REVIEWS

SINEWS OF WAR AND TRADE

Shipping And Capitalism In The Arabian Peninsula

Laleh Khalili, Verso, 2020¹

and

EXTRACTIVE CAPITALISM

How Commodities & Cronyism Drive the Global Economy

Laleh Khalili, Profile, 2025²

Down here on the Pacific rim, New Zealand is pretty much a cargo cult, though we seldom notice it. Almost everything we use is made elsewhere. It arrives as if by magic, from distant capitalist relatives. Most of what we extract ourselves disappears offshore—timber 80%, milk powder 94%, gold 100%?— along with very large “invisibles” of profits, interest, royalties and licence fees. We just ignore the carbon emissions from all our cargo to-ing and fro-ing.³

Although focused on the Arabian Peninsula, Laleh Khalili’s work provides excellent background on the logistics and infrastructure underpinning the world economy that we are part of. She is Iranian-American and a Professor of Gulf Studies at the University of Exeter, who writes on globalisation, capital, neo-colonisation and seafaring. The logistics, politics and profits of trading commodities, particularly oil, are her area of research and expertise.

Maritime trade, logistics and hydrocarbon transport are the clearest distillation of how global capitalism operates today, she says. “On the map of global trade, China is now the factory of the world,” says her publisher’s book’s blurb. Tankers and bulk carriers bring iron ore, coal, oil and other commodities to its ports, and container ships take away its manufactured goods. “The oil that fuels China’s manufacturing comes primarily from the Arabian Peninsula”.

Trade Winds & Sea Lanes

The phrase “sinews of war”, meaning logistics, comes from Marcus Tullius Cicero on the expanding Roman Empire: “The sinews of war are infinite money”.⁴ To enable even more money to be made. So I’ll begin with her last chapter, which is on war—history which Trump has clearly not read. Trade through the Red Sea, Persian Gulf and East African coast, first established by Indian⁵ and Arab dhows sailing east and west on the monsoon (“trade”) winds, was forcibly taken over in the 1500-1600s by Portuguese, Dutch, then British empire-builders.

Strategic harbour and ports of trade such as Jeddah, Aden and Salalah became telegraph cable laying points, coal and oil “bunkering” ports and military bases for the British Empire, and later US ships.⁶ The Suez Canal was built by Egypt in 1869 with French finance but the debt led to it being sold to Britain in 1875. This faster route for gunboats and steamers encouraged massive capital investment to the east, mainly in mineral extraction. In the two world wars, the canal zone became a major British military installation.

During the 1950s-60s, Egypt, Iran, Saudi Arabia and other sheikdoms claimed independence from British influence but US and UK petroleum corporations maintained their control, with “regime change” as required (e.g. Iran 1953). In 1956 Egypt’s leader Nasser re-nationalised the Suez Canal, and Britain, France and Israel invaded to depose him. The canal stayed closed for six months, with the route around the Cape of Good Hope increasing shipping times by weeks. So, the US, Soviet Union and UN pressured the allies to withdraw.

Choke Points

Oil companies in Russia and Saudi Arabia responded to the closure by swapping customers west and east, and started building pipelines. The Suez Canal was the front line between Israel and Egypt in the Six Day War of 1967 and the Yom Kippur War of 1973, so was closed to shipping until 1975. The Organisation of Petroleum Exporting Countries (OPEC) took the opportunity of the 1973 war to raise crude oil prices, leading to carless days and stagflation in industrialised countries.

These Gulf states and global oil companies then invested in developing oil and gas refineries, petro-chemical and fertiliser production, huge automated ports, Free Zones for trade and oil-based industrial production, etc. The Gulf is at the centre of our fossil fuel-based global economy, and its northern shore is Iran. Two of the world’s most important shipping routes flank the Arabian Peninsula states, with three out of five of world’s choke points for shipping. The most difficult one is within Iran’s 200 nautical mile exclusive economic zone (EEZ). What did the White House think Iran would do?

True, the US has allies. Several are helping bomb the independence out of Yemen, and the United Arab Emirates (UAE) has its own nasty little empire and oil war in Sudan.⁷ But the only ally that wants to take on Iran is US-proxy Israel—or is it Israel-proxy the US?—as part of its paranoid and genocidal bid for more lebensraum. Khalili starts her book by explaining shipping routes and the development of ports around the Arabian Peninsula as oil discoveries were made.

Shipping routes are not just evanescent paths through the sea or constantly adjusted lines on nautical maps, but are a series of calculations about costs, insurance, port fees, and spot or forward freight prices on the Baltic Dry or Worldscale Indexes—all subject to change. Rapid modern communications between ships and agents enable more “tramp” ships to pick up cargo as they go.

Oil used to be shipped in barrels (still the unit of measurement), incurring high labour costs to handle. It was Greek shipping tycoon Aristotle Onassis (Jackie Kennedy’s second husband) who commissioned the first mega-tankers, filled directly from pipelines, that helped oil displace coal as the main industrial fuel after WW2. Containerised freight from the 1970s underpinned globalisation manufacturing by greatly reducing labour and therefore freight costs, from factory to shop.

Free Ports And Pollution

Once, ports around the Arabian Peninsula were merchant towns on deep harbours or river mouths, accessible by sail and from productive hinterlands, attractive as pilgrim stopovers or as British “protectorates”. Now, most are privately constructed and operated, highly-secure spaces at a distance from any city and public facilities, with their own workforces. Dubai Ports World operates 78 (as of 2019). Khalili recounts the histories, shifting politics and harbour-making of the oil-exporting ports around the Arabian Peninsula - Dammam, Ras Tanura, Dubai, Jabal Ali, Salalah, Aden, Jeddah and others. I had to read with Google Maps in my other hand.

The Red Sea has delicate coral reefs; much of the Gulf is shallow, once lined with mangroves; the Strait of Hormuz has channels between reefs, with scattered islets and cliffs on Oman’s Musandum Point. Thousands of ships churn the waterways in and out, leaking oil, discharging ballast water, destroying ancient fisheries. Massive quantities of foreshore and seabed have been dug, dredged and dumped to create ever-deeper artificial harbours for supertankers and palm-shaped marinas for superyachts.

The whole northern coast of the Gulf is Iran’s. Territorial claims to its waters and subsea resources were sorted in the 1950s, mainly by arbitration between State oil companies. Law on the sea was “about translating the commodities underneath it into dollars or sterling,” says Khalili. It’s Iran’s 200 nautical miles’ EEZ that the US Navy is staying out of, not drone range. Iran’s recent demand for navigation and environmental restoration fees is hardly unreasonable.

Tankers and containers required much less stevedoring but, as these oil-producing countries built infrastructure and expanded into refining, petrochemicals, and more recently, plastics, their labour requirements grew massively. “Sinews of trade” include road, rail and pipelines from hinterland to coastal ports, built with oil money by colonists, corporations and/or Governments to facilitate military logistics and commodity extraction, says Khalili.

Refineries and factories have been built alongside new automated port facilities, often in “free port” zones without customs, taxes or labour laws, to allow “the unfettered accumulation of capital”. From the 1970s, these legally “off-shore” spaces were adopted to varying degree across the region. Aden was the first. The sheik of Kuwait blocked a proposed free zone in the 1970s as it would strengthen the power of the merchant class against his own. The UAE now has 41, with 20 in Dubai including the largest Gulf port, Jabal Ali. Dubai Ports World, owned by Dubai’s government (“and/or ruler”) is now the world’s fourth largest port operator.

Bahrain has become “a whole country free zone of sorts”. Rather than customs-free zones, the Saudis have developed “industrial cities”, constructed by UK and US contractors, each with its own governing authority and differing sheik patronage, creating “diffuse and competing centres of power”. Crown Prince Muhammad bin Salman, who controls Aramco (Saudi Arabia’s State-owned oil company) and the country’s sovereign fund, is building a sci-fi, high-tech megacity called Neom on its northern Red Sea coast, projecting power into client states Jordan and Egypt and across to East African ports.

Racialised Labour On Land And Sea

As can be read in contemporary accounts, Gulf labour markets have been racialised hierarchies since British colonial times. “Anglo-American heads, Indo-Pakistani hands and Arab feet” were said to constitute the labour body, reports Khalili. At other times, reliable, hardworking Indians were contrasted with lazy, politically conscious Palestinians. The racial mix and reservoir of casual labour have been manipulated by changing visa, sponsorship (“kafala”) and employment rules in order to control wages and workers. Unions are banned in Saudi Arabia since 1956; in Aden, Bahrain and Kuwait, unions were permitted within a single company, and for nationals only before the late 1960s.

As port zones are at a distance from towns, workers are typically dependent on their company for accommodation in barracks—“places of surveillance and control”. Nevertheless, Khalili recounts forgotten histories of industrial action and State repression in the Gulf states, beginning in 1948 with a strike against extremely low wages in still-British Aden. The waves of strikes and mobilisation through the 1950s laid the groundwork for the anticolonial struggles of the 1960s. She notes that ports and straits offer “chokepoints” in the global circulation of commodity that were among the tactics used in these struggles.

Unions are still absent on the ports and docks of Saudi Arabia, Qatar and the UAE, and permitted in only a very corporatist form in Oman. In 2015, the majority of the population of Bahrain, Kuwait, Qatar and the UAE were foreigners, with large foreign communities also in Oman and Saudi Arabia. Around the ports of the Peninsula, Khalili saw how certain migrant groups were predominantly employed in particular categories of jobs. Two ports were now recruiting Emirati and Saudi women as crane drivers—but perhaps it’s a new form of category discrimination, says Khalili, replacing South Asian workers.

Shipboard life involves mind-numbing, boring, repetitive labour for everyone, says Khalili. The more so, the lower the seafarer is in the ship’s hierarchy. They work alternating four-hour shifts, chipping rust and repainting, or do more skilled work in hot, throbbing engine rooms. Hierarchy and routine rigidly structure even leisure time onboard, says Khalili. At ports, seafarers work with dockers to unload and load.

As port fees are high, turnaround times are often less than 24 hours, with no time to visit a nearby town, if the shipping company allows it. Saudi Arabia does not permit seafarers to enter, and the UAE port of Khor Fakkan just doesn’t have a border crossing into the UAE. At least satellite Internet access has transformed seafarers’ ability to connect with their family while at sea.

The shipboard hierarchy in discipline is typically reflected in physical arrangements, top to bottom: where officers or crew sleep, what they eat, leisure equipment, and a dual wage system. Most shipping companies headquartered in Europe depend on Filipino crew members. The Philippines has maritime training programmes for crew and officers, and depends on remittances. The ships Khalili travelled on had a single Filipino officer, who ate with the crew.

Khalili dates this racial divide back to the recruitment of lascars⁸ in colonial times. They were acknowledged as British citizens, yet a series of British laws confirmed discriminatory pay rates and deportation if they were not employed. Up until the 1960s, a quarter of all crew on British ships were lascars. Unsurprisingly, lascars were involved in the Aden strike of 1948, and joined maritime unions and various communist movements. From the 1970s, however, Euro-American oil companies began chartering larger tankers from independent shipping companies.

These companies automated loading processes, accelerated turnaround times and greatly reduced workforces. They then re-registered their tankers and freighters in “flags of convenience” countries with few shipping or labour regulations (or taxes). Any requirement to hire nationals could be set aside and the number of foreign crews proliferated. All this led to poorer working conditions for seafarers, including dual wage and contracting systems.

In 2015, the five top ship-owning countries were Greece, Japan, China, Germany and Singapore, with nearly half of all shipboard tonnage. But a vessel may be owned by Greeks, chartered by a French shipping company, flagged to Liberia, officered by Chinese or Eastern Europeans and staffed by Filipinos. The five largest suppliers of officers and crew were China, Philippines, Russian Federation, Ukraine and India. There were estimated to be 1.6 million seafarers, 14% of whom were Filipinos. Chinese officers surpassed the number of Filipino officers that year, but Filipinos still dominated among crew.

No Pay, No Food, No Way Home

Working conditions on ships are wildly variable. Because of the internationalisation of the ship, its forms of discipline and dual wage structure, worker cohesion is low compared to other groups, Khalili says. A marine delay insurance group reported strikes by stevedores and other port workers in 2015-2016, but none among seafarers. A great many seafarers have fallen prey to unscrupulous shipowners who abandon sailors aboard faulty vessels in foreign ports, with no pay and no way to return home.

Seafarers have been left to the mercy of Red Sea pirates, by shipowners unwilling to pay ransom. One Filipino crew, in the 1980s, were slowly starving as their initial ship owner, then a new one, cut back budgets and fired an officer who objected. When the ship reached Rotterdam to unload, the crew went on strike. But the Rotterdam court said Philippines’ law applied and Philippines law doesn’t permit strikes, so they should just get back to work.

In her 2025 Extractive Capitalism, she tells a more recent story of a Syrian seafarer abandoned in the Suez Canal for four years. No, not on the mega-container ship that got stuck sideways in March 2021. That got pulled out in six days. The Egyptian government only held the Ever Given and its crew for three months while it negotiated how the owners and insurers would pay to fix the canal. The media attention reminded people about the Bahraini-flagged MV Aman.

In 2017, creditors got the ship (sic) arrested for “unpaid wages” for the current and previous crews, and for “inadequate provisions, inhuman conditions, expired contracts… agent untraceable, owner not responding”. The crew’s families paid to get them home, but the Egyptian court designated the First Mate as the ship’s legal guardian and required him to stay on board—without fuel, electricity, food or water. He had to swim ashore every few days to get basics and charge his phone. He was released in April 2021, but the abandoned hulk is still there.

Mistreatment Also Happens On This Side Of The World

Don’t think such mistreatment only happens on the other side of the world. On Labour Day 2024, the Maritime Union of NZ held a film evening and discussion of “Before You Eat”, a Greenpeace Indonesia documentary showing appalling labour conditions for Indonesian seafarers, often on Chinese-officered-or-owned fish factory ships or freighters.⁹ The exploitation of seafarers is one face of modern slavery, on which Parliament is considering legislation, as our last NZ-flagged, NZ-owned container ship Moana Chief is being withdrawn from service.¹⁰

If you’d prefer to read about the world of shipping as a true but “cracking tale…written like a thriller”, try Dead In The Water: Murder And Fraud In The World’s Most Secretive Industry, by Bloomberg reporters Matthew Campbell and Kit Chellel (2022).¹¹ By eliminating financial and regulatory friction at every opportunity, say the authors, gigantic ships were “so efficient” by 2011 that getting a container of gadgets from China to the US cost only about US$2,000.

The tanker Brilliante Virtuoso, crewed by 26 Filipinos, was owned by a corporate entity in the Marshall Islands tax haven which was owned by a Greek family in Piraeus, who used another Greek firm to manage the ship, which sailed under the flag of Liberia, whose open register is run by US-Israelis in Dulles, Virginia. Its cargo of crude oil worth US$100 million was owned by a commodity trader based in Switzerland and Morocco, whose Cyprus shipping agent had chartered the Brilliante Virtuoso.

Cargo and ship were separately insured by syndicates of various “names” at Lloyds, the “invitation-only investment club for preserving wealth and privilege”. The ship was attacked and set alight in the Gulf of Aden. The insurers authorised local Panama-flagged salvage tugs and engaged a London marine services company who hired an ex-pat marine surveyor in Aden to investigate the claim. He was killed by a car bomb. Read on.

Khalili’s Wider Work

Sinews Of War And Trade is a substantial, very detailed work, based on years of study, interviews with port workers and seafarers, and Khalili’s own travels on super-freighters. In 2024 she published The Corporeal Life Of Seafaring,¹² which focuses on the bodies and lives of those who provide labour on ships and wharves, with pictures. Khalili writes insightful political commentary for the London Review of Books¹³, as well as US and French newspapers. You can find some of her articles online, as well as recent interviews about the US invasion and blockade of Iran—see UK-based YouTube channel Middle East Eye¹⁴, and US-based Democracy Now!¹⁵.

Extractive Capitalism is short, blunt, and in her more journalistic writing style. It’s a set of 14 essays, each from a different angle, on the global commercial ventures that mine for commodities—sand, iron ore, bauxite, coal, oil—trade them across oceans, and channel vast profits to a narrow pool of investors and shareholders. Extractive capitalism has made our globally and locally unequal world the way it is, says Khalili.

Three essays update already-published articles, while others expand on issues touched on in Sinews. She writes about glitches in global oil business (Suez, Organisation of Petroleum Exporting Counties [OPEC], covid) and the money made out of futures for oil and other commodities. The essay on sand for concrete, the second most traded commodity, is relevant background to our own campaigns that stopped large scale commercial extraction at Mangawhai and Pākiri.

She writes about how global trading came to be done in US dollars, giving the US enormous power. Superyachts for the rich to show off. Guano islands becoming bunker ports and military bases, with Chagos Islanders exiled so the US has a comms station in mid-ocean between India, Africa and Iran. How a US general with extensive military connections retired to a lucrative career advising business leaders and sitting on corporate boards.

How management consultants—Khalili once worked for one—contributed to corrupt State contracting from South Africa to Saudi Arabia, and advised capitalists how to enrich themselves without inconvenient workers, taxes or regulation. The half-built “high-tech hellscape” of Neom (Saudi Arabia). The down side of development politics in the age of private equity. China’s Belt and Road policy. Shipping emissions and COP27 “fiddling while the world burns”. Houthi attacks on Israel-related shipping in the Red Sea. Lots of interest. A great read.

BASIC INCOME

The Policy That Changes Everything

The Common-Sense Policy Group

Matthew Johnson, Kate Pickett, Daniel Nettle, Howard Reed, Elliott Johnson and Ian Robson, 2025¹⁶

This short book presents arguments and evidence for the UK government to provide an individually guaranteed “basic income” payment to all UK citizens and permanent residents (i.e. not quite “universal”). It extends the existing literature on universal basic income (UBI) by focusing on the benefits of an adequate income for physical and mental health and community wellbeing, including fiscal savings. The Group comprises academics, policy makers, third sector leaders and community leaders and “people with lived experience”. You may know Kate Pickett as one author of the highly influential books The Spirit Level and The Inner Level,¹⁷ on the adverse health impacts of inequality, including relative inequality.

The book is directed at a UK audience; it draws on UK data and assumes some knowledge of UK social support systems and policy jargon. But their many examples of the UK welfare system’s “conditionality traps” in entitlement, bureaucracy, perverse incentives and resulting child poverty levels will sound very familiar to readers here.

A Three-Stage Proposal

The Group proposes a greatly simplified system of Basic Income for All, presented as three carefully costed “schemes” which are really stages of implementation. Scheme 1 proposes weekly payments of £75 per adult and £50 per child, with State super at the current £205 per senior. That seems pretty inadequate but with a few tax tweets it would be fiscally neutral (and non-inflationary). They argue this initial scheme would then reduce Government expenditure through savings in social services and the National Health Service (NHS), and can lead on, in say five years, to Scheme 2 at £185 per adult, £75 per child, seniors stay the same.

This is a “halfway house” to Scheme 3 at $295 per adult, $100 per child, $295 per senior—that’s what we’d call a Living Wage. This would require some fundamental changes to achieve fiscal neutrality: higher progressive rates of personal income tax and wealth tax and forms of carbon tax. Scheme 3 could be implemented over perhaps a decade.

A flow chart of the overall logic of their case for Basic Income shows positive benefits at different individual, community and fiscal levels, via several pathways. As fiscal neutrality is already achieved by tax and expenditure changes along the way, longer term positive socio-economic outcomes will provide benefits and savings to Government that will be a nice return on investment, they argue. “The more generous the Basic Income scheme, the greater the social and economic benefit”.

The chapters that follow review current issues in the UK’s deteriorating conditional welfare system, then the evidence for and benefits of Basic Income policy in tackling (i) poverty, including child and generationally-transmitted poverty, (ii) impacts of financial and other stress on physical and mental health, (iii) insecurity and risk behaviour, (iv) care of children and old people, and how it can provide (v) a collective return on investment. I’ll skip the UK horror stories and touch on the key anticipated benefits of a Basic Income.

Applying for a benefit is hard and stigmatising for applicants, and is retrospective to being in need. There will be uncertainty about entitlement and amount, and a built-in delay before payment (as well as any “stand down” period). It is hard, complex and very expensive for Governments to administer. Conditional systems and means testing often generate perverse incentives. A Basic Income for (almost) everyone cuts through the punitive bureaucracy, is already there when-and-if needed, and is taxed away when not needed. This is not a libertarian argument, the authors say (like individual insurance or a voucher system). A complementary and wide range of social services must be directly provided by Government.

Basic income per adult and child reduces poverty, particularly in larger households, by securing the basics. A table shows percentage change in income by decile household income under each Scheme as recouped by its tax changes for fiscal neutrality. Scheme 1 increases the income of the poorest households by 139.5%, reducing the top decile households’ very high incomes by just 7%. Scheme 2 is lowest decile +319.5%, highest decile -16.8%. Scheme 3 increases the lowest decile of household incomes by 519.9%, to give them “an acceptable standard of living”. Scheme 3 taxes back to reduce decile 9 household incomes by just 7%, and the richest decile’s incomes of households by 30.1%. Sounds fair to me.

Analysis of health data and income changes in UK longitudinal studies suggests Scheme 1 could prevent or postpone 118,000 cases of physical ill health and 124,000 cases of depression per year. In Quality Adjusted Life Years economics, that could equal £3.87 billion a year in healthcare costs and productivity gains. Under Scheme 3, that could be £20 billion a year. Remember, both schemes were already designed to be fiscally neutral. “Basic income is not just a cost; it is also a generator of collective return”.

Uncertainty And Stress

An important link between ill health and income is stress. Uncertainty about what will happen and risk of bad outcomes are conditions for chronic psychological stress—and are typical experiences of those living in poverty and income or job insecurity. The UK welfare system exacerbates uncertainty, say the authors, and research on Organisation for Economic Cooperation and Development (OECD) countries over two decades shows the level of Government social spending is an important predictor of residents’ levels of worry. They describe conditional benefits systems as “particularly psychologically ugly and demeaning”.

For all wage and salary workers, two chief risks to income are work-impairing illness or accident, and precarious work hours or “gigs” along with cyclical unemployment. Basic income policy is the “best form of insurance possible”, even for those on a good salary. If things go horribly wrong, it pays out unconditionally and immediately.

A Basic Income provides not just money, but security. This is why the authors advocate for it over other income support systems. Even at a low level, it can help balance the certain and uncertain parts of a person’s or a household’s income stream. That allows people choice, to take good risks (rather than bad desperate ones), to make decisions for the longer term. These indirect benefits are harder to quantify, but are a “double dividend”, in the authors’ view, beyond resolving the immediate need for rent or food money. That security can allow more time and mental space for community engagement, with societal benefits. It is the evidence for wider societal benefits that prompts the title “the policy that changes everything”.

Leaving Your Kids To Care For Other People’s

There is much in the UK social welfare system that needs changing (as in New Zealand). The current presumed solution to family poverty is to push parents into the paid workforce, using the conditionality of income support as a lever. Often into jobs with too few “flexible” hours of employment and low wages. High abatement rates on benefit or tax support often mean little change in total family income. The authors term this a “conditionality trap”. A perverse aspect of this is the way this system makes people—women, mainly—look after other people’s children or elderly parents, instead of their own.

On their own family care needs, low-income families are squeezed between official pressure to “return to work” and the very high costs of child and elder care, under other policy settings (including privatisation). There are also conditionality traps in the pensions, care costs and security of the ill elderly themselves, who are assessed together with their spouse or family member carer. A Basic Income at a liveable level would remove these pressures and allow better choices for family care (which could in turn support demands for better wages and conditions for care workers).

The separate Basic Income entitlement for all children in a family (not limited to two), moving to an adult rate at 18, is designed to address child poverty¹⁸, the current “transmission” of poverty down the generations, and the UK’s low international rankings on child mental health and life satisfaction at age 15. “A functioning society involves the provision of care, on a massive scale”, which is part of everyone’s life cycle, say the authors. The UK is one of the wealthiest countries in the world. Yet the health and wellbeing of ordinary families, the raising of next generation, and caring for the previous are not valued as policy priorities. “This is a waste of life for individuals and a waste of economic potential for society”.

Public Support For Basic Income

A growing level of support for a Basic Income policy is shown by surveys and other research, by these authors and others. In 2016, in 20 out of 23 countries, more than 45% were in favour or strongly in favour, including the UK. In 2021 the authors undertook a survey in the Midlands and North of England, which have large working- class populations. Respondents (N=850) were asked to indicate their degree of support from zero to 100 for a Basic Income policy: 232 gave it 100, 447 more than 80, 749 more than 50. That is, only 11% scored it below a neutral 50 out of 100.

The authors considered this very politically encouraging, with the caveat that the survey did not distinguish between Basic Income and “doing any at all” to reduce poverty and inequality. Their results may partly reflect a consensus that people should be getting more help. In a UK-wide survey the previous year, however, a majority had preferred a Basic Income policy to an equally generous but conditional one, both for the then-pandemic and for “normal times”. During the pandemic, say the authors, “people who never dreamed they would need State aid…saw that the conditional retrospective system could not keep up”.

Of course, support goes down if cost is emphasised, they say. A further survey in 2022 presented Basic Income policies of different generosities on a trade-off axis with personal income tax rates. The higher the tax rate, the better the effect on poverty had to be to justify it—but results showed a zone of support for Basic Income policies at substantially higher rates of taxation from at present from Labour and (somewhat less so) Conservative voters. There was no difference in support by age or sex.

People liked Basic Income more if they thought “simplicity of administration”, “reducing stress and anxiety”, and “valuing every individual” were important, and these were stronger influences overall than concerns about “undeserving” people getting support. The study also showed funding Basic Income policies through wealth tax, tax on corporate profits or corporate carbon taxes made them especially popular, “given that so much of the economic growth of the last 30 years has been captured by capital, not labour”.

The small number who were strongly opposed were then asked to think of arguments that might convince others. From these the researchers distilled six justifying narratives—a bit long to detail here. Each combined concrete examples with broad principles and all stressed Basic Income as a policy for all us, not just an ‘othered’ subgroup of unemployed.

Here In Aotearoa New Zealand

The Common-Sense Policy Group’s research results and policy arguments are very relevant here. Our social welfare system is as dysfunctional and punitive as the UK’s, union strength is much reduced, and our young people are looking to Australia for job security. Artificial intelligence (AI) has begun writing middle class skills into software-as-a-service for rent. By treating real people’s lives as “labour costs” to be minimised, capitalism risks crashing the consumerism it has relied on, as well as the planet. We need a major policy rethink.

There have been debates and advocacy for a “universal basic income” inside and outside Left political parties since the 1980s, without rising to the surface of actual Government policy. I strongly support a Basic Income policy for New Zealand. In the 1980s I was part of a small feminist group that argued (against certain economists) that UBI should include part-rates for children and teenagers. A current advocacy group is Basic Income (https://basicincomenz.net/). I don’t think basic income will be the one “policy that changes everything”, as the title says. We may need to change everything, starting with the Government, before we can begin to guarantee liveable incomes, security and better health for everyone.

Tax The Rich, Feed The Poor

How can we afford Basic Income for All? By changing the tax system, as well as the Government. Tax Justice Aotearoa has released an election year “Tax Policy Statement For A Fairer More Transparent Tax System”, to enable “a flourishing country, where every person enjoys the best health possible, lives in a warm and safe home, and has opportunities to learn, grow and participate in community life”.¹⁹

Its recommendations include greater income tax progressivity, increased taxation of companies, trusts and transnationals, a capital gains tax on sale of assets (not the family home) plus a transfer tax (inheritances and gifts) and, if needed, supplementary taxes to capture excessive wealth and windfall profits. To help those with least income, it recommends no tax on the first $5,000 and reducing the rate of GST.

The only political party I can find detailed policy papers from, on tax, income, or anything else is the Greens. At the 2023 election the Greens’ End Poverty Together policy included an Income Guarantee for all New Zealanders, to be funded through adjustments to the tax system. They costed it at $385 for individuals, $770 for couples, and $735 for a single parent, plus payments for children.

Their 2025 Industrial Strategy includes a Green Jobs Guarantee, building on the 2020-23 Jobs for Nature programme with Labour.²⁰ In June 2026 they released a set of tax policy proposals to fund the future they want to see—greater progressiveness in personal income and company tax, capital acquisition tax on assets and gifts (other than family home/farm), a bank levy, withholding tax for offshore companies, and a small wealth tax on the superrich.

So far Labour has promised a capital gains tax on sales of property (other than family home) and a Medicard for three free doctors’ visits a year - which won’t fix the socio-economic factors in ill health, let alone poverty itself. But it’s hard to know from Labour’s policy drip-feed or the short bullet points on their Website so far. The newly invigorated Opportunity Party’s Website has policy bullet points that do include Universal Basic Income, to be funded by a wealth tax. Great, but no details given on what or how.

I’m unsure if we can implement an annual tax on wealth held. Tax Justice Aotearoa says we have very little public or Government information about who holds wealth in investments, companies and trusts, or how much.²¹ We have registers for companies, houses, cars and dogs, but not trusts. The companies’ register asks about “ultimate beneficiaries” and directors, but not shareholders of privately held companies. Only public companies provide public financial statements—in their country of registration. UK tax expert Richard Murphy says wealth in assets in housing, company share or other investment funds is in any case difficult to assess.

Even if wealth is not in tax havens, it’s worth is often in the eye of accountants, who can be creative.²² On the other hand, when assets change hands, it happens through public processes, involving professional lawyers, accountants, share registers, titles, real estate agents and bank transfers. The parties settle on a market price at a point in time – when it can be more readily known and taxed. So capital gains, gift or inheritance taxes are much more straight forward than taxes on wealth.

LIVING WELL WITHIN LIMITS

The Truly Sustainable Alternative

Interview with Julia Steinberger, Planet Critical, YouTube, 23 April 2026²³

If ensuring adequate income is to “change everything”, it needs to be complemented with a wide range of social services, says the Common-Sense Policy group above. Degrowth researcher Julia Steinberger goes further. “Public services are the lynch pin for living well within planetary limits”, she says in a wonderfully encouraging interview. “This would reduce our material footprints, energy footprints, and, of course, societal inequality”.

Steinberger is a degrowth scholar and lead Intergovernmental Panel on Climate Change (IPCC) author at the University of Lausanne. She and her colleagues are engaged in an award-winning international research project called Living Well Within Limits.²⁴ Their research reveals that, systemically, inequality is the root of environmental destruction, and that “internationally and locally at the household level…public services are the thing that allows us to reduce every kind of resource use, every kind of environmental impact and still live good lives”.

Energy Needed For Wellbeing Is Falling

As a former physicist, Steinberger’s work in the team focused on energy flows in relation to material throughputs; that is, resource extraction and use in the economy that results in greenhouse gas (GHG) emissions and environmental impacts. Since the 1970s’ oil crisis, countries have a lot of data on energy and energy accounting. It is a myth, she says, that increasing energy use leads to higher development that means higher well-being.

Although material throughput requires energy—human, coal, oil, electricity—in fact, the energy requirements for wellbeing have been really dropping over time, over history. We do things more efficiently thanks to technology improvements but also to many innovations that do not require much energy—like medical advances, better nutrition for children, immunisation, sanitation, better education or knowledge levels. A lot is social and organisational improvement.

How is that, when currently no country in the world is able to satisfy the needs of its inhabitants and have high average well-being levels without passing multiple planetary boundaries? When the team broke down the data, they found that household energy use was quite equal, at the international and at the country level. The poorest 50% of households all use roughly the same level of household energy. But transport energy use by income group was massively unequal. Bigger cars, more expensive cars, longer distances, more frequent trips, flying, private jets, cruise ships, super yachts—“this is where people spend their excess income”.

“Transport is something you can’t green-grow your way out of”, she says. A country’s emissions, pollution and negative environmental impacts can be greatly reduced, however, if we replace personal transport vehicles with interconnected public transportation systems run on different fuels. That is, public services for transport. She sees capitalism’s constant need for market growth and profits as entailing “coercive consumption”.

For example, in industry working with the State to make us depend on cars. With growing inequality, consumption goes way beyond wellbeing. “As soon as we get unequal power relations, wealth accumulation, we’re also on the path to environmental degradation… We have to curb the excess consumption of the richest classes because they are choosing to destroy the planet with their excess income”.

Energy Efficient Households

Household energy use can also be reduced while increasing wellbeing. In the UK, poor households are paying very high energy bills because of poor housing efficiency, she says. Investing in housing renovation and thermal efficiency would be a huge boost for people’s well-being and health, swapping fossil fuels for renewals. Using most energy efficient technology that we already have—heat pumps, microwaves, induction cooktops, electric buses and trains, clean water and sanitation—if we make those technologies and the services that everyone needs available to everybody, the energy required for everyone to live well in 2050 would be half the energy we currently use. That has been a major finding of the research project.

“It’s tragic, when you look at the international data, how many households still rely on really inefficient traditional biomass, mainly wood fuel. People spending whatever money they have to buy it. If they had access to electricity and these more efficient appliances, they would be using a fraction of the energy, at a fraction of the environmental cost, and be a lot healthier”.

In Vietnam, Zambia and Nepal, the team was able to look at specific households that were below the national average in energy use, yet had high well-being indicators. In general, what enables them to use less energy and be well is access to electricity, access to sanitation—so, access to network infrastructures—and access to things like markets, transportation, a health clinic, in a version of what Paris calls “the 15-minute city”. That was a main finding of the project that she was not expecting—that public services are the lynch pin for living well within limits.

No Conflict Between Social And Environmental Goals

We need to address the demand side, not just the supply side of energy, she says. Just as $10 is not the same to the poor as to the rich, not every gigajoule is the same as another in terms of what it’s delivering to the population. We need to invest and deploy technology strategically. “If we’re just mining up our few remaining protected wilderness zones in an attempt at unlimited energy that only really benefits the wealthiest whilst minimising the benefits that go to everyone else, and often at the expense of lives around the world—that’s not a solution”.

This is not a vision which has room for billionaires and autocrats, she says. “It doesn’t take a huge amount of inequality, it doesn’t take a huge number of billionaires, to still crash through planetary boundaries… But by getting rid of them, we have room for all eight billion of us—on a healthy, regenerating planet”. Lastly, a useful policy insight for election year: “We really need to take to heart that we should refuse to pit social well-being and environmental sustainability against each other”. The team’s research was able to show that “empirically that conflict is not there… Industry doesn’t have a conflict. It’s against both social and environmental agendas”.

SLOWING THE SUN

Nadine Hura, Bridget Williams Books, 2025²⁵

Nadine Hura (Ngāti Hine, Ngāpuhi, Pākehā) is a poet, writer and climate activist. Her title is apt for a book of essays about climate action and the environment from a Māori perspective. Maui, the clever Polynesian demi-atua reborn of the sea, used the power of his grandmother’s jaw bone to fish up the North Island. He failed to achieve immortality by crawling back up his mother’s vagina; even pīwakawaka thought that was a silly idea. But he and his brothers did succeed in harnessing the Sun with harakeke ropes and slowing its passage (particularly during South Island summers). As Hura and Viggers et al. (see below) propose, we can now capture the Sun’s energy more fully with solar technology, to power our homes, devices and transport.

Hura is very good at gently presenting facts, arguments and mātauranga Māori through personal stories, allegories and pūrākau. For example, she draws a great parallel between the plot of the film “Titanic” and our disastrous lack of international progress on emissions reduction. She shares insights into why people don’t vote, or whether citizen’s assemblies would work any better than party politics, by embedding them in her experiences of attending a conference, lunching with a Green politician, or learning how not to drown from a fisherman/activist on sea-level rise and foreshore change. Some of her pieces are family stories that embody impacts of environmental and social destruction.

Woven into her story-telling is a sharp analysis. Let me pull on that thread. “‘Whenua’ has dual meanings… land and placenta both sustain life…The climate crisis began with massive deforestation of Indigenous lands…”²⁶. To land-hungry settlers and soldiers “a patch of grass was worth more than an ancient tree… Indigenous people have been actively and vocally opposing everywhere mines and quarries are found. This despite the fact that the lowest paid jobs in the extractive industries are performed by Indigenous people”—in forestry, fishing, quarrying and mining, road building.

“Any serious intersectional examination of the causes of, and solutions to, climate change must be grounded in anti-colonialism… Climate change is the result of a system that incentivises and profits from the disconnection between people and land, promising that the free market can do a better job than the placenta… It’s not about the ‘management of nature’, but how we manage ourselves to live in a relationship with nature”. Woven into stories, her messages may reach many to whom an all-the-facts climate solutions book like “Sharing The Sun” is less appealing. I must say, with both sitting on my reading pile, I read Hura first. She’s a lovely writer. There are even poems.

SHARING THE SUN

Empowering Small-Scale Renewable Generation In Aotearoa

Helen Viggers, Keriata Stuart, Philippa Howden-Chapman, Steele Roberts (2025)²⁷

To Viggers, Stuart and Howden-Chapman, the story of Maui and his brothers slowing the Sun “sounds remarkably like a successful battle for appropriate regulation”. This book advocates for system changes to support residential production and use of solar electricity, while not excluding marae, business and farm applications. A high proportion of our residential energy use is already electrical—73% in 2022—so we are even more dependent than comparable countries on an appropriately regulated and smoothly operating electricity sector.

Electricity An Essential Public Service

This book can get quite technical, so Viggers begins by explaining terms and concepts. She then provides a history of production and regulation of electricity through the 20^th Century to the “reforms” of the 1980s. Unlike, say, in the US, the New Zealand government acted early to prevent private corporations gaining control over resources and carving out profit-seeking monopolies. The intention was to provide electricity as an essential public service at reasonable cost to as many New Zealanders as feasible.

Beginning in towns, where consumers are most concentrated, the national grid system was developed and gradually extended to nearly all rural households (prioritising farmers) by the 1920s. State control may, however, have stymied small communities from building their own small system (as Parihaka did around 1896). With North and South Island transmission linked from 1934, the Electricity Department charged an averaged “bulk tariff” to elected local power boards and municipal electricity departments for supply to local customers.

All that changed under neo-liberal policies from the 1980s, as Geoff Bertram explains. Electricity NZ was corporatised in 1986, then fragmented to separate national generators from regional distributors, and distribution line owners from retail suppliers. Market-like features under “light-handed” regulation and encouraging “new entrants” into the market would theoretically provide market efficiencies and lower costs. Our State-built low-cost production assets ended up mainly in the hands of four large generating companies, with the Government a very passive 51% shareholder of three of them.

Gentailers

Distribution—often trust-owned lines—remain a natural monopoly. A “new entrant” duplicating lines and transfer stations would be silly, but in the early 2000s the Government pushed lines owners to raise the book value of their assets to the hypothetical cost of a replacement system. This benefitted any shareholder who could cash out a capital gain, in a massive transfer of wealth. When retail supply was hived off distribution from 2014, the four generating corporations were allowed to grab retail customers (becoming “gentailers”).

They each supply enough households and have enough cut-price deals with industry (aluminium smelter, milk powder plants) to ensure demand presses up against total generating capacity, keeping peak time pricing high—and dependent on gas or coal. The old “bulk tariff” was replaced by half-hourly bidding by generators, with the highest bid needed to meet demand for that time slot being paid to all the bidders, however low their costs from heritage hydro.

This pricing system “is designed so that all generators will maximise the price they receive if expensive generation is run, and these costs are passed on to consumers”, says Bertram. The “gentailer” production model provides little competition or incentive for investment, as his graphs show. The big four already have the largest hydro and geothermal sites, and also landbank consented hydro and wind sites, blocking potential new entrants. This “consciously constructed and Government-protected rent-seeking arrangement is finally under threat”, he says, from household and farm solar arrays and wind farms. But current electricity asset ownership (i.e. vested interests) means the political cost of reversing this arrangement is likely to be high.

Bertram proposes ten changes (my summaries):

• Break the market power of the gentailers and Transpower, an obvious way being to re-nationalising their assets.

• Re-bundle generation and transmission, with pricing at grid exit points.

• Cancel the lines/energy split, opening the way for community systems and coordinate distributed and grid energy.

• Take Transpower out of the State-Owned Enterprises Act which subordinates social responsibilities to profits.

• Give the Commerce Commission the teeth to bite profiteers.

• Make the Electricity Authority fit for the purpose of fairness in retail pricing and openness to independent/distributed producers.

• Provide subsidies and attractive feed-in tariffs for solar rooftop.

• If the Tiwai Point aluminium smelter gets a cut-price contract, so too should large wind or solar developers and energy-poor residential groups.

• Urgently electrify transport and industry.

• Recognise water and geothermal rights under the Treaty of Waitangi.

Increasing Electrification Is Important

Ralph Chapman looks at household energy use in the context of climate policy. Our built environment including housing contributes 13-20% of our GHG emissions, and in 2023 residential electricity consumption overtook industry consumption. Our electricity generation is already 88% from renewable sources. But increasing that proportion, and increasing the electrification of space and water heating and transport is important, and cheaper.

It is also less risky than having to meet shortfalls in our 2035 and 2050 emissions reduction targets by planting more forests or obtaining carbon credits offshore at very high cost. But recent cuts and unambitious policies make clear, says Chapman, that the present Government is not taking carbon mitigation seriously. Yet residential housing presents an opportunity as solar photovoltaic (PV), wind turbines and batteries drop in price.

Distributed energy sources in housing, farms or local communities not only reduce bills, they reduce peak time loads, grid investment needs, and the power losses that occur in long distance transmission. Improved insulation and building “up not out” in urban areas could multiply these benefits. Solar PV panels can charge an electric vehicle (EV), reducing transport emissions.

The threat of customers going off grid can be reduced with better buy-back tariffs and by ensuring gentailers don’t pay their own retailers a lower-than-market rate to undercut others. When the Commerce Commission reduced the lines companies’ price increases a little in 2024, they complained this threatened security of grid supply. As Rewiring Aotearoa pointed out, this makes the case even stronger for more solar and batteries, with low-cost funding.

Other authors present three urban and three rural case studies of community energy projects, with different requirements and different solutions. The Cohaus median-density energy-efficient complex in Auckland was designed and financed by residents and has a shared electricity system. Te Kī a Alasdair apartment block in Wellington, with integrated support for people with complex needs, includes centralised heat recovery ventilation and hot water heat pump technology but the apartments’ electricity is a separate customer network.

Kāinga Ora’s 2020-2024 renewable energy programme aimed to support tenants’ energy needs while contributing to decarbonisation goals. Grid-tied solar panels installed on apartment block roofs without batteries spread funding to benefit as many as possible. The Electricity Authority permitted a multi-trader trial to allow provider choice, with the proceeds from electricity buy-back going to Kāinga Ora to benefit those in dwellings not suitable for solar panels.

Energy system design for the historic Pakihaka Pa in rural Taranaki needs to be fiscally viable, reliable, cope with ordinary household use but also large hui and community emergencies. It needs to meet the Pa’s rangitiratanga aspiration as well as helping to restore Papatuānuku. A modular system comprising different types of generation is being considered.

A Ngāti Maniapoto project has developed small scale solar farms to supply power and help generate funds for 14 local rural households but also other Maniapoto whanau wherever they are located across the motu. Evaluation has shown it to be a technical, cultural and social success. Great Barrier Island has no reticulated electricity, relying on individual diesel generators and solar panels. Options are being explored for a renewable energy microgrid for initially ten households and a marae, with inclusion of another 30 anticipated.

The last section of the book looks at energy sharing schemes for a resilient future. It includes an update and critique of the Māori & Public Housing Renewable Energy fund on which some of the case studies relied. The relationship of passive house design to distributed generation is explored. The final chapter explores possibilities and challenges for an expanding distributed energy system, arguing it could support the national grid in managing local and national peak demand.

BlackRock & SolarZero: A Cautionary Tale

I was most struck by the story of SolarZero’s great contribution to community resilience during Cyclone Gabrielle in 2023. A third of its Far North customers lost grid electricity but core household electricity needs were met thanks to SolarZero’s “virtual power plant” cutting edge technology. Ahead of the storm wave, all SolarZero systems were remotely instructed to maximise energy storage, enabling over 2700 families to keep the power on—and help out a few neighbours. The chapter concludes with a set of recommendations for future support and adoption of this kind of dispersed, resilience-supporting solar technology.

Sadly, SolarZero is the company that was put into liquidation by its overseas owner, BlackRock, at the end of 2024. Despite BlackRock’s 2023 commitment to raising $2 billion for green investment in New Zealand.²⁸ SolarZero (est. 1970) began renting solar panels to residential customers in 2015 (“the Netflix of solar”) and was bought by BlackRock in November 2022²⁹. In 2024 SolarZero signed up to put solar on an additional 20,000 Kiwi homes with supporting loans from the NZ Green Investment Fund (axed by Climate Change Minister Simon Watts in April 2025³⁰).

Although orders dropped in December (as they tend to), the Chief Executive Officer (CEO) assured staff that SolarZero was “on track for next year”. Then BlackRock pulled the plug, leaving $40 million owed to 170 employees and numerous creditors, and 150,000 homeowners wondering who owns their solar panels now.³¹ BlackRock’s only public comment was that SolarZero wasn’t “viable”. In the asset management world, that would mean BlackRock no longer anticipated a sufficiently high return to investors, from “rent” from the rooftop assets and capital gains if the business is sold on.³²

Two other comments from me. In 2023 I bought four solar panels from a local energy cooperative. On its advice, the grid provides my evening back-up and buys my daytime surplus (via Toast, the Wellington Sustainability Trust’s electricity retailer). The co-op had recently failed the legal and regulatory hoops to build a community solar farm. An extremely expensive independent feasibility study required by the Companies Office depleted the co-op’s resources, which led to disagreements and loss of some active participants. The co-op continues as a solar panel provider and household energy adviser.

What Do Electricity Retailers Actually Do?

I do agree with Bertram about removing the lines/retail split. Also, Viggers reports that the gentailers’ ability to play both sides of the electricity market makes it an uneven playing field for small retailers wanting to hedge their own contracts. But, having read Brett Christophers on information technology (IT) platforms as rentier capitalism, and on electricity markets elsewhere,³³ I don’t understand the point of a separate retail layer—except to extract profit. What do they actually do?

Meters are installed by the distributors who own the power lines—in my area, a community trust. It is their meters that collect customer use data and pass it to the retailers. The retailers then earn “rent” from two assets: a list of customers and a software package that sends out bills, usually by email. In market theory, competition pressure in pricing comes from “new entrants” and/or from customers constantly monitoring price plans and swapping between providers. The Electricity Authority and Powerswitch (Consumer NZ) urge us to do this—or we may in effect be paying a “loyalty tax”³⁴. But who of us has time for such “bullshit” work?

In the old days of electricity as a public service, fair-enough pricing—and putting revenue aside for maintenance and future capital works—was a responsibility of public service managers acting in the public interest. In one integrated, national, non-profit system—as described by Viggers. Sounds good to me. This is a very useful book to understand how the New Zealand electricity system works—and why it doesn’t work for most of us.

Essential Reading

It’s essential reading for anyone thinking about community-based energy systems or planning for the future climate resilience we will need. Lots of colour graphs, tables and pictures. Readers may also be interested to check out Sapere: “From Faultlines To Resilience: The 2024 Energy Shock Does Not Require An LNG Response”, an independent report for Rewiring Aotearoa, 2/6/26.³⁵

Watchdog 172 -- August 2026

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