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Economic Record Volume 84 Issue 265, Pages 281 - 283 Published Online: 3 Jun 2008

Reviews: Arndt's Story: The Life of an Australian Economist - by Peter Coleman, Selwyn Cornish and Peter Drake

Review by Howard Dick 1

Arndt's Story: The Life of an Australian Economist - by Peter Coleman, Selwyn Cornish and Peter Drake

Heinz Arndt grew up in a cultured, academic family in the then German town of Breslau (now Polish Wroclaw). Though only part Jewish by descent and by religion not at all, in 1933 Nazi anti-semitism forced first his father, then at age 18 Heinz and his brother into exile and study at Oxford. There he completed a BA in Philosophy, Politics and Economics before going on to postgraduate study at Oxford and the London School of Economics. In May 1940 he was interned as an alien and shipped off to Canada, where he spent a miserable few months before repatriation in January 1941. He then returned to the London School of Economics, married and had a wonderful stroke of fortune in being recruited as a research assistant by Paul Rosenstein-Rodan, the man with the best claim to being the pioneer of development economics, to research and write a report for Chatham House on Post-War Reconstruction. Published in 1944 under Heinz's own name as 'Economic Lessons of the Nineteen-Thirties', this was the making of him. After 3 years as Assistant Lecturer under J.R. Hicks at Manchester, in 1946 an almost random application found him joining the Economics Department of Sydney University under Sid Butlin.

Heinz arrived in Australia full of energy, fresh from close contact with many of the leading economists in Britain, and applied himself to teaching and research in macroeconomics. With Noel Butlin he reworked Coghlan's pioneering estimates of national income but later became best known for his work on money and banking, especially the seminal Australian Trading Banks (1957). In 1951, at age 35, he was appointed as Chair of Economics at Canberra University College, which was later absorbed into the Australian National University. Although Canberra was then still a very small town, he was fortunate to be able to work closely with a like-minded group of brilliant economists, both academic and in the public service, who shared a commitment to forward-looking economic policy.

In 1963, seeing no future in the field of macroeconomics, which was rapidly becoming the preserve of econometricians, he transferred to the Research School of Pacific and Asian Studies to take up the new second Chair in Economics alongside Sir John Crawford, who was simultaneously the School's first director. This took Heinz back to development economics. In the early 1940s with Rosenstein Rodan he had been part of the very beginnings of the field and his interest had been kept alive by a chance association with Gunnar Myrdal, a Visiting Professorship in 1958/1959 with the Indian Statistical Institute, and a year (1961/1962) in Geneva with the UN Economic Commission for Europe. Now ensconced at ANU with a free rein, he recruited a talented young department and soon made the then extraordinary decision to focus not on India but on Indonesia, then in economic meltdown under President Sukarno. The close personal and institutional links developed with Indonesia over almost 40 years, including a wide network of economists expert on Indonesia, are his enduring monument. Despite formal retirement at 65, he continued to work daily in his office at ANU until his sudden death in 2002 at the age of 87. En route to deliver the eulogy at the funeral of his long-time friend and colleague Sir Leslie Melville, he apparently had a blackout and drove into a tree on campus, right next to the Coombs Building.

Despite Heinz's substantial oeuvre, he is not recognised as one of the leading economist of his generation, even in Australia where his contribution in macroeconomics was limited to the 1950s. It is his post-retirement book, Economic Development: The History of an Idea (1987), that is most likely to stand the test of time. His great contribution was not an individual one but what he achieved for the profession as a builder. He wrote about the theory of externalities but he generated them prodigiously. This includes two leading departments at ANU, the Indonesia Project, three leading international journals, a host of PhD students and a network of economists committed to economic development and better relations between Australia and Asia.

From 1955 to 1975 Heinz worked with Dick Downing as de facto assistant editor of the Economic Record. Although English was not Heinz's first language, he became a masterly editor, insisting upon absolute clarity of argument and expression. He went on in 1965 to establish and nurture the Bulletin of Indonesian Economic Studies, then in the late-1980s Asian Pacific Economic Literature.

From quite soon after his arrival in Australia until his death Heinz was vigorously engaged as a public intellectual. His worldview evolved from liberal to Communist sympathiser to socialist and member of the Australian Labor Party, whom for almost 10 years he represented on the ACT Advisory Council. After his resignation from the party in 1971, he gradually moved into more conservative circles, becoming a frequent contributor and, for a time, co-editor of Quadrant. He was also a compulsive writer of letters-to-the-editor. Of whichever persuasion, his views were always firmly held and well argued, regardless of popular opinion.

Authors Peter Coleman, Selwyn Cornish and Peter Drake have drawn on Heinz's voluminous files of correspondence now held in the National Library to compile a polished and seamless narrative that is sympathetic but not uncritical of the man and very well contextualises the various aspects of his private, scholarly and public life. As bookends, Heinz's daughter, Bettina Arndt, provides brief and amusing family recollections.

Those who knew Heinz will draw particular pleasure from this biography. I first came to know him in the 1970s as a PhD student working on Indonesia. At that time he was very much the God Professor, politely aloof but both expert and discreet in his guidance. After graduation I came to know him better as a head of department. He took full responsibility, saw no need for democratic procedures, yet informally consulted a good deal and ran everything with a light hand. Later I came to know him better still as a colleague and intellectual sparring partner. Yet he always remained somewhat enigmatic. This biography does not dispel the enigma, but elucidates it.

Nevertheless, the book can be read with pleasure and insight by anyone in the field of economics or economic history. Whether or not they knew Heinz personally, his 70 year journey through economics and his associations and prolific correspondence across Britain, Europe, the USA and Asia illuminates our shared intellectual origins and also something of the character of post-war Australia.

The authors have no didactic purpose but, intentionally or otherwise, they do suggest some existential questions as to what it means to be an economist, a scholar, an intellectual. They also remind us how little we know biographically, other than by word of mouth, about other noted Australian economists, how they related to their times and their contribution to the profession and economic policy, whether in Australia or beyond. Now that 'impact' has become sanctified as a 'key performance indicator', there is much to be said for a broader view and a longer-term perspective. Moreover, at a time when the cold hands of conformity are again palpable, the discipline has lost its allure and students are marshalled by relying on the very compulsions which economic theory condemns as obstacles to free trade, some of Heinz's verve and sheer intellectual curiosity may be a very good antidote.