Horror writer, Stephen King, once wrote a macabre tale about a man stranded on a desert island with no food and a large cache of morphine.
The man resorted to anaesthetising himself with morphine and gradually eating his own limbs.
At the end of the story he was little more than a torso.
This bizarre story could be an analogy for the New Zealand economy. We have sold off many of our most productive assets to fund our consumption.
It looks as though we are about to start selling our dairy industry.
As a country we have been living off other people's money to pay our way in the world.
The statistic that illustrates this is our current account deficit which has been massive over the past decade.
It has improved dramatically recently because the profits and interest we pay to foreigners have dropped due to the recession.
Yet the huge overseas debts and foreign ownership of many of our key companies still remains.
We have been able to keep spending beyond our means by borrowing from overseas and selling productive assets to overseas investors.
When Chinese investors buy a part of Fisher and Paykel or Wrightsons or Mainseal this helps prop up the value of the New Zealand dollar against other currencies.
This allows us to keep buying SUVs, plasma TVs, cellphones and computers at reasonable prices.
The potential sale of the Crafar dairy farms to Chinese interests is alarming.
We may be about to start selling our lifeblood to fund our addictive consumption habits.
This could be the start of an avalanche that would see control of our dairy sector shift to overseas hands.
This is the harsh reality of New Zealand's poor savings record that many economists have been bleating about for years.
Do we want to become a nation of employees working for foreign owners? This brutal reality would not be the fault of farmers selling their farms at premium prices to overseas buyers.
It will be due to a lack of New Zealand-controlled investment funds able to retain our own assets or buy the productive assets of other countries.
The appalling performance of our financial sector has also meant that a big chunk of kiwi savings is now little more than holes in the ground or half-finished building projects.
The Overseas Investment Office has to approve any foreign bid to buy the Crafar farms. It must be very careful in its decision or risk being accused of xenophobia.
If it denies any valid overseas bids it sends a very negative message to potential overseas investors.
But there is a more fundamental question that is unlikely to be addressed.
Is New Zealand wise to be following a purist free trade policy when other countries such as China are playing hardball?New Zealand is the Zsa Zsa Gabor of free trade deals.
We are willing to sign on the dotted line with most trade partners.
In 2008, we signed a historic free trade agreement with China. The problem is that China does not practise free trade.
China deliberately keeps its exchange rate pegged at an artificially low rate against the US dollar.
As the US dollar depreciated so has the Chinese yuan. This gives Chinese exporters a competitive advantage.
This has allowed China to run massive trade surpluses against many of its trading partners.
China has accumulated a huge stockpile of foreign currency. It is using these reserves to buy the productive assets of other countries.
New Zealand's dairy industry could be swamped by this cash mountain. International trade and finance in a globalised world can be brutal.
The recent credit crunch showed the depth of interdependence between countries.
Economic theory suggests that free trade can be a win-win situation for the countries involved.
However, if a massive economy such as China practises mercantilist policies to give its exporters the edge, this may not be the case.
The Chinese have kept their currency undervalued to promote exports with the aim of accumulating foreign reserves.
They are now buying the productive capacity of other countries.
This situation is a win-lose scenario in the long run for New Zealand.
We get cheap imports in the short term but lose our most productive assets in the long term.
There are no easy solutions for New Zealand.
The Overseas Investment Office may deny this particular deal but the problem will not go away.
Our prodigious spending and lack of savings mean we are very vulnerable.
We may retain political power in our own country but our economic sovereignty will be severely compromised.
• Peter Lyons teaches economics at Saint Peter's College in Epsom and has written several economics texts.
