The commonly accepted myth of settler uprightness may also be designated “the myth of the possessors” – the myth of those who entered upon their inheritance in the 1870s, having tamed the Governors, freed themselves from the Colonial Office, abolished the Church (in the person of the missionaries) as an effective force, and defeated the Maoris. Not all the settlers, of course, were possessors: men of considerable property, in land, commerce, and finance, dominated the country socially, economically, and politically. The non-possessors, subsistence farmers, artisans, and labourers, were numerous, and their numbers were swelled by the emigration policies of the 1870s. Their condition, further, was worsened by the depression of the 1880s. By 1890 they were a political force, thanks to manhood and equal suffrage; their adhesion to the political party headed first by John Ballance and then by Richard Seddon inaugurated and maintained the Liberal era. From their aspirations and successes emerged what might be called a counter myth, “the myth of the non-possessors”.

Again, this myth involves the person of George Grey, this time in a heroic role, though he was not responsible for its creation. Credit for that must go to the journalist, politician, and historian, William Pember Reeves. Grey certainly used the label “Liberal” in the 1879 election; Ballance's successful party in 1890 was indeed called “Liberal”. It was temptingly easy, and the great majority of historians from Reeves to the present day succumbed to the temptation, to assume that the 1880s saw “the rise of the Liberal Party” as a continuous development from Grey to Ballance. The politics of this decade do not permit much certainty even yet, but one thing that is certain is the absence of any Liberal Party, or of any other political party in a modern sense, during the period. The continuous development of Liberalism as an organised movement cannot, it seems likely, be placed earlier than 1887.

The myth of the non-possessors can account for the whole of New Zealand history from Grey's premiership (1877–79) to the present day. Indeed, the myth is still in the process of formulation: “the quest for equality” is its current designation. The heroes are all champions of the non-possessors, busy using the power of the State to turn them into possessors. The list will include John Ballance; Richard Seddon; John McKenzie; William Pember Reeves; Joseph Ward; and the trade unionists and socialists who founded the Labour Party, Henry Holland, Michael Savage, Peter Fraser, and Walter Nash. They are heroes, and eminently successful ones; the tradition they set was from time to time interrupted, but not for long, by some rather low-keyed villains: Harry Atkinson, W. F. Massey, J. G. Coates, George Forbes, Adam Hamilton, and Sidney Holland.

The error of this myth is not that it asserts that the main impetus in New Zealand politics since 1890 has come from a succession of parties grouped around leaders who run from Ballance to Nash; and not that it asserts that these men and parties were, at least in considerable part, concerned with social welfare: these two assertions are quite true. The error is rather that the myth exaggerates the identity between leaders and parties it canonised, as well as the difference between the “heroic” left and the “villainous” right in New Zealand politics. It serves to obscure the antipathy between Grey and Ballance, between Ballance and Seddon, and between Seddon and Reeves. Ballance's chosen successor was Stout, not Seddon, a fact which has only recently become known and accepted. It serves further to transform a political line-up into a social cleavage. Parties, to continue to exist, must fight each other, but we do not need to suppose that they are always, or even often, fighting about anything that matters. As far as policies and achievements go, Massey and Coates are a good deal closer to Ballance and Seddon before them and to Savage and Fraser after them than this reconstruction would suppose.

It remains to be said that the myth of the possessors and the myth of the non-possessors have one thing in common. They are myths of the settler New Zealand which sealed its victory in the 1860s, myths of the initial and of the subsequent inheritors of the country. Not until the advent of a Labour Government in 1935 did the myth of the non-possessors expand to include the Maoris as a deprived group; until that time the heroes of the right and the heroes of the left were at one in regarding the Maori as a vanishing race, an inferior race, a race whose land was a settler legacy, the gift of a Pakeha providence.