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This essay discusses the effects of a state apparatus and new forms of labour in a kin‐based egalitarian distributive economy. The atoll society of Tokelau is currently establishing a modern state, largely financed by aid, but also through revenue from Tokelau's fisheries zone. The new labour regime associated with the introduction of a state administration is in practice entangled with an egalitarian distributive system of production and reproduction. The local kin‐based leadership is able to incorporate and use the system of capital in an egalitarian fashion. Whether it will be able over time to accommodate social inequality – that is, the division of villagers into skilled and unskilled workers with potentially qualitatively different access to livelihoods – is, however, an open question. Where comparative studies from Aboriginal Australia describe unequal access to work and standards of livelihoods by reference to ontology, and hence by implication to ethnicity, the tensions experienced in Tokelau take place within one social network in which new forms of labour contribute to a devaluation of skills associated with gendered patterns of livelihoods. From this devaluation follows a potential loss of sustainability for the atoll society should the capital flow move elsewhere.

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