The Asiafication of New Zealand production.

Reports that New Zealanders are working longer hours with more responsibilities and little if any overtime pay, are less unionized and more casualized (part time) than any time before in the country’s modern history suggests that not only has the national model of accumulation changed. It suggests that the labor market and labor process have fundamentally changed as well. The trend towards increased exploitation of human labor as an input commodity, added to an increasing lack of employer concern for the social costs imposed on workers by super-explotation and the long-term nurturing of employees as productive assets, is reminiscent of something that Marx wrote about a long time ago: the Asiatic mode of production.

I have written about the Asiatic mode of production before on this site, differentiating it from Oriental despotism and referring to my observations about Singapore when I lived there in recent years. The core of the model centers on an abundance of cheap and easily replaced human labor. This labor is used instead of machines or other labor saving devices because it costs less in terms of initial investment and long-term maintenance, although it is less efficient in terms of productive output generated by individual laborers. The labor market is dominated by employer “flexibility” in hiring and firing and setting wages, working terms and conditions. Workers are treated as expendable commodities, not as assets. In Singapore this was done via the importation of foreign labor from the sub-continent and Southeast Asia (not to be confused with the foreign “talent,” mostly Anglo-Saxon, that is imported to staff corporate upper management in the island state).

In New Zealand it is accomplished by maintaining unemployment rates at sufficiently high levels so as to have a labor surplus in semi-skilled and unskilled, middle to lower income, mostly youth and entry-level  positions. Creation of lower minimum wage sub-categories (such as the youth wage) and lowering wage requirements for casual or part time work reduces labor input costs. Dropping of social welfare benefits forces people into the job market out of necessity rather than choice, adding to the numbers of the unemployed seeking work. Loosening of the regulatory environment in which most workers work gives them less legal grounds for grievance across a range of issues, from workplace safety to wages.

The combination of factors allow for the easy replacement of semi-skilled and unskilled labor (and in some instances, skilled workers such as academics), which increases the employment uncertainty and precariousness of the work force. That makes employees malleable to employer demands for more wage restraint, more task assignments, more productive output per employee and hence more working hours with little extra pay or benefits. For employees in a labor market characterized by work scarcity, loose regulations and employment precariousness, increasingly onerous jobs are not easy to give up (tragically, Pike River comes to mind). On the other hand, for employers it is a take it or leave it proposition. If workers want better pay or conditions, they can look elsewhere.

The deliberate undermining of collective bargaining by successive National governments (which the Fifth Labour government did not fully restore) and the decreasing role of unions in the labor process plays into this scenario. Less means of collective defense in the face of of the labor market shifts described above leads to atomization of the work force into a mass of uncoordinated and stratified individual opportunity seekers. As the opportunistic ethos takes hold and replaces the collective solidarity ties of previous generations, it reinforces the Asiafication trend.

An important aspect of the trend is immigration demographics. Since New Zealand is labor poor it must import foreign workers in order to grow. The historical use of unskilled Pacifika labor in New Zealand is well known. But what is interesting in recent years is the turn to Asian sources for all types of labor, most of it semi-skilled and skilled. Regardless of specific provenance, Asian immigrants are much less familiar with Western labor market rights and responsibilities and in fact are eminently susceptible to the labor process conditions outlined in the Asiafication model. Moreover, where working class benefits have accrued in Asia, much of that has been done via strong collective action (such as in South Korea) and/or via paternalistic state policies (such as in Singapore). In New Zealand neither of those factors have obtained in recent decades.

The increasingly non-Western immigration demographic appears to be easing the consolidation of the Asiafication trend. New Asian immigrants, schooled in authoritarian modes of production at home, arrive in New Zealand eager to work, relatively ignorant of their rights and less inclined to complain about employment terms and working conditions. To these can be added immigrants from Central Asia and the Middle East, who also have come from mostly authoritarian and highly stratified societies where workers know their place in the social hierarchy and where the concept of collective and individual rights is narrowly construed.

This mass of new arrivals, to include the first generation born and raised in New Zealand, add highly motivated opportunity seekers into the labor market mix. Although some may be refused work because of racism or difficulty with language, the larger trend is to increase competition for the relatively scare available jobs and in doing so lower the overall wage bill. That leads to more income inequality between workers as producers of value and the managerial consumers of their commodified labor.

Another way of looking at the issue is in terms of consent. Over the years Western workers have seen their material threshold of consent, which is the general expectation of fair treatment in the workplace and fair remuneration for providing their labor services, institutionalized in labor law and labor market practices. It includes access to collective representation and bargaining and state enforcement of workplace health, safety and other basic standards for working conditions and pay. What the Asiafication process does is lower worker’s expectations of “fair” treatment in the labor process, which in turn lowers their overall material threshold of consent. Reinforced by institutional and structural shifts that are reproduced over time, this further subordinates the salaried classes to the logics of capital as defined by investors and asset owners.

Asiafication also shows workers their “proper” place. After years of contesting capitalist domination of the political and economic system via party competition reinforced by union collective action in an effort to level the socio-economic playing field, Asiafication helps restore the overt social hierarchies that underpin the capitalist class system and which were camouflaged by design in democratic welfare states.

For employers (as sellers of cheapened labor, value added products), the result of Asiafication is lower price outputs across the board (be it in services, manufacturing or primary good-derived exports). That makes them competitive in the global market of production, service and exchange.

The result for workers is a vicious circle in the social division of labor as well as in production: a labor market created by an economic and political decision-making elite who see modern variants of the Asiatic mode of production as the wave of the future and something to emulate (however hard that is to do under democratic conditions), coupled with an increasingly non-Western immigration demographic that is historically familiar with the “flexible” labor market dynamics inherent in that model and its contemporary applications and which does not necessarily see the Asiatic mode of production, including intense social stratification and opportunistic individualism, as a bad thing. Under such conditions the race to the bottom begins in earnest.

It should also be noted that the Asiafication of New Zealand production facilitates the increasingly Asian focus of New Zealand trade and investment strategy. The push to increase investment in and trade with Asian and other non-Western countries has its domestic complement in the alterations to local labor market conditions. Asian investors who otherwise might be put off by Western labor market standards and regulations can now see something more familiar in the New Zealand labor market, which is becoming more akin to what they are used to in their home countries. That eases the way for the inward flow of non-Western capital into New Zealand’s productive apparatus, something that contractually reinforces local commitment to the Asiaification model.

I am not a labor economist or sociologist, much less an expert on immigration. I am sure that there are exceptions to the trend. The knowledge economy may still be around and centers of productive excellence perhaps abound. It is clear that the welfare state labor market model is kaput. It is equally clear that there are significant variations in Asian and other non-Western labor market standards that argue against making gross generalizations. Even so, there is a discernible trend at play when it comes to New Zealand’s labor market, and that trend derives from or at least resembles modern variants of the labor market typology associated with the larger structural model known as the Asiatic mode of production.

It also seems to me that there is something amiss about a purported liberal democracy that so energetically pursues a model of accumulation that at its core is dependent on a highly exploitative labor process in which material short-term gains for employers is emphasized over the long-term employment security and welfare of workers. After all, the rewards of the former accrue to the few, even if there is some trickle down to the masses. But the long-term stability of democratic society depends on having relatively contented working and middle classes who invest in their jobs not only for immediate gain (or relief), but to help secure the next generation’s material well-being. If that is no longer feasible due to the conditions of production, then something will have to give.

Absent an authoritarian regression along the lines seen in certain Asian political economic models (which would have to include major changes in the basic socialization mechanisms of the citizenry, be they new immigrants or not), it seems to me that the Asiafication of New Zealand production will become untenable over the long-run. Long term disenchantment with economic exploitation turns opportunity seekers into the politically disillusioned, and it is the politically disillusioned who, however apathetic at first, eventually agitate the most for substantive change. Under competitive electoral conditions that means that the politically disillusioned become a potential support base for reform-mongerers and the parties that best represent them.

In summary, I believe that the current Asiafication of New Zealand production is a short-term, market elite-driven solution to a perceived problem of competitiveness that is not sustainable even with the changing national demographic based on non-Western immigration trends. I believe so because I do not think that the elites of New Zealand are prepared or inclined to engage in the authoritarian measures required to impose a new social division of labor consonant with modern variants of the Asiatic mode of production. Absent the will or the way to add Orientalism to the equation, there will be an inevitable political backlash to the Asiafication model that will see its undoing in favor of a labor market that is less exploitative and more attuned to long-term social gains rather than short term business profit.

It will be a good day when that happens. I just hope that it happens in my life time.


10 thoughts on “The Asiafication of New Zealand production.

  1. Grat Post but if you can see the Asification of production why not the move to orientalisim of the elites or politics? Is’nt it just feudalism for Asia, ie just a stratified hierachical society with a few at the top and lots below. Whats makes you so sure that NZ elites wont or cant stomach trying to roll backor destroy the barriers to greater profits, seems they have been keen to push it as far as they can so far.

  2. Dan:

    I intentionally left the question of a parallel move towards Orientalism unanswered precisely because it is open to debate. I do think that under current conditions, given the ideological dominance of market logics, Orientalism is not required for Asiafication to take hold. But as I said in the post, the latter is not a long-term solution in a democratic society, which is why the question of its preferred political shell becomes relevant.

  3. Fair enough but you may be more optimistic than me in regards to the elites in any country wanting to maintain a shell of democracy if it can be done away with, or better yet maintin the illusion of democracy while hollowing out all genuine democratic aspects of a society. I have also seen what Singapore is like, having lived there, and the illusion is very detailed.

    New Zealand current political elite may not be openly saying what they want but the effects of many of the policies which are being enacted are clear enough. The shift may be minor at this point but I would say that the movement is towards a Singapore like state not away.

  4. Dan:
    It is a rare day when I am called optimistic about things political. I share some of your skepticism about the present NZ elite, but do not think that it is possible for them to steer NZ towards a SG-like state. SG’s very small size and the resultant one party domination of most aspects of society is so pervasive so as to limit the comparison. NZ may be small but not THAT small, so issues of control would be more difficult even if there was an authoritarian regime in power.

    For NZ elites to make a successful move towards Orientalism would require cooperation by Labour, the Greens and others. It would require suppressing local government autonomy (which I admit has been done to some extent). And it would require a population willing to trade off democracy and other forms of voice and participation in and out of the work place in pursuit of some ethereal better material standard of living (which is what most Singaporeans have essentially done up until very recently).

    I do not think that combination of factors will obtain in NZ, which is why I see the move towards Asiafication as a dangerous but ultimately short-term solution to issues of market competitiveness.

    The question is how long before Labour, the Greens and other progressive organizations unite around common repudiation of the model. So far, I see no indications from Labour that it will do so, and the CTU is more interested in keeping its share of the pie rather than rolling back the Asiafication process. Although the Greens and less compliant unions may be working to that end, without the support of the big players the road to de-Asiafication will be a bumpy and perhaps long one.

  5. Pablo:

    I would agree with your points, sorry about calling you an optimist.

    My concern is less what any current goverment would do but that there does not appear to be little if any roll back by the opposition when it does come into power which leads to a slow creep away from the basic values which democracies hold. True it can never really be a one party state but it can become one of those captured democracies where the elites are incharge and just change the parties to suit. Somewhat like the US.

    Obviously there is a limit to this and I like you am interested in seeing where and when that reaction would crystalise.If it follows any historical bent it will be when the facade starts to really crack and conditons (political or economic) become such thatthere is more value in getting involved than sitting out.

    Also you are right that NZ cannot be a direct copy of SPG but I was alsways amazed how it could appear from the outside to be such a pleasnt democratic place but once inside it could be relatively draconian if a benign state.Once referred to by William Gibson as “Disneyland with the death penalty”.

    The comparision to NZ was that the illusion would be greater than reality at some point and any true means of chnage would waterd down or lost.

    That said I watched SPG with the transition for Lee Kwan Yew to his son and the effect that had, or the debate over the casino, or the ongoings with Dr Chee so its fair to say that democracy is not dead in SPG but its muted, very muted.

    And while I am not a Green supporter per se I see them as more likly to advocate for change than Labour which if anything is just trying to get its numbers back before going back to biz as usual.

  6. Pablo, I agree that there is certainly an end to the “welfare capitalism” that cacooned the western working class from the effects of unrestricted capitalism for a long time, until capitalist development in Asia reached a certain threshold, but your invocation of Marx’s Asiatic mode of production is incorrect, and unnecessary. The Asiatic mode of production was one of several pre-capitalist modes of production postulated by Marx. It became a bit of a sideshow that was regarded as a variant of feudalism. The key issues in any consideration of a “mode of production” in Marxian terms are the forces and relations of production. Under a Marxist understanding of captalism, a key feature of the relations of production is the existence of “free labour” — free in the sense that the owners of the means of production have no responsibility for those they employ beyond paying them the value of their labour minus the surplus value thereof. So what we have at present, however much it might be influenced by contemporary Asian forms of capitalism, is still a capitalist mode of production, not the pre-capitalist feudal variant to which Marx gave the tentative name “Asiatic mode of production”.

  7. Blackadder:

    Thanks for the critique. I agree that the “free labour” concept is useful to describe the approach to workers in unregulated labor market conditions. My use of the concept of the Asiatic mode of production, extrapolated from its conceptual origins to the present (and recognizing the risk of conceptual stretching in doing so), hinges on the core concept of the super-exploitation of human labor and the corresponding social relations of production that derive thereof. These can be either pre-capitalist or capitalist, pre-modern, modern or post-modern in manifestation.

    Like other productive forms, contemporary Asiatic modes of production have their roots in pre-capitaist modes of production but have evolved over time into what we see in many parts of Asia today. Thus it is by no means a feudalistic sideshow but in fact central to the the way in which Asian capitalism has come to the fore in recent decades, to the point that it is now considered to be the most competitive type of capitalism when compared to Western variants.

    One can argue that all variants of capitalism had their origins in feudalistic variants (I do not subscribe to that notion but put it out there for argumentative purposes), but path dependency analysis demonstrates that their respective evolutions (or dialectics if you prefer) have led to very different contemporary manifestations of “post-feudal” production. Contemporary Asian capitalist variants exhibit demonstrable collective differences from Western variants in that they continue a historical lineage rooted in super-exploitation of human labor as a central if not defining feature. In the developed West of which NZ is ostensibly part, that feature was abandoned nearly a century ago.

    In the Asian models labor is not “free” in the sense you describe but in fact constrained by employer and/or state-centered regulation that ensures the collective subordination of the working class to the dominant ideological project. In the free labor model workers could still organize independently even in the face of employer resistance and at some individual hazard, something that if very difficult to do allowed them the opportunity to use their collective weight to extract concessions in the labor process. Although not as important as craft guilds in the formation of early Western unionism, the opportunity structure of free labor helped in the development of working class collective agency in the 19th century.

    Unencumbered by the niceties of Western labor market regulations and conditions–codified in the likes of ILO articles and conventions drawn up mostly by Western welfare states in the post WW2 era and to which countries like Singapore either do not or only partially adhere to (and if so, differentiating between individual and collective rights and reaffirming the dominant role of the state in determining them)–the new form of Asiatic production is at its core as ruthless and relentless in its exploitation of human labor as was its pre-capitalist predecessor, with the exception that now advanced technologies have been added into the surplus generating form (I shall omit discussion of the role of “borrowed” rather than indigenously researched and created technologies in this evolution).

    Because Western elites have bought into the concept of the “Asian Century” as a result of the phenomenal transformation of Asia over the last three decades, some such as those in NZ appear to think that the best way to remain competitive is to import Asian approaches to production lock, stock and barrel. When that includes attempts to model labor market frameworks along Asian-style lines, that becomes a large point of concern.

    One irony is that in the most developed democratic Asian states such as Japan, South Korea and Taiwan (and to a small extent even Singapore), there has been a move towards selectively adopting more Western style labor market approaches, which is seen as humanizing the productive process and fostering, if not deepening, more egalitarian forms of interaction at the sub-national, non-political level. This is done because these states understand the long term reproductive need for social harmony based upon working class consent to the the political-economic status quo.

    In NZ we are going in the other direction.

    Thanks again for the critique. My answer may not satisfy you but it is good to hash out these differences in interpretation. After all, I do not get to discuss Marxist concepts very often now that I am out of academia and living in the “real” world.

  8. The key component here is the “reserve army of labour” i.e. unemployed, underemployed, precariously employed and migrant super exploited under minimum wage rates. Milked for all it is worth by most employers major and tin pot.

  9. Pablo: Thanks for your detailed response. My own comments were focussed on what I took to be a loose appropriation of Marx’s category of Asiatic mode of production; but I, too, find myself in the real world and indisposed to endless hair splitting on matters of Marxist theory (so I won’t). Having said that, I agree that it is good to give differences of interpretation a good workout, and Marx’s ideas remain valuable for interpreting the contemporary world. Unfortunately there is little appetite for them in NZ, as the fewer than usual number of replies to your latest posting demonstrates.

  10. Blackadder: To borrow another Marxist concept, false consciousness – the financial counterpart to the “house negro” – has successfully manifested in the form of the Reagan Democrat/Essex Man/Waitakere Man demographic by way of the aspiration delusion, who would otherwise challenge the system. It also evokes the “12 cookies” joke.

    And not many of the Singaporean model’s cheerleaders would invoke Lee Kuan Yew’s immortal quote: “If Singapore is a nanny state, then I am proud to have fostered one.” Unless of course, it applies to the “proles” rather than the Inner & Outer Parties.

Leave a Reply

Your email address will not be published. Required fields are marked *