment (ie their parties equivalent to National and Labour) are waging a rhetorical war against Near Asia (Russia and Iran) and Far Asia (China and North Korea); and are sacrificing Ukraine to a nasty unwinnable death-sprial against Russia. There is no moral dimension to this. Even if the Asian powers are as evil as the Euro-West elites say they are, the potential consequences to the inhabitants of the contested Eurasian lands – lands populated by Orthodox Christian Slavs and Muslim Arabs – and the innocent Global South are catastrophic.

(We may imagine a Sino-Mexican arrangement to install Asian troops and missiles ‘south of the [United States] border’. And if Mexican militias started firing Chinese drones at ‘Gulf of America’ oil refineries. No American president could tolerate that.)

So why would New Zealand – increasingly an Asian country in demography as well as physical geography, and all the better for that – want to align itself with a dying Euro-West; an increasingly inconsequential geopolity that’s “completely lost the plot” to repurpose a phrase from our leader who (despite wanting to assist Ukraine in its project of national suicide) clearly understands that New Zealand would be utterly marooned in the world if detached from Asia?

Robert Muldoon successfully pivoted New Zealand away from Europe towards Asia in the 1970s and 1980s. Subsequent governments – especially National governments – further embraced that pivot. It’s largely been from 2020 that New Zealand elites have turned away, sentimentally, from Asia; and reactionaries have emerged from the woodwork. That may be because of – rather than despite – the accelerated post-2022 populating of Aotearoa New Zealand with people of Asian ancestry, especially among those under 50 years-old and among New Zealand’s new born.

I have little doubt that New Zealand has become a more racist country this decade than it was in the previous five decades. But New Zealand doesn’t remotely compare with Israel and Ukraine as racist countries. Just try doing a Google search ‘Ukraine football racism’ to get a sense of racism in that Luxon-loving country. (One appalling new example of open anglo-supremacist racism in New Zealand is this YouTube channel The Anglo-Saxon. See this egregiously racist example of advocacy for tactical/strategic voting: Let me change your mind about the New Zealand Election 2026.)

Two of the three most ego-driven politicians in the world today are the leaders of Israel and Ukraine; and neither of these two men cares in the slightest bit about the impact of their behaviour on the wider world. These are failed nations which the European Union remains staunchly allied to, and promotes through nefarious geopolitics. EU countries – themselves perpetrators of many historic genocides – continue to look the other way despite their complicity in the most malicious televised genocide ever.

It is interesting to see how, in the present televised French protests and riots (including the dramatic footage of the burning of the Limoges town hall), it is clear that non-peaceful rioters have undermined the narrative of the students just wanting better schools. Indeed, the claim that parties with violent insurrectionist agendas have taken over these protests is uncontroversial. While there have been no deaths so far (except one case of cardiac arrest), Google AI tells me that “more than 500 police officers, firefighters, and paramedics were injured during the violent demonstrations and fires”. Violent demonstrations are riots, not demonstrations. New Zealand saw peaceful demonstrations in 1981; no police were injured, so all the violence then was perpetrated by the police.

In Iran there was an event in January 2026, similar to France though two orders of magnitude larger. About 220 police and security personnel were killed during those events, and perhaps 30,000 others – a mix of rioters, protesters and bystanders. The argument that what was initially a simple peaceful protest was hijacked by people sponsored by Mossad and the like was at least as strong as the argument relating to the hijacking of the French school protests. This extremely violent event – violence from both sides, but not all of both sides – was used as a pretext for Israel and America to wage an offensive and illegal war and campaign of assassination on Iran, despite it having all the appearances of a set-up; as similar events in Iran in 1953 are now clearly documented to have been a setup.

We demonise Iran by demonising the IRGC because Iranian political bosses are so difficult to demonise. (Effectively the Euro-world gaslights the Iranian leadership; just as Othello was gaslit in that famous Shakespearian tragedy. Everyone in New Zealand knows the name of the Russian president. Very few New Zealanders know the name of the Iranian president; a reformist who was democratically elected in July 2024, survived the assassinations, and who has near-fully liberalised the street-culture of Iran. The Iranian dress-code liberalised as quickly as the New Zealand Parliamentary dress-code!)

The 500-year European imperial project of world-domination is in its death throes. Why would we in New Zealand want to rejoin it? We are increasingly exposed to silly narratives about the geopolitical ambitions of China, Iran, and Russia; and it may not be long before such narratives extend towards gaslighting our near-neighbour Indonesia which is aligned geopolitically to its Asian co-BRICS. New Zealand needs to embrace Asia, for security and prosperity. When Europeans came to Asia they were long seen as barbarians, and that’s increasingly what they’re seen as today. (By 2050, people with only European ancestry will be about five percent of the world’s population.)

The elitist European retro-liberal project has today descended into one of murder-suicide-manslaughter; murderous intent towards Russia through a military stalemate, suicide of Ukraine, collateral manslaughter of non-combatants by making the world a less habitable place. Europe is facing its most embarrassing period in world history since the Dark Ages.

On balance, and given their support for a dying European project, I would have to label the Hipkins-led Labour Party as eurosupremacist, as believers in the moral (and possibly intellectual) superiority of western Europeans. (Indeed we saw this during the Covid19 pandemic and the general disrespect the government showed for resident workers without permanent residence – denizens, of which New Zealand has many – whether stuck in New Zealand or stuck outside of New Zealand); and on balance Hipkins too – and Luxon – given their overt support for EU foreign policy. Euro-Kiwis became particularly sympathetic to Ukraine in and around 2022 precisely because they looked and talked like us; we easily identified with them. We saw ‘us’ when we looked at them on our screens.

When we look at ourselves in the mirror, too many of us still see Europe. However, Europe is – literally – the antipodes! Nevertheless, Asia is our lifeline. Or our deathline if we choose to go that way in a decreasingly secure world.

References

The general talk among the realist academic community is that the world is safer now, because the Euro-American ‘unipolar moment’ has been defeated – note past tense – and that the important political and academic discussions are about the present – not future – construction of a constructive multipolar world, and whether Europe can or will play any serious part in this future world order. There is clear understanding though, that Europe – especially with the support of a likeminded future retro-liberal United States administration – can still do a lot of preventative harm to the creation of a post-Europe world order. The United States has the serious means to flail about like a diminished madman. And, of course, however the multipolar order evolves, the United States will necessarily be one of its several poles.

I particularly recommend the analyses of these three international public intellectuals, all of whom made their reputations in the 1990s, and all born between 1945 and 1955: David Gibbs, Jeffrey Sachs, John Mearsheimer. See the following:

Jeffrey Sachs: Europe as a Frontline in a Multipolar World? Glenn Diesen

The Real Death of the West | Prof. David Gibbs; Neutrality Studies, Kyoto.

John Mearsheimer: Russia’s Existential War & the Rise of a Post-Western World Glenn Diesen

Will China Attack Taiwan? | Ask The Professor; John Mearsheimer

I would also recommend the two ‘peacemongers’: Swiss academic Pascal Lottaz (including at Kyoto) and British diplomat Ian Proud. Here is some of their work, along with some other presentations at the recent peace symposium in Kyoto.

Is Ukraine Europe’s Colony? | Why It Should Have Chosen Neutrality, with Pascal Lottaz, from The Peacemonger.

British Ex-Diplomat Detained for Peace Efforts, Reaching out to Russia | Ian Proud; Neutrality Studies.

Ukraine War Narrative COLLAPSES. Europe Starts Panicking | Ian Proud; Neutrality Studies.

The REAL Reason Europe Destroyed Itself | Dr. Ulrike Guérot; Neutrality Studies, Kyoto.

Europe’s Mass-Psychosis Getting WORSE | Prof. Mattias Desmet; Neutrality Studies, Kyoto.

Putin’s India Deal SHOCKS USA | Prof. Anuradha Chenoy; Neutrality Studies, Kyoto.

Ex-Foreign Minister EXPOSES NATO’s Dirty Tricks | Evarist Bartolo; Neutrality Studies, Kyoto.

Why China is NOT Scared of the USA | Zhang WeiWei; Neutrality Studies, Istanbul.

And note this re the Ukrainian insider-sceptic Iuliia Mendel:

Russia is Crushing Ukraine’s Capacity to Fight / Iuliia Mendel, from Daniel Davis / Deep Dive.

On the other side of the argument, here is Radosław Sikorski interviewed by Al Jazeera. Note his playing of the Munich card with his references to “pocket Chamberlains”; and his disparaging “payroll” reference to Gerhard Schroeder, former Chancellor of Germany, once compared to Tony Blair though not anymore. And here is the recent Berlin Briefing Special which mentions New Zealand.

Radosław Sikorski: Fear of Ukraine war spillover | Talk to Al Jazeera

Former German Economy Minister Habeck: Russia is still the biggest threat, Berlin Briefing.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 16 October 2026 – The two charts here show New Zealand’s immigration and emigration for this century. While the data was collected monthly, these data are annual ‘rolling averages”.

Age 25-to-34

The first chart shows people aged 25-to-34. On immigration, we see a general pattern of around 30,000 immigrants in this age range during the 2000s. The uptick began in 2013 and ‘stabilised’ at around 45,000 in the late 2010s. This immigration did not drive the housing bubble of 2012 to 2017, but it did place big pressure on the private rental market. While immigration stopped increasing in 2016, it remained at historically high levels, and significantly ahead of emigration.

There was another burst of immigration in 2019. The point with the circle represents the year to January 2020, meaning the last 12-month period which was not influenced by the Covid19 pandemic. The subsequent peak included people returning to New Zealand ahead of their pre-Covid intentions.

Post-Covid, the big catch-up immigration – which included New Zealanders stuck overseas during the pandemic – was short-lived. The New Zealand economy started to ‘tank’ at the end of 2023, though there were signs earlier that year that all was not well. Nevertheless immigrants in this age group continued to exceed emigrants, despite record-high emigration in 2024 and 2025. The most recent data shows signs of a weak recovery in New Zealand, though emigration continues to exceed the highs of 2011 and 2012.

On emigration, in the late 2010s we see emigration at a time when more opportunities were opening up overseas, and when parents of this age group were cashing in on their property-boom capital gains. For adult children, home was leaving them. Australian property prices were then competitive for arriving New Zealanders.

A number of emigrants in 2024 and 2025 will have been immigrants a year or two earlier. Or immigrants around five years earlier, having gained their New Zealand citizenship. (We should note that, to some extent, the acquisition of a New Zealand passport represents an opportunity to emigrate; especially an opportunity for working-age New Zealand residents to settle in Australia. If New Zealand ever passes a law allowing only citizens to vote in elections, the overseas vote in New Zealand elections would become proportionately higher than at present; indeed significantly so, given the proportion of tax-payers in New Zealand who do not have New Zealand passports.)

Age 35-to-49

Looking at older adults, many of these being people with children, we see the same patterns; though with lower numbers. There was less overseas emigration in the 2010s than in the 2000s; though there had been much North Island to South Island migration in the 2010s, coincident with international immigration peaks hitting New Zealand’s North Island.

Again we see a substantial flow of post-pandemic emigration; a flow that is not tapering off for older adults, many of whom have children. Families seeking greener pastures.

Finally

These age-specific data do not show the pattern of specifically trans-Tasman migration. Though we do know that this is the biggest component of emigration; indeed an even bigger component these days, given the heightened geopolitical risks of living further afield.

What we can expect in the immediate future is continued immigration and emigration at persistently higher levels than took place before 2011. The transformation from Aotearoa being a Euro-centric nation to being an Asia-Pacific-focused country will probably only abate when Aotearoa New Zealand (the North Island in particular) becomes categorically a country of mostly non-Europeans. New Zealanders with full European ancestry will become as much ‘ethnics’ – to use that pejorative word – as any other New Zealanders.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 14 October 2026 – Last weekend, the political leader of ACT New Zealand, David Seymour, announced his party’s fiscal policy for the 7 November election. The policy announced represents the epitome of the dominant elite narrative in New Zealand in particular and the Euro West in general. That narrative is best called ‘financial mercantilism’. The word ‘mercantilism’ is a conjunction of ‘merchant’ and ‘capitalism’.

Narrative versus Ideology

‘Neoconservatism’ and ‘neoliberalism’ are ideologies which have much in common. The word ‘neoconservative’ is more prominent in the United States; reflecting United States elite culture – the neocons – a particular American brand of imperialism and partisan pre-Trump ‘Republicanism’ (distinct from generic ‘republicanism’). An ideology is a package of beliefs about what ‘should be’ or ‘could be’.

In New Zealand, David Seymour, I think, would happily call himself a ‘neoliberal’ but not a ‘neoconservative’. Neoliberals, while having a near-identical economic philosophy to neoconservatives – called economic liberalism, formerly known as laissez-faire – would class themselves as ‘socially liberal’; neoconservatives as ‘socially conservative’. (Thus Christopher Luxon very much fits the bill as a ‘neoconservative’, though he does not embody the overt eurosupremacism – the ‘rightful’ hegemony of the West – characteristic of American ‘neocons’.)

Mercantilism is both a narrative about what the elite world is (as opposed to what someone might wish it to be), and a prescription for success within that world. That prescription may be best summarised as ‘mining money’.

The concession to liberal ideology is a preference for ‘competitive’ mining; though competitive miners might themselves be mined by their owner-class ‘higher-ups’. The essence of economic liberalism is the primacy of the private property rights of the owner-class; a legality principle which ACT and Seymour keep coming back to.

Money Mining

Whether running a mining business, some other business, a government, a school, or a hospital – financial mercantilists mine their resources (including their labour and their suppliers) to maximise monetary profit or to otherwise minimise their costs. And they mine their customers. Customer-mining techniques include hard-sell advertising, peddling addictive products, peddling insecurity narratives with technological solutions, and offering ‘free’ products in ways that “if something is free, you’re not the customer; you’re the product“.

It is apparent in the United States that insurance companies mine their policy-holders; exploiting inelastic demand for insurance products (meaning high premiums), while finding any opportunity they can to minimise their payouts on claims. It applies to social insurance, too; that’s a mercantilist frame for social welfare.

Trade Mercantilism

Mercantilism, as understood in the political economy literature, is ‘trade mercantilism’, an ideology of nationalist economic imperialism through trade ‘success’; where trade success is defined as a long-term experience of trade surpluses – making money through excess exports – by a nation state in which big business and executive government act as a ruling coalition. (The most famous mercantilist enterprise in world history was that of the Dutch East India Company, which – incidentally – ‘discovered’ and named New Zealand.)

Donald Trump is an unreconstructed trade mercantilist. And, in this century, China is understood as the world’s most successful mercantilist nation; with a history of trade surpluses – especially as a physically large country – translating into an ability to wield geopolitical power.

In global economic and political history, the third quarter of the second millennium was (literally and figuratively) the ‘golden era’ of trade mercantilism; the era of the establishment of euro-imperialism over the world, in which the rivalrous European nations dominated world trade by fair means and foul (mostly foul). So it was a period in which European nations fought against each other to dominate the non-European world, and fought the non-European world to establish their dominance over it.

The final struggle of that trade-mercantilist epoch took place through the eighteenth century and culminated with the final defeat in 1815, by a British-led alliance, of Napoleon Bonaparte’s France. That tussle can rightfully be called World War Zero. It ushered in 99 years of geopolitical Anglo-supremacy over the world; from 1815 to 1914.

The American Revolutionary War of 1776 to 1783 was a part of this geopolitical struggle, in which the American ‘Rebels’ teamed with the French super-state to inflict Great Britain’s major defeat within a war in which Britain eventually prevailed. It took until 1917 before the Americans had fully aligned with Great Britain – Britain becoming the United Kingdom in 1801.

The American Revolutionary War was very much a product of the virulent trade-mercantilist ideology which dominated those times. The British establishment – especially the English – saw its then ‘colonies’ as economic machines which would ‘mine money’ for the landed and mercantile elites of England. Trade mercantilism was actually a class-based nationalist project; much narrower than a project from which the nation as a whole could benefit. The American settlers wanted to create their own mercantilist project; and not be subsumed into the English project as mere hewers of wood and drawers of water. (And of course, especially but not only in the first industrial revolution, the British working class were themselves heavily mined.)

After 1815, and especially after the 1840s – under the leadership of the United Kingdom and to a lesser extent France – trade mercantilism morphed into financial mercantilism. Britain’s early form of financial mercantilism came to be understood as free-trade imperialism. (And note Bernard Semmel’s 1970 book The Rise of Free Trade Imperialism 1750-1850.)

Financial Mercantilism is a False Narrative rather than an Ideology

The core tenet of mercantilism is that money equals wealth, and the central metaphor for money is ‘gold‘.

‘Mercantilism’ is understood, by anyone who knows how to use that word, to be a false narrative; a King Midas narrative; as that king discovered, you cannot eat gold. Just as it is practically false to assert that base metals can be transmuted into gold, and that such a creation – were it possible – could be called ‘wealth’. It follows therefore, that any measure of success derived from a mercantilist narrative must itself be meaningless if not false.

We note that money, in any form, is never actually wealth. It is a set of ‘claims’ on wealth; promises. Economic wealth is resources priced in accordance with their capacity to produce (ie augment) present or future sustenance and happiness. Money – unlike land, machines, human labour – does not produce anything; though, through its circulation, it does lubricate the processes of production and enjoyment. Hoarded money does not even do that. (Money may provide psychic wealth to those who have it, but that must be offset by the psychic poverty of those who do not have it.) A society with an inflated or compounded set of financial assets is not wealthy. Asset inflation is not wealth. Nor can a society with too many dollars and not enough sense be called wealthy.

In trade mercantilism, the winning nation would be the nation that made – effectively mined, where ‘mined’ best translates as ‘extracted’ rather than ‘dug up’ – the most money. British mercantilism began, in earnest, in the reign of Queen Elizabeth with its royal sponsored anti-Spanish piracy in the Caribbean Sea and with its Irish ‘plantations’. Mercantilism began as a sanctioned criminal enterprise.

So, mercantilism is the narrative which equates wealth with the accumulation of money as extracted or otherwise expropriated profit. Money is understood as a ‘stock of wealth’ or a ‘store of value’ – rather than as a circulating medium. It’s a narrative – not an ideology – in that its adherents believe the representation of money as wealth is truth rather than aspiration. The mercantilist narrative is that imperial or national or class or individual success is achieved by ‘making money’; making more money than one’s rivals.

Thus financial mercantilism is a ‘financial race’ which can utilise the ‘equality of opportunity’ trope; each person starts with the same amount of money (possibly zero), and the individual winners – the ‘gold’ medallists – are the people or nations who make the most money.

Re nations as rivalrous competitors, we may think of the Sydney-Hobart yacht race. The biggest fastest boat gains ‘line honours’. The most successful little boat may gain ‘overall honours’ (aka ‘handicap honours’), which are equivalent to population-adjusted success.

(Liberal competition, by the way, has ‘win-win’ outcomes, in which everyone gets something they want; the principal principle here is called ‘comparative advantage’. Mercantilist competition – ie rivalrous competition – is ‘win-lose’, meaning that for every winner there are one or more losers. In economic science, this kind of competition is called game-playing, and it is quite plausible in some game simulations that all game-participants lose. Modern geopolitical games can easily take this ‘lose-lose’ form. In political economy, gaining the upper hand in illiberal – ie mercantilist – competition, is called ‘competitive advantage’.)

Various tropes – ‘getting ahead’, the ‘property ladder’, ‘compound interest’, ‘nest egg’ – all relate to financial mercantilism as applied to individuals or households. In financial mercantilism, money is an ‘end’; whereas in normal market-based life, money is a means. Mercantilists seek to hoard their money. Normal people spend their money, interpreting their prosperity through the enjoyment of what they buy, rather than from holding a portfolio of assets.

In financial mercantilism, liabilities (such as debt) are ‘anti-money’. Financial mercantilist success, when applied to governments, is to have hold less ‘net debt’ than other nations’ governments. For households, success is to have more ‘net assets’ than other households.

Geo-mercantilism

So, mercantilism is akin to a race or a game – or, to use a golf analogy, akin to match-play. A race-to-the-bottom is a valid mercantilist tactic; you win by defeating your rivals, and not simply by gaining a high score. To win is to be better off in relative terms, though not necessarily in absolute terms. You can ‘win’ a war by incurring 1.1 million casualties compared to your opponents’ 1.2 million casualties.

Geopolitics today – or should I say ‘geo-mercantilism’ – is like a set of regional contests which will eventually set up a USA-China grand-final. If the planet gets trashed in the process, in the run-up to the grand-final, then that’s OK; the point is to establish a winner at ‘the end’. The United States adopts a belligerent tone, much as Great Britain did in the eighteenth and nineteenth centuries; whereas China adopts a defiant tone.

ACT New Zealand’s financial mercantilism

Re ACT’s Fiscal Plan Cuts the Waste to Grow the Country, press release, Scoop 11 October 2026, the first phrase to note is “truth-telling”. ACT is working to a narrative which it believes to be ‘truth’. The next expression is “cut waste”. This is not about the environment; this is ‘financial waste’, which means the minimisation of government outlays such as expenditure and transfer payments. “Grow the economy” means to extract more financial assets for the national balance sheet.

(In financial mercantilism, spending is essentially waste, though may be excused if it can be classed as ‘investment’. Hence, the culture of mercantilists – such as religious puritans – is parsimonious. There are also Epstein-type mercantilists, who make very much money and also spend very much, but seeing their spending as investment; for example, investing in power-networks.)

In the ACT press release, “Balance the books with no new taxes” means to stem ‘public-to-private money flows’ – government spending, social security, superannuation – even more than curbing ‘private-to-public’ flows such as taxes. There is no concept of price-based public economics, such as government borrowing when the price is right; capitalists follow price signals, mercantilists don’t. Governments are expected to be price-insensitive and austere. ACT’s financial mercantilism is a game played by financially wealthy private organisations and households to ‘get ahead’; or, more pertinently today, to not get behind.

“Taxpayers know the Government has too much debt”, ACT says. Well, this recent video The Global Debt Crisis is just a Side Show…This is the Main Event by George Gammon shows that public debt levels, per se, make no difference to a country’s economic ‘performance variables’. Gammon compares countries with governments with high debt (Japan), medium-high debt (US), and low debt (Australia). The performances were practically identical. Australia’s debt was given as 51% of GDP – and Australia has a much higher GDP per capita than New Zealand. Most measures of New Zealand’s government debt in 2026 are between 40 and 49%, lower than Australia’s despite the low GDP denominator. As I heard on RNZ recently, New Zealand has a public debt ‘problem’ that most countries would be envious of. (Private debt in New Zealand is another matter.)

We note The only thing NZ has to fear is…fear of debt itself, 23 July 2026, by Bernard Hickey. Hickey says, “For a PM who professes confidence about the country’s future and is eager for ‘growth, growth, growth’, Christopher Luxon is remarkably fearful about using the tools at his disposal to generate that growth.” This applies even more to David Seymour, who wants to cut public debt in dollar terms, by $12.4 billion in four years, and seems to be not satisfied with reductions to public debt relative to GDP. I suspect that Seymour does understand that he’s embarking on a crusade that is not conducive to growth, despite the title of ACT’s policy document.

(It was ‘The Communists’ who most vehemently sought to pay off public debt; most prominently Romania’s Nicolae Ceaușescu in the 1980s. Arguably, Romania has still not recovered from Ceaușescu’s ravagings, just as New Zealand Inc remains structurally bankrupt from the ravagings in the 1990s of our ‘greatest ever’ financial mercantilist, Ruth Richardson. But see this – ‘Bankrupt’ Western Governments Need ‘Ruthanasia’ – on CNBC from 8 September 2010, as Europe’s austerity crisis was just getting underway.)

Government deficits worldwide constitute one of the great macroeconomic stabilisers. Public debt levels are stable in both Japan and Australia. Sound fiscal management, for non-boom non-bust years, is to have a fiscal deficit – as a percentage of GDP – that is as close as possible to the rate of nominal economic growth. For New Zealand for the last year, that would be a deficit of 4.8% of GDP; not a surplus. (In boom years, fiscal deficits will be and should be smaller than five percent; in bust years, fiscal deficits will be and should be greater than five percent. Governments need never run fiscal surpluses; when they do run surpluses, there is likely to be something unsustainable or otherwise wrong in the private sector.)

Usury: Making Money from Money

The centrepiece of David Seymour’s financial policy is the very usury that led to Christianity breaking away from Judaism almost exactly 2,000 years ago; as documented in the New Testament. Until the Reformation of 500 years ago, the central ethic of Christianity was its disavowal of the practice of leveraging money in order to extract more money.

Such usurious sentiment is summarised in ACT’s desire to “boost KiwiSaver, [and] cryptocurrency adoption”. This is particularly epitomised – and clearly enunciated by David Seymour in last night’s ‘multiparty’ leaders’ television debate – in ACT’s policy to not tax compounding interest income, so that it can compound at a higher exponential rate, ‘creating’ magical sums of dollars decades into the future. (Refer Election 2026: Here’s how the multi-party leaders’ debate unfolded, Joel MacManus for The Spinoff, 13 October 2026.)

In the televised debate, the first thing said by any party leader was Seymour (in his priority statement, and not in response to a question) saying “We’ll take tax off your KiwiSaver returns. People need to be able to save for their retirement, and the biggest impediment to that is that when you put your money away it starts compounding but the government takes its share every year, and the cost of that compounded over years is enormous.”

(We note from the larger document that ACT wants to “gradually increase the superannuation age” [from 65 to 67], following a somewhat less gradual age-formula than most other proposals. Presumably, Seymour favours using the same formula to raise the age in which KiwiSaver funds may be accessed. Treasury would like the ‘retirement age’ – which means the KiwiSaver access age as well as the pension entitlement age – to be gradually raised to 72; refer Retirement age will rise to cover superannuation cost, investment company predicts, RNZ 13 February 2026.)

We note that ACT’s clear policy around compound interest is that interest rates should be comfortably above the inflation rate. And we note that ACT, in its press release, fails to mention economic growth. (Though there is an allusion to growth in the title of main document, as if the elimination of waste is itself a recipe for magical growth. Wellington has eliminated much of its ‘human waste’ since 2023 – meaning ‘wastefully-employed humans’, referencing “the size of the bureaucracy”; ie not meaning sewage, although there is that too – but has not yet grown up like an entrepreneurial phoenix from the litter of restructuring.)

Only financial mercantilists – not economists – can conceive of compound interest independent of commensurate economic growth. (Adherence to financial mercantilism is tantamount to adherence to a cult.) Compound interest is fully, literally, and explicitly predicated on exponential growth – the inflation of savings’ balances. So, the expectation is that those exponentially adjusted credit balances will be realised through future transfers of real wealth, as extractions from those who have experienced compounding debit balances. It is a policy of exponentially compounding inequality.

ACT: “Stop kicking the can down the road on hard issues like Superannuation”

What is ACT’s mercantilist vision of retirement living? We note that Seymour’s principal vision is based on exponentially compounded interest, whereby a few nominally rich ‘rentier’ retirees – having rented out their money for above-inflation returns – may live well in retirement, extracting large lump sums or annuities from those who have incurred debit interest compounded at even higher exponential rates; and even these savers might not be allowed to retire until they are 72 year-olds.

(It’s practically impossible to have above-inflation compound-interest returns for forty years in a capitalist economy. Either there is a bout of significant inflation within that time – which favours debtors over creditors, acting as a debt-stabilising correction – or the economy breaks completely, as in the Great Depression and the ensuing World War, leading to a financial levelling event. Such events hit – in percentage wealth losses – the surviving rich harder than the surviving poor.)

Under ACT’s policy, most of us aged under 60 will have to wait until they are 67 years-old before they can get a universal pension; a pension which will probably be indexed at the lower of average wages or average prices. Or they will have to go through an intrusive bureaucratic process to apply for their retirement pension. ACT has much to say about bureaucracy, but very little to say about the cruel and wasteful bureaucratic procedures which entrench the welfare poverty traps faced by the lower classes.

The mercantilist narrative is that a person’s worth lies in their compounding savings’ balances. This story posits that working class people, serfs, slaves, livestock and robots are all very much the same thing; dispensable economic resources which incur maintenance costs.

We note that ACT’s greatest political achievement so far has been the legalisation of euthanasia in Aotearoa New Zealand, as acknowledged in the television debate. What happens to most racehorses when their working careers are over?

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 9 October 2026 – If one follows the present Eurasian Wars reasonably closely, and with academic detachment – with disinterest (ie neutrality) though definitely not uninterest – it has to be clear that the present ‘Northern Eurasian War’ represents the greatest risk to life on Earth, ever, or at least for a quarter of a billion years. If things go seriously wrong, the destructive potential of the conflict between Russia and The West is an order of magnitude greater than any human event in the historical past.

Yet the causes of the present set of conflicts are so trivial. I call them ‘vanity wars’. Others call them ‘wars of choice’. One of the core problems, I believe, may be called ‘Munich Syndrome’, and it goes back to a skewed reading of World War Two and especially of the events of September 1938 in Munich, Bavaria, Germany.

(The causes of the ‘Southern Eurasian War’ also go back to skewed readings of World War Two; the biggest – but far from only problem here – may be called ‘Auschwitz Syndrome’, reflecting the biggest of the many victim narratives arising from WW2. [Iran has a rather spectacular – though rarely heard – victim narrative, too, from WW2 and its aftermath. Victim narratives, while usually substantially true, are very unevenly told.] WW2 itself was caused by the biggest victim narrative from World War One; the false ‘stab in the back’ narrative about how WW1 was stolen from the German side, in light of the fact that Germany was winning that war from August 1914 until June 1918 and had already defeated its principal opponent, Russia. For the Germans, WW2 was meant as payback for WW1. For the victims of Auschwitz and Treblinka, the ‘Southern Eurasian War’ today represents a protracted pay-forward process, with the descendants of the perpetrators of Auschwitz fully supporting the cultural descendants of their most prominent WW2 victims; escalating a post-WW2 cycle of victimisation in Southwest Asia.)

The ‘theatres’ of the Northern Eurasian War are Ukraine and Russia. For Russia, this is not a proxy-war; Russia is fighting for Russia. On the other side it’s somewhat murky. Clearly, Ukraine is not only fighting for Ukraine but also for the political class of Western Europe; hence the mass unpopularity of Europe’s established political class at present. Further, the European Union, the United Kingdom and Canada are a vassal ‘states’ of the United States; with that vassalage most clearly expressed through the organisation known as Nato.

The Appeasement Narrative

The simple appeasement story told in the Anglo-West – a zone which includes Aotearoa New Zealand – is that Adolf Hitler and his band of very bad men were emboldened to conquer all of mainland Europe. For a long time there was minimal resistance – indeed there was appeasement – on the part of the British and French political leadership. The particular appeasement event we choose to remember was signed at the Munich Conference of September 1938 – attended by Hitler, Mussolini, Chamberlain, and Daladier.

The principal ‘transgression’ by Anglo-France was a ‘peace’ treaty to allow Hitler’s Germany to appropriate the former Austrian parts of Czechoslovakia – the German-speaking territories north of the now ‘rump state’ of Austria, which were incorporated (via the 1919 WW1 peace settlement at Versailles) as the Sudetenland into the new buffer state of Czechoslovakia.

The framing of World War Two has been that of a good nation versus a bad man; though, like all ‘good’ nations in history and mythology, the United Kingdom was a flawed ‘good nation’; and the Munich treaty was Britain’s biggest mistake. It must have been; didn’t Winston Churchill say so?

A subtext is the widely accepted story that Adolf Hitler could easily have been assassinated in Munich that month, but that the would-be assassin chickened out. This is important, because WW2 has been largely framed as the United Kingdom versus Hitler; not the Allied Powers (the most important eventually being the Soviet Union) versus the Axis Powers (the most important being Germany.) If only Hitler’s Germany had been decapitated – so the story goes – the basically good men and women of Bavaria and Westphalia etcetera would have risen up (as, as the much more recent story goes, they did in Kyiv in 2014) and replaced the remnant Nazis with a government much like that in the then Czechoslovakia. Mussolini would have crept back to Italy, without the support of his buddy with the Charlie Chaplin moustache, to be dealt with later by someone with more cojones than Chamberlain.

Today’s Munich Syndrome analogy

In present day United Kingdom, and to a slightly lesser extent France, the present war is Ukraine versus Putin; a ‘plucky’ ‘good’ nation – a new nation – standing up to a very bad man. Part of the Munich myth – meaning an embellished story which overwhelms other stories – is the role of Winston Churchill, who condemned Britain’s neutrality on this matter. (But see below for Churchill’s other views on neutrality and appeasement; indeed, in the later parts of WW2, Churchill became a serial appeaser. And we note that Churchill – a man of empire – saw all these matters from a British strategic viewpoint, and also did not say that the Munich treaty made war less likely. Churchill only said that the treaty did not make peace more likely.)

For Germany, I think its anti-Russia motives are somewhat darker than Britain’s. As Glenn Diesen said in Larry Johnson: Europe-Russia War is now “Inevitable”, YouTube, circa 30 September 2026, “Even though Germany is in decline now, it’s still the central gravitational point in Western Europe. And if we’re going to have a war between Europe and Russia it will quite likely be triggered as a German-Russian war, as another German-Russian war, but this one probably will be much more violent than the previous.” Given that the total violence that took place on the territory of the USSR between 1941 and 1945 is substantially greater than that of Auschwitz and Treblinka, “much more violent” is certainly a matter of some concern!

The danger, of course, is that waging a new war – in the present case, a war between nuclear-armed powers – motivated by a grossly simplistic interpretation of a previous war is a terrible (and possibly existential) thing to do.

Even if Putin was worse than Hitler – and any reasonable assessment is that he is not as bad as Hitler was – the stakes are an order of magnitude higher today. Better to allow a Hitler to win a war than to eradicate life in the solar system. It is foolish to adopt a drastic long-term solution (such as suicide, let alone murder-suicide) in order to address a short-term problem; murder-suicide – which happens too often, even in little ole New Zealand, albeit as small-scale events – represents an extremely unbalanced psychological state.

Further, just as Hitler was worse than Putin is (though not worse than Josef Stalin was), Hitler’s Germany was easily worse – in its domestic and foreign policies – than Putin’s Russia is. (Further, if we contrast the ‘bad man’ in today’s Southern Eurasian War with the ‘bad man’ in today’s Northern Eurasian War – and we judge badness by the ratio of civilian casualties to military casualties – then the southern Eurasian bad man is clearly much worse.)

So today, the problem that leads us to war is at least an order of magnitude less severe than that of WW2, but the potential harm is at least an order of magnitude more severe than that of WW2.

Game theory has been applied to nuclear confrontations. Almost every time, the outcome – following a single nuclear strike – has been catastrophic. Nuclear war is the extreme example of a ‘negative-sum game’.

The 1930s’ Appeasement Reality

Munich 1938 was not the only appeasement event undertaken by the British and French in the 1930s. The first important event was in 1936.

While there were other events before 1936, to an extent they were matters of depression pragmatism; matters such as the cessation of reparation payments by Germany, and the depression recovery policies which included re-armament as well as autobahns. These were unenforced breaches of the 1919 Treaty impositions on Germany; and they told the world that, in essence, the provisions of that treaty were unenforceable.

The serious event of 1936 was the Remilitarisation of the Rhineland crisis. This was the opportunity of France and Britain to take action when they had the upper hand; they could have enforced this part of the Versailles treaty, but chose not to. The Third Reich was still militarily weak. The Rhineland is the part of Germany to the west of the Rhine River, has a direct border with France, and has relatively easy access to Britain via Belgium. While action here could have prevented World War Two, it might also have reoriented the course of WW2, giving it a more explicit eastern focus.

The serious geopolitical event of 1936 to 1939 was the complex proxy civil war in Spain, which was a contest between an anarcho-democratic-communist left-wing panoply of forces and the ‘Nationalist’ General Franco (with substantial Catholic Church support, and many Moroccan troops). From the outset, Nazi Germany and Fascist Italy got involved in Spain on Franco’s side. On the ‘democratic’ side, there were various international brigades which included many idealist men (such as George Orwell) from the Anglo-West, and also a more ‘official’ presence by the Soviet Union.

From 1918 to 1938, the principal geopolitical adversary of the United Kingdom (and to a lesser extent, France) was the Soviet Union, the USSR; not Germany.  In the Spanish Civil War, the British government was formally neutral but sympathetic towards Franco, a bulwark against ‘communism’. France, from 1936 to 1938, was governed by the left-wing Popular Front (formed with a bit of ‘soft-power’ support from Soviet Russia); as such, France – in contrast to Britain – was sentimentally supportive of the democratic forces in Spain.

From a violence perspective, the most egregious event of the Spanish War was the carpet bombing of Guernica, a Basque town in northern Spain, in April 1937, by the German Condor Legion. This was one of the most cynical war crimes ever committed in the history of humanity, and prompted Picasso’s famous painting. Notionally in support of the Nationalist cause, this atrocity was likely more a test run for the future bombings of places like Warsaw, London, and Coventry.

Here was a perfect opportunity – in 1937, and in western Europe – for Britain and France to take steps to suppress the military growth of the Third Reich; to take a stand. But both governments chose to appease Adolf Hitler. According to GoogleAI, “In his World War II memoirs, [Winston] Churchill (who was then a back-bench MP) condemned the raid on the civilian population as an early example of devastating aerial warfare and terror bombing.” At the time though, and we have this from historynet.com: “The Nationalists supported their push to Spain’s northern coast with a blockade of all Basque ports. Although the odd cargo ship managed to sneak through, official British policy adhered to the League of Nations protocol of non-intervention. Conservative statesman and future Prime Minister Winston Churchill mandated “an absolutely rigid neutrality, with the strongest protest against any breach of it”.

If we evaluate people by their deeds and not their subsequent sweet words, Churchill ordered a bombing raid on Mönchengladbach on 11 May 1940, the day after he became Britain’s Prime Minister, killing significant numbers of civilians. Further, “In the 1920s, Winston Churchill and Arthur ‘Bomber’ Harris developed the strategy of ‘Aerial Policing’, which involved the deadly bombing of the Arab population in Iraq.”

The next act of appeasement was the Austrian Anschluss of March 1938, when Hitler annexed rump Austria for Germany. (‘Rump Austria’ means what was left of imperial Austria after WW1.) By then, it was too late for Britain or France to invoke a military response. And the event was supposedly consensual (though the first thing Hitler did was to order the Austrians to drive on-the-right rather than the left side of the road; quite heavy handed!).

So by time we got to September 1938, and in relation to Czechoslovakia, there was nothing Britain or France could do. Further, to a large extent the annexation of the Sudetenland was supported by the Sudeten populace; the argument was little different for that pertaining to Austria. This Munich appeasement also reflected the popular will of the democratic United Kingdom. Popular opinion only changed early in 1939, when Hitler went on to annexe the rest of Czechoslovakia. While this was another fait accompli appeasement on the parts of Britain and France, it did create the momentum for a change in British and French foreign policy.

So the leaders of Britain and France did a deal with Poland, causing Hitler to trash his own deal with Poland. Both western countries then sent envoys to Moscow, the Triple Alliance negotiations. Essentially the plan was that the Soviet Union would ally with United Kingdom and France to support Poland from Germany. The real British plan, though, was that Moscow and Berlin would end up going to war over Poland, in Poland; the plan was for both these enemies of Britain to destroy each other.

Stalin immediately saw through the plan, however. The envoys had to reveal to him how much military support Britain and France would give towards Poland, if Germany attacked Poland. The answer turned out to be that France’s support for Poland would be next-to-nothing. And Britain’s support would be much less! So Stalin sent the envoys packing, and eventually shared his knowledge with Hitler. Then Hitler and Stalin did a deal; a non-aggression treaty called the Molotov–Ribbentrop Pact. This left Britain and France exposed, with a military commitment to Poland that they couldn’t fulfil; and which Hitler knew they wouldn’t fulfil. (And of course, if appeasement had not taken place in Munich in 1938, Britain and France would have been brutally politically exposed for making commitments they couldn’t keep. Chamberlain then thought it better to not reveal his weakness, only to inadvertently let the cat-out-of-the-bag the following year in Moscow.)

Munich 1938 was not the appeasement that mattered. The appeasements which mattered were those of the Rhineland, and Guernica. Anglo-France should most definitely not be putting our world at risk today, by acquiescing to Munich Syndrome; trying to restore their blighted WW2 conscience – paying penance – by waging an existential new war against an opponent presented as Hitler 2.0; though Putin’s Russia is actually quite dissimilar to Hitler’s Germany.

Kaliningrad Flashpoint

World War Two in Europe began with the Danzig question; the Versailles-mandated separation of East Prussia (now Russia’s Kaliningrad) and the rest of Germany. (Danzig is now Gdansk, in Poland.)

Today there is a similar flashpoint; Kaliningrad (formerly Königsberg), just along the road from Danzig. Germany has long-coveted Ukraine and the Caucuses further east, for their natural resources and their strategic position as the ‘pivot’ of Eurasia. (We might also note that Ukraine has an abundance of ‘white women’, an attraction for a country – Germany – undergoing a demographic crisis.)

Recently a British military think-tank did an exercise around the possible Nato annexation of Kaliningrad, which is a Russian exclave, but very much – since World War Two – Russian sovereign territory. Russia’s predictable responses were read as threats to invade – or worse – Nato territory.

A week ago I watched Russia warns NATO of a possible nuclear response if Kaliningrad exclave is cut off; DW News. Vladimir Putin is shown as saying in answer to a question: “If it comes to a direct attack on the Russian Federation … referring to Kaliningrad … then of course the question of the Russian Federation deploying all sorts of weapons at its disposal will inevitably and immediately be on the agenda”. He didn’t say ‘nuclear weapons’, so this was not actually a direct threat to use them; rather he did say that the scenario in question would be a substantial violation of Russian sovereignty, and that all possible responses would have to be considered.

Then Konstantin Eggert, “DW [Deutsche Welle] Russian analyst”, said “Nuclear weapons are one of the very few cards Russia can play … Kaliningrad is the weakest and most sensitive links in Russia’ defence chain … the Baltic Sea is essentially a Nato lake … Western spy-planes [recently] encircled Kaliningrad in a show of force … the Chinese will put extreme pressure on Moscow not to resort to nuclear weapons … this is the last resort … Putin and his general staff know that in any kind of nuclear war against Nato, Russia will lose.” That sounds to me like two very concerning claims: first, Nato should discount Russia’s deterrence capability because China will intervene; second, that Nato can win a nuclear war against Russia!?! Essentially, this comes across as an open admission that Nato isplaying chicken with Russia. (Present tense, not future tense.)

Conclusion

Geopolitics – whether ‘kinetic’ or not – should be conducted in its own time and place; and with a rational balancing of risks and consequences. Munich Syndrome – trying to correct for past weakness as a form of present penance – risks converting one overstated past mistake into a much bigger present mistake with existential consequences for the near future.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 5 October 2026 – Since 24 August, six weeks ago, the New Zealand dollar (NZD) has fallen in value by 5.3% on a weighted-average basis, and by a greater percentage against the USD and most Asian countries’ currencies.

The exchange rate mechanism is supposed to be a global mechanism of stabilising price feedback, whereby a country with an external surplus – with higher foreign-income receipts (especially exports) than foreign-income payments (especially imports) – should have a rising exchange rate. And that countries with an external deficit should have a falling exchange rate. Currencies are a ‘zero-sum game’; if some appreciate, other must depreciate in an equal and opposite way. (See my rather long essay; Feedback Economics: Stabilisation versus Escalation, Scoop 2 October 2026, for a general discussion of the interplay of economic feedback and economic policy.)

The result of this thermostatic mechanism – when it works as it should – is that countries with depreciating exchange rates, while having more inflation, become more price competitive and thereby export a bit more and import a bit less. Vice versa for countries with appreciating exchange rates. Exchange rates should stabilise at prices which confer balanced trade; minimal external surpluses across all countries, and therefore minimal external deficits across all countries.

The problem is that the mechanism – which is an excellent mechanism in theory – doesn’t work in practice. Too many countries want to have external surpluses rather than balanced trade. (If you look at tradingeconomics.com, and at the ‘current account’ column, you will see ‘green for surplus for good’ and ‘red for deficit for bad’ in the various countries’ numbers. A zero balance is good; a surplus or deficit ‘unbalance’ are equally bad. Countries which persist in having external balances in surplus for many decades are ‘successful’ trade mercantilist countries; while they practically give their stuff away, they gnaw away at international economic stability. They typically have undervalued currencies.)

In particular, currencies’ values are to an overly large extent determined by ‘financial investment’ flows. Here, we mean ‘investment’ in the financial sense of ‘saving’, not in the economic sense of ‘spending’.

Examples of external financial flows are: overseas borrowing and lending, repaying overseas loans, overseas loans being repaid, selling overseas assets and repatriating the proceeds, and selling domestic assets to foreign buyers. In New Zealand, a big contribution this year has been funds managers acquiring foreign shares and bonds and real estate on behalf of their New Zealand clients; these transactions place downward pressure on the NZD.

These financial flows – since the 1980s at least – are commonly manipulated by central banks (such as the BBNZ), with the aim in particular of maintaining or raising the price of a currency through those reserve banks posting higher interest rates. In particular, comparing two countries both with high credit ratings on government finance as assessed by the New York based credit rating agencies, the one which posts the higher interest rate gets to ‘enjoy’ high levels of ‘foreign investment’.

(This procedure amounts to an international Ponzi scheme, in that the interest and any repayments are serviced not by exports but by keeping domestic interest rates perpetually ahead of those of the other countries with similar credit ratings. New Zealand played this game for 35 years from 1985 to 2020. It has not been possible to keep playing after Covid19, given the high interest rate policies of the United States, United Kingdom, and Australia. The NZD has held up (but not risen) this decade – from 2022 to 2025 – thanks to very favourable export prices.)

The Charts

The four charts here show the changes, from 2018, between the NZD and the currencies of seven countries: South Korea, China, India, Philippines, Japan, United States, and Australia. And it shows the TWI measure (‘trade-weighted index’) which correctly displays the international price of the New Zealand dollar, measured against the 17 currencies New Zealand conducts most of its trade in.

The first chart shows a strongish Korean won and a weakish Chinese renminbi in the late 2010s. Then, in the post-Covid years, there is exchange rate stability; short-term fluctuations (‘noise’) but no trends. Then from mid-2025 to mid-2026, the Korean currency fell against the NZD while the Chinese currency rose. In early 2026, the Korean won appears to have suffered from the Israel-Iran War.

Then, in very recent months, the NZD fell sharply against both of these currencies. The NZD has experienced a particularly precipitous recent decline against the Korean won; an 18% fall in three months.

The second chart shows the Indian rupee and Philippine peso against the NZD. These are both source countries for large numbers of very new New Zealanders. Economic relations with these two countries represent an important part of New Zealand’s future. We see that from 2020, those two countries’ currencies have moved together, much as the New Zealand and Australian currencies commonly move together. We note the NZD falling five to six percent against these in the last few weeks; shifts that could be either ‘loud noise’ or the start of a bigger decline of the NZD.

The third chart shows the Japanese Yen and United States dollar. These are the two currencies which, of late, have been ‘making waves’ (in complementary directions) in the global economy. We see that the NZD has fallen substantially against both in recent weeks, though those very recent changes do not yet show up as an unstable ‘dive’ of the NZD. The differences here reflect, among other things, perpetually low interest rates in Japan, and high post-Covid interest rates in the United States. Japan, with it’s external surpluses, should – based on the exchange-rate price mechanism –be strong and the United States should be quite weak. This fundamental relationship – theory but not observation – has been contradicted in large part by Japan’s high and increasing ownership of United States government debt.

The final chart shows the New Zealand and Australia currency relationship. And it shows the TWI, which is the most accurate measure of the price of the New Zealand dollar; measured as a weighted average against 17 currencies, with the USD having the greatest weight. This chart shows that the relationship between the two southern dollars was stable from 2018 to mid-2025. And that the NZD slide against the AUD began about 15 months ago. Further, the chart shows that the overall depreciation of the New Zealand dollar began two years ago.

The declines in the last six weeks might be the start of a bigger depreciation; this is especially so in the sense that its not politically viable for the RBNZ to push interest rates up to the five-percent level which would be required for New Zealand to outcompete on interest rates the United States, the United Kingdom, and Australia, for floating international money.

Escalating Feedback

Countries’ currency movements can be destabilising – escalating – exactly the opposite of what the floating mechanism is supposed to achieve. This occurs when ‘players’ in the international ‘investment’ game base their predictions not on the economic fundamentals (ie the price of currencies in relation to countries’ international trade) but on the converse expectation that a falling currency will continue to fall. Thus, assets denominated in the falling currency will be increasingly sold; whereas, according to basic economic principles, such assets should be increasingly bought.

(It works like this with general prices and domestic inflation, too. The expectation used to be that too-high prices would fall soon enough; and too-low prices would rise soon enough. Nowadays though, we enforce monetary policies based on the opposite expectations; namely that people in countries with prices that are rising the most will expect those prices to rise even faster in the future. This new expectation – in vogue since the 1980s – is contrary to fundamental economic principles around the price mechanism.)

The Jury is Out

Is New Zealand on the verge of an extranational financial crisis? (Extranational here means ‘New Zealand versus the world’ rather than ‘New Zealand in the world’.) But we note that there’s much chatter around the world about an imminent global financial crisis, precipitated by appreciating ‘bond yields’ on the world’s debt markets as interest rates on ‘safe debt’ are becoming unsustainably high.

So, there is a very real chance that an ongoing decline of the New Zealand dollar will be an early symptom of a wider crisis. If international perceptions become that New Zealand is an increasingly marooned economy, those perceptions will escalate as capital flight takes hold. Capital flight exists when foreigners cash up their New Zealand assets, and when New Zealanders scramble to acquire foreign assets. This latter phenomenon is already clearly visible re KiwiSaver managed funds.

Still, if highly favourable export conditions persist – of if rich foreigners increasingly like the look of New Zealand precisely because it is marooned away from the world’s perceived danger spots – New Zealand may continue to appear prosperous to foreign eyes.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 2 October 2026 – On 18 September I applied textbook ‘circular flow’ consideration to the New Zealand economy, in the context of plans by Labour and National to expand a savings mechanism at a time when a higher proportion than ever of New Zealanders’ savings are draining rather than feeding the economy. (Refer: Tone Deaf KiwiSaver and the Circular Flow of Income.)

This circular flow analysis is not a hypothesis. It’s a description made more vivid through the use of metaphor and analogy. Like all educational descriptions, it’s a simplification, a ‘model’. A model can never be the whole story. The circular flow model is an excellent way to understand ‘demand-shocks’, ie spending shocks; less useful, though far from useless, for modelling supply-shocks such as big increases in oil prices. Policy induced increases in interest rates are, simultaneously, demand shocks decreasing spending and supply shocks increasing costs.

Applying this mode of understanding to New Zealand at present, the drainage – or leakage – is to a large extent a result of funds managers using the savings of New Zealanders to buy foreign assets rather than to invest in the New Zealand economy. (Circular flow leakage is not only applicable to money going overseas. Hoarding “money in the tin” – as Cameron Bagrie [RNZ, 29 Sep 2026: Labour commits to securing first pay equity deal by next Budget would have the government do] advocates – is a form of drainage in the circular flow model. Money works by circulating, not stagnating.)

The present leakage – the large scale purchases of foreign financial assets by funds managers – is presently relatively benign, in the sense that it is helping to offset a huge inflow of export receipts resulting from high prices for meat and processed milk. (The other major offset to booming exports is of course import spending; there is also a rising interest bill payable ‘offshore’, as interest rates increase on present private and government debt.)

As a result of an export inflow of funds being more than matched by an outflow – especially into purchases of foreign assets, foreign goods, foreign services – the New Zealand dollar is falling in value on the world’s foreign exchange markets. (The NZD fell by 4.8% in a few recent weeks – from 24 August to 30 September – based on a trade-weighted average of 17 foreign currencies. The New Zealand dollar is now 19% lower than it was in 2015, again despite rapidly rising export revenues. Since 24 August, the NZD has fallen against all 17 of those currencies; the biggest fall has been against the South Korean won.)

Commodity export receipts (based on fortuitously high prices) and hot money (meaning money flowing into New Zealand to take advantage of higher interest rates) have been the two main taps – inflow valves – enabling the New Zealand economy to sustain a veneer of prosperity from 1985. The three open plugholes – three significant drains – have been imports, interest and dividends paid to foreign owners, and the purchases of foreign financial assets by funds managers.

New Zealand’s prosperity – inflows arising especially from the abovementioned export receipts – has increasingly taken the direct route rather than the scenic route from the taps to the drains, meaning that large swathes of New Zealand have missed out on that prosperity flow. When spending and income flow through the ‘scenic’ hinterland, as they should, government clips the ticket on each transaction, through especially income tax (including company tax) and GST. That’s good; it’s how governments gain their necessary revenue and thereby fund most of their spending. Circulation drives revenue.

We may think of economic prosperity as being like a spa pool full of circulating water; external (in and out) and internal circulation add to prosperity while keeping income distribution equitable. Taps and commensurate drainage holes – representing exports, imports, and other foreign transactions – keep the prosperity ‘fresh’. An emptying pool, or a stagnating pool, represents economic contraction; a filling pool represents economic expansion over and above natural growth; a spilling pool represents classical inflation.

The big question for New Zealand is: What happens when the stimulatory export tap turns off; or turns down, with inflows reducing to New Zealand’s historical average? The prosperity drains away, like a storage lake during a drought. As evidenced from the exchange rate numbers mentioned above, the external outflow of prosperity already exceeds the inflow. Fortuitously, the falling exchange rate – a market price – serves as a form of stabilising economic feedback.

If the drains remain wide open, the contraction becomes an economic crisis. If unremediated by offsetting policy or by constructive feedback (such as strong private sector responses to rising export and import prices), eventually the economy and the society collapses, dries up. (Will the last person to leave please turn off the lights? To use a phrase used by Rupert Murdoch among others. And used in New Zealand I recall, I believe in the early 1990s.)

We must we careful to understand the spa pool analogy correctly; the prosperity of an economy lies in the flow of spending and income, not the amount of ‘money in the tin’. And – for an economy, if not a jacuzzi – that ‘fluid’ prosperity maximises when there are significant flows through a variety of channels; the scenic route, rather than rapid flow through a single channel from tap to plughole. Spending by retired people represents one of these important prosperity channels.

We can usefully think of irrigated farmlands. The main flows of water through Canterbury are a small number of large rivers. The Canterbury economy is prosperous when that water is diverted through many slow channels, and with the amount of water coming into the system being matched over time by the amount of water going out. An important part of the slow-flow process is the filling of aquifers; nature’s reserve ponds. And the slow channels may provide good habitats for fish, a form of wealth. These channels are internal flows; the system is sustained by external circuits, equivalent to exports and imports. Rain flows into the system, and evaporation from the oceans – the source of rain – matches the flow of water into those seas.

Negative Feedback Processes

The circular flow process is a simple approach to understanding changes in the state of the economy; and conceptualising remedies for a failing or flailing economy.

All of the events noted in my earlier article – leakage and stimulus events – constitute primary change. Primary change induces feedback which is known as secondary change. Such events may start as disruptors within a stable or balanced economy; or such events – especially policy responses, which are themselves a form of feedback – may start within an already out-of-kilter economy. In the first situation, the event destabilises the economy, and the feedback – the secondary change – typically restabilises the economy though at a different point of balance. In the second situation, an appropriate policy intervention should facilitate a desirable correction.

This process of restabilisation is known as negative feedback, and is generally understood to be a good thing. Positive feedback, on the other hand, itself aggravates instability; and is generally understood as a bad thing. (This can be confusing for those of us who tend to associate the word ‘positive’ with ‘good’; and ‘negative’ with ‘bad’. In medicine, recovery from say influenza is a negative feedback process, whereas cancer is a positive feedback disease.)

The principal negative feedback mechanism recognised by orthodox (neoclassical) economists is called the price mechanism. Such economists may also call it the ‘market mechanism’; which can be misleading because markets correct resource misallocation through both price and quantity information. Key quantity words are ‘shortage’ and ‘excess’.

A ‘policy’ to rely solely on negative feedback is a conservative policy. It’s a solution to an economic problem which can be called ‘wait and self-heal’. However the wait may be too long and too uncertain; that’s why Keynes said: “in the long-run we are all dead“. Further, the resulting balance may not be the most desirable correction; for example, it may be unacceptably inequitable. John Maynard Keynes, in the 1930s, showed that something resembling balance could be achieved despite high levels of involuntary unemployment. (The present official definition of unemployment very much assumes the word ‘involuntary’; some economists today regard much joblessness as tantamount to a vacation, and the official definition reflects that view.) Such an undesirable form of balance may be called a rut, and activist fiscal policy is the surest way out of a rut.

Keynes’ solution for a depressed economy (with excess labour, with underemployed plant and equipment, and with unemployed self-regulating automata such as AI) – high ‘unemployment’ in every sense of that word – was for governments to ‘borrow and spend’. The New Zealand government did this in 1936 by borrowing at artificially low interest rates and spending on social housing. This was a major reason for New Zealand’s spectacularly rapid, though late, recovery from the Great Depression. The government intelligently deployed an available mechanism of artificially lowering interest rates.

The feedback mechanism which followed was that output and income increased, unemployed workers became employed, and income tax receipts grew even faster. Thus, by borrowing more and spending more, the fiscal deficit (the government’s budget deficit) decreased within a year or two; by 1938 the fiscal deficit was smaller because in 1936 it was made bigger. This process – by the government injecting new spending into the circular flow – led to a rapid corrective expansion, landing the economy in a good and popular place. (This included a couple of years of double-digit economic growth; 20% over two years instead of the paltry 0% over two years that we have in 2026!)

It was not for nothing that Michael Joseph Savage was widely regarded as New Zealand’s man-of-the-century. This was a negative (ie correcting) quantity (key information was shortages and excesses) feedback ‘loop’ that can be said to have saved New Zealand in the years just before World War Two. The new spending stimulated all corners of the New Zealand economy; it took the ‘scenic route’. Subsequent import controls in December 1938 meant that spending-output-income flows kept emphasising the scenic routes for longer. Other capitalist countries used comparable policies to create their post-war ‘economic miracles’; these policies actually saved capitalism from the fate widely predicted in the 1930s.

In my lifetime, economists have tended to emphasise corrective processes based on the price mechanism; on price rather than quantity information. Thus, when an imbalance occurs – too much leakage or too much stimulus – then the correction is that the prices of some things will go up (so we buy less of them) and the prices of other things will go down (so we buy more of them). (Note my use of the word ‘price’ rather than ‘cost’; today’s overuse of the word ‘cost’ relates to a narrative quite different from that of neoclassical economics.)

A recent example of this price mechanism in action is the substantial growth of foreign demand for dairy and red meat products, two classes of product with which New Zealand has comparative advantage. As a result, these products have become very expensive in New Zealand, so consumers here have switched to other cheaper sources of protein, including a variety of imported protein substitutes. Farmers’ higher incomes have filtered into the wider economy, though arguably not enough; otherwise prosperous New Zealanders have cut back on meat and cheese, on account of their high prices.

Automatic Stabilisation

One important form of stabilisation is known in the textbooks as ‘automatic stabilisation’. Under automatic stabilisation, when an economy contracts, there are forms of income available which automatically mitigate the loss of market income of those people adversely affected. And there is an automatic reduction in tax revenues, creating an automatic and stabilising government budget deficit.

A mix of a comprehensive social security and a suite of income-graduated taxes are the critical automatic stabilisers which have underpinned western post-war prosperity for decades. In New Zealand, a particularly potent automatic stabiliser is New Zealand Superannuation, which takes advantage of the ability of retired people to keep spending during an economic downturn, and to maintain spending from diverse and often scenic geographic locations.

Automatic stabilisers are the economy’s thermostats.

A basic universal income can be an efficient automatic stabiliser; as even former National and Act leader Don Brashrealises, as evidenced from his speaking in favour of a universal basic income at a TOP election meeting in Grey Lynn in 2020. (Does David Seymour know this, I wonder?) A universal income set into legislation – which of course is what New Zealand Superannuation is – serves this purpose well, because it immediately helps people to keep spending, and can be easily raised to create a fiscal injection.

(One easy win, in times like now, would be to create a 60-plus variant of the job-seeker benefit, which would have fewer conditions attached to it than regular job-seeker benefits; and which would have minimal abatement provisions for 60-to-64 year-olds taking on part-time or free-lance work. Additionally, 60-plus beneficiaries could be hired – perhaps on a semi-voluntary basis – to mentor young people starting on their life-journeys as productive workers.)

Fiscal Policy as Destabilising Feedback

My 1930s’ example above showed that, in particular at times of significant unemployment, borrow and spend policies were an important case of initiating a stabilising feedback process; creating eventual fiscal balance, full employment and normal growth. The ‘fiscal balance’ part is counterintuitive, given that the correction started by intentionally aggravating a fiscal imbalance. Yet improved fiscal balance was a result of that feedback process; prosperity was the more important result. The hinterland prospered, and the Treasury coffers filled; the First Labour Government ‘spent money to make money’, as an entrepreneur might say.

This suggests correctly that the opposite policy approach – cut-borrowing, cut-spending – constitutes destabilising positive feedback. Allowing a leaky draining economy to drain faster or to fester, waiting for a very slow price response (or worse, an aggravating private-debt-deflation response as we saw in the early 1930s), is at best government abuse through neglect.

A policy to cut spending in favour of public-debt repayment is a policy to accelerate the drainage of a draining economy. It creates positive feedback, making the existing problem worse. As such, it increases fiscal deficits by reducing government revenue, thereby raising public-debt; and, by decreasing or stalling GDP and possibly creating deflation, it further raises the government’s debt-GDP ratio. As the debt problem becomes bigger, further application of this false solution takes place; thereby escalating the problem, and escalating the policy that escalates the problem. And so on. At some point either the economy breaks (leading to a reset such as what may happen after a great war, perhaps a great levelling), the counter-productive policy is abandoned, or some (exogenous) lucky break from outside puts an end to the process.

Advocates of such downwardly destabilising policies tend also to advocate the removal (or lessening) of the very thermostatic stabilisers which help to maintain a semblance of order in a shock-prone world. The Act Party, for example, seeks a flatter (less graduated) tax scale, and without a negative income tax (as Milton Friedman advocated for in and around 1962) or refundable tax credit or basic universal income to compensate.

Economic Growth

A stabilised economy is not a static economy. It allows for natural growth processes; such as those attributable to improved production techniques, increased societal knowledge, and wider critical literacy. (Critical literacy is a feedback process – voice over exit – whereby participant suggestions are heard and acted upon.) It also allows for natural processes of substitution from income-preference to leisure-preference; productivity processes which were once argued to be the hallmark of fully-developed economic societies.

We note here that income acquisition means the subjugation of a person’s time to employers or clients. Leisure, on the other hand, represents activities or inactivities – the use of time – according to persons’ own preferences. Increased leisure relative to income is a central process of meaningful economic growth.

Some other important feedback processes

Economists these days do not emphasise either of the above-mentioned stabilising feedback processes as much as they used to. ‘Relative prices’ was once the ‘bread and butter’ of economics’ education. Now the big interests are inflation (and inflation psychology) – considered as a positive feedback process, ie a destabilising process – and the supposition that government spending suppresses business investment. (We note that, in late-1930s’ New Zealand, government spending was the critical facilitator which revived business investment.)

And there is the idea that economic success for a nation lies in the quantity of money that comes into a country – through sales to foreigners of goods, services or assets – facilitated by access to sufficient quantities of strategic resources such as fertiliser, diesel, high-tech-batteries, pharmaceuticals, or intelligence (human or artificial). Money that comes into the country through tourism or exports is deemed to be non-inflationary, whereas money created within the domestic banking system is deemed to be inflationary.

The idea of venerating money as wealth is the essence of mercantilism; mercantilism is to economics (a social science) as alchemy is to chemistry (a natural science). Both mercantilism and alchemy idolise gold. Money is not wealth; rather it’s the circulating lubricant which allows economies to function, and which allows economic quantities to be assigned a value.

The global economy is today facing a number of deeply problematic positive feedback processes. One is obviously the ‘arms race’ processes which lead to military escalation. As well as the destruction inherent in the consumption of military products, there are all the greenhouse-gas emissions arising from the production and operation of military goods, and lost opportunities arising from peaceful technology.

Another destructive form of positive feedback is the ‘race to the bottom’. These feedback processes can be well understood through a branch of economics known as ‘game theory’.

The feedback process I emphasise though is that of climate change – increased extremes in temperatures, compromised access to fresh water (drought and flood), and increased wildfires. Our response is to increase energy-hungry air conditioning, thereby exacerbating the problem which we are trying to escape from. This – along with the AI race, which includes unsustainable energy-hungry and water-hungry data centres – is a kind of slow race towards human end times; a race which is being reinforced by the present global arms race, so is very much a virulent form of a race to the bottom.

Further, artificial intelligence is a positive feedback process of ‘recursive self-improvement’ (RSI), a reinforcement learning race between AI agents; that’s what makes it so scary.

Inflation (and deflation)

Inflation is widely understood in economics today – as it was in ‘classical economics’ which had its heyday 200 years ago – as a form of positive feedback, of destabilising feedback; as a process which creates its own dynamic.

The belief today is that certain small policy mistakes (almost always, only evaluated in hindsight as mistakes) – such as allegations of overcooked or undercooked central banks’ monetary policies (eg in the Federal Reserve in 1929, and in the RBNZ in 2003/04 and 2021/22) – created inflationary or deflationary feedback spirals which thereby induced severe difficult-to-tame financial or fiscal crises. (In the early 1930s, the United States Fed committed much of its resources in a futile attempt to reverse deflation through monetary reflation.)

One of our alleged problems is called accelerating secondary or second-round inflation, and it’s presented as a pavlovian consequence – inflation expectations – arising from primary inflation. Primary inflation is anything, be it war or retirement spending, which may provide an impetus to push or pull prices upwards. Second-round inflation then – allegedly, and if untreated – causes the consumers price index to increase by ever-increasing annual percentages in excess of policy-target percentages. (We may note the notion of NAIRU which posits the idea that a certain amount of unemployment is required in normal times to suppress any outbreak of ‘accelerating inflation’.)

Normal neoclassical economics treats primary inflation as a shock or stress that leads to a stabilising price-feedback response. We spend less – not more – when general prices go up, and as a result prices go down again. And, when prices go up, we expect them to go down sooner or later; or to increase more slowly in the near future. New classical economics, on the other hand, claims that if the inflation rate is, say, four percent this year, we expect it to be more than four percent next year, and more again in the years after.

When a war causes the price of wheat to go up, and the price of diesel to go up, we actually expect two things. First, we expect the war to be short-lasting. Second, we expect supply-chains to adjust to the new circumstances; we expect supplies to be redirected or sourced from other places, with resulting decreases in prices, though maybe not all the way back to pre-war levels. (Take 2022 as a perfect example of this, re wheat.) At least, that’s what neoclassical economics – which sees price changes as stabilising rather than destabilising – supposes.

Another example is that, after Cyclone Gabrielle which wreaked havoc on apple orchards in New Zealand, we expected apple prices to go up – which they did; and then the prices came down with supply chain adjustments, and then they came down further as the destroyed crops came back into production. That’s normal market process – and normal market psychology – which is what happened, and the psychology was reinforced by what happened. The new classical monetary wizards, however, told us that, as a result of cost or spending shocks, we would expect all prices to accelerate upwards; unless, that is, they – the appointed wizards or wizardesses – intervened.

Another example was the global disruptions to supply chains caused in 2020 to 2022 by especially the Covid19 pandemic (sometimes called a ‘world global pandemic’, which is of course verbal inflation) and the whatever-scale Russian attacks on Ukraine in 2022. Global primary inflation soared in early 2022, and subsided in most countries by 2024. There is no evidence that there was ever a problem of secondary inflation; only stabilising ‘ripples’. And there is no evidence that policy responses, on the basis of ‘expected’ second-round inflation, made any beneficial difference to ‘cost-of-living’ outcomes.

The overblown concept of ‘problematic second-order inflation’ is important for our understanding of what has been framed across the western world as the ‘cost-of-living crisis’. Any non-wizard knows that there will always be some feedback effects arising from a supply-shock (a cost-shock) or a demand-shock; to expect otherwise would be equivalent to denying that there are ripples when a stone is thrown into a pond. The question is whether these ‘ripples’ of secondary inflation are destabilising or stabilising, are problem or solution. Do ordinary folk expect price ripples to turn into price tsunamis if the monetary wizards are not there to apply their magic? I don’t think so.

The economic orthodoxy for the last forty years says that secondary inflation constitutes destabilising positive feedback; driven by naïve expectations of business principals and wage-workers that ‘hyperinflation [100% or more] must be just around the corner’. Commonsense would suggest that price ripples decelerate – they don’t accelerate – and that when general prices go up we expect at most a slow decline in the inflation rate without having to have that expectation bludgeoned into us. The now-orthodox ‘accelerating-inflation’ hypothesis is completely wrong as a general hypothesis, and is only ever valid in a few highly specific historical cases; there has never been a global hyperinflation.

Inflation itself is an important debt-stabilisation feedback process

While inflation isn’t always a good thing, it can be. Indeed inflation is the solution to the world’s mounting problem of private and government debt; whereby a small investment class of already rich people extract interest from most of the rest of us.

Inflation and economic growth have been the principal mechanisms through which substantial post-WW2 government and private debts were resolved throughout the western world. And inflation – not compound interest – is the principal reason why so many people alive today born between 1925 and 1955 are asset wealthy. Inflation paid their mortgages and other debts. In the absence today of much economic growth, inflation – rising nominal GDP, the denominator used for all meaningful measures of national indebtedness – does the business of servicing debt and maintaining a stable income distribution between creditors and debtors.

In today’s capitalist global economy, interest rates in excess of inflation are unsustainable, inequitable, and systemically destabilising. (In medieval times, such interest rates represented the vice of usury.) Inflation itself is the stabilising price mechanism which makes real interest rates negative; which defuses to ‘usury problem’ for want of a better label. Inflation several percentage points above base interest rates achieves an outcome whereby ordinary people can “get ahead”, as Chris Hipkins and Christopher Luxon like to announce as their goal for “ordinary Kiwis”. That’s how the grandparents of millennials got ahead.

There is a comedic irony about all this. Two wrongs can make a right. If anti-inflation policy is counter-effective and inflation above policy targets is beneficial, then ‘anti-inflation policy’ makes us better off because it creates the inflation that it claims to cure.

While New Zealand’s relatively low government debt is the envy of most capitalist governments today, a healthy dose of inflation can make significant inroads into that debt. Inflation also increases government revenue even when the economy is struggling, through a process called ‘fiscal drag’ or ‘bracket creep’. (As such, this may be one reason why a democratic capitalist ‘universal income / flat tax’ policy is not favoured by our legacy political parties; a universal income would by its very nature be inflation-adjusted.) In the recent PREFU, the New Zealand government’s revenue was higher than widely predicted, not because of good economic management but instead because of the very inflation which the government says that it is determined to overcome.

Fiscal drag is not a benefit to working people. It is an ‘optical’ benefit to governments pushing the ‘into surplus’ rhetoric while being too afraid to introduce stabilising tax-benefit reforms. These are governments which acquiesce to prevailing class-based narratives, rather than seeking to bend or otherwise contest those narratives.

Interest rates

The mallet – bludgeon – of monetary authorities nowadays is ‘interest rates’. Interest rates are meant to be a critical market price which facilitates the balancing of saving and investment in the circular flow model. That is, if saving (a leakage) gets too high and investment (an injection) gets too low, the balancing price mechanism involves a market-led reduction in interest rates. Interest rates are critical to price-mechanism stabilisation, which is a negative feedback process. Interest rates are supposed to rebalance saving and investment. Neoclassical economics favours both stabilising feedback and minimum policy intervention.

Unfortunately, this particularly critical market price has been hijacked by macroeconomist policy interventionists. Interest is nowadays used as a policy lever to correct us of expectations which we – businesses and workers – never had in the first place. It’s a policy tool that ‘works’ by playing mind games on uncomprehending stakeholders.

The deeper and more tragic irony is that the raising of interest rates through monetary policy is itself a supply-shock – a cost shock, much like escalating diesel prices – which serves to create the problem that it is supposed to be fixing. Hence, the misuse of interest rates – as a blunt lever – reinforces the expectations which it is supposed to be dowsing. By becoming an instrument of positive feedback – rather than negative feedback, creating what it is supposed to be curing – we find the use of that lever escalates, making the cost problem worse, and therefore ‘requiring’ even more use of that lever. This is what is known in geopolitics as an escalation trap; a dangerous positive feedback process.

Escalating interest rates serve as a monetary drain serving the interests of the upper- and upper-middle classes at the expense of the remaining ninety-percenters. In New Zealand and elsewhere, large amounts of New Zealanders’ interest payments are flowing down that drain; increasingly as an external flow into the pockets of rich foreigners rather than to rich New Zealanders.

At some point, this feedback process of escalating interest rates breaks – as all destabilising processes do – and as did happen globally in 2008. The chatter out there in YouTube-land is that it will be significantly worse next time.

Benjamin Button economics: Forward to the Past

New Zealand and other contemporary capitalist economies are now being subject to a particularly virulent form of classical economics – classical economics being the dismal science – which preceded the neoclassical marginal revolution of the 1870s. New classical economics is particularly obsessed with government debt and inflation. Public economists – meaning economists who the public see and hear – have largely abandoned both Keynesian and neoclassical frames of reference.

And humans’ journey into the depths of their modern economic past may not end through re-engagement with the classical economics of David Ricardo and Reverend Malthus. Economic narrative is falling further back into the age of trade mercantilism, which is the pseudo-economics and public policy of Donald Trump and the people he prefers to talk to. (Some claim that capitalism is moving even further back, into a new age of feudalism. Refer Yanis Varoufakis: ‘Capitalism is dead. The new order is a techno-feudal economy’, El Pais, 11 October 2023.)

(While monetary and fiscal probity – small but powerful government – were important features of classical economics, its central thrust was a growth process which took advantage of a prior and fortuitous emergence of a substantial middle class, and proceeded through a growth process which would eventually eliminate that middle class. ‘Winners’ would be those who benefitted through social mobility and gained entry to the upper class; David Ricardo – a successful financial speculator – had already become a landed gentleman by the time he commenced his career as a political economist. Classical economics was a story of transition from one unequal stationary state into another. The offsprings of classical economics were Marxian economics – which would presage a benevolent end state following its harrowing birth – and neoclassical economics which preserved the middle class.)

I don’t think that the current set of opinion leaders and power brokers are deliberately stupid. Rather, their world view is based more around a linear narrative – as the Bible is – than a circuitous understanding of wealth moving within a biosphere which has self-correcting propensities. Economies start, things happen, eventually end times arrive. The winners (or winner) are revealed at the end. By definition, if you are not there at the end, you are not a winner.

Economic narrative is entering an era of financial mercantilism, an era of linear pseudo-social-science in which the goal of humanity is to extract – for no useful social purpose – as much ‘money’ from the Earth-system as humans and other ‘intelligences’ can before that system itself will no longer be sustained. Financial mercantilism describes a game, a race-to-the-end to see who can make the most money.

Musk-win Escalation Race

Races between and among superpower presidents, between super-entitled tech-lords, between Nietzschean Übermenschen; have become quite the topics of present-day chatter. While übermenschen dominate their worlds from within rather than above – including fictional examples such as Rakhmetov and John Galt – there is also today a messianic sense of the world concluding much as it began with a Singularity; ‘one God to rule them all’, to invoke the favourite book of one of the present world’s most notorious dark lords, a lord with a palantír and a New Zealand passport.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin, 23 September 2026 – I recently read Annie Jacobsen’s Nuclear War; a Scenario (2024), and it’s a sobering reminder of what’s at stake when the world’s elites play existential geopolitical games.

What use is geopolitics? Is it just a super-elite sport? A form of evangelism? As one astute American geopolitician said around 1992, following the passing of the Soviet Union: “What does the preacher do when the Devil dies?” (Refer, The Real History of the Forever Wars, Neutrality Studies, YouTube, 20 September 2026.)

Whoops, some numpty dropped the ball!

What’s the chance that an elite rugby player will drop the ball in a high stakes’ game? One in ten maybe? Would anyone choose to play elite sport if they had a one-in-ten chance of (literally) eliminating themselves and their opponent? I guess the Roman gladiators took those kinds of chances; but they typically did not have the option to choose.

The Heuristic Scenario

A heuristic scenario of a cataclysm is one used for exploratory or teaching purposes; not necessarily the most likely version of such a disaster.

Jacobsen presents her scenario by positing an unhinged North Korean regime initiating what would become a 72-minute cataclysm, by striking with a double-nuclear-warhead both a nuclear power station in California, and the city of Washington DC. She never really suggests why North Korea might do this; but her aim was to show how events might unfold, following an event which represented a failure of ‘deterrence’.

And she aims to show that nobody can really defend a successful nuclear strike of this type; and that war-game game-theory suggests that, once started, humans (taken collectively) do not have the intellectual bandwidth to avoid nuclear escalation and hence annihilation. And she aims to show that a nuclear death is not a nice way to go; not ‘pretty’. (Around 200 years ago, some Romantics – participants in a philosophical tradition which emphasised aesthetics – thought that a death by tuberculosis could be ‘pretty’; ‘cults of privilege’ can have deeply problematic belief systems. Refer to ‘Tuberculosis in the Romantic Era of Consumption’, chapter 14 of Epidemics and Society from the Black Death to the Present, Frank Snowden, 2019.)

Questions which were not raised by Jacobsen

What if the Jacobsen-narrated warhead which struck the California nuclear power station was not a nuke, and if the one which targeted Washington missed and did not explode? Would a dead-hit by a non-nuke on a nuclear power station be considered a nuclear war? Would the nuclear-retaliation algorithms be activated? And is there any sense of the word ‘rational’ which could justify a fullscale ‘murder-suicide’ response to a small or large ‘first-strike’ nuclear attack?

Fitting Aotearoa New Zealand into Jacobsen’s picture

Jacobsen’s Nuclear War is very northern hemisphere centric. New Zealand gets a single mention near the end, with the underexamined assumption that New Zealand, Australia and Argentina would have a few survivors; survivors even after a holocaust in which the United States and Russia both ‘shoot their (nuclear) wad’. The scenario that all life might be extinguished was too much, even for Jacobsen; though she did compare her event to an extinction event like that which killed most of the dinosaurs.

The scenario harks back to one possible event in paleontological history. Indeed, there may well have been a human near-extinction event in the past, tens of thousands of years ago; such as a super-volcanic eruption which killed everybody not living in southern Africa.

What matters for New Zealand is to understand that there are mid-range nuclear war scenarios, short of a complete apocalypse, which might lead to between say one-quarter and three-quarters of humanity surviving a year after the last nuclear detonation. In some of those scenarios – especially some of possible asymmetric scenarios – New Zealand could be an early target; meaning that all New Zealanders would be among the ‘definitely dead’.

The best way for New Zealand to avoid such an asymmetric nuclear scenario would be for New Zealand to be – and to be seen to be – strictly neutral. Unarmed neutrality; meaning that New Zealand could be a threat to nobody. Security through peacemongering rather than the absurdity which is ‘security through war’. As such, New Zealand, while welcoming genuine tourists and seasonal workers, should be wary of hosting millionaire pre-refugees; people who seek to buy their way into New Zealand [exit] in preference to advocating peace to their own countries’ governments [voice]. (Note this: Real estate agents reveal how A-list celebrities buy property in New Zealand, Catherine Smith, New Zealand Herald, 22 Sep 2026. People famous-for-being-famous might attract the most media attention. There are others who compromise New Zealand’s security by using New Zealand as a bolthole to shelter themselves from the consequences of their own follies.)

What happens to New Zealand in a ‘limited’ nuclear war which only destroys half of humanity? That could mean zero war-related deaths in New Zealand.

And what is the probability of such a war occurring by the end of this decade? I would say that the probability of such a war is greater than one-percent. That’s the probability of a person’s town being hit by a one-in-one-hundred-year flood; and we know that there have been plenty of those events in New Zealand and elsewhere, in recent years.

Everyone should be making their own estimate. And the elites should be publicly discussing, justifying, and contesting their estimates. Not wishful estimates; rather, estimates based on realism.

The world situation is this. We currently have a nuclear super-power (Russia) at ‘fullscale’ war with a non-nuclear power. Most realists would argue that the non-nuclear power – Ukraine – is serving as a proxy of Nato, the world’s most assertive nuclear super-power. Rhetoric coming out of Europe is more bellicose than anything coming out of Russia. Non-nuclear Ukraine just last weekend attacked – and killed people in – the capital city of its nuclear-armed adversary.

Historical Precedent

I remember a similar situation, in October 1962. In that year, the Ukraine-equivalent country was Cuba; Cuba was hosting nuclear-capable missiles aimed at the United States, the world’s biggest nuclear power. At the time, almost everyone would have said that the odds were ten-percent (or higher) that there would be a world-ending nuclear conflagration. Maybe another ten-percent possibility that there would be a non-world-ending nuclear conflagration. Some would have argued that I am being conservative here.

That game of Russian roulette was averted then, thanks to the then relatively wise incumbents in the White House and the Kremlin. Cuba’s loose-cannon president and his 2IC – Fidel Castro, and Che Guevarra – were disappointed that Cuba did not get to fire some sort of salvo at the United States.

The odds of a nuclear war, soonish, may now be similar to what they were in 1962. We should be talking about it. And, just as when we talked about climate change, the talk needs to be about adaption as well as avoidance; about survival in a world in which there is sea-level rise or a nuclear fallout.

Could anyone imagine President Kennedy not ordering as escalatory response in 1962, if Castro (and, by inference, Khruschev) actually fired missiles at Washington? Well, we all saw the recent attack on Moscow; that’s all who still watch the news. If we think back to 1962, such an attack should have shortened the odds. The issue is not whether Vladimir Putin is a ‘bad guy’ or a ‘good guy’. The issue is what his response will be, ‘justified’ or not. The second issue is what will happen to Putin if his response is seen by powerful compatriots as ‘too weak’. We do know what happened to President Kennedy thirteen months after his response; a response which was considered by some domestic political adversaries to have been a ‘climb down’.

Could New Zealand face a post-nuclear famine?

Consider a scenario that, despite mass destruction in the northern hemisphere, the climate and radiation levels are relatively unchanged in New Zealand. New Zealand’s present economy is heavily predicated on trade with the northern hemisphere; undertaken by northern hemisphere ships using northern hemisphere fuel, and returning with northern hemisphere consumables and fertiliser.

Would Australia save New Zealand by sending wheat and rice as food aid? Maybe Australia, assuming it has also survived largely intact, will have other priorities?

New Zealand would have to shift rapidly into arable farming, away from export-oriented meat and milk. The price of potatoes would soar. People would be fighting to pay megabucks for produce for sale in farmers’ markets. Kiwis would be regretting the bulldozing of New Zealand’s best horticultural land for housing developments.

On Monday, RNZ ran this interview: Arable farmers ‘checked out’ as farm struggles continue, RNZ 21 September 2026. The process of replacing staple food production with export-oriented meat and milk products continues unabated. New Zealand’s ability to feed itself diminishes, as New Zealand pursues a self-unreliance strategy which fails to acknowledge the geographic isolation of this archipelago.

I’ll finish here by noting that two of the most famous historical examples of preventable famine occurred within the British Empire, and to two food-exporting nations: Ireland in the late 1840s, and India in the early 1940s. The capacity to export meat and milk and space technology is not the same as the capacity to pivot, quickly, to staple domestic production sufficient to keep 5.4 million people alive and healthy.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.