People say we’re the cheapest in the country,” Bill Katterns says, grinning. “Where else can you get a shirt for a dollar, a tie for 10 cents… a threepiece suit for five bucks? Tell me where you’ll find a book for 20 cents?” He checks inside the cover of a Reader’s Digest Condensed Classic. “Hmmm. Sometimes we sell the hard-covers for 50 cents.”

Still a steal, I reckon. Bill’s not so sure. “There are a lot of people out there who can’t afford even our prices. They come in, look around, but they don’t have the money. They’ll ask you to put stuff aside: they say they’ll come back later in the week… and sometimes they do.” He shakes his head slowly. “It’s tough out there at the moment — real tough.”

Bill Katterns has worked at the Glen Eden Methodist Church’s opportunity shop for as long as I can remember. Now 80, the retired St John ambulance man looks the same as he did when I was a kid: he’s still craggy as hell, still bullishly fit (he does aerobics and yoga three times a week). And still great company.

I pull up a chair and soon we’re blathering on about rugby league and the recession — the usual Kiwi blokes’ one-two these days. This morning’s Herald had asked if New Zealand was going to be the next Iceland — and I’d certainly seen evidence of distress in Glen Eden on my way in. The shops, even those hawking $2 tat, seem quiet and, at the top of West Coast Rd, there’s a great empty lot — 4000sqm — going cheap. Used to be a caryard — now it’s a rare, gilt-edged opportunity for anyone who’ll take it. Still, Bill says, Winz is humming along. He laughs ruefully: it’s time to retreat to cheerier ground. The old times.

My family moved to Glen Eden in 1972 when my father, a minister, was posted to the local Methodist church. I was not yet two and so my earliest memories are of this unremarkable west Auckland working-class village. Unremarkable? Come on! Back then, Glen Eden was widely regarded by me and my mates as the best place in the world. There was a pine forest down the back of our place, Nobilo’s vineyard next door, Nola’s orchard up the road. A minute’s bike ride away, the Glen Eden shops had pretty much everything you needed. If you were crook, you’d go see Mr Hollings, the chemist; hungry, Peck’s (bakery) or the Patels (greengrocers), or, for more substantial supplies, Gubay’s (aka Three Guys). Clothes? Dave Cockerton Menswear had a mighty stock of stubbies.

At the top of West Coast Rd, there’s a great empty lot — 4000sqm — going cheap. Used to be a caryard — now it’s a rare, gilt-edged opportunity for anyone who’ll take it.

But my favourite store was the Glen Eden bookshop. I’d go each day after school and read on the sly but I never bought anything. Then one day, the proprietor, a cantankerous coot with coiled-wire eyebrows, brought me over a stool. For the next few years, that’s where I’d sit. That’s where I’d learn.

We weren’t rich — my Dad earned $7700 a year in 1979 (the average wage then was $8170) — but we had the good life. We got a second-hand black-and-white telly when I was seven. When I was eight, we got a dryer and our neighbours would sometimes bring their washing over to finish it off. We’d get heaps back — homegrown fruit and veggies would be dropped off, buckets of pipis plonked on our doorstep. Good people in Glen Eden.

Old Bill’s one of the best of them. A lifelong Westie, he was born in his parents’ home in Avondale and has lived in Glen Eden since marrying Mavis in 1953. “We lived the Kiwi dream,” he reminisces. “We built our own house — everyone did back then because the banks wouldn’t loan you money if you lived west of the Whau Creek.

“You got all you needed from Gummer’s — you could buy one nail, you could buy a box. Gummer’s would help you with anything… now that was a real hardware store. Just up there in Kelston. It’s a McDonald’s now.”

Bill laughs and shrugs his shoulders. “Progress, eh?” Ah, yes the good old days. Back in the fifties, New Zealand was the third-richest country in the world: back then you could throw a line out and catch a feed from any beach and the Minister of Labour knew our 42 unemployed workers by name. Great days.

I know. This was also a time when the All Blacks were the only show in town, poofs were illegal and anyone too clever was exiled to England. When the spade was mightier than the pen. In the same way, my charmed seventies childhood was an era of stagflation, 10 per cent unemployment and carless days. When the Maori Land March and then Bastion Pt blew the lid on “the most harmonious race relations in the world”, Rob Muldoon’s illfated Think Big projects were on the horizon and when, in 1979, a record 33,400 New Zealanders emigrated to Australia.

Nostalgia’s never as good as it used to be. But when Bill walks me outside on to West Coast Rd — “Cars, cars, cars, all day they never stop,” he groans — I’m reminded that the best place in the world died some time ago. Fifteen thousand vehicles a day now travel along West Coast Rd: the pine trees at the back of the church are gone; Nobilo’s vineyard and Nola’s orchard have been overwhelmed by high-density housing estates. In turn, Glen Eden’s been subsumed by Waitakere City, whose population reached 200,000 people last year. By 2018, it’ll have grown to a quarter of a million. West Coast Rd will get even busier.

There’s nothing you can do about it — it’s just the way of things. As Bill says, “Nothing stays still. You can’t stop progress.” I farewell my old friend and head up the road to the little village that once had everything. It’s bigger now — it has 18 takeaways, seven dairies and six $2 shops — but it’s lost many of its specialist stores: Dave Cockerton’s was first to fall, killed off by the big chains at nearby LynnMall, then the shoe shop, then the supermarket. My bookshop’s still hanging on: it sells Lotto tickets, mags and Hallmark cards now — and just a handful of dusty tomes, including Barry Crump’s Crocodile Country.

I cross over the railway lines to Waikumete Cemetery, the country’s largest, to visit my Dad. When I was a boy, I’d run through here with him — he with a towelling headband holding his comb-over in place — and afterwards we’d read the headstones of the people with funny Russian-sounding (actually Croatian) names who’d made Glen Eden.

Just up from my father’s grave is the glorious vista that provides the opening shot of this story. Go back and have another look. What do you see? Beneath those dark, glowering hills, do you see the old Dalmatian tending his vines, a snoozing goat tethered by the road, some kids playing touch at Parrs Park?

Or do you see the factories on Waikaukau Rd, the terraced boxes that have claimed lost orchards or, up there on the right, the marching polystyrene-pillared armies — five-bedrooms, two bathrooms and a triple garage — that nibble at the feet of the Waitakeres? Welcome to Palm Heights, West Auckland: welcome to San Pedro Place, San Fernando Way, San Angelo Court.

I guess you see what you want to see.

“What’s the capital of Iceland?” A cherubic bearded bloke, who could’ve been Bill Bryson’s brother, rushes for the punchline. “$2.50!” A week after my Glen Eden sojourn, I’ve braved a squally evening to attend a guest lecture at the Auckland tertiary institution Unitec. A4 sheets on rain-lashed concrete pillars direct us to the “Rod Oram Talk”.

Like most of the 100 or so people here — older folk mostly, in Dockers pants and zip-up jackets or sensible skirts — I’ve come looking for a little certainty. Some answers from one of New Zealand’s foremost financial journalists. How is the recession going to affect me? My family? My friends? How will it affect New Zealand?

“What’s going on in the world is not a recession,” Oram avers, in the measured tones of a man who worked at London’s Financial Times for 18 years. “A recession is something cyclical where things return quite quickly to where they were. Things are not going to go back anywhere near where they were.

“This is not a recession. This is systemic failure. This is the Great Contraction.”

Oram talks of an “amazing tsunami of false money around the world”, then of “an unprecedented destruction of global wealth”. Deploying a battery of graphs and charts, he assails the conventional view that New Zealand is somehow insulated from the worst of it all.

Consider our vaunted 31 per cent increase in real gross domestic product (GDP) since 2000. The result of hard yakka, smarts and Kiwi ingenuity? Or one hell of a consumption bender — fired by an overheated housing market?

The evidence suggests the latter. Between June 2003 and June 2008, our house prices rose by 62 per cent, the second highest in the OECD. Ninety-seven per cent of New Zealanders’ individual net wealth is now tied up in real estate, compared with 81 per cent a decade ago and 72 per cent in 1988.

And it’s largely been bought on tick.

In simple terms, we’ve borrowed billions from abroad to buy some of the most expensive houses, relative to income, in the world. “We don’t save,” Oram explains. “We ‘dissave’. And so we finance a lot of our activity by borrowing offshore. In fact, 70 per cent of our mortgage money is raised offshore… so all the interest payments go to Belgian dentists, Japanese housewives and Chinese companies.”

Indeed, overseas-sourced bank funding soared from $32 billion in 1998 to $140 billion at the start of this year. In that time, total bank residential mortgages leapt from $51 billion to $156 billion.

Which has helped create an alarming current account deficit (which measures how much more we spend than earn overseas). “The problem is not on the Government side,” Oram continues. “A lot of Government debt has been paid down over the past decade. The problem’s on the private side.”

More numbers — frightening numbers. Our current account deficit for the year to September 2008 was $15.5 billion (the current account deficit to gross domestic product ratio has risen to 8.6 per cent from 3.1 per cent in 2002). Household debt has risen exponentially from $5 billion in 1978, $31 billion in 1991 and $63 billion in 1999 to $175 billion now.

Says Oram: “Our households are the second most indebted in the Western world. Number one is Iceland.”

Now that gets our attention. The spectre of Björk’s bankrupt land — so far removed from our own Pavlova Paradise — reminds me of another reason I’ve come here tonight. I want to know what’s become of the Kiwi dream.

It’s come a long way since Bill Katterns built his bungalow. It still includes the house (on a quarter of a quarter-acre), but to this you might add a boat. The bach. A Prado. A flat-screen telly. Home entertainment system. Sky. Stainless-steel fridge. A couple of cheap renters… perhaps an apartment in town.

We’re materially richer now than we’ve ever been. No question. Our average real incomes are 60 per cent higher than when I was a kid, two to three times higher than my grandparents’. So why the nagging feeling that it’s not nearly enough? That we’re somehow falling behind. Why is it that a single income could pay a mortgage and feed a family 30 years ago, whereas now people struggle to get by on two pay cheques?

While the recession — the contraction — makes us feel even more anxious, it seems injudicious to question our economic direction. We’ve just got to get on with it — get things back to normal.

However, Oram demurs. “Never let a good crisis go to waste,” he says, quoting Rahm Emanuel, Barack Obama’s chief of staff (who was himself channelling Machiavelli). “It’s an opportunity to do things you didn’t think you could do before.” The era of rapacious growth — “turbo-capitalism” — is over, but this has given the world a precious opportunity, the chance to start again.

It wasn’t long ago that the lunch room chit-chat was of peak oil, melting icecaps and a post-carbon world. How quickly we get back to business: when you’re worried about your job, about the mortgage, the polar bears can wait.

Unfortunately, we’re out of time to discuss specifics, but Oram talks of balance, prudence, sustainability. Getting beyond boom-bust — living within our means. “Borrowing and spending less; investing and saving more.” It’s a message that resonates with its audience. Afterwards, we’re directed outside to a feast that includes some particularly fine feta and sundried-tomato club sandwiches. Usually, the Dockers set would pick at this and barely make a dent but tonight they’re circling. I spot my friend from before — Bill Bryson’s brother. “I don’t know whether I should just have a snack now and get something on the way home,” he says, “or whether I should save some money and have my dinner now.” He shrugs his shoulders.

“Hard times,” he says, smiling. Everyone tucks in. Five minutes later, everything except a few slices of banana cake has gone. Hard times hide inconvenient truths. It wasn’t long ago that climate change was the crisis of the moment — petrol $2.19 at the pump — and the lunch room chit-chat was of peak oil, melting ice-caps and a post-carbon world. How quickly we get back to business: when you’re worried about your job, about the mortgage, the polar bears can wait.

Listening to the radio on the way home, it’s all about the economy. People seem more positive than at Oram’s lecture: the “pessimism porn” of the first three months of 2009 has been supplanted by a kind of horticulturalism — that eager vigil for those first “green shoots” of recovery. Of course, real estate boosterism (with the usual use of selective statistics) is leading the way. Real estate agents — a genus 4000 fewer than a year ago — report rising buyer interest.

Real estate will be our salvation. The engine that’ll get the economy moving. Get us growing again. For growth’s really what the game’s about. Only growth will create jobs. Catch us up to Australia. Bring our children home. Only growth will take us back to our rightful place as the third richest nation on Earth.

There’s a self-perpetuating logic to this: an assumption that growth is good — and therefore more growth is better. And this is a game that has no end: the more things we acquire, the more things we must replace. Update. Upgrade.

Yet it doesn’t have to be this way. We could, were we of a mind to, hop off the treadmill. Find some sort of equilibrium. Something like the stationary state John Stuart Mill, the father of classical economics, dreamed of a century and a half ago.

“It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement,” Mill wrote. “There would be as much scope as ever for all kinds of mental culture, and moral and social progress: as much room for improving the art of living, and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on.”

So what if we asked: what is the New Zealand art of living? Most of us, I think, would talk about lifestyle. The great Kiwi outdoors. Uncrowded beaches. Backyard barbies. Long weekends. Time with the whanau. And some sort of egalitarianism — where everyone’s given an equal shot and those who fall short aren’t left in the gutter.

We like our myths, none more so than 100% Pure New Zealand. Good brand — great ads — but this one scorns the reality that New Zealand is a frontier society: we’ve always used what we had as quickly and carelessly as possible. From the moa to the felling of the great kauri forests; from squandering our Maui gas resource to our collapsed orange roughy fishery, New Zealand’s replete with examples of shortsighted, unsustainable exploitation of its resources.

And pound for pound, we’re consummate polluters: of the 43 developed countries which accepted CO² obligations under the Kyoto Protocol, New Zealand’s rate of increase — 26 per cent since 1990 — is among the worst.

But here’s the wonderful thing about New Zealand: the sparseness of our population gives us a chance to rethink where we’re going. A small country — once the “social laboratory of the world” — is well placed to build Utopia. Grab back that Kiwi dream.

Here’s how we might.

We could start by planting trees. Easy to mock, yes, but clean green New Zealand should not be about eroded hillsides and dirty rivers. Why not make it mandatory to plant a 25m strip alongside all waterways? Laud the noble example of ordinary New Zealanders who’ve covenanted — and protected in perpetuity — 100,000 hectares of their land with the QEII National Trust (and encourage others to follow).

The sparseness of our population gives us a chance to rethink where we’re going. A small country — once the “social laboratory of the world” — is well placed to build Utopia. Grab back that Kiwi dream.

And why not set a target — say 35 per cent forest cover by 2025 — and plant exotic and native plantation timber on marginal crown land? It’d create jobs, earn us heaps of carbon credits — and also look a bit better for the tourists, who, generally speaking, don’t come here for Auckland’s urban architecture.

We’re blessed with the ninth-longest coastline in the world, but we’ve radically, and very quickly, transformed great swathes of it. Since 2000, 70 holiday parks — including my beloved summer playgrounds at Whitianga and Hot Water Beach — have been flogged off to developers. So how about a five-year moratorium on new coastal subdivisions? Rates relief for campground owners? Or a government fund to purchase coastal land on behalf of us all? Perhaps this could all be part of a national coastal plan with responsibility for development transferred to a California-style Coastal Commission (instead of local council corruption and ad-hocery).

Let us keep dreaming for a moment longer. Why not take more holidays — it’s hard to believe the nation’s productivity would suffer if we were to have, say, one long weekend each month. Get some work-life balance. The Government’s nebulous nine-day fortnight scheme could be a step towards this. Indeed, journalist Tim Watkin argued on pundit.co.nz that it could “reinvent what it means to be a New Zealander”.

“If workers were able to spend a day a week in some voluntary work,” Watkin says, “imagine the potential outcomes — better organised social groups, greater community ties, and rejuvenated neighbourhoods.” Giving something back, he said, could be John Key’s greatest legacy.

However, any reimagining of the Kiwi dream will fail unless we confront some old canards. We could start with the “number eight wire” mentality — the delusional belief that New Zealanders possess unmatchable ingenuity (a delusion, incidentally, we share with almost every other country in the world). While it’s true we invented egg beaters, tranquilliser guns and spreadable butter, our insecure insistence that we “punch above our weight” stops us ever being comfortable with ourselves — proud to be who we are but secure enough to know there’s a whole world out there.

It’s the same mindset that sees us fretfully comparing ourselves to incandescent-bulb-banning, shower-restricting Australia. We whinge because our incomes are three quarters of theirs — and forget the fact that half of the “Lucky Country’s” export income is derived from mining and minerals ($NZ120 billion compared to the $NZ8.4 billion we earn from dairying).

But we also forget that we have as much water as they do (theirs rationed over 30 times our landmass) and, more importantly, that we’ve won more Rugby World Cups per capita than they have.

There are other myths we’ve got to get over. Like New Zealand’s the highest-taxed nation in the OECD (we’re actually the eighth lowest). And that the country is strangled by red tape and the Resource Management Act. In fact, New Zealand’s a great place to do business. Last year, Milton Friedman’s Economic Freedom of the World index ranked our supposed nanny state third, behind Hong Kong and Singapore.

We hear all the while that the “safety hammock” is holding back our best and brightest, and chafe at redistributive state intervention that (we’re told) penalises our “tall poppies” while propping up the feckless. But the stats don’t support either claim: while New Zealand’s income gap has narrowed slightly in the past couple of years (due to Working for Families and several minimum wage increases), we had the second-highest increase in income inequality within the OECD from the mid-1980s to 2005. The richest 10 per cent of New Zealanders own more than half the nation’s net wealth: the bottom 50 per cent just 5.2 per cent.

However, the logic of growth means more is never enough: instead we’re in thrall to the idea that our future wealth and wellbeing rest on relentless population expansion.

The latest argument for priming the immigration pump runs like this: we have an ageing population and so we must import new people to look after us as we shuffle into decrepitude. But what happens when these new people age: do we quietly pack them off to the works? Or do we import more (to look after them)? And then more? It all seems rather Amway.

Now the real benefits of immigration hardly need restating: I’ll just say, as a grandchild of three immigrants, that my life has been greatly enriched through mixing with new New Zealanders, Pasifikans especially (not to mention marvellously interesting Pakistani nuclear physicist taxi drivers). But there are costs, too. Auckland’s beleaguered infrastructure was designed for a city half its 1.4 million: with the population tipped to hit two million by 2025, the situation’s not going to get better. And each year more orchards, vineyards and farms will disappear.

When you set off on a sentimental journey, you have to watch your inner curmudgeon. And when I went back to Glen Eden, I found myself raging like a talkback tub-thumper, mourning the demise of my childhood home — the waning of my childhood memories. Ridiculous, really. Things change. And so I’ve returned for another look.

“Glen Eden’s coming back,” Bill reckons. His beloved Glenora Rugby League Club is in good heart — it has 18 teams in competition now. “People are getting involved again. They realise there’s more to life than the dollar. They’re not just chasing their tails.”

A proud community man, Bill takes me on a tour, past the fine new library that stands opposite the venerable Glen Eden Playhouse, past the cool cafe Pumped, which opened up in the old railway station (beside Waitakere’s new double-track line that’s spurred rail patronage to its highest level in 50 years).

And then, for old time’s sake, past Peck’s Bakery — whose front window announces it was voted home to the Best Croissant in 2000 and Best Quiche in 2002.

However, there are still those lost orchards, and our conversation returns again to the inevitability of “progress”. There’s no natural law that demands we keep growing, hewing, bulldozing our way westwards. We can choose where it ends.

The conversation returns again to the inevitability of “progress”. There’s no natural law that demands we keep growing, hewing, bulldozing our way westwards. We can choose where it ends.

Bill likes to talk of “permanence”, which I guess is the old-school word for “sustainability”. At 80, he lives for the future even when he’s reminiscing about the past.

“We weren’t rich — no one really was back then — but I had a great childhood. The whole town, and the harbour, was our playground. And I was lucky enough to have a mother and father who cared. I’d race down to Pt Chev beach with my mates and we’d sail up to Herald Island for the day. When we came back, Dad would always be there, standing out on the point, watching us come in.”

How do you put a value on that, he asks?

Indeed. And I find myself asking the same question: how can you put a value on that stool at the bookshop where I sat all those years ago?

The real Kiwi dream is not about money.

A blogger on the Stuff website last year offered a definition as good as any I’ve seen. Said “Kate”: “Affluence (assumed to be accumulation of capital wealth or ‘things’) appears to be your measure of wellbeing. Whereas my reference is more to freedoms. Freedom to fish for a meal; freedom to turn on the kitchen tap and drink the water; freedom to swim in the local rivers; freedom to walk to primary school with your primary school mates unaccompanied by an adult; freedom for a one-only parent to be able to work a 40-hour week and still be able to house, clothe and feed the family; freedom to live in your home without locking yourself in.”

This article was written with assistance from the Bruce Jesson Critical Writing Fund. First published in North & South magazine in July 2009 it won the 2010 Citibank Financial Journalism Award (Best Economy Story). It was also part of my portfolio at the 2010 MPA Magazine Awards where I was named Best Current Affairs Journalist.