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Many developed countries restructured relations between state and economy from the late 1970s into the 1990s. Among them, New Zealand went far, fast, and left a clear trail, making it possible to study economic restructuring as it occurred, with all the debates, uncertainty, surprises, mistakes, and accomplishments this entailed. Adam Smith's Islands reveals the inside life of a government determined to revolutionize its nation's politics and economy.
While the 1980s economic restructuring of members of the Organisation for Economic Co-operation and Development and former Warsaw Pact countries can seem like a foregone conclusion from the vantage point of the twenty-first century, John Weaver examines how local and global institutions had to come together to implement social adjustments in New Zealand. Mounting evidence that the state had not functioned as an effective manager split the business community and primary producers between defenders of subsidization and free-market insurgents. Reforms undertaken by the governing Labour Party included abandoning currency controls, privatizing state-run businesses, ending a multitude of open and disguised subsidies, tightening fiscal responsibility, and reforming taxation. Adam Smith's Islands focuses on the verifiable: direct primary sources from dozens of state collections and deposits of personal papers. The archival cornucopia informing this history supports a narrative that has little in common with intellectual histories of neoliberalism. To understand how the relationship between the economy and the state changed, we need to grasp how and why core institutions, practices, and cultural beliefs shed some of their once potent legitimacy.
Through the lens of New Zealand, Adam Smith's Islands examines larger questions about policy dilemmas, the global flow of capital, and the sustainability of social adjustments in economic restructuring. In so doing, it casts new light on the formation and history of what is casually labelled today as the neoliberal state.
