|Interviewer: Robin Hughes
Recorded: January 22, 1992
This is a transcript of the complete original interview conducted for the Australian Biography project. Each transcript page covers one videotape (approximately 35 minutes). There is also QuickTime video of the full interview available. To play the video, click on the icon in the right hand column. In addition, each question in the transcript is linked to the video. Clicking on a question will play the video from that point. (Help with this feature.) Optionally, you can download the video file for offline viewing (approx. 10MB).
The interview has been left it in its original state so that you can get a sense of how the conversation developed. The repetition of some questions, or a question followed by another question, is often due to the end of a particular tape or some other interruption, and has been indicated at the appropriate place in the text. There has been minimal tidying up of the text so that the flavour of the encounter has been kept.
When you were growing up in those towns in Western Australia, what contact did you have with the arts, with the world of culture generally?
Well as I think I said earlier, in the literary - from the literary point of view it - well we were certainly a literate family, but books were part of life and important - so that was my mother's influence particularly, she read everything. And she talked to me, she saw that I had books and so on, and we talked about them, so that that was important. But apart from that, a major source of what you might call that artistic or cultural influence was the church. As I said, I went to church regularly, I went to Sunday School, I sang in the choir but as a result you see the - I was very interested in that program that the ABC had on the other night about the English language and the influence of the St James, ah King James version of the Bible and the Book of Common Prayer and also that the readings from the Bible which were part of the church service and so on and the bits I had to memorise for the Sunday School you know, all that. That kind of thing, but also, it introduced me to well, to music. Not that I ... I wasn't musical although one of the things which was characteristic of the time was that I was not allowed to learn music because my sisters had to learn music and they had to have some privileges see so I didn't learn music, but as I say I didn't really acquire any significant expertise in music, but at any rate, I was fed music by my sisters. One of my sisters proved to be a very good pianist and played the organ, you know the organ for church - and consequently that kind of music - church music and well - some basic classical music was part of the family life and so that goes. But I think the ... see I think of, in a way, poetry was very badly taught in schools and so on, but those sources, the religious sources you know, the Anglican Liturgy and the readings from the Bible and those things, they were a kind of introduction to poetry of ... and that has stayed with ... that interest in words and their arrangement and so on, it's been a factor in my life all through. But I, apart from that, well I think the kind of introduction that you get to art in schools, in those days at any rate, and I think it doesn't [get] much better now, was probably my - better without it rather than those but still some of the wife of the teacher who bullied me into taking some academic success was a very good pianist and she was ... oh, I mean, played for the dances and - but also did play classical music which ... and I used to hear this when I ... So those were things which I acquired without having, being consciously taught about them or anything.
When did you first encounter the theatre?
Oh, I acted in some plays at teachers college as a ... Bernard Shaw and James Barry and people like that went a little so, but that's ... and I went, oh, to concerts, I heard Madame Melba sing one of her farewells. So, but no I ... but I don't remember being particularly interested in - oh, I went to art galleries and so on, but that was pretty much a matter of choosing a night out - I remember being very impressed with that experience, but I didn't really become interested in the theatre until I became involved in the Elizabethan Theatre Trust, I suppose.
Oh, so that's interesting. It wasn't because of a pre-existing passion for the arts that you first got involved in them?
No, no, they are, as I say, except ... my only real artistic experience, that I had as a child and as a young man, a teenager and so on, was literary.
And when you went to London, you must have encountered theatre and galleries and so on there as a student. Mind you, you were pretty busy at the time but ...
But well, well, but I did all of that you know. We went regularly to the Old Vic you know, both all the Shakespearean plays and all the contemporary plays and to the ballet and to the opera. Opera was quite a long time before I could take an interest in opera. In fact I don't think I ever got any real pleasure out of it until I became involved in that - in the formation of the Opera Company in the ...
Why do you think that was?
Ah, well I ... my response to it was, it was so artificial, you know the ... it was a long time, it took actually a long time to realise that that doesn't matter, that the idea that you would make love to a girl by standing about like this and, beefing it out ha, ah.
It wasn't the way you did it?
It wasn't the way I did it or the way - even the way I thought about doing it. So I think that's probably what it was, but well the - I've become really very ... I took to ballet very very quickly. I can remember getting very great pleasure. I saw Pavlova dance the Dying Swan you know, in the theatre in Perth. And, oh, later on we saw ... but that was like football you know, it was movement and I had to ... and I got the thrill of, you know, of movement and bodies in motion, which I think - well it's a very natural kind of thing to get pleasure from, I think. So, but apart from that and the business of performing in plays, I didn't really - haven't got much from my childhood or ... apart from as I say from going to the theatre in London, but that was, so to speak, was London, it was England, it was, you know, Europe that I was interested in I suppose really.
What did you enjoy about the theatre that you went to then?
Oh, well, mainly I got lots of things that I remember with Shakespeare really, it was ...
And that was part of British culture?
That's right yes.
Something to be admired.
I don't think that was why I - you know I liked it but it's - but I think I ... well, you know [it] was in my program. Why it was in my program, that while I was there I didn't know whether I'd ever get back to it - Europe - and there I felt that I had to combine experience in those aspects of European life as a part of the purpose of being there. So that it was neither of the factors which made it a really jammed up sort of set of experiences.
When you came back to Australia, with a PhD under your belt, and some awareness of the latest economic trends that were happening overseas, what did you think you'd do? Did it ever occur to you that you might move into the private sector and make a lot of money, or what was in your mind?
Well I don't think that was. No I always had the idea that I wanted to be involved in some way in economic - you know I mean economic management. That was the reason why I chose the topic for my thesis and I had made contact [with] the Professor I worked with in Perth, Professor Shan. He was really an economic historian, but he was the Professor of both economics and economic history. He was not a good ... he was not a great economist but he was a very good teacher, and also he was a man that liked argument, and we became very good friends because he was ... as an economist, he was very conservative, and whereas I was, by that time, very critical of the way the economic system was working. So the classes were very small, the seminars were half a dozen people, so that there was a great opportunity to discuss issues, and I ... so that that was really very, a very important part of my education as an economist, that half the time I decided while I thought about things, by disagreeing with what he said he thought. Yeah, but he had that gift of seeing debate as a pedagogic instrument, this teaching, so that was, that was really quite important. Ah, while I was doing my ... I did [an] MA thesis before I went to England and while I was doing that, he was invited by the Bank of New South Wales to act as a kind of adviser to them on economic policy during the Depression, and as a result of the ... he and the university asked me whether I would take some of the courses, teach some of the courses which he had been teaching before. So that I did that and that was quite a constructive exercise. But the point that I wanted to make was that as a result of this very close relationship with him, when he went to work in the Bank of New South Wales on a term of two years I think it was, as an economic adviser, he became friendly and involved with Melville who was the economist at the Commonwealth Bank at that time, and they worked together on some of the issues about policy for the Depression and things of that kind, and he talked to Melville about me, suggesting that, you know, a valuable field for me to work in might be to work for the Commonwealth Bank in their economist department. So I had that possibility in my mind from before I went to London, and it was always, in a way, part of my agenda, that I was going to try and do it that way and that it ... While I was in London, Melville and Shan both came to London to an economic conference, you know, an Empire conference, conference of the British Commonwealth about economic matters, just after that conference in Ottawa at that trade thing, and I met Melville and we had various discussions and the possibility of my going to work for him or work in his department at the bank was mentioned as a possibility. Ah no commitments were made or anything you know, but he just said, well it might even be nice if something like that could happen so that that was there for the way my career, so to speak, began to be mapped out. To go into that kind of work.
And when you came back, did that happen straight away?
No. I went ... oh, when I came back I went back to teaching in a school in Perth, but by this time the university asked me to do some lecturing, and also there was a technical college which ran, amongst other things, some courses in economics and I gave lectures at the university and at the technical college while I was teaching during the day - but in evening lectures, things like that so that - but all were during that time, I was about 18 months in Perth I think after I came back. When I was back in the Education Department, then I got the offer to join the Commonwealth Bank. Well at least the issue was raised and there was apparently a ... must have been quite high level discussion about it, not so much about me but about whether the Commonwealth Bank should have such a thing as a ...
An economic adviser. What did economics have to do with banking?
Banking that's - I was interviewed by Casey who was ... he was the Treasurer, I think, at the time, and I was very flattered by this. To think that I - just I - should be interviewed by the ... [INTERRUPTION]
This period that you were at the Commonwealth Bank as Economic Adviser, what was the main issue that you had to contend with during that time? That you were asked for your advice about?
Well I wasn't the Economic Adviser, I was just an offsider to Melville. I was called an Assistant Economi[st] ... the Assistant Economist. There was only one economist and one assistant and to some degree I did kind of statistical work. I can remember trying to compile an index relating to the structure of the manufacturing industry in Australia, classifying companies and things. So that some of it was more semi-mechanical like that. But of course it was also about government policy of the time and there were enquiries, and very shortly after I got there, when it became evident that - when we were heading for trouble in Europe with the war coming up and things like that - well it became a possibility, the government in Canberra set up two committees in a way to prepare for the war. One was called the Economic and Finance Committee, which consisted of three or four of the leading academic economists together with Roland Wilson who was the statistician, the only qualified economist in the Commonwealth Public Service at that time, as a committee looking at economic and financial policy for wartime activities. And the other one was an examination of our international trade to identify problems of what could occur if we went to war and lines of communication were interrupted and we found difficulty in selling our exports and things like that. And I was appointed to that committee but also Melville was appointed to the one about the - at least worked with the one about economic and financial policy. So we really worked on both of them together. He went to one of them and I went to the other. Also I was anxious to continue contact with the university and I used to attend seminars, staff seminars run by Professor Mills, who was the Professor of Economics, at which the various teaching staff used to discuss contemporary literature including Keynes and some of those - some of the other people who were writing at that time. And arising out of that, they asked a friend of mine who had been at university in Perth with me [who] was teaching economic history at Sydney and he wanted to ... he had study leave due to him, but he was told he could only have the study leave if he could find someone who would take his courses including one on the history of economic thought. And he asked me whether I would take this class for him and I said, 'But I don't know anything about it, I never even, have never look really studied the history of economic thought'. 'Oh', he says, 'You could read it up you know'. Anyway finally I was persuaded and I accepted that, which was really a very enlightening experience because it was my real introduction to the classics, economic classics, to Adam Smith and to John Stewart Mill and to Marx and to the really great men of the origins of economics: and since I had to teach it, I really had to read it.
So you read them in the original - a tremendous number of people have only ever read them from secondary sources.
Well that's right, my acquaintance with them up to that time had been entirely that they were mentioned in textbooks, and I had read bits about them. I could quote from them, but the quotes were all second-hand too. But that was a very, very valuable experience for me because I gained a tremendous amount from that and those original writings have influenced me very profoundly in my thinking ever since.
And it also gave you a context in which to evaluate Keynes.
Keynes, that's right.
Were you able to apply any of the new ideas you'd been developing and acquiring overseas to actual practical problems that existed in Australia or in these problems that you were looking at in preparation for war?
Well it was. I mean Melville and I argue[d] - you continue the kind of education by argument - because we too had a different kind of general approach, in that sense, to the subject matter, but I don't really remember having been influenced so much by Keynesian and similar things in practical problems, except second-hand through Melville for that Finance and Economic Committee where we discussed the kind of financial and other aspects of policy which would be required if the Government went to war, so to speak. You know, how you would shift resources towards those things, and a whole lot of theoretical questions, so that to some extent it influenced me there, not so much on the trade issue. But really those things only came alive in the sense of - when I went to work in Canberra, which I did in - just after the outbreak of war. I was lent by the bank to the Treasury to act as Economist to the Treasury, the only economist on the Treasury staff at that time. Now they've got hundreds of them, but at any rate, so that was a ... but then, of course, these issues about financial policy and the kind of theory that Keynes was advocating, you know the idea of working towards a level of expenditure which got - produced full employment, things like that became practical issues, when you had to find resources out of the total to put into this aspect of the war effort and that aspect of the war efforts. Where did they come from, what was the effect of them - that taking those out on the civilian population and so on. Or the Keynesian theory, the whole structure on which his work was based became bread and butter, in the working out of economic and financial policy once we were involved in the war.
Was this very exciting to you?
Oh it was. It was tremendously exciting, yes. I mean in a way it was ... I think it was in terms of my attitude towards military issues. I was a pacifist and indeed you know the question of whether I should enlist was an issue that every man of that age group had to think about and I was concerned about this or I didn't know, quite know how I was going to manage it, but I remained a pacifist and opposed to the war on political grounds and so on. But the idea of being working on how you sought to manage the war so that the impact of it on people was minimi[sed], adverse effect was minimised. That sort of gave me a kind of intellectual escape from the dilemma of how a pacifist could work in you know, and this became a very alive issue. It's when I was put in charge of rationing, because for the first time what I was doing was protecting the civilian population's share of the resources. Seeing that they got a fair crack of the whip and individual people got a fair deal and so on. And it was very interesting because it meant when I came to recruit staff for the rationing, I got a very able staff, very highly motivated because it was a job that appealed to people who had that kind of motivation. So that - but that was, you know, the conduct of the war, particularly in Australia, more so than anywhere else, was, it seemed to me at the time and has always seemed to me so ever since, was an exercise in Keynesian economics. How do you manage this in terms of Keynesian theory? And that was partly because I was involved and was committed on this, but also because there were people from Sydney University, teachers from there who also came into the bureaucracy to manage different aspects of the war and we shared this common intellectual approach to these problems. We were all Keynesians, so see ...
So when the theory was put in ... [INTERRUPTION]
When the theory was put into practice it actually worked?
Well I think it did. Certainly it made trying to understand the problems very much easier when you had a framework which was applicable and which led to answers. In fact, you know, I still believe that as a kind of working framework for thinking about economic policy issues, Keynesian theory, you know, with a Keynesian framework the model, is still one of the best working tools.
What do you think it was that led it to become unfashionable?
Ah, well I think it assumed that the purpose of economic management was ... to use all the resources - including human resources - to use them in a way which was approaching a more equitable use than previously existed. So in a way, Keynesian theory was a theory which was sympathetic to what you might call small 'l' liberal thinking about the way - it was not socialist, it wasn't - it didn't say well we must destroy the existing system, but we must manage it so that there are jobs for everybody. There are the things that are produced [which] are the things that people need and oh, so that you have ... But then if you - when you had people whose mind, whose concern was much more in quantitative terms in the way - how much good they had [to] measure the total output and also prosperity of industry and commerce becoming a criteria of policy rather than equity or them.
So it was really a sort of 'fair-go' philosophy that was embodied in Keynes and what ...
Well at any rate it led itself to thinking in those kind of terms - but certainly I think the big change was well - see, as Keynesian stuff was pushed on one side, it was followed by monetarism, that the most important thing was the money supply and who had it, and the price you paid for it, and all those sort of things, which was quite a different kind of model and it was of interest to different kinds - people who thought in different kinds of ways.
Do you think it would have been possible for some of the new ideas, about money management as being the prime factor in managing the economy, do you think that might have been able to be adapted into a Keynesian model?
Oh, well certainly I think that the period when I was at the Commonwealth and Reserve Bank was a period - I saw it as a period which was a continuation of the war-time policy of using the Keynesian model as the instrument for analysis and exposition of what monetary policy [was] at the time. Most of the stuff that was written at that time of course was internal, but I did a series of lectures which were published subsequently as Other People's Money. Of course, that's what I thought we were doing, managing other people's money. But that was Keynesian, there's no doubt about that but it was; well and I think so. Until I left the bank, the intellectual thinking in the bank, in the economist department and in the managerial section of the top management, the debate was conducted essentially in Keynesian terms.
During the war you were in charge of rationing. Could you tell us a little bit about how you went about that. I mean obviously you were putting Keynesian theory into practice, but ...
Oh. Well I mean, the main Keynesian aspect of it was that you looked at the total resources available and argued that a certain amount of those resources had to be reserved for the maintenance of economic activity in the civil sector. If you put it all into the war, you'd lose the war because your population would starve and you wouldn't even be able to feed, feed and clothe and so on, your armies. So that in that sense it was fairly simply economic theory then and it's still there. My role there was still part of the conduct of the war. The rationing part of it was simply a distributional exercise; it was establishing a system by which there was equality of access to the goods available. What there was available was a question of how much you could produce with that section of the resources reserved for the civilian population, less what you wanted to send overseas to other ... you know to Britain and so on.
Did you run into any problems in implementing the rationing, I mean were any of your ideas, about what should be rationed and how, challenged?
Ahhh. Oh well I think not so much. Well the decisions about what should be rationed were based upon two things. One, that when the resources got down to the level where they - you know, people couldn't walk into shops and buy them - that they weren't, things weren't on the shelves, then that they had to be rationed or [you'd] have chaos. In the period where ... leading up to the actual start of rationing, there was a period where the clothing ... or shops selling all those kind of things used to open at nine o'clock and close at five past, because there was just not enough production to satisfy possible demand and once people realised that things were getting scarce of course, they grabbed everything they could get. So that there was that period of about six weeks while we worked out a system of rationing but there was absolute chaos. And if it hadn't been for that chaos I suppose it might have been much more difficult to introduce rationing, but people realised straight away that okay, there weren't going to be dresses and socks and that on the shelves, and if you were going to get some, there had to be some way in which you got your fair share. And that was the motto, we had this all around the country - fair shares. Fair shares, fair shares - heading at every press statement, every advertisement, everything coming from the rationing commission was headed fair shares, and it - that's what it was. It was [the] introduction of a second form of currency which allocated the goods not merely to the people who could pay for them, but to the people of - a quantitative fair share. Now of course ... calculating fair shares is pretty arbitrary and therefore people were dissatisfied. They felt that - well there ought to be more; but even apart from that, they should get more than they were getting and so on. And when restraints were put upon the degree to which they could borrow somebody else's or they could give some of theirs to somebody else and constraints on those things, there was resentment about that. And, of course, there was resentment about the whole business of having to have coupons and on the things that were rationed by - in ways other than coupons - the antagonisms coming from people who couldn't buy beer and couldn't buy cigarettes and all these things, because they were simply rationed by cutting down the supply that the retailers got, and it was left to the retailers to decide who got it. Well, believe me, the antagonisms that were generated by the people who didn't want to crawl to the tobacconists to get a packet of cigarettes was pretty bitter. Believe me. So that it was a very interesting exercise. We had a Complaints Department and I can remember on one occasion having and they ... I had a complaint from the church about how my staff had been rude to ... rude to the Archbishop.
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