The recently released Security Intelligence Service file on Dr Bill Sutch confirms what a lot of us already knew - Bill Sutch was not spying for the Soviet Union.

The SIS had not a shred of evidence to back up this serious claim yet, despite this, they charged him under the Official Secrets Act of ‘obtaining information ‘ that would be ‘helpful to the enemy’.

Sutch was acquitted in 1975 and died some six months later of liver cancer.

Bill Sutch was, more or less, a Fabian socialist. Indeed in 1934 Sutch was apparently involved in setting up the Wellington Fabian Society, which was formed solely in order to invite George Bernard Shaw to give a public address.

This should of told the SIS that Sutch wasn’t a Marxist - Fabian’s believed in softening the more harsher aspects of capitalism. They didn’t believe in overthrowing capitalism altogether.

What Bill Sutch was was an economic nationalist. His was the economics of Keynes.

He was not alone. In fact it was the prevailing orthodoxy within the political and intellectual elite in which he circulated.

It was Sutch and others like him, who built up what later became disparagingly referred to by its detractors as ‘Fortress New Zealand’.

This was an economy that was heavily regulated. It was the social democratic model of a state that intervened heavily in the economy and that believed in a strong welfare state.

It was from this model that New Zealand’s post-war egalitarian ethos flowed.

Politicians of the opposing camps believed in it. Holyoake did. Kirk did. Rowling did. Muldoon did. Jim Anderton used to.

It was an attempt to build ‘capitalism in one country’.

Little wonder that people like Sutch were attracted to some aspects of the Stalinist concept of ‘socialism in one country’.

In fact, and this is where Sutch can be criticised, while admiring Soviet-style central planning, Sutch tended to turn a blind eye to the obvious lack of political freedoms in the Soviet Union.

He wasn’t alone in this failing. There are still people around today - now converts to the ‘free market’- who were once admirers and defenders of the Soviet Union. Former CTU President Ken Douglas, for instance.

But by the early 1970s things were beginning to change.

Sutch, as an economic nationalist, questioned whether selling off New Zealand’s assets was either sensible or desirable. In particular, two books - Colony Or Nation (1966) and Takeover New Zealand (1972)- were a defence of ‘Fortress New Zealand’ and an attack on the political forces that wished to break down that fortress.

Sutch argued that, rather than opening up the New Zealand economy to the global economy, New Zealand would be better off going it alone.

It was, in a way, a last defence of neo-keynesianism.

It was an argument that Sutch was destined to lose as capitalism attempted to restore its rate of profit by reverting back to monetarist economic theory that had been previously been discredited in the 1930s.

Bill Sutch was no spy. His only 'crime' was that he became increasingly out of step with political forces that were seeking a way to break down the economic and political model that he helped to build, forces that would eventually find their expression in the fourth Labour Government.


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