The Gypsy Economist: The Life and Times of Colin Clark 9789813369450, 9789813369467

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PALGRAVE STUDIES IN THE HISTORY OF ECONOMIC THOUGHT

The Gypsy Economist The Life and Times of Colin Clark

Alex Millmow

Palgrave Studies in the History of Economic Thought

Series Editors Avi J. Cohen, Department of Economics, York University & University of Toronto, Toronto, ON, Canada G. C. Harcourt, School of Economics, University of New South Wales, Sydney, NSW, Australia Peter Kriesler, School of Economics, University of New South Wales, Sydney, NSW, Australia Jan Toporowski, Economics Department, School of Oriental & African Studies, University of London, London, UK

Palgrave Studies in the History of Economic Thought publishes contributions by leading scholars, illuminating key events, theories and individuals that have had a lasting impact on the development of modern-day economics. The topics covered include the development of economies, institutions and theories.

More information about this series at http://www.palgrave.com/gp/series/14585

Alex Millmow

The Gypsy Economist The Life and Times of Colin Clark

Alex Millmow Federation Business School Federation University Ballarat, VIC, Australia

ISSN 2662-6578 ISSN 2662-6586 (electronic) Palgrave Studies in the History of Economic Thought ISBN 978-981-33-6945-0 ISBN 978-981-33-6946-7 (eBook) https://doi.org/10.1007/978-981-33-6946-7 © The Editor(s) (if applicable) and The Author(s) 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Clark Family Collection This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Praise for The Gypsy Economist

“This mesmerising study privileges the contributions of a major applied economist who had international impact. The book provides revealing insights into some of the more pressing economic and social issues facing Australia and the world in the mid-20th century from the perspective of a creative, heterodox economist. Colin Clark challenged the predisposition of historians to place all economists into rigid ‘schools’ or traditions of thought; he was indeed a ‘gypsy’ in an ideational sense because he formed intellectual reactions to a whole series of economic problems in a criss-cross fashion, often times assisted by the innovative construction and active use of statistics. Clark added greatly needed nuance to traditional accounts of these problems. This is an important addition to the scarce literature devoted to intellectual biographies of Australian economists in particular.” —Anthony M. Endres, Professor Emeritus, Department of Economics, University of Auckland “Colin Clark was a pioneer in the development of national income accounting, an associate of John Maynard Keynes, senior advisor to the Government of Queensland, Oxford don and an influential thinker and public intellectual. A biography of his life and work has been long overdue. Alex Millmow has filled the gap with this outstanding work, at once comprehensive, authoritative, eloquent and instructive.” —Selwyn Cornish, Associate professor, Research School of Economics, Australian National University v

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PRAISE FOR THE GYPSY ECONOMIST

“Thoroughly engrossing, entertaining and illuminating. A vital contribution to the history of economics. Clark, being a polymath, used insights gained in one area of study to enrich other areas of study. A provocative scholar who brought excitement to a profession that could other wise be very dull and technical. We advance our knowledge by standing on the shoulders of giants, and Clark was one of those giants, perhaps a bit of a maverick and not one to follow the crowd, but who independently followed the beat of his own drum. Flawed perhaps, but we all are, and his contributions in so many different areas were monumental. Millmow has done the profession a great service by allowing us to understand Clark’s contributions in vivid detail and historical context.” —John Lodewijks, Professor of Economics, S.P Jain School of Global Management “Colin Clark single-handedly compiled the first modern set off national income accounts for the United Kingdom, and pursued data collection on a world-wide scale. Having started academically as a scientist, he was almost self-taught in economics, leading to a creative imagination matched by his intellectual brilliance and originality. His Herculean data collection efforts in the 1930s remain unparalleled to this day, especially as they were funded from his own resources. Although Clark was inspired by precursors like Sir William Petty, Alfred Marshall and Sir Arthur Bowley, in the development of national income accounts, he far surpassed them all. Colin Clark invented the concept of Gross National Product before Simon Kuznets created Gross Domestic Product, and also inspired others like Nobel Laureate Sir Richard Stone to carry the baton forward. His work was not only of substantive importance, but in due course transformed empirical macroeconomics. As a macro-econometrician, I owe Colin Clark a huge debt for greatly improving the conceptualisation, quality and coverage of aggregate statistics on economies, enabling empirical model building. It is a pleasure to see the extensive and insightful biography by Alex Millmow according due recognition to Clark’s really important contributions to measuring economies and thereby understanding how they function.” —Professor Sir David Hendry, Institute for New Economic Thinking at the Martin Business School “Alex Millmow’s writing catches, and matches, the intellectual energy, synthesis and independence that characterised Colin Clark’s life and work.

PRAISE FOR THE GYPSY ECONOMIST

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To be formative and interrogative at the same time, to influence major movements in economic knowledge while insisting on the perspectives of faith, and to challenge orthodoxies while being closely associated with some of major realignments of policy, politics and economics across the twentieth century, is a story to be relished – which this book does. If Colin Clark might often have ‘preferred to be engaged in controversy in Australia’, he took up debates that were global in scale – from population strains to energy use – in ways sometimes ‘utterly wrong’ but often prescient. Millmow’s readers will have the great opportunity of arguing with Clark throughout, and long after, reading this book.” —Professor Nicholas Brown, School of History, Australian National University

“And I,” he said, “the secret of their art, When fully learn’d, will to the world impart; But it needs heaven-sent moments for this skill.” from Matthew Arnold, ‘The Scholar-Gipsy’ (1853)

Contents

Preface

xvii

Acknowledgments

xix

1

1 8 11

Introduction The Need for a Biography References

Part I 1905–1937 The Makings of an Applied Economist 2

Brilliant Beginnings Family Background Scholarship Boy Oxford, Chemistry and Embracing Economics A Socialist Apprenticeship An Introduction to Increasing Returns An Early Chance at British Politics The Economic Advisory Council References

17 18 22 24 26 28 30 32 37

3

Cambridge and Fabianism Clark’s Views on Economics Clark as Teacher Mixing with the Fabians

39 41 43 45

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CONTENTS

Marriage and a Last Chance at Politics References

48 52

Becoming the World’s Economic Statistician How Did This Aspect of Clark’s Research First Begin? National Income and Outlay (1937) Clark’s Working Habits Contesting Malthus Leaving Cambridge References

55 57 61 64 65 66 68

Part II 1937–1952 Australian Idyll 73 82

5

Great Southern Land References

6

Forsaking Keynes The Role of Dalton New Zealand Interlude Telling Keynes Bad News The Attraction of Queensland Distributivism The Bureau of Industry Paying Tribute to Australian Economists References

85 85 87 90 95 97 101 105 110

7

Three Classic Contributions A Critique of Russian Statistics (1939) The Conditions of Economic Progress (1940) The First Edition Subsequent Editions The Economics of 1960 (1942) References

113 113 115 116 121 123 126

8

Spiritual Awakening On the Front Line Metamorphosis Turning to Rome A New and Important Friendship A New Vision

129 130 133 134 137 141

CONTENTS

xiii

Property and Economic Progress (1945) References

142 147

9

Two Revelations The Optimal Size of Cities The Natural Limits of Taxation American Reactions Australian Reactions Channelling the True Keynes References

149 149 154 157 159 161 166

10

Macroeconomics and the Pursuit of Ruralism The Post-war Australian Economy Creating a Rural Nirvana Exposing Leviathan Attacking Wage Rigidity Self-Appraisal Clipped Wings References

169 169 173 177 179 181 183 183

11

The Tarmac Economist England India and Development Economics A Dramatic Resignation Leaving Australia References

187 188 190 194 200 205

Part III

1953–1969 A Gypsy Scholar at Oxford

12

Research Leadership Chicago Oxford Reclaimed The Agricultural Economics Research Institute (AERI) An Eye for Trouble A Troublesome Student References

211 211 212 217 222 225 227

13

The Man Who Smashed Convention Free Trade ‘a Complete, Utter, Howling, Disastrous Failure’

229 233 234

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CONTENTS

The Soviet Experiment Once More The Institute of Economic Affairs References

237 238 241

14

A Critical Eye on British Economic Policy Growthmanship Taxmanship The Economic Consequences of Harold Wilson Life as an Oxford Fellow References

243 243 247 248 252 254

15

The Grand Soothsayer Introduction Development Economics The Balance Between Global Population and Food Supply Food Wars: Taking on the FAO The Crusade Against Neo-Malthusianism The Economics of Subsistence Agriculture (1964) Population Growth and Land Use (1967a) Reaction The Economics of Irrigation (1967b) Starvation or Plenty? (1970d) References

257 257 258 260 267 271 274 279 284 285 286 287

16

Slaying the Doomsayers The Economics of 1968 Vatican Economist Refuting the Club of Rome A Parallel Life References

291 292 293 296 300 303

17

Angling for Australia Australian Hopes and Fears (1958) A Farewell to Oxford References

305 307 311 312

Part IV 18

1969–1989 Australia Resumed

The Monash Years The Institute for Economic Progress Raising Dust

317 320 321

CONTENTS

19

xv

The Political Economy of a Christian Society The Return of Mr. 25 Per cent A Thatcherite Vignette Monash: Autumn Years References

324 326 332 336 339

At Heaven’s Gate Regional and Urban Location (1982) Reconciling Keynes and Friedman Long-Term Economic Change Affirmation Death Epilogue References

341 344 344 346 347 350 351 355

Bibliography

359

Index

381

Preface

Colin Clark was the first economist I ever laid eyes on. In 1972 at Mazenod College, a Catholic boys’ secondary school, run by the Oblate Fathers in south-east Melbourne, Colin Clark was introduced to a fourthform English class. The scene was mildly absurd; what was an eminent international economist doing talking to a class of adolescent boys? Of course, we were too innocent, too silly then, to know of his stature. His visit was linked to the books we were studying: Only One Earth: The Care and Maintenance of a Small Planet (1972)) by René Dubos and Barbara Ward and The Population Bomb (1968) by Paul Ehrlich. They were grim reading for young minds but represented the gloomy zeitgeist of those times. Clark had been called in to contest the arguments of either book and banish our fears of a world running out of resources, even oxygen. He refuted the idea, advanced in either book that, upon reaching adulthood, we should not have children. Though I cannot recall what else Clark would have said, I do recall his educated English accent and the way a draft of wind suddenly cropped his wispy hair like a cockatoo raising its crest. I found that moment hilarious. At the time Clark was an Honorary Research Fellow of the Faculty of Economics and Politics at Monash University. When I started researching for this book, I discovered that he contributed an article to the Monash student union newspaper which contained roughly the same content he had conveyed to my classmates. Monash had a fairly radical student body at the time which was unaware of his libertarian slant. Perhaps they liked

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his optimistic prognosis that we were not all headed for destruction. Clark also ran a think tank funded by the Roman Catholic Archdiocese of Melbourne. One of his more prosaic tasks for the Church was to undertake demographic studies about future enrolments at Catholic schools in Melbourne. As a student at Monash in 1978 I then encountered Clark when he gave a few classes in a fourth year unit called Agricultural Economic Development. I had earlier attended his 1977 Monash Economics Lecture on ‘Population and Depopulation’ where he elaborated upon a subject of his lifetime research; it was, incidentally, forty years since he had first spoken for the Eugenics Society on ‘The Menace of Depopulation’ at Scots Church, Melbourne in July 1937. That occasion was probably the first time many Australians had heard of Colin Clark; he had arrived from Cambridge only a few weeks earlier for a year’s sabbatical in Australia. Before Monash, I recalled seeing Clark on Australian television in 1971 when he debated ecologist Paul Ehrlich over his call for Zero Population Growth (ZPG). Four years later, on another television program, he was seen nodding in agreement with visiting American economist Milton Friedman about his monetarist panacea for curbing inflation. Both programs were broadcast in prime-time, almost unimaginable today. Friedman and Clark had known each other since the late 1940s. Friedman felt Clark was ‘one of the most imaginative and original people working in problems of economics.’1 For his part, Clark thought that Friedman had become too fixated with monetarism.2 Once aware of the blaze of his career it was curious that Clark, once a close associate of Keynes, could befriend someone hell-bent on destroying the whole edifice of Keynes’s economics. Explaining that puzzle, just one of the many that intersperse Clark’s life, is the reason for this book. Ballarat, Australia

Alex Millmow

1 Friedman to P. W. Hoguet 14/2/1966, Milton Friedman Papers, Hoover Institution. 2 Clark to W. Herbert 5/7/1971, Colin Clark Papers, University of Queensland (UQ).

Acknowledgments

This work has had a long gestation. In 2012 I published a survey article about Colin Clark in the History of Economics Review. It was wellreceived and the idea dawned about committing to writing a full-length biography of Clark. The fact that he was one of the few remaining economic giants not to have a biographical study was one justification. In that respect Clark makes for a captivating study; too many have rushed to judgment about him, especially his switch in mid-career to Catholicism which corresponded with a switch in economic philosophy. Another motivation for this study was that the mostly untouched Clark papers were within relatively easy access for an Australian-based scholar. Another prompt was the encouragement I received from many of my peers to write on Clark. In that regard I would like to thank my mentor and friend Selwyn Cornish who, when approached by the publisher about the feasibility of a biography on Clark, strongly supported my interest to undertake it. He is among the many whom I have to thank for having read the draft manuscript and making critical suggestions, querying facts, correcting errors, and the like. I also asked a number of academics to read the draft. One of the first was Stuart Macintyre who asked relevant questions and made useful suggestions. He was followed by John Lodewijks, Geoff Harcourt, John King, Tony Endres, Peter Dixon, Ross Williams, Anita Doraisami, and Robert Freestone, all of whom made critical comments or pointed out errors, sometimes gaping ones!

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ACKNOWLEDGMENTS

As the manuscript neared its final stages I asked Sue Howson for comments. She made an exacting audit of the manuscript suggesting some excellent amendments. She also kindly provided me with material Clark’s activities at the Oxford Union and his dealings with James Meade. Five members of the Clark family, David Clark, Cecily Woodberry (née Clark), Nicholas Clark, the late Claire Clark, and Mary Ryllis Clark have been extraordinary helpful in this project. All three read the manuscript as did other members of the Clark family. I might add that the Clark family exerted not the slightest editorial interference with the finished product. There are other people to thank for providing assistance or advice that improved the manuscript. They are: Frank Bongiorno, Nicholas Brown, Jerry Courvisanos, Benedict Davies, Peter Drake, Alan Duhs, Ross Garnaut, Bob Gregory, Ted Kolsen, Bruce Littleboy, David Merrett, Val Noone, Paul Oslington, Keith Tribe, Bill Stent, and Bob Wallace. In England I would like to thank the following scholars who all provided input and insight about Clark’s time as a fellow at Brasenose College—Vernon Bogdanor, Sir David Hendry, Gavin McCrone, and the late Peter Sinclair. As the convention goes, what remains is my work and any errors or misconceptions lie with me. Colin Clark’s papers are held at the Fryer Library at the University of Queensland and there is also Clark material relating to his earlier life in England kept at his old college at Brasenose. Accordingly, I would also like to thank Simon Farley and the staff at the Fryer Library for granting me generous license to access the Clark material as well as the library staff at Brasenose College, Oxford. Clark attended Winchester between 1919 and 1924 and the archivist there, Suzanne Foster, was very helpful in advising me of his activities there during his schooldays and thereafter. My editor, Philip O’Brien, has gone through several drafts of the manuscript and has compiled a comprehensive index; I thank him for his forbearance and guidance. Lastly, I would like to dedicate this volume to my beautiful wife, Amanda.

CHAPTER 1

Introduction

Joseph Schumpeter (1952, ix) once said: ‘Economics is a big omnibus which contains many passengers of incommensurable interests and abilities.’ The Anglo-Australian economist Colin Clark was such a passenger but one with a seat all on his own. Apart from an abiding passion for economics and history, his life was informed and infused by three things. First, there was his love of Australia and, before that, Britain. Then came his dedication to Roman Catholicism. Finally, there was his ideological odyssey, in the 1930s from Distributivism and then, in the 1940s, to a nascent form of economic liberalism at the time called ‘radical conservatism’ (Grattan 1956). These were complemented by an Edwardian sense of chivalry and compassion for the powerless. Above all else, though, it was Clark’s amazing facility with statistics that was to cement his status in world economics. He was one of the great pioneers of empirical economics but also a ‘conscientious one’ (Garnaut 2013, 31). Like the American economist and statistician Simon Kuznets, Clark was a pathbreaker in the statistical revolution that changed national accounting. It was said that, when working with statistics, Clark made ‘bricks without straw’ to produce figures for the subject he was surveying (Giblin 1940, 262). The Nobel Laureate, Lawrence Klein (1988, 168) marvelled at Clark’s eagerness to work with poor and obscure data yet still generate meaningful findings. While he would dream in numbers he was, © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_1

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more practically, the first economist to inform governments about the macroeconomic future using quarterly estimates of the Gross Domestic Product (GDP) as his tool (Tily 2009). This, coupled with the economics of Keynes, allowed governments to engage in the new art of demand management. There were other achievements. Clark was the first economist to derive the concept of GNP and one of the first since Sir William Petty to talk about the three sectors of the economy. He was also one of the first economists to broach development economics, especially differing levels of GNP per capita between countries, and to question the role of investment in generating economic growth (Speich 2011). He was also one of the first economists to foresee Asian industrialisation, the re-emergence of India and China within the global economy and how this would shift the centre of economic gravity. Colin Clark was also the first economist to inform the world that the rapid industrialisation of the Soviet Union, including its economic growth rate, was built on dubious statistics. In addition, he also saw the damage that Mao’s Great Leap Forward (1958–1962) with its attempt at frenzied industrialisation, had upon the Chinese population, not least in producing mass famine. With Joseph Schumpeter, he was one of the few economists to predict that there would be no post-war slump in America after 1945 based on his thesis that the global economy would soon encounter a global capital shortage. That said, Clark, with his prowess in economic statistics and understanding of how the sectors of the economy interacted, had, at times, a tendency to predict macroeconomic trouble. Using a basic econometric model of the American economy, he boldly predicted a major recession there in 1954 and, when proved wrong, was dubbed ‘the knight errant of economics.’1 More enduringly, Clark predicted the rise and persistence of inflation when taxation levels exceeded 25% of Gross National Product. Robert Skidelsky (1996, 192) believes that while there is no definitive tax threshold, a priori, Clark’s mechanism still has general acceptance but that a new sustainable ratio for western economies now lies in the range of 30–40%. In the 1950s Clark was the first to debunk the spectre of mass hunger, prophesised by the Scottish physician and biologist Lord Boyd Orr, by

1 ‘‘A Joust’ on Capital’, The Argus (Melbourne), 2 May 1955.

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3

arguing that, all moral and religious questions aside, rapid population growth was a boon to economic development. His disregard, though, of contrary views, such as in dismissing the adverse effects of overpopulation, eroded trust in Clark’s reputation as a scholar (Davis 1968, 133). For his adopted country of Australia, Clark promoted shifting its economic orientation away from manufacturing towards agriculture and services long before his peers did. He was accurate, too, in canvassing the idea of Australia’s economic integration within the Asia Pacific, but some 30 years before this became reality. According to Walt Rostow (1990, 389) Clark can sit happily in the pantheon of economists alongside the likes of Gregory King and Sir William Petty. Indeed, in the second edition of his magnum opus The Conditions of Economic Progress (1951), Clark argued that modern economics had taken a wrong turn by moving away from these seventeenth century pioneers who had inquired into the conditions necessary for material prosperity. While the greatest influence upon Clark’s career was probably the American economist Allyn Young, he once admitted that he regarded the fourteenth century Tunisian philosopher and historian Ibn Khaldoun as ‘the pioneer of economics rather than Adam Smith or Sir William Petty’.2 Ibn Khaldoun had anticipated Malthus in arguing that population growth was limited not by the capacity of land but rather by the inevitable decay of the state. The other attraction was that Ibn Khaldoun (1967, 231) was aware that excessive taxation would destroy civilisation. Khaldoun argued that when there was high taxation ‘the interest of the subjects in cultural enterprises disappears, since when they compare expenditures and taxes with their income and gain and see little profit they make, they lose all hope … Therefore, many of them refrain from all cultural activity. The result is that the total tax revenue goes down.’ Clark was not a predictable character; he lived a life of opposites. He was once described as a ‘loner… bubbling with ideas’ (Maddison 2004, 31). He seemed to relish this solitude. But he was also a controversialist. In that light, Colin Clark was quite prepared to change his mind, as Keynes would say, when the facts changed. This is one of the themes of this book. When he felt that a doctrine or set of ideas was no longer valid or supportable for human betterment he moved on. For Clark, this

2 Clark to H. Trevor Roper, 13 March 1957, Clark Papers, UQ.

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meant a long ideological journey from Labour Party activism and Fabian socialism to Distributivism and then radical conservatism. Another puzzle for a biographer to unravel is Clark’s character. What lay behind the benevolent smile when he was making some observation? What made him tick? Never conventional, in either dress, manner or ideas, Clark was a polymath with a slide-rule in his back-pocket. He loved numbers and empiricism. For a statistical economist he had a rich background in history, science and literature. He practised his Latin in the mornings; his dinner conversation was cerebral, often esoteric. For instance, he would quiz his High Table colleagues at Brasenose College by enquiring as to the most efficient human invention in terms of labour productivity and transport efficiency. After canvasing options around the table, Clark suggested the wheelbarrow. At first, he shunned computers, fearing what he called ‘computer-toxication’ where loads of data were fed into computers in the hope that they would do the analysis. In his later years he recanted, having become fascinated by them. It might be said, too, that Clark had a computer-like mind, grinding out a solution to man-made problems. Despite having outlandish views, he struck most people whom he met as kindly. Yet sometimes he was unaware how his forthrightness could upset others. At a personal level, Clark’s intellectual views were put directly ‘in a crisp, take-it-or-leave-it’ style which alienated many (Arndt 2000b, 12). He once told an interviewer that he had ‘a sort of instinct to disagree with the powerful, whoever they may be. And to give support to those who are weak, whoever they may be’. He detested groupthink; on several occasions he suggested that economists, financial journalists and statesmen are never so wrong as when they are virtually unanimous. He took delight in entertaining perverse views, in being a man ‘out of step’ with prevailing trends (Bulbeck 1987, 16). One authority wrote that Clark was a controversialist, ‘completely happy to be in a minority of one, taking defeat in a good cause with modesty and good humour’.3 That iconoclastic streak set him apart from other economists. The Australian economist Heinz Arndt (2000a), who sparred with him over the fiscal limits of taxation, grew to respect his independent and heretical views on growth, development and political economy. Simply put, Clark loved to épater la bourgeoisie (“shock the bourgeoisie”) with remarks meant for

3 ‘Colin Clark, Economics on an International Canvas’, The Times, 5 September 1989.

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5

effect. Many in high opinion did not welcome him as a rational antagonist, one against whom they could sharpen their wits.4 It gave him an air of flippancy but those who knew him well believe that it was just a mask. When Clark gave seminars at Cambridge or the London School of Economics (LSE) his contributions were often considered to be eccentric and off-beam. Yet people still came to hear him. He made a point of being at odds with the prevailing zeitgeist, whether on urban-based economic development, foreign aid, feminism, environmentalism, subsidised tertiary education, the welfare state or Keynesianism. He lamented modern capitalism’s obsession with urbanisation and sprawl because, he argued, it bred crime, slums, noise, congestion and other external diseconomies; it also generated disproportionate gains for inner city landowners. In everyday life Clark had no small talk. He was a clubbable man but only in defined company. He refused to ally himself with groups such as the Mont Pelerin Society but, by the same token, was dismissive of the Robinson-Kahn interpretation of the economics of Keynes. He was a keen admirer of Keynes but also regarded A. C. Pigou, Dennis Robertson and Lionel Robbins as worthy mentors. He maintained correspondence with Milton Friedman, J. K. Galbraith, Bob Solow and Simon Kuznets. While a free trader, he maintained a long correspondence with the conservative politician 3, one of the most ardent protectionists ever to sit in the Australian Parliament. This anomaly may be explained by Wentworth’s vehemently anti-communist stance, something Clark shared. However, it was Clark’s devotion to Catholic doctrine or, as one observer put it, his ‘intransigent religious social outlook’ together with his ‘prickly kind of opinionativeness’ that set him apart.5 Sometimes that dogmatism impeded him in securing academic appointments, particularly in Australia. There was also a widely-held suspicion, for instance, that after 1940 Clark’s work and outlook was animated by Distributivism and Catholic social thought. In that sense he would defend his approach, saying that the Catholic faith had morals and principles that concurred with his own convictions. For instance, it will be shown that Clark was critical of neo-Malthusianism long before his conversion to the Catholic Church. The conversion to Catholicism was only one stage in his journey; there would be even more radical, almost bizarre, turns in the future.

4 I am indebted to Vernon Bogdanor for this perception. 5 The Nation Review (Sydney), 11 April 1959.

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Having graduated from Oxford with a second-class honours degree in chemistry, Clark turned wholeheartedly to economics. Eight years later, his name appeared in The General Theory, crowning one of the ‘most astonishing career transformations within the annals of economics’ (Peters 2001). Like W. S. Jevons, another chemist-turned-economist, Clark had, in Keynes’s words, ‘the prying eyes and fertile controlled imagination of the natural scientist’. Clark felt that his scientific and mathematical training gave him a comparative advantage in economics. This was complemented by a background in English literature. One observer took the view that, besides being a first-rate economist, Clark saw economics as fit for public purpose (Groenewegen 1994), for ‘improving the human condition’ (Kolsen 1990, 3). Remarkably, Clark would never become a full professor in his adopted discipline. At one stage, he was unable to secure even a university appointment in Australia. In fact, during the 1960s, he felt an outcast from Australia, a country where he had spent the bulk of his career and to which he apparently wanted to return. He was regarded as an Australian economist yet the British also deem him as one of their own (Pratten 2004). An early liberal, Clark would look askance upon his Australian contemporaries for their embrace of protection, regulation and centralism. In turn, the Australian economics profession regarded him as a quixotic character, a ‘prophet, largely without honour in his adopted country’ (Crawford 1954, 174). Recognition came only two years before his death when he was made one of the first Distinguished Fellows of the Economic Society of Australia. It was an overdue honour, given that his contributions to economics science had long been overlooked by the Australian branch of the profession.6 His work included economic statistics, national income accounting, comparisons of real income per capita in terms of international purchasing parity and development economics. This last interest involved looking at the determinants of agricultural productivity and the economic consequences of population growth. There were also contributions in public finance, transport economics, location economics, macroeconomics, education and the history of ideas. Despite his many theoretical contributions, Clark enjoyed no high office or title compared to such bestowed on many of his contemporaries.

6 In 1978 Clark was made a Corresponding Fellow of the British Academy.

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He received no university chair, no vice-chancellorship, no medals or knighthood for services to the study of statistical economics. One recognition, though, was to be elected a Fellow of the Econometric Society along with Paul A. Samuelson, Paul Douglas, Trygve Haavelmo and Michal Kalecki in 1944. This lack of high office was, as we shall see, partly his own fault. Philipp Lepenies’s (2016) short account of Clark’s life, entitled ‘The Frustrations of Colin Clark’, suggests that his career was one of lost opportunity considering that he did not persist with his seminal work on national income accounting. He chose to spend his most prolific years shaping public policy for the Australian state of Queensland rather than pursuing a university chair. However, Clark never lamented his time in Australia. Moreover, he had moved on from national income accounting to something grander, the international comparisons of living standards. In doing so he became, as it were, ‘a kind of one-man central statistical office for the world’.7 Colin Clark was a twentieth century economist akin to an intellectual fountain. He involved himself in varied controversies, from questioning women’s rights to abortion, to condemning urban blight including the ugliness and poor habitation provided by tower blocks. His output did not focus on a single wellspring of research. This meant that, while nominated several times, he was denied the Nobel Memorial Prize in Economic Science. He must surely have been disappointed not to share it with Simon Kuznets in 1971, Theodore Schultz and Arthur Lewis in 1979 or, even more acutely when his former student, Sir Richard Stone was honoured in 1984. His self-effacing response to Kuznets’ award in 1971, partly for his work on national accounting, was simply ‘He has done more than I have’. Kuznets, Schultz, Lewis and Stone all worked in areas which Clark had helped pioneer or to which he had made a substantial contribution. This apparently now seems to have been entirely forgotten when some recall those who just missed out in being awarded the Nobel Memorial Prize in Economic Sciences (Sanderson and Siegfried 2019). It was said, too, that Clark’s work in economics and statistics lacked a firm theoretical foundation. Another way of looking at this, suggested by one of his sons, David, was that Clark simply pushed on to other domains, leaving

7 Daily Telegraph (London), 5 September 1989.

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the glittering prizes to his successors.8 He was, in any case, beholden to the view, first expressed in 1940, that ‘there is space for two or three economic theoreticians in any generation, no more’. He felt that economics could only succeed as an empirical science and that economists, following Keynes’s wish, should become as humble as dentists and that they should be content to build a bank of knowledge by constant testing of economic theory against observable facts. He also regarded forecasting as an active part of the economist’s workload and was prepared to make ‘odd risky extrapolations’ (Pen 1976, 234–235). Forecasting and prediction are, however, treacherous grounds on which to stake one’s reputation and some of Clark’s major prophecies went horrendously wrong. In the 1970s Clark clashed with the ecologist Paul Ehrlich over the issue of a population explosion and inadequate food supplies; he antagonised feminists by suggesting as late as 1977 that women should keep out of politics and business and that men should be given preference over women in specialist and expensive higher education courses. Yet this was the same man who, before anyone else, pushed the idea that housework be included in GDP simply because of its importance (Clark 1958). Twenty years before, Clark had spoken about the need to raise the economic status of domestic housework and child-minding.9 Clark’s large family (eight sons, one daughter, seven of whom were born in Australia) meant a continual focus on household finances and the search for additional income. It also, of course, stimulated his creativity, work ethic and his views on population growth in general. He wrote for the press, a straightforward task for one who was well-rounded, opinionated and never captive to consensus.

The Need for a Biography By the end of his life, Clark said that he had never bothered to write his memoirs, arguing that ‘one forgets a great deal’.10 In the late 1970s he was urged, by both Heinz Arndt and Vernon Bogdanor, to write his life story. He declined. He did agree, however, to three lengthy interviews, the first being in Adelaide in August 1977 and conducted by

8 David Clark memoir on his father, Colloquium at Brasenose College, Oxford, 2005. 9 ‘Household Economics’, The Courier Mail (Brisbane), 15 September 1939. 10 Clark to D. Patinkin, 22 October 1980, Clark Papers, UQ.

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Derek Healey and Bruce McFarlane. These interviews, in addition to correspondence, papers and other archival material, offer a useful timeline to chart his career and experiences (Healey and McFarlane 1977 and partly re-released in 1989; Blackman 1986; Higgins 1989). The interview with Federal Treasury official Chris Higgins, undertaken in 1988 and published the year after, was the most forensic and illuminating of the three; the interview with Barbara Blackman was an opportunity lost, with Clark sounding tired and labouring throughout because he was suffering a major illness. He did tell Blackman, though, that he had lived ‘a fairly interesting life’.11 There were other interviews: with the journalist Geoffrey Barker in 1983, about Clark’s religious beliefs and his friendship with Keynes; and in 1986 with Chilla Bulbeck about his role as an economic advisor with the Queensland Government. There have also been biographical portraits and assessment of Clark’s intellectual contributions undertaken by Heinz Arndt (1979, 1992, 2000a, b), Ian Castles (1999, 2014), Gregory Clark (2010), Tony Endres (2007), Hartley Grattan (1956, 1958) Peter Groenewegen and Bruce McFarlane (1990), Peter Groenewegen (1994), Bill Herbert (1991), George Kenwood (1988, 2007), Ted Kolson (1990, 1991), Angus Maddison (2004), Alex Millmow (2012) George Peters (1990, 2001), Graham Pyatt (1984), Walt Rostow (1990) together with memoirs of him written by participants in a colloquium at Brasenose College, Oxford in 2005 marking the centenary of his birth. There was also a festschrift dedicated to Clark which was organised by three Australian economists, Duncan Ironmonger, James Perkins and Tran Van Hoa, which fortunately appeared just a year before his death. The title, National Income and Progress (1988), was inspired by the titles of Clark’s best-known works.12 This festschrift featured eleven authors, including two Nobel Laureates, Richard Stone and Lawrence Klein, as well as Sir Alec Cairncross, one of Clark’s former students. Perkins and Alan Powell (1990) as well as Peter Crossman (1997) undertook a helpful taxonomy of Clark’s many scholarly interests. Of all those who have written about Clark, it is George Peters (2001), a former colleague who had closely worked with him for eight years, who best captures his versatility and genius: ‘It is not easy’, he wrote, ‘to pick

11 Interview with Barbara Blackman, NLA, 1986. 12 D. Ironmonger obituary note on Clark, Clark Papers, Brasenose College, Oxford.

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out all of the elements of such multifaceted activity; not least because he always appeared to be working on numerous projects simultaneously with astonishing energy and determination and … with a sheer liking for controversy’. What bound his life together, concluded Peters (2001, x), was an ‘abiding passion for statistical information, a love of patterns in numbers, and not least a genius for analysis and a great facility in writing’. Given all this, it is appropriate to ask why a biography of Clark has, until now, not been undertaken. This is especially puzzling given the publishing boom in books about Gross Domestic Product (Coyle 2017, 610). In that respect, Sir Alec Cairncross (1988) believes that Clark’s role in promoting the use of statistics in shaping economic policy was a key contribution ‘worth celebrating’. While several Australian economists, in particular George Kenwood from the University of Queensland, had expressed an interest in writing a biography of Clark nothing came of it.13 As mentioned, during his career Clark had been urged to write his autobiography but felt that such efforts tended to be self-serving and, in any case, he was busy with applied economic work. Clark (1977, 1978, 1984, 1986) did, though, write at least four semi-autobiographical pieces. In addition, his book Australian Hopes and Fears (1958) was a highly personalised and politicised account of Australian history, society and economics that contained snippets drawn from his own life. This biography has been constrained by available source material. Clark’s papers held at the Fryer Library, University of Queensland number some 31 boxes, including duplicates of the Clark material held at Brasenose College, Oxford. While Clark carefully arranged his papers by topic and correspondents in 1986, a few years before his death, there are gaps in its coverage. For instance, there is no material from his days as a university student. Some family papers, too, were apparently lost or have been misplaced. It is interesting that, within the collection, there is no record of Clark’s curriculum vitae, a sign, perhaps, of his neglect of position. That neglect of his work has now become generalised. Apart from four honorary doctorates, two each from European and Australian universities, bestowed towards the end of his life, there is now relatively little international recognition of his work. Apart from the odd citation in academic literature, Clark’s place in the development of economic thought today 13 Claire Clark, an international relations scholar, and one of the extended Clark family in Australia, also considered writing the biography of her father-in-law.

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is barely recognised; indeed, most omnibus volumes on the history of economic thought barely cite his name. It is much the same in the development economics literature which overlooks his pro-population views of the 1960s (Kelley 1988; Simon 2006; Speich 2011). Now, just after the thirtieth anniversary of his death, this book attempts to redress this glaring oversight and, in doing so, present an account of a significant figure in twentieth century economic thought. Not modest, Clark described himself as ‘an academic economist with a considerable international reputation’. One of his sons, David, appropriately described him as ‘a scholar gypsy’ after his father’s favourite poem by Matthew Arnold. In a sense, Clark wandered through applied economics in much the same way as he liked to ramble through the English countryside or the Australian bush. His wanderings over the main fields of economics made him the gypsy economist of the twentieth century. This, then, will be a biography of a life spent not just in economics but also in politics, advocacy and faith. To take stock of Colin Clark’s life we break it into four parts, alternating between Britain and Australia, covering a span of some 84 years.

References Arndt, H.W. 1979, ‘Colin Clark’, in D.L. Sills (ed.) International Encyclopaedia of the Social Sciences, Biographical Supplement, Vol. 18. New York: The Free Press, 121–124. Arndt, H.W. 1992, ‘Stubbornly Defending the Free Trade Position’, Economic Analysis and Policy, 22(2): 117–126. Arndt, H.W. 2000a, ‘Colin Clark’, History of Economics Review, Supplement: 1–5. Arndt, H.W. 2000b, ‘Colin Clark as a Development Economist’, History of Economics Review, Supplement: 6–14. Blackman, B. 1986, ‘Oral Interview with Colin Clark’ National Library of Australia. Bulbeck, C. 1987, ‘Colin Clark and the Greening of Queensland: The Influences of a Senior Public Servant on Queensland Economic Development: 1938 to 1952’, Australian Journal of Politics and History, 33(1): 7–18. Cairncross, A.K. 1988, in Ironmonger, D., J.O.N. Perkins and T. Van Hoa (eds.): 11–19. Castles, I. 1999, ‘Vice President’s Note’, Dialogue 18(1): 7–22. Castles, I. 2014, ‘Measuring Economic Progress: From Political Arithmetick to Social Accounts’, in A. Podger and D. Trewin (eds.) Measuring and

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Promoting Well-Being: How Important Is Economic Growth? Canberra: ANU Press: 271–280. Clark, C. 1958, ‘The Economics of House-Work’, Quarterly Bulletin of the Oxford University Institute of Statistics Bulletin, 20: 205–211. Clark, C. 1977, ‘The Golden Age of the Great Economists’, Encounter, 48(6): 80–89. Clark, C. 1978, ‘Australia’s Wrong Turnings’, Quadrant, 12(12): 5–10. Clark, C. 1984, ‘Development Economics: The Early Years’, in G.M. Meier and D. Seers (eds.) Pioneers in Development. Oxford: Oxford University Press: 59–77. Clark, C. 1986, ‘The Bureau of Industry’, in D. Fraser (ed.) Administrative History in Queensland. Brisbane: Royal Australian Institute of Public Administration. Clark, G. 2010, Between Four Worlds: China Russia Japan and Australia, Between Four Careers: Diplomat, Economist, Journalist and Japanologist, internet version. Coyle, D. 2017, ‘Review of the Power of a Single Number’, Journal of the History of Economic Thought, 39(4): 610–611. Crawford, J.G. (ed.). 1954, Wartime Agriculture in Australia and New Zealand 1939–1950. Redwood City: Stanford University Press. Crossman, P. 1997, ‘Plus Ca Change: Problems Faced by the Queensland Government Economic Advisor’, Economic Analysis and Policy, 27(1): 1–42. Davis, K. 1968, ‘Colin Clark and the Benefits of an Increase in Population’, Scientific American, 218(4): 133–138. Endres, A. 2007, ‘Colin Clark’, in J.E. King (ed.) A Biographical Dictionary of Australian and New Zealand Economists. Cheltenham: Edward Elgar: 49–54. Garnaut, R. 2013, ‘Removing Climate Change as a Barrier to Economic Progress’, Economic Analysis and Policy, 43(1): 31–47. Giblin, L.F. 1940, ‘Economic Progress’, Economic Record, 16(2): 262–270. Grattan, H. 1956, ‘Colin Clark: A Conservative as Radical’, The Antioch Review, 16(3): 374–384. Grattan, H. 1958, ‘Colin Clark on Australia’, The Review of Politics, 20(4): 615– 622. Groenewegen, P.D. 1994, ‘The Making of Good Economists; Reviewing Some Consequences of Colin Clark’s Life and Practice’, Australian Quarterly, 66(1): 7–24. Groenewegen, P.D. and B. McFarlane, 1990, A History of Australian Economic Thought. London: Routledge. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. Herbert, W. 1991, ‘Vale Colin Clark’, World Review 30(3): 60–63.

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Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Ibn Khaldoun, I. 1967, The Muqaddimah: A History. translated by Franz Rosenthal. Princeton, NJ: Princeton University Press. Ironmonger, D., J.O.N. Perkins and T. Van Hoa (eds.). 1988, National Income and Economic Progress. Essays in honour of Colin Clark. London: Macmillan. Kelley, A. 1988, ‘Economic Consequences of Population Change in the Third World’, Journal of Economic Literature, 26(4): 1685–1728. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) op. cit. 107–123. Kenwood, A.G. 2007, ‘Clark, Colin Grant (1905–1989)’, in Australian Dictionary of Biography, Vol. 17. Melbourne: Melbourne University Press. Klein, L. 1988, ‘Global Monetarism’, in D. Ironmonger, J.O.N. Perkins and T. Hoa (eds.): 169–176. Kolsen, H.M. 1990, ‘Colin Clark: A Personal Tribute’, Economic Analysis and Policy, 20(1): 2–3. Kolsen, H.M. 1991, ‘Vale Colin Clark’, World Review 30(3): 63–67… Lepenies, P. 2016, The Power of a Single Number: A Political History of the GDP. New York: Columbia University Press. Maddison A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. Millmow, A. J. 2012, ‘Colin Clark and Australia’, History of Economics Review, 55: 56–70. Pen, J. 1976, Modern Economics. London: Pelican. Perkins, J.O.N. and A.A. Powell. 1990, ‘Colin Clark, 1905–1989: ‘An Affectionate Memoir’’, Economic Record, 66(4): 329–341. Peters, G. 1990, ‘In Memoriam: Colin Clark’, Journal of Agricultural Economics, 41(1): 129–131. Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist ’, Working Paper No. 69, Queen Elizabeth House, University of Oxford. Pratten, C. 2004, ‘Clark, Colin Grant (1905–89)’, in D. Rutherford (ed.) Biographical Dictionary of British Economists. Bristol: Thoemmes Continuum: 223–227. Pyatt, G. 1984, ‘Comment’, in G.M. Meier and D. Seers (eds.) Pioneers in Development. Oxford University Press: 78–83. Rostow, W.W. 1990, Theorists of Economic Growth from David Hume to the Present. New York: Oxford University Press. Sanderson, A.R. and J. Siegfried. 2019, ‘The Nobel Prize in Economics Turns 50’, The American Economist, 64(2): 1–19.

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Schumpeter, J.A. 1952, Ten Great Economists. London: George Allen and Unwin. Simon, D. 2006, Fifty Key Thinkers on Development. London: Routledge. Skidelsky, R. 1996, The Road from Serfdom. New York: Penguin Books. Speich, D. 2011, ‘The Use of Global Abstractions: National Income Accounting in the Period of Imperial Decline’, Journal of Global History, 6(1): 7–28. Tily, G. 2009, ‘John Maynard Keynes and the Development of National Accounts in Britain, 1895–1941’, Review of Income and Wealth, 55(2): 331–359.

PART I

1905–1937 The Makings of an Applied Economist

CHAPTER 2

Brilliant Beginnings

Colin Grant Clark was born in London on November 2, 1905. He was the first son of James, a Scottish-born manufacturer and merchant, who had emigrated to Queensland in 1878 and had made a fortune exporting refrigerated meat. Colin was strongly influenced by his father. Indeed, as we shall see, he seemed to emulate him by also becoming an entrepreneur in ideas, rather than merchandise. It amused Colin that his father had the misfortune to make, and then lose, three fortunes and in three different countries. He lost money following the Australian depression of the 1890s, in South Africa as a repercussion of the New York financial collapse of 1907 and, lastly, in England at the end of World War One. This explained Colin’s nascent interest in economics, particularly business cycles.1 But, despite these reverses, there was a strain of mercantile acumen in the family blood. There was also a shared love of the poetry of Robbie Burns, which both father and son could recite at will. Clark idolised his parents and penned memorials to each.

1 C. Clark, ‘What Is Wrong with the Australian Economy’, address to Chatham House, London, 17 March 1953.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_2

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Family Background2 Colin Clark was always proud of his Scottish heritage. His father, James Clark, was born on April 18, 1857, in the now-vanished hamlet of Auchindoir, Aberdeenshire, Scotland. James had initially been a farmer; his own father had been a crofter and timber contractor. James Clark believed in what he called “the broad principles of the Christian religion”. He had a Scottish dislike of Catholicism but, like many Scots, felt that Scottish Calvinism could not withstand the criticisms of Robert Burns whom he regarded as the greatest poet and prophet of all time. It might be argued that Burns’ humane, relaxed, sceptical and egalitarian verse contributed to the character of the emerging nation of Australia, which received many Scottish migrants at the time.

2 The following notes are abridged from an earlier version written by Colin Clark. I have also used notes from Margaret Hinton (nee Clark) who wrote a short account of her life entitled ‘Scenes from my life’.

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James Clark Assisted by his father, James began work at 16 as an apprentice in the Glasgow trading company of Scott, Dawson and Stewart in 1870. Following early success there, he was invited in 1878 to set up a branch in Townsville, Queensland, following the discovery of a highly productive gold field at nearby Charters Towers. Clark made a success of that venture and worked as an agent for the Queensland Meat Export Company in the new business of refrigerated meat. He later moved to Brisbane and built an imposing mansion, called ‘Dunsinane’, in the inner suburb of Hendra, a large wooden house which remained standing until 1946. Colin Clark would have seen this mansion when he visited Brisbane in November 1937 and, when he settled in Brisbane the following year,

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acquainted himself with older businessmen who remembered his father. ‘His word was his bond’ recalled one. Benefitting from the innovation of refrigerated meat, James Clark played a large part in establishing the Queensland Meat Export Company in Townsville during the 1880s. One of the company’s achievement was to export tinned meat to British troops in the Boer War. James Clark seems to have had several business ventures then and had already amassed a fortune, one which was much diminished in 1889 when one of the partners speculated unsuccessfully with the firm’s funds. His memoirs recounted long journeys on horseback, crossing flooded rivers, with dangers from crocodiles and also from Aborigines, who were much more militant in this region than in the rest of Australia. His recounted memories of Australia in those days made a strong impression on Colin. In 1893 James lost stock in the great Brisbane River flood but he escaped the worst effects of the banking collapse of the same year through having taken out insurance on his bank account. Moving to South Africa in the late 1890s as a selling agent for the Queensland Meat Export Company, he was on the last train to depart Johannesburg before the Boer War began in 1899. By turn of the new century, James had amassed another substantial fortune in South African and Australian securities. In April 1904 he met Marion Nelly Jolly, who had come to South Africa as a music teacher. Despite their age difference—James being 47 and Marion 24—it was a whirlwind romance and the pair quickly became engaged. Born in Birmingham on August 30, 1880, Marion studied at the Royal Academy of Music in London at the turn of the century where she took qualifications in singing and piano. As a child, Colin would have heard her singing for visitors to their Plymouth home. She and James were married in October 1904 at her father’s home at Water Orton, then a village, now a suburb of Birmingham. Despite a mansion awaiting her in Australia Marion resisted the idea of living there believing it was too rough a society for a ‘respectable’ lady. Colin, the first of their four children, was born in London in November 1905. The family then briefly returned to South Africa where Kenneth was born in 1907. On marriage, Marion had been endowed with a large settlement and much jewellery. These all had to go in 1907, a year of world-wide stock exchange collapse when South African mining and Australian industrial shares, in which most of James’ fortune was placed, fell heavily in value.

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Marion Clark with Baby Colin When the family returned to England they settled first in Plymouth, where Margaret was born in 1911 followed by Malcolm in 1913. It was a comfortable middle-class existence with a nanny, nursery maid and cook. After settling in Plymouth James bought a fruit processing business known as Devonshire Products and Supplies. It made jam and confectionary. James Clark retained an interest in Australian affairs. He was displeased with developments in minimum wage legislation, observing: “These people want to make Australia a Paradise for people of their own class”.

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James never forgot that he was a proud Scot and had ‘The Scotsman’ newspaper posted to him each week from Edinburgh. The thought of living in Scotland was never contemplated given the atrocious weather. He dressed Colin and Malcolm in kilts for church on Sunday which made them very conspicuous in Plymouth. Colin hated the idea of wearing a kilt. When the business did well the children saw little of their parents as they mixed with those in the local business society. The children had their meals in the nursery but on a Sunday the family had lunch together. Marion Clark was ambitious for her children and both Colin and Kenneth won scholarships to prestigious public schools. The jam business did well, bolstered by large naval contracts but this also brought greatly increased taxation, and James Clark’s Australian dividends had to pay double tax in those days before international tax treaties. As the war came to an end, naval contracts were cut back heavily. Wages had also been greatly increased by the Board of Trade and, when the jam could not compete with the cheaper and coarser product produced elsewhere, the business closed down. Now in financially straitened times the Clarks moved to Dunsford, near Exeter. Having until then enjoyed reasonably good health, James had a bad attack of sepsis of the gums and had all his teeth extracted. Unable to receive an anaesthetic because of his age and state of his heart, the shock of the surgery was too much for him and he died in August, 1927 leaving Marion a widow in her late-forties. The business failure meant she was not well off which would have been a great disappointment for James who had worked hard for all his 70 years. Following his death, his old friend Lord Meston helped the family with a generous loan for the younger children to attend good schools. As the eldest son, Colin undoubtedly felt responsibility for this debt. Marion eventually moved to London where she rented a small house, surviving the Blitz when her house was badly damaged in a raid in December 1940. While not hurt, she suffered an incapacitating stroke two days later. She was moved to a nursing home in Cambridge but died there in February 1942 aged 61 years.

Scholarship Boy Colin must have been a precocious child because a master and later headmaster at the Dragon School, Oxford, A. E. ‘Hum’ Lynam, who knew James Clark, encouraged him to send his son to his school so that he

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might win a scholarship to attend a good public school. As a boarder Colin met both Lynam and his father’s expectations winning a prized scholarship to Winchester. It was just as well as the family’s business fortunes were then in sharp decline. Colin attended Winchester from September 1919 until July 1924. He was placed in a relatively high class at admission and made rapid progress. Exuding confidence, Clark was a member of the school’s debating society and the natural history society. In one school debate in January 1924 on the motion ‘The (Labour) government in assuming office, enjoys the confidence of the House’ Clark defended the Ramsay MacDonald Labour government saying it was ‘absurd’ that it was trying to ‘bring in socialism by trickery’.3 He was joined in the debate by two of his school mates, Hugh Gaitskell and Edward Radice. The motto of Winchester, was ‘Manners makyth man’ and its founder, William of Wykeham, elaborated on this by writing ‘It is by politeness, etiquette and charity that society is saved from falling into a heap of savagery’ (Winder 2017, 155). Clark upheld those values throughout his life. His contemporaries, at Winchester and later at Oxford, included Richard Crossman, John Betjeman, Kenneth Clark and Hugh Gaitskell who, being in the same class as Clark, was a rival for academic prizes (Brivati 1996, 10).4 At Winchester, Clark was just a few years behind Frank Ramsey, and, a few years ahead of David Champernowne, both of whom became Fellows at Cambridge. In one of Clark’s classes was Kenneth Clark, later to become a famous art historian and knight of the realm. According to his biographer James Stourton, Clark, who sat next to Colin in class, was said to embody certain characteristics that could be described as ‘Wykehamical’. Apart from a social conscience and sense of public duty, these included being ‘astringent of mind, ferociously disciplined, and occasionally chilly’ (Stourton 2016, 28). Many said that Colin exhibited the same characteristics, but it was leavened by a certain sweetness of nature. Clark recalled that, in the last two years at Winchester, he was placed in a class where students specialising in maths and science still received an adequate training in English composition and literature, history, both modern and ancient,

3 ‘Debating society’, The Wykehamist No. 643. 11 February 1924. 4 Ivan Yates, ‘The Lessons of Gaitskell’s Early life’, The Guardian, 20 January 1963.

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scripture and general knowledge; in short, it was a well-rounded education. When he could, Colin helped Margaret and Malcolm with their algebra and arithmetic. Conditions, especially the food at Winchester, were spartan but Colin dare not complain to his father whom he always addressed as ‘Sir’. Upon his father’s death in 1927, Colin, as the eldest in the Clark family assumed the family debt to Lord Meston. That impost diverted Colin away from a bohemian life, to which he was drawn both in ideas and manner; instead it impelled him to make money. It also left him with an abhorrence of waste and needless extravagance. The fact that his father had worked in Australia for nearly 20 years intrigued Colin such that he, too, would chance his hand there when the opportunity arose. As we shall see, Colin would later dabble in the beef export trade, which his father had helped to pioneer, by trying to secure Australian meat exports to the American market in the 1950s. He had earlier also shown some entrepreneurial flair by engaging in a paint manufacturing concern with his brother Malcolm, before it was wound up in the late 1930s. There would be more business ventures in the future allied to his expertise in economics.

Oxford, Chemistry and Embracing Economics Colin excelled in his studies at Winchester and won an open natural science scholarship to read chemistry at Brasenose College, Oxford. In appearance he was a physically striking young man, six feet in height, with grey eyes and a mop of brownish air. Brasenose had a reputation ‘for athletic prowess, philistinism and drinking’ (Clark 1977, 84). This left little mark on Clark other than his fondness for canoeing and beer. Ale was the staple for undergraduates of average means. David Clark, the youngest of Colin Clark’s eight sons, recalls his father telling him that his student days at Oxford were ones of enforced poverty by making do with a meagre scholarship. He commenced his degree in 1924, ‘working quite hard’ at chemistry (Higgins 1989). Studying chemistry required a disciplined, ordered mind as well as imagination. He required some knowledge of basic German and, after graduating, undertook some postgraduate research on uranium and thorium under the guidance of A. S. Russell, one of the first workers on radioactivity (Higgins 1989). Chemistry introduced him to the power of the slide-rule, a tool he would use for the next forty-five years.

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Clark would always relish the fact that another great economist, William Stanley Jevons, had also started out as a chemist.5 Apart from a shared interest in empiricism there were other remarkable parallels between the two. As young men, both had gone out to Australia to hone their skills; Jevons worked at the Royal Mint in Sydney in the 1850s, Clark at the Queensland Treasury in Brisbane nearly a century later. Each had wide interests, dabbling in a number of fields, not merely economics (Castles 2014, 277–278). Clark thought that a natural scientist had an advantage over economists without such a grounding. He also had a training in statistical techniques which was partly curricular and partly undertaken for his own edification. He had a fascination with numbers but, long before he graduated, another field of knowledge seized his mind with a passion: economics. The Oxford system allowed him to attend Lionel Robbins lectures in the subject. He began to read economics during the first two years of his chemistry degree, studying Alfred Marshall’s Principles, Henry Clay’s Economics for the General Reader and D. H. Macgregor’s Economic Thought and Policy. Why did Clark become interested in economics? The interest came primarily from what was being discussed at the University Labour Club which Clark had joined in his first year.6 According to Robbins, then a fellow of New College, Clark was already ‘somewhat disillusioned’ with chemistry. A friend introduced him to Robbins’ lectures at Oxford. Robbins (1971, 119) recalled how at the Adam Smith Society, an economics debating club that met at New College, Clark would turn up ‘with large sheaves of statistical material, worked up in his spare time, to illuminate and bring down to earth the theoretical discussions of his fellow members’. In time, Robbins would become the first of several patrons who studded Clark’s career; he can be credited, too, with urging Clark to take up economics as a profession. In turn, he urged Clark to acquaint himself with Hugh Dalton, then Reader in Economics at the London School of Economics and a Labour Member of Parliament: ‘Dalton would be the most powerful friend you could have at this 5 One of Clark’s contemporaries at Cambridge during the 1930s was Brian Reddaway who was going to study chemistry but, alarmed at the state of the world, converted to economics in which he excelled. 6 Attributed to Susan Howson and her ongoing work on James Meade and for which I am most grateful.

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School … There are no rules to be observed with him. At least the only rule is not to be inhibited. The more you are completely yourself, the better your chances’.7 They were prophetic words; Dalton, who liked to recruit promising young men for the Labour Party, helped Clark secure useful appointments, especially on committees charged with developing economic policy (Brivati 1996). As we shall see, this opened up a whole new vista to his life. Clark paid his dues to Robbins, later telling him that his advice had led to better work and better prospects than had he remained a scientist and, ‘attributed this fortunate state of affairs entirely’ to his counsel (Howson 2011, 153). Dalton’s patronage was to prove even more instrumental in shaping Clark’s subsequent career.

A Socialist Apprenticeship For many students, to be at Oxford during the mid-1920s was ‘gay, frivolous, stimulating and tremendously alive - it was a brief, blessed interval when the lives of the young were neither overburdened by the consequences of the last war nor dominated by the fear of a future one. Most of us sighed with relief and settled down to the business of enjoying ourselves’ (Gaitskell 1960). The same could not be said about the young Clark who quickly became involved in politics. And if he did enjoy a bohemian lifestyle, it was on a budget. Away from the laboratory, Clark fell into the orbit with former Guild socialist, G. D. H. Cole who was Reader in Economics at University College, Oxford (Healey and McFarlane 1977). The two men met through the Oxford University Labour Club which Clark joined in his first year. The Club had 150 members in 1925 with dons such as Cole, R. H. Tawney, Bertrand Russell and Harold Laski in attendance. Interestingly, women played a larger part in the club’s activities than in any other university club such that it was ‘lampooned as a matrimonial agency’ (Parker 1974, 223). In the third year of his degree Clark would successively serve as Junior Treasurer, Secretary and Chairman. Clark credits Cole with sparking his interest in applied economics and the measurement of national product (Healey and McFarlane 1977). John Parker (1974, 226) described Clark as ‘one of the most original and striking Labour Club personalities.’ In November 1927, the Labour Club was

7 Robbins to Clark, 19 September 1928, Clark Papers, UQ.

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uncertain how to mark the tenth anniversary of the Russian revolution until Clark moved a motion that it be celebrated by singing the ‘Red Flag’.8 It was followed by a speaker describing the firm organisation of socialism in the Soviet Union. One of Clark’s contemporaries at Oxford, the Australian, Walter Crocker (1981, 34) sheds more light on Clark’s character describing him as one of the leaders of the University Labour Club and widely regarded as ‘a difficult Red’; but not so strident to not participate as a leading player in a satirical revue in August 1926 entitled ‘The Striker Stricken’ written by Cole (Parker 1974, 226–227). What is interesting about all this behaviour was that it would have distressed his father who had no time for Labourist politics, nor indeed Bolshevik Russia. The 1926 General Strike radicalised some but not all of the student body and forced young minds to adjust their priorities (Durbin 1985, 94). Clark distributed trade union leaflets during the strike. At one meeting of the Adam Smith Society an employers’ lockout was discussed which most of the economists there considered would impair the country. According to Christopher Saunders, a member of the University Labour Club, Clark produced figures and statistics about the level of profit and argued that the mine owners could afford to pay the miners twice as much, given the profits they were making.9 He was even prepared to recommend that the coal industry be nationalised (Parker 1974, 228). Clark was also a member of the Cole group of young men and women that formed after the General Strike of 1926 to discuss on fairly advanced lines the socialist issues of the day (Parker 1974, 226). The membership was restricted to members of the Labour Club. Parker recalled that the initial batch of members was invited by Cole, in consultation with Clark, who had taken attendance records of the men and women who came to the Club. Some other members of the Cole group were John Parker, Evan Durbin, Douglas Jay, James Meade and Michael Stewart (Parker 1974). Clark had befriended Meade in 1926 and had once gone tramping with him. Clark also featured in debates at the Oxford Union during 1927 and 1928 which was mostly dominated by Liberals. Displaying his facility for handling data to support his arguments Clark participated in debates

8 Notes courtesy of Sue Howson. 9 Interview with Christopher Saunders, courtesy of Keith Tribe.

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such as ‘That the problems of the land can be solved by state intervention’. One observer noted that Clark ‘should speak far more often’. In another debate, on ‘whether the Liberal and Labour parties form a working alliance before the general election’, one observer noted that Clark was ‘always good’.10 There could be no doubt that Clark was seriously entertaining the prospect of politics. In 1928 the impressive leader of the British Labour party, Ramsay MacDonald agreed to give a speech to members and guests of the University Labour Club. He had been made honorary President of the Club the year before. MacDonald was a little peeved, however, when learning that he would be not be dining at high table but rather accorded the ‘usual cheap dinner’ for speakers (Parker 1974, 225). In the late 1920s Clark also attended weekend meetings of socialists at the stately home Easton Lodge in Essex, the residence of the Victorian grande dame Lady Warwick. These meetings were organised by Cole and his wife Margaret, with many future Labour Party luminaries, including Clement Attlee, in attendance (Riddell 1995, 947). Many of the delegates slept in an outhouse. One visitor recalled bumping into Clark in bohemian attire with ‘sandals and straw sticking out of his hair’ (cited in Durbin 1985, 97).

An Introduction to Increasing Returns Intensified by his family’s descent into hard times, Clark’s interest in alleviating poverty lasted all his life. Indeed, his first piece of statistical research, ‘A Graphical Analysis of the Unemployment Position 19201928’, earned the 1928 Francis Wood Prize awarded by the Royal Statistical Society’s President, Sir Alfred Flux (Clark 1929). The article was published in the same year in the Society’s journal. At the time, Britain was ailing from a prolonged post-war slump brought about by structural and macroeconomic factors. While Clark was studying for his chemistry degree, John Maynard Keynes, the Cambridge economist, ruffled feathers in the economic policy establishment by proposing public works as the solution to mass unemployment. After completing his studies, Clark was recommended to William Beveridge, Director of the LSE, who hired the young graduate as a 10 These extracts were taken from the Oxford Magazine and were kindly extracted by Sue Howson.

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research assistant at a salary of 260 pounds per annum. His tasks were two-fold. Half his time was to be devoted to a ‘Survey of London Life and Labour’, work which he described as ‘laborious’. This project was to reproduce and update the earlier detailed household survey on the London poor undertaken by Charles Booth in 1890. His other, more alluring, task was to assist the imaginative American economist Allyn Young who was then Professor of Political Economy at the LSE. Clark was beginning to feel that the economics he had been exposed to at Oxford was too theoretical, too deductive and lacking an empirical edge (Lepenies 2016, 32). Young would therefore be of remedial value. Young (1928a) had noted that reaping economies of scale was not just merely a function of the size of plant but mostly a function of ‘increased specialisation and subdivision of processes’ which could be subcontracted out to other firms (Arndt 1992). Of course, the extent of such specialisation was governed by the extent of the market, a fact made clear by Adam Smith. Concentrating purely on the national market, Young made the startling discovery that Britain needed a population of 100 million to facilitate the sub-division of processes and thereby reap economies of scale. He was obviously blind to the prospect that a small, industrialised country could, by intense specialisation on certain products, achieve such economies of scale by exporting to a global market. This explained the high level of productivity achieved by export manufacturing countries, such as Switzerland and Sweden, even though their domestic markets grew slowly. Under Young, Clark was tasked with finding empirical proof for this hypothesis using American manufacturing statistics. His research came up emptyhanded.11 Nonetheless, this preparation was to prove useful when, a few years later, Clark edited George Jones’ thesis on the comparison of US and UK industrial size and efficiency, published as Increasing Return (1933). Jones had been killed in a motor accident before finalising his Cambridge doctorate for publication. The work of both Jones and Young exerted a profound effect upon Clark’s analytical approach to economics. For instance, he imbibed Young’s dictum that there was no such thing as a value-free economics which embodied only pure analysis and description and that the purpose of economics was ‘the material welfare of mankind’ (Clark 1958, 23). Young disapproved of doctrine drawn from abstract deductive logic. In his inaugural lecture at the LSE he spoke of

11 Clark to C. Blitch, 7 December 1972, Clark Papers, UQ.

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how ‘Economic theory divorced from its functional relations to economic problems, or with those relations obscured, is no better than an interesting intellectual game … But it cannot advance knowledge for it leads up a blind alley (Young 1928b, 4–5) … Economics will have to make room for new conceptions and new sorts of abstractions if it is to make effective use of the new facts which the statisticians are uncovering’ (ibid., 10). In his association with Young, Clark enjoyed the experience of working with someone whom Keynes considered ‘the outstanding personality in the economics world’ (cited in Sandilands 2009). Young’s research was cut short in early 1929 when he died after contracting pneumonia. Yet, while Clark absorbed Young’s approach to economics, it was Nicholas Kaldor who stole the lead in applying Young’s work to support Britain’s manufacturing sector.

An Early Chance at British Politics In 1929 Clark left the LSE to take up an appointment as a research assistant with the distinguished sociologist and demographer, Alexander Carr-Saunders, the Charles Booth Professor of Social Science at the University of Liverpool. This meant doing similar work to that which he had undertaken with Beveridge, in this case looking at living conditions of the poor of Liverpool. Clark welcomed the opportunity to use applied sociology to study urban life in Merseyside. The fieldwork opened Clark’s eyes to urban squalor and stimulated his thinking about ideals for city living. He began to appreciate the use of sociology in his analysis; it also complemented his serious interest in Labour Party politics and his dream of winning a seat in the House of Commons. Clark, then just 23, had been selected to contest the almost unwinnable seat of North Dorset for the Labour Party in the general election of 1929. As the Labour Party wanted to contest every constituency in order to diminish the potency of the Liberals, Clark had little hope of success. Little is known about the electioneering activities he undertook although he received much help from his friends (Parker 1974, 227). Dalton came to Dorset to speak on his behalf. Clark had one rustic connection as the owner of a farm in Cotley. Devon. Yet, so poor was his vote that he lost his deposit. According to his younger sister Margaret, Clark had little chance

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of winning the seat because the farm labourers dare not vote for fear of losing both their jobs and accommodation.12 Elated at the election of Ramsay MacDonald’s Labour government in 1929, Clark would have been dismayed by the orthodox economic policies used by Chancellor of the Exchequer, Philip Snowden to deal with the economic crisis. Clark would again run for the Labour Party in the 1931 general election in the Liverpool constituency of Wavertree. Ernest Bevin, the powerful General Secretary of the Transport and General Workers Union, encouraged Labour voters to support the young Clark and considered his knowledge of economics and statistics would be a great asset for the labour movement. He was unsuccessful again; in a safe Conservative seat and with a swing away from the failed Labour government; the incumbent, Ronald Nall-Cain, increased his share of the vote from 65 to 78%. It was indicative of the overall election result in October 1931; the Labour Party was reduced to a rump. Yet it would be a different story in 1935 when Clark would run again as a Labour candidate for the winnable seat of South Norfolk.

12 Margaret Hinton, ‘Scenes from My Life’ Mimeo, Clark family papers.

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Colin Clark as the Labour party candidate for the seat of Wavertree in the British 1931 general election

The Economic Advisory Council After eight months working with Carr-Saunders, Clark was stunned to be invited, in March 1930, to join the Economic Advisory Council (EAC) in a junior capacity as a research assistant. Knowing him only by reputation, Keynes agreed that the appointment of Clark ‘sounds rather good’ (Howson and Winch 1977, 25). The other young economist appointed to the secretariat was Henry Hodson. The EAC, established two months before, was Prime Minister Ramsay MacDonald’s attempt to deal with the economic crisis by employing Britain’s best economists (Howson and Winch 1977). Keynes pushed for the creation of a small committee of leading professional economists to produce meaningful advice suggesting to MacDonald that ‘issues of economic diagnosis’ were ‘the sort of things

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for which economists, if they are any good at all, should be useful’ (Howson 2011, 179). The EAC had originally been the idea of Beveridge, amongst others, who conceived it as the equivalent of the wartime General Staff. It was the first time that a formal body had been established to provide economic advice to the British government (Coyle 2014, 12). Again, it was Clark’s knowledge and innovative use of statistical techniques that led Cole to recommend him (Howson and Winch 1977, 25). Cole, who emphasised the importance of unemployment policy in any recovery strategy, had asked Clark to consider making temporary estimates of Britain’s National Product or what we now call National Income (Riddell 1995, 944). Clark learned of his likely appointment when Michael Stewart, then President of the Oxford Union and a fellow Fabian, told him that he was being considered for the EAC.13 When it was announced Stewart, in jest, saluted his colleague: ‘To the most high, most mighty, and illustrious Prince Colin, a member of the Staff of his Majesty’s most honourable Advisory Council, etc., etc., etc’. More seriously, Stewart acclaimed it as ‘a most brilliant achievement’.14 Clark’s annual salary was 650 pounds; he was just 25, the youngest member of the Council secretariat and with an interest in public affairs and economic policy. He would have felt excited at being engaged in economic policy-making, even if only as a research assistant (Middleton 1998, 177). He would be employed there from March 1930 until September 1931 when he resigned. Looking back, Clark was sceptical of the EAC’s worth, describing the processes within the Council as ‘pretty farcical’ (Healey and McFarlane 1977, 4). Despite its potential, the Council was ineffective since MacDonald had a tendency ‘to immerse himself in a sort of warm bath of talk without any decisions being reached’ (Clark 1977, 85). Its main shortcoming was that it was awkwardly large, comprising twentyfour members divided into three groups including scientists ‘who knew nothing about economics’ and prominent bankers and businessmen ‘who talked too much, mostly about their own problems’ (c.f. Middleton 1998, 177). Besides the union leader, Ernest Bevin, the economists on the EAC were Maynard Keynes, G. D. H. Cole, Josiah Stamp and the 13 M. Stewart to Clark, 9 February 1930, Clark Papers, Brasenose. Interestingly, Stewart, like Hugh Dalton, became a Labour MP after three unsuccessful attempts during the interwar years. Stewart would become Lord Stewart of Fulham. 14 Stewart to Clark, 3/1930, Clark Papers, Brasenose.

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economic historian, R. H. Tawney. Hubert Henderson served as the chief economist to the EAC. Clark had first met Keynes at a party in 1929. However, it is quite possible that Clark had attended Keynes’s 1924 Sidney Ball lecture, ‘The End of Laissez Faire’, when it was given in Oxford. Keynes had made the observation that Laissez-faire could easily correct mistakes in an expanding economy; under a stagnant economy its haphazard nature could not be afforded and a planned direction in economic life was now necessary in the form of public investment (Clark 1947, 22). After the first meeting of the EAC, MacDonald asked each member to prepare a document about Britain’s economic problems and Clark, together with two other staffers, was asked to grade them. The contribution which most impressed him was a memorandum written by Tawney who noted how the countries to which Britain exported, such as Australia, had all suffered an adverse movement in their terms-of-trade and could therefore not import as much as before. The British response to this had been to engage in more domestic production with much of the industry concentrated around London. It left certain regions suffering from the idleness of their staple industries. Tawney recommended the redirection of public investment away from London to these distressed regions (Clark 1977). One errant suggestion circulated was to bundle the unemployed off to Australia and New Zealand as part of an emigration program. Clark put an end to this by detecting that the number employed in farming in New Zealand was actually falling (Clark 1984, 70). In April 1930 Clark served as secretary to a cabinet committee consisting of MacDonald, the Chancellor of the Exchequer, Sir Philip Snowden and three other ministers. It was charged with surveying the trade position in the light in the light of world trade since the war (Howson and Winch 1977, 84). On his own initiative Clark calmly wrote a long memorandum on the effects a fall in export prices had upon Britain’s economy. He estimated the number of jobs that would be created if Britain replaced her imports of manufactured goods and secondly the impact an improved terms-of-trade would have had on the economy. Instead of focusing upon more exports as the panacea, Clark concluded that even if the pre-war situation had been restored there would still be a pool of unemployed. He concluded that ‘the central feature of the economic question’ was for Britain to develop new industries producing for the domestic market. The rest of the memorandum adopted Keynes’s Treatise analysis of savings running to waste. Clark

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dismissed the idea that the unemployment was due to wages squeezing profits or that an all-round reduction in domestic costs might be the answer to the economic predicament. All this imaginative thinking was made redundant when the Prime Minister presented own submission involving a mixture of deflation and protection (Howson and Winch 1977, 84–85). Clark was also allowed to sit in on these meetings of the Committee of Economists - Keynes, Henderson, Pigou, Stamp and now Lionel Robbins, who had just taken a professorial chair at the LSE; Dennis Robertson was not invited to join, which Clark felt was a grave mistake (Healey and McFarlane 1977). The opportunity allowed Clark to imbibe the shared wisdom and become fascinated by the growing feud over policy between Robbins and Keynes. He would later write a memoir about the two men, regretting how ‘a violent quarrel’ over the imposition of import duties between them had torpedoed any hope of a united response from the economists (Clark 1977). He concluded that there was ‘wrong on both sides’ (Durbin 1985, 106). If only Cambridge and the LSE had managed to compromise on the need for British reflation, he argued, this ‘could have exerted the greatest influence for good’ and ‘the subsequent course of history’ might have been different (Clark 1977). Clark felt that Robbins was the culprit but there is some evidence that Keynes had patronised the younger man.15 Clark was asked to circulate some statistical data which compared the industrial production index with employment figures for manufacturing industries. These figures indicated that product per man year, or productivity, had shown a moderate increase during the 1920s. Keynes was interested in the figures, but the other members of the committee refused to believe them. They were pessimistic about British economic performance, assuming that Britain had not returned to its productivity levels of 1914. Much later Clark explained away their bleakness as a collective pining for the pre-war era of economic stability when everything was in its place. And, given his youth, he had a more upbeat disposition that anyone else on the Council. As Clark (1977) recalled, with the Committee of Economists beholden to preserving the Gold Standard, reflation through public works was ruled out. The other expedient was to resort to protectionism. Clark

15 A. L. Rowse to Clark, 25 September 1975, Clark Papers, UQ.

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was ‘appalled at the rapidity and unanimity’ with which the Committee, including Keynes, adopted protectionism as the solution by August 1930. Objecting to this expedient Robbins wrote a minority report. He regarded protection as doing as much harm as mass unemployment. Using data provided by French economist Jacques Rueff, Robbins argued that that Britain’s unemployment was due to excessive real wages and other rigidities. Having already examined this, Clark ascertained that this analysis was premised on the wrong price index and that it would be a difficult problem to reduce real wages, per se (Clark 1977, 88). Drawing on Pigou’s work on welfare, Clark argued that protection would lead to corruption in politics, but Keynes dismissed this, saying that a little bit of corruption was not altogether intolerable. Clark favoured devaluation and domestic expansion; the only EAC member to support him on this was Bevin. Apart from Clark showing his brilliance with economic statistics, something else emerged from the EAC experiment; Richard Kahn’s income expenditure multiplier was introduced and Clark declared that he had been there at its birth.16 In May 1930 Keynes and Cole recommended that the secretarial staff of the EAC prepare an estimate of the direct and indirect effects on employment of the maximum possible expansion in trade. Clark, along with A. W. Flux, prepared a three-page memorandum giving a quantitative underpinning of the multiplier. By positing that an increase in exports could have ‘an infinite series of beneficial repercussions’ on the level of employment, Clark knew that such a series was unlikely due to limiting factors which were at the time ‘obscure and economic theory cannot state the possibilities with precision’ (cited in Dimand 1988, 103–104). He supplied figures to Kahn which included leakages such as the marginal propensity to save and import. In April 1931 Kahn belatedly acknowledged the figures, which were ‘perfectly lovely and I am really grateful.’17 He also acknowledged Clark’s input in his June 1931 article in the Economic Journal, which put the multiplier into the public domain. Keynes would quickly use Kahn’s concept to justify the case for public works to deal with the British economic slump. 16 He later changed his mind about this saying that it was, in fact, the Australian economist, L. F. Giblin who has first made an elementary statement on the concept of the multiplier: ‘Key to Unlock one of the World’s Worst Problems Found Here’, The Telegraph (Brisbane), 10 December 1940. 17 R. Kahn to Clark, 23 April 1931, Clark Papers, UQ.

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The Committee of Economists tabled its report in October 1930. However, it was not acted upon and the British economy continued to drift along. In April 1931 MacDonald, who had now become an avowed protectionist, wanted an economist to help him produce a manifesto that would justify this position. Here was the ready-made evidence of ‘woolly thinking’ to which the City economist, Nicholas Davenport (1974, 59) feared MacDonald was receptive. MacDonald turned to Clark and proposed they spend a long weekend at Chequers, where they would prepare a document which would rewrite economic theory and end the free trade case (Higgins 1989, 305). According to Clark, he declined the invitation and, much embarrassed, submitted his resignation from the EAC.18 It was clear to him that MacDonald was beginning to lose his mind due possibly to the pressures he was facing. He would not be the last major political figure whom Clark considered half-mad or unscrupulous. Confirming this Clark was then approached by Oswald Mosley who, after resigning from the MacDonald Cabinet, had formed the New Party and invited Clark to become his economic adviser. Clark also declined, not least because of Mosley’s protectionist views. Instead he had received a better job which would place him at the centre of the economics world..

References Arndt, H.W. 1992, ‘Stubbornly Defending the Free Trade Position’, Economic Analysis and Policy, 22(2): 117–126. Brivati, B. 1996, Hugh Gaitskell. London: Richard Cohen. Castles, I. 2014, ‘Measuring Economic Progress: From Political Arithmetick to Social Accounts’, in A. Podger and D. Trewin (eds.) Measuring and Promoting Well-Being: How Important Is Economic Growth? Canberra: ANU Press: 271–280. Clark, C. 1929. ‘A Graphical Analysis of the Unemployment Position, 1920– 1928’. Journal of the Royal Statistical Society, 92(1): 74–99. Clark, C. 1947, ‘Lord Keynes’, Twentieth Century, 1(4): 20–25. Clark, C. 1958, ‘What’s Wrong with Economics?’ Encounter, 10(4): 15–23. Clark, C. 1977, ‘The Golden Age of the Great Economists’, Encounter, 48(6): 80–89. Clark, C. 1984, ‘Development Economics: The Early Years’, in G.M. Meier and D. Seers (eds.) Pioneers in Development. Oxford: Oxford University Press: 59–77. 18 Clark to S. Howson, 25 October 1977, Clark Papers, UQ.

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Coyle, D. 2014, GDP: A Brief But Affectionate History. New Jersey: Princeton University Press. Crocker, W. 1981, Travelling Back: The Memoirs of Sir Walter Crocker. London: Macmillan. Davenport, N. 1974, Memoirs of a City Radical. London: Weidenfeld & Nicolson. Dimand, R.W. 1988, The Origins of the Keynesian Revolution. Cheltenham: Edward Elgar. Durbin, E. 1985, New Jerusalems: The Labour Party and Economics of Democratic Socialism. London: Routledge and Kegan Paul. Gaitskell, H. 1960, ‘At Oxford in the Twenties’, in Briggs, A. et. al. (eds.) Essays in Labour History. London: Macmillan: 6–19. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Howson, S. 2011, Lionel Robbins. Cambridge: Cambridge: University Press. Howson, S. and D. Winch, 1977, The Economic Advisory Council, 1930–1939. Cambridge: Cambridge University Press. Lepenies, P. 2016, The Power of a Single Number: A Political History of the GDP. New York: Columbia University Press. Middleton, R. 1998, Charlatans or Saviours? Economists and the British Economy from Marshall to Meade. Cheltenham: Edward Elgar. Parker, J. 1974, ‘Oxford Politics in the Late Twenties’, The Political Quarterly, 45: 216–231. Riddell, N. 1995, ‘The Age of Cole?’ G.D.H. Cole and the British Labour Movement, 1929–1933’, The Historical Journal, 38(4): 933–957. Robbins, L. 1971, Autobiography of an Economist. London: Macmillan. Sandilands, R.J. 2009, ‘New Evidence on Allyn Young’s Style and Influence as a Teacher’, Journal of Economic Studies, 26(6): 453–479. Stourton, J. 2016, Kenneth Clark. New York: Alfred A. Knopf. Winder, R. 2017, The Last Wolf . London: Abacus. Young, A.A. 1928a, ‘Increasing Returns and Economic Progress’, Economic Journal, 38: 527–542. Young, A.A. 1928b, ‘English Political Economy’, Economica, 22(March): 1–15.

CHAPTER 3

Cambridge and Fabianism

It was Keynes who, impressed by Clark’s work for the EAC, expressly arranged for him to have a lectureship in economic statistics at the University of Cambridge. This would prove to be an inspired appointment. Lionel Robbins feared that, with Kahn providing the theory and Clark the statistics, Keynes would become all the stronger. Clark’s annual salary of 350 pounds was modest compared to that offered by the EAC; it was, in truth, a humble research position. He would work alongside Professor Udny Yule as University Lecturer in Statistics at Cambridge.1 In accepting Keynes’s offer, Clark also had to forgo another job offer, this time as Secretary of the New Fabian Research Bureau (NFRB) which had grown out of the Cole Group. However, the university post allowed Clark an entrée into the world of Keynes. The friendship between the two men can be deduced from their correspondence, especially the manner by which they addressed each other; it was always ‘Dear Maynard’, ‘My Dear Colin’. There is no doubt, too, that Keynes valued the younger man’s statistical genius. This appointment would be the making of Clark as an applied and statistical economist. His duties at Cambridge apart

1 Clark had another enticing job offer at that time as tutor to the children of the Soviet diplomat Maxim Litvinov who was then based in London; Barbara Blackman interview 1986.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_3

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from research were primarily to teach the practical aspects of statistics to economics students.

Colin Clark at Cambridge 1933

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With this appointment Clark would have a front row seat at the Keynesian revolution to which he provided some aggregative concepts. However, while a frequent participant at Keynes’s Political Economy Club which met on Monday evenings, Clark was too late to be part of the fêted Cambridge Circus or ‘meeting of minds’ which, in the early part of 1931, helped Keynes formulate his new paradigm. Yet he saw at close hand how Keynes moved from A Treatise on Money to The General Theory and outlined his role this way: ‘In the Treatise the real issue was the difference between savings and investment and after 1930 it was just the opposite - to prove that savings were brought down to the level of investment. It took Keynes a long time and much effort to make that change. I was able to watch his mind at work while it was going on; this was between 1930 and 1932’ (Higgins 1989, 298).

Clark’s Views on Economics At this point Clark’s apprenticeship in economics had been one of learning by doing rather than the study of a formal program. He had been exposed to the disciplines of chemistry, statistics, sociology and economics and knew how to present his findings in an effective way. In an address to his old school in 1950 he told students that economics was a science which employs four branches of knowledge—history, political theory, geography and demography. He added that the laws of economics were ‘indefinite and changeable’.2 Moreover, in the hierarchy of the social sciences, economics was subordinate to political science and history (Groenewegen 1994, 13). Indeed, Clark was insistent that the economist must acknowledge the supremacy of history because it embraced political, cultural and religious factors and therefore took a wider view that qualified it as ‘the coordinating science’.3 As mentioned Clark highly regarded geography, particularly at school level, because it introduced students to the basic facts of the economic world.4 He would not brook the idea of economics dominating the other social sciences. History, too, was important for Clark; he read the works of the great historians, Gibbon, Spengler and, later, Arnold Toynbee who was

2 ‘World Economic Development’ The Wykehamist No 964, 31 July 1950, p. 164. 3 Clark to Kuznets, 31 May 1950, Clark Papers, UQ. 4 ‘The Teaching of Economics’, Economic News, 11(9) (1942).

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his favourite. And he also upheld the teaching of economics at Oxford as the ideal model where students were exposed to moral philosophy, politics and modern political history. By contrast, Clark lamented that economics was studied at Cambridge in isolation from the social sciences; this led, he told Simon Kuznets, to ‘brilliant but sometimes unbalanced results’.5 Much later Clark praised Geoff Harcourt for attacking the intellectual imperialism of economists.6 Nor was economics, he felt, a suitable discipline for school students. He wrote ‘The complex nature of economics science, which consists in part of empirical observation, in part of mathematical deduction, and in part judgements upon human morality, makes it one of the most difficult subjects to teach’.7 He believed that economics should only be taught at postgraduate level and only to students who possessed knowledge of differential calculus.8 These reflections came from someone with no formal qualifications in the discipline but who revelled in it. The study of long-term economic phenomena, Clark insisted, should be undertaken with an appreciation of other social sciences, especially geography, demography and history. Clark noted how his American counterpart, Simon Kuznets, upheld this. They had begun corresponding after Kuznets (1933) favourably reviewed Clark’s first book The National Income 1924–1931. Clark told Kuznets that long-period trends and their analysis were being neglected by universities.9 He focused on geographical economics as a corrective to the one-sided nature of macroeconomics and econometrics which had squeezed economic history and geography from the syllabus. Kuznets agreed, decrying the pressure for quick results and not being able to cross disciplinary boundaries. But Kuznets also warned Clark that he was in danger of underestimating ‘the importance of the technological revolution as a factor of economic growth’.10 He agreed, however, that there should be a more intensive study of the processes of economic growth rather than just its quantitative aspects.

5 Clark to Kuznets, 31 May 1950 Clark Papers, UQ. 6 Clark to G. Harcourt, 18 April 1979, Clark Papers, UQ. 7 ‘The Teaching of Economics’, Economic News, 1942. 8 Ibid. 9 Clark to Kuznets, 31 May 1950, Clark Papers, UQ. 10 Kuznets to Clark, 5 July 1950, Clark Papers, UQ.

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Clark’s position at Cambridge involved working in the Marshall Library as a practical economic statistician and taking undergraduate classes in the social and economic aspects of the economic syllabus. He persuaded the university to buy a Monroe Calculating Machine for him to use with his students. A reference provided earlier by Robbins testified to Clark’s ability to teach economic statistics: ‘Mr. Clark has the qualities of the ideal university lecturer. He is lucid and clear; he is original and stimulating; the students coming under his influence would feel that they are being brought into close contact with those frontiers of our science where new work is being done’.11 Clark’s approach was that many of the laws of economics could be deduced from comparative observation rather than from an a priori position.

Clark as Teacher According to one of his postgraduate students, (Sir) Alec Cairncross (1998, 44), Clark had a habit of ‘facing the blackboard and talking inaudibly to it’ but was a fine supervisor. He showed students ‘how to play with statistics’ (Cairncross 1988). Indeed, Cairncross insists that Clark was the person ‘who really inspired most of the research workers at the time’ (Tribe 1997, 39). Both Cairncross and Clark were working on capital investment and both were trying to marry economics and statistics; this was before the discipline of econometrics had been identified. It meant stumbling around in the dark, trying to build, from imperfect material, a conception of how the economy actually worked. Using a rough conceptual framework, it also meant proposing plausible theories which had to be reconciled with relevant statistics (Cairncross 1998, 45). While one student, T. W. Hutchison, thought that Clark ‘was a pretty poor lecturer’ (Tribe 1997, 128), two other postgraduate students of Clark, (Sir) Hans Singer and (Sir) Richard Stone, attribute some of their worldly success to their instructor. Another of Clark’s students, V. K. R. V. Rao was awarded a PhD from Gonville and Caius College, Cambridge for his doctoral thesis on ‘The National Income of British India, 193132’. Lorie Tarshis’ doctorate on ‘The Determinants of Labour Income’ was initially supervised by Clark before he left for Australia.

11 Letter of reference for Clark by Robbins, 2 October 1929, Clark Papers, UQ.

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Sir Hans Singer’s recollections of his supervisor were especially intriguing: ‘It was a very different Colin Clark from the later Colin Clark, very different, yes’ (Tribe 1997). At the time Clark, already of some repute, was engrossed in his work on national income and wealth comparisons between nations. Singer (1977, 60) recalls that Clark then ‘was an ardent non-religious person living in great disorder in a room on the spot in Cambridge which was soon to be demolished for the building of the Arts Theatre’. In supervisions, Clark was happy to talk, which Singer found ‘was more interesting’. When students arrived for a tutorial demonstration there would be no empty seats. Clark would simply overturn chairs full of materials and beckon the students to sit; it was a ‘very informal way’ to conduct supervisions. Like Stone, Cairncross and Rao, whose work Clark supervised, Singer was full of praise for his overseer: ‘I owe him a great deal, he was a wonderfully inspiring man’ (Tribe 1997, 60). Singer later wrote his doctorate on ‘Materials for the study of Ground Rent’ which established that for the period 1945 and 1913 the rise in rents were due to urbanisation and increase in incomes (Chandavarkar 2003). Another student Clark supervised was Jean Polglaze from the University of Melbourne who was studying investment spending and how it related to the business cycle. Clark rated her abilities highly and recommended she travel to New York to continue her studies under Simon Kuznets at the National Bureau of Economic Research. She told Douglas Copland that ‘Mr Clark is never prepared to let a subject drop until it’s settled’.12 While not one of his students Angus Maddison recalled reading Clark’s Conditions of Economic Progress as a schoolboy and being ‘fascinated at the way it quantified what was going on in so many countries’ (cited in Castles 2014, 351). Two Australian economists who encountered Clark at Cambridge in 1935 mistook him for a student. One of them, Joe Burton, recalled ‘I wondered who this rather awkward and gawkish-looking undergraduate is with (Torleiv) Hytten. However, he didn’t seem to be a slouch when we began to talk to him’.13 Another economist who considered Clark to be his ‘greatest influence’ was the Nobel Economics laureate Sir Richard Stone who was particularly

12 J. Polglaze to D. Copland, 17 February 1937, FECC, UMA. 13 J. Burton to D. Copland, 23 May 1935, FECC, UMA.

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attracted to Clark’s pioneering effort in deriving national income. Before becoming Clark’s protégé at Cambridge he had come to know Clark socially, finding him ‘a very amusing companion, unstuffy to a degree’. Stone (Pesaran 1991) noted that Clark was quite ‘a hardy fellow’ and recalled how both had once gone on a week-long canoeing trip along the River Severn. After inclement weather, Stone quit halfway through with a high temperature; Clark promised to go on alone and meet up with him in Cambridge. A few days later Stone spied Clark on a Cambridge street and hailed him: ‘But I thought you were going on’. Clark shot back ‘I did but the boat sank so I decided to abandon her’ (Pesaran 1991). Clark enjoyed the great outdoors, rambling and camping out, fuelled by pints of beer. He told one of his sons, David, that ‘As a young man, I generally found I could do about 30 miles to the gallon’.14 In fact, he apparently walked at a pace his sons could rarely match.

Mixing with the Fabians In the same year that Clark secured an appointment to Cambridge, he joined the Fabian Society. He quickly assumed a position on the executive committee of the New Fabian Research Bureau (NFRB), which consisted mostly of young economists engaged in teaching and researching forms of democratic socialism. Through his networks in the early 1930s, Clark became private secretary to Clement Attlee, a Labour MP and junior minister in the MacDonald Labour government. He admired Attlee’s detachment, brevity and organisational ability. Clark helped Attlee prepare a paper on British industry in July 1930 which called for a Ministry of Industry ‘to control the development of the nation’s economic life’, emphasising rationalisation and the concentration of production into more efficient units (Pearce 2014, 38). In 1931 Attlee passed on to Clark a company director’s suggestion of producing a business magazine along the lines of American equivalents.15 Attlee felt that Clark’s facility with economic statistics boded well for the venture. While the magazine failed to launch, the episode suggested that Attlee and Clark were close colleagues.

14 Author’s conversation with David Clark. 15 C. Attlee to Clark, 9 January 1932, Clark Papers, Brasenose.

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Looking back on the 1930s, Clark would cryptically write that remedies for the economic malaise always contained the word ‘plan’. Indeed, one of the Fabian and Society for Socialist Inquiry pamphlets which Clark (1931) helped to write was actually on National Planning; in it he foreshadowed the possibility of creating employment in distressed regions of England rather than in London and the South East. Apart from drafting the Labour Party conference resolutions and its 1931 electoral manifesto, Clark provided statistical help to Labour politicians Hugh Dalton and Ernest Bevin who were both working on a national development plan known as Socialism and the Condition of the People. This included provisions such as a 40-hour working week, pensions for the over 65s and disability pensions (Durbin 1985, 218–219). In 1932 Clark and Bevin co-authored a NFRB paper on achieving greater executive control over economic policy in a future Labour government. Since such a government would be a big-spending one, the authors feared the power of the Treasury would undermine its intent. So, the paper proposed that the Treasury be emasculated, replaced by a National Investment Board and an Industrial Development Board charged with the provision of funds for public authorities, state enterprises and industry. Overriding this would be an expert National Economic Planning Board. The blueprint was couched in simple and pragmatic language even though it contained dramatic proposals capable of undertaking great social and economic change (Cronin and Weiler 1991, 59). Dalton was further assisted by Clark in 1934 in writing The Next Labour Budget. For this, Clark costed Labour’s proposed social services; he also proposed a separation of revenue and capital accounts and identified cyclical variation in the ratio of loans to taxation for financing public works (Durbin 1985, 114). Dalton was always more grounded than other socialist thinkers in the Labour Party and attended a dining fraternity for party members with connections in the City. The XYZ Club met to discuss financial and economic questions and to educate the party on the ways of high finance (Brivati 1996, 31–32). With the possibility of Clark contesting the seat of South Norfolk at the 1935 general election, Dalton advised him on how to present himself to Labour Party officials. He suggested that Clark mention his experience with planning, his work with the EAC and his position at Cambridge.

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He even advised him how to wear a tie to impress the electoral selection panel.16 By the summer of 1933, Clark, James Meade and Austin Robinson, with the advantage of regularly meeting Keynes, had largely absorbed his conceptual framework which explained the persistence of unemployment (Durbin 1985, 138). In a pamphlet for the NFRB entitled The Control of Investment (1933b), Clark attributed the 1930s depression to an excess of savings over investment (Durbin 1985, 142). Clark also found an outlet for his work on investment and savings by contributing a chapter to a volume prepared by Cole entitled What Everybody Wants to Know About Money (1933a). Nine graduates from Oxford, including Harrod, Hugh Gaitskell, Evan Durbin, E.A. Radice and Clark contributed to this book. In his chapter, Clark (1933a) argued the case for public works and a wage policy to buttress aggregate demand. Interestingly, he argued that a deficit budget might have a harmful impact on business confidence. Robert Dimand (1988, 79) argued that, of all those who had contributed to the volume, it was Clark who demonstrated an acute awareness of the income expenditure multiplier though he gave no quantitative estimate of its power. Within the Labour movement, Clark, together with Durbin, Gaitskell and Douglas Jay, laid down the intellectual foundations for Labour’s socialist platform using Keynes’s new theory. They emphasised especially the link between investment and employment in Labour’s redesigned spending programs to assist the unemployed (Durbin 1985, 251). However, their policy recommendations were quite conservative and Clark, who wrote a statistical appendix to the report, identified a continuing high rate of structural and frictional unemployment. Meanwhile he continued his work along with Gerald Shove and Joan Robinson for the Labour Party’s Finance and Trade Committee, chaired by Dalton (Durbin 1985, 98). On behalf of this Committee, Clark continued to work on the outline of a National Investment Board, which would be funded by taxation, but was vague on the issue of nationalisation (Durbin 1985, 164). Keynes welcomed the report but felt that the authors had not gone far enough in the sense of controlling the volume of investment (Winch 1971, 353).

16 Dalton to Clark, May 1935, Clark Papers, Brasenose.

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Marriage and a Last Chance at Politics 1935 was an important year in Clark’s life. On July 28 he married Marjorie Tattersall, fifth daughter of Hugh Herbert Tattersall, a master mariner, and his wife, the former Lillian Elizabeth Webb. The young couple met through leftist politics; Marjorie was propaganda secretary to the Hampstead Labour Welfare Club, associated with the LSE, and had worked at the League of Nations in Geneva. She had stood as a labour party candidate for president of the student union at the LSE where she was completing an economics degree. Apparently, she won the vote but soon realised that the communists were behind it and denounced them for it; when the vote was re-cast she lost partly because the communists had turned against her. The couple married in Clark’s prospective electorate at St Peter and St Paul church, Carbrooke, near Watton, in Norfolk. The best man was John Parker, General Secretary of the Fabian Society, later to become a Member of Parliament and eventually Father of the House of Commons. The wedding reception was held at Finella’s, Cambridge, with an invitation to guests that read ‘No wedding presents, please’. Keynes, who could not attend, sent three dozen bottles of beer (not champagne!). The couple honeymooned on a camping holiday in Switzerland.

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Colin and Marjorie Clark 1935 Mary Marshall once told Keynes that his marriage to Lydia Lopokova was the best thing he ever did because it gave him an anchor and allowed

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him the creativity which led to the writing of The General Theory. One could say the same about Clark’s marriage to Marjorie Tattersall. She adorned his life, with intelligence and beauty to charm even the misogynist Pigou to accept lunch at the Clark household. And she challenged Clark at a critical juncture in his life. One morning before the wedding, in March 1935, she came to see Clark in his flat and found him still lying in bed at 11 o’clock. ‘You’re leading a pretty idle life!’ she chided him. He sheepishly responded ‘That may be true’; never again would he be criticised for indolence.17 It directly led to Clark taking his canoe up the River Cam and mulling over ‘a casual but profound conversation’ with Austin Robinson about how to commence a lecture in economics to new students (Cairncross 2016, 40). Robinson suggested that perhaps the best approach was to ‘tell your class that per head real income in India was only about a quarter… of per head income in Britain. What were the causes of this situation?’ (Cairncross 2016, 40). It was a great question which set Clark’s mind racing. Armed with a few sheafs of paper, Clark scribbled out the outline of what would become his most celebrated work, The Conditions of Economic Progress (1940). The title was derivative of Marshall’s intended volume entitled Progress: Its Economic Conditions and what Marshall (1961, 461) called ‘the high theme of economic progress’. While it took Clark only one hour to map out the project, the final work took five years to reach fruition, interspersed by three other major works over the period. Hugh Dalton’s wife, Ruth joked that, with Clark torn between spending his time in Cambridge and London, raising pigs in Devon and electoral work in Norfolk, his ensemble of interests had become quite ‘bewildering’.18 In 1935 he contested the November general election as the Labour candidate for South Norfolk. ‘Colin Clark, MA’ was described as an ‘uncompromising’ socialist. When it was first announced that he had secured preselection, Attlee congratulated him saying that this was a seat that could fall to Labour, adding ‘We want you in the House’.19 The

17 This incident is recalled in all of Clark’s three major interviews (Healey and McFarlane 1977, 9). 18 R. Dalton to Clark, 1 March 1935, Clark Papers, Brasenose. 19 Attlee to Clark, 25 January 1933, Clark Papers, Brasenose.

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parliamentary salary at the time was 400 pounds a year. More importantly the Labour platform, For Socialism and Peace, was about the party affirming nationalisation and bore the imprint of the NFRB and XYZ Club with its commitment to limited economic planning (Ellis 2018, 494). Clark ran on a platform of Fabian policies such as extending unemployment insurance to farm workers, the nationalisation of land and the reorganisation of agricultural marketing. Even Keynes got into the act by writing a letter of support for Clark and urging Liberal voters to consider that he ‘would be an exceptionally well-qualified member of parliament’, given ‘the sound knowledge which he brings to economic and social problems which should be the subject of early legislation’.20 One newspaper described Clark as ‘the son of a Plymouth merchant … having the unconcerned untidiness of the intellectual … plays the accordion … [and] is interested in farming’. Clark polled 13,000 votes against the incumbent James Christie, representing the MacDonald-led National Government, who polled 18,000 votes. On a grander scale, the defeat of the Labour Party in the 1935 general election was a bitter one for Clark and his colleagues, given the amount of time they had invested in designing an effective economic policy (Durbin 1985, 223). It was a policy that sang the praises of free trade, lower taxes and higher wages for agricultural workers. While Hugh Dalton retained his seat in the House of Commons and John Parker won for the first time, Gaitskell and Douglas Jay failed, like Clark, in their bid to win seats (Durbin 1985, 114). In conceding defeat, Clark remarked that he had ‘become an old hand at losing elections and that this was a privilege his opponent had yet to experience’.21 It had begun to dawn on him that he was perhaps not cut out for political life, that he did not have ‘the right personality’ for politics. He realised that he was at heart ‘a scientist. Whereas politicians have to deal with action. It is a fundamental distinction’ (cited in Higgins 1989, 297). It also dawned on him that the National Government was likely to be in power well over the horizon. In fact, had Clark won, he would have been a member of the House of Commons for a decade as the next general election would not be held until July 1945. He went back to his rooms at

20 Keynes to W. B. Goodbody, 31 October 1935, Clark Papers, Brasenose. 21 Eastern Daily Press, 16 November 1935, Clark Papers, Brasenose.

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Cambridge and, in time, would recall what Keynes told him about politicians after going on tour with them: ‘Politicians are unspeakable people. Do you know, they say the same things in private as they say in public? Their stupidity is inhuman’ (Clark 1951, 8).22 After the election, Clark remained the endorsed Labour Party candidate for South Norfolk.23 Apart from his continuing work with the NFRB, he would, a short time later, find another outlet, which he called a ‘scientific’ one, to vent his labourist faith. As an economic advisor he would associate again with politicians, but this time in a far-off land. A more immediate compensation for his electoral loss came when Marjorie gave birth to a son in 1936. This child, christened Gregory, was the one whom Keynes famously blessed, while on a visit to the Clark farm in Devon, likening the hairless babe to a piglet (Clark 1983). More seriously, Marjorie told her mother that having a baby while not being rich underlined the fact that most mothers ‘have a hell of a life’.24 Indeed she later told a public gathering of women that the mothers of large families are the poorly treated people in society.25 Things would soon change for the better. In 1937 Clark was offered a chance to lecture in Australia and would take a sabbatical to see the land of which his father had so often spoken.

References Brivati, B. 1996, Hugh Gaitskell. London: Richard Cohen. Cairncross, A.K. 1988, in Ironmonger, D., J.O.N. Perkins and Tran Van Hoa (eds.): 11–19. Cairncross, A.K. 1998, Living with the Century. Fife: Lynx. Cairncross, S. 2016, Austin Robinson: The Life of an Economic Advisor. London: Springer. Castles, I. 2014, ‘Report on Human Development: Lies Damned Lies and Statistics’, in A. Podger and D. Trewin (eds.) Measuring and Promoting Well-Being. How Important Is Economic Growth? Canberra: ANU Press: 341–367.

22 Geoffrey Barker, ‘The Truth and Keynes’, The Age (Melbourne), 1983. 23 The seat did change hands in the general election of 1945 when Christopher Mayhew

won it for the Labour Party. 24 M. Clark to L. Tattersall, 6 October 1936, Clark family letters. 25 ‘Mother of large family is the most badly treated person on Earth, says Mrs. Colin

Clark’, The Telegraph (Brisbane), 10 May 1941.

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Chandavarkar, A. 2003, ‘Sir Hans Singer: The Life and Work of a Development Economist by D. John Shaw’, Economic Development and Cultural Change, 52(1): 237–239. Clark, C. 1931, National Planning, SSIP Pamphlet 5: London. Clark, C. 1933a, ‘Investment, Savings and Public Finance’, in G.D.H. Cole (ed.) What Everybody Wants to Know About Money. London: Gollancz. Clark, C. 1933b, The Control of Investment, NFRB Pamphlet 8. London: Victor Gollancz. Clark, C. 1940, The Conditions of Economic Progress. London: Macmillan. Clark, C. 1951, ‘John Maynard Keynes’, Economic News, 20: 6–7, 1–8. Clark, C. 1983, ‘Recollections of Keynes’, Economic Papers, 2(3): 33–41. Cronin, J. and R. Weiler, 1991, ‘Working-Class Interests and the Politics of Social Democratic Reform in Britain, 1900–1940’, International Labour and Working-Class History No 40. The Working Class and the Welfare State: 47– 66. Dimand, R.W. 1988, The Origins of the Keynesian Revolution. Cheltenham: Edward Elgar. Durbin, E. 1985, New Jerusalems: The Labour Party and Economics of Democratic Socialism. London: Routledge and Kegan Paul. Ellis, C. 2018, ‘Evan Durbin (1906–1948)’, in R.A. Cord (ed.) The Palgrave Companion to LSE Economics. London: Palgrave Macmillan: 487–514. Groenewegen, P.D. 1994, ‘The Making of Good Economists; Reviewing Some Consequences of Colin Clark’s Life and Practice’, Australian Quarterly, 66(1): 7–24. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Department of Economics Working Paper 12. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Kuznets, S. 1933, ‘Review of the National Income 1924–31 by C. Clark’, Journal of the American Statistical Association, 28(183): 363–364. Marshall, A. 1961, Principles of Economics. variorum edition 2 vols. London: Macmillan. Pearce, R. 2014, Attlee. London: Routledge. Pesaran, M.H. 1991, ‘The ET Interview: Professor Sir Richard Stone’, Econometric Theory, 7(1): 85–123. Singer, H. 1977, in K. Tribe (ed.) Economic Careers: Economics and Economists in Britain, 1930–1970. London: Routledge. Tribe, K. 1997, Economic Careers: Economics and Economists in Britain, 1930– 1970. London: Routledge. Winch, D. 1971, Economics and Policy. London: Fontana.

CHAPTER 4

Becoming the World’s Economic Statistician

David Clark once asked his father the difference between GNP and GDP. ‘I invented GNP’ was his sole reply, expecting his son to research it for himself.1 This concept made its appearance in 1937 in his second book on national accounting entitled National Income and Outlay. Building on the work of Sir Arthur Bowley and Sir Josiah Stamp (1927), Clark is rightly credited as one of the leading creators of national income accounting although his methods and manner were ‘somewhat unconventional’ (Patinkin 1976, 1116). It was also a lonely struggle. Writing in the third person, Clark (1932, v) recalled that the hard spadework was ‘left entirely to the unaided efforts of a single individual with a number of duties to perform. The only clerical assistance available was that which he cared to pay himself’. The Australian economist Duncan Ironmonger goes so far as to call Clark ‘the father of the national accounts’ because he was the first to measure national product, its growth and distribution; his forbears had only looked at measuring national wealth. Geoff Tily (2009, 343) credits Clark as being ‘the world leading economic statistician’ in the 1930s because he pioneered economic forecasting by analysing quarterly movements in GNP. Two later works on 1 David Clark, communication with the author.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_4

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the origins of GDP, one by Diana Coyle (2014) and the other by Philipp Lepenies (2016), correctly identify Clark as a pioneer of national income and expenditure estimation. Other accounts of the origins of national income accounting and GDP usually attribute these concepts to Simon Kuznets, with Clark sometimes entirely written out of the history (Lepenies 2016, 32). This was to be a recurring pattern over much of Clark’s life and work. While the power and promise of national income accounting was brought to the attention of Whitehall by Clark, the civil service was reluctant to take the intellectual lead (Tily 2009). Indeed, Clark’s bid to galvanise the authorities into investing more effort into national income accounting met with little response. The United States assumed world statistical leadership when the Senate commissioned Kuznets to undertake a comprehensive study of the national product between 1929 and 1932. Meanwhile, in Britain, the Treasury churlishly refused to equip Clark with a calculating machine for his work with the EAC and the Committee of Economists (Patinkin 1976, 1115). A memorandum written for the EAC by Keynes, requesting a calculating machine to process economic statistics went unheeded. The 1931 Macmillan Committee on Finance and Industry had also recommended a more serious effort at collecting economic statistics. Clark had helped prepare some tables for the Committee and, in April 1931, Keynes sent Clark a draft of his recommendations to the Committee. He added: ‘I should be rather grateful if you would look through it and let me know and let me have any criticisms or further suggestions. There is rather a chance for getting a weighty recommendation in favour of improved statistics’.2 It was an ironic remark because, as Patinkin (1976) repeatedly shows, Keynes, despite his encouragement of Clark, was strangely ambivalent about the worth or veracity of the aggregate estimates. This might have had something to do with the critical, almost hostile, review of Clark’s first book, The National Income, 1924–1931. Even as late as 1939, the British Treasury relied upon the unofficial estimates of national income prepared by Clark and others. It was an advance, nonetheless, on the days when some Treasury officials regarded such estimates as ‘all hooey’ (Higgins 1989, 299). Behind this attitude was the belief that the figures produced by Clark should not be accepted without

2 Keynes to Clark, 17 April 1931, Clark Papers, UQ.

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considerable hesitation. While Patinkin (1976) paints Keynes as a diffident supporter of Clark’s work he did, as editor of the Economic Journal, publish five articles by Clark on national income accounting during the 1930s.

How Did This Aspect of Clark’s Research First Begin? Apart from his first published work with the Royal Statistical Society, Clark’s foray into national income accounting began when he gave a paper at Cambridge in May 1931 which was subsequently published in the Economic Journal.3 This article, his first in an economics journal, was entitled ‘Statistical Studies relating to the Present Economic Position of Great Britain’ (1931) and was generated from work he had undertaken for the EAC. One of its findings was that the rise in unemployment could be entirely attributed to the loss of exports, the contraction of the capital goods industries, and the increase of people entering the labour market. Keynes encouraged Clark to publish his research on national income by informing Daniel Macmillan about the young statistician’s work.4 Keynes told him that Clark’s forensic work had already had convinced him that ‘He is a bit of a genius: almost the only economic statistician I have ever met who seems to me quite first-class. He is quite young and this is his first work’ (Patinkin 1976, 231). Clark’s first book, The National Income, 1924–1931, published in 1932, was, according to Angus Maddison (2004), an attempt to map the gyrations of the business cycle with quarterly estimates of national income. Clark’s accomplishment was a major advance on the work of Bowley and Stamp (1927), which had been confined to earnings and taxes in 1924. They had concluded that home-produced real income per head was very nearly the same then as it was in 1911. After estimating the total of national income, Clark (1932, vi) looked at how it was ‘produced, distributed and spent’. He also looked at government revenue and expenditure and at aggregate borrowing. For the first time a distinction was made between national product and national income. The

3 Keynes to Clark, 26 May 1931, Clark Papers, UQ. 4 Keynes to Clark, 5 December 1931, Clark Papers, UQ.

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book also attempted to put forward estimates of the fundamental equations of Keynes’s Treatise from actual data in a bid to explain economic fluctuations from 1925 to 1931. In relation to Keynes’s works, the data of The National Income, 1924–1931 were used to support the Keynesian identities with empirical data. These identities included Saving and Investment, aggregate costs of production compared with the general price level of output and an estimation of the multiplier. G. D. H. Cole praised the book, especially the last section, where Clark attempted ‘to make the Keynes’s formulae flesh and blood’.5 In this respect, Philip Sargant Florence said Clark’s empirics would be a proud achievement for the Cambridge School of Economics if it gave Keynes’s theory added force.6 This was true but Clark only upheld that Keynes’s theory of money was intrinsically superior to Hayek’s alternate model because his concepts were more easy to attach quantitative measures to (Clark 1932, 138–139). Afterwards, Clark regarded Hayek and others from the Austrian School as too ready to reject statistical and econometric research (Clark 1978, 6). Henry Phelps Brown (1933, 416) described the book as ‘brave’ and ‘remarkable’. In his exposition, Clark showed that in 1931 the level of saving vastly exceeded the level of investment with the imbalance due to the depression and the preference of the saving classes to leave their balances idle. This under-investment begged for an increase in public spending to put these productive resources to work. When Keynes read the book, he wrote ‘I think it is excellent. An enormous step forward. I hope it is selling all right. You have quite convinced me that gross output, gross investment, gross savings, etc. is the natural way to work and not the net, and I have been re-writing my definitions and equations on these lines’. Clark replied ‘Dear Maynard, this is really rather fascinating. It certainly beats physics’ (Keynes 1983, 58–59). Clark’s work on the definition and measurement of the dynamic change in aggregate economic activity helped Keynes to quantify his macroeconomic conception. After being convinced by Pigou, Clark had derived GNP by deducting indirect taxes and depreciation allowances, a measure which was more convenient to handle than mere national

5 G. D. H. Cole to Clark 1932, Clark Papers, Brasenose. 6 Florence P.S., ‘Statistical Economics’, The Cambridge Review, 18 November 1932.

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income and an attempt to reconcile his income totals with his estimates of expenditure. Alfred Marshall once said ‘Statistics are the straw from which I, like all economists, make my bricks’. As such, Clark (1932, vi), drawing upon his experience with the EAC, lashed out at the dreadful state of British economic statistics. In the foreword to his book he complained that it was, indeed, a ‘weary’ business to ‘make bricks without straw’ and that it was time for ‘a little plain speaking’ about the ‘disgraceful condition of British official statistics’. He urged ‘the centralisation and proper coordination of the Government’s statistical work, the form of administration adopted in nearly every foreign country and in the British Dominions’ (Clark 1932, vii). He also noted that publication of figures on industrial profits had been resisted by the Federation of British Industry as an act of ‘deliberate obscurantism’ to fortify their wage negotiations. That remark led the Federation to threaten to take Clark to court unless he retracted. He brushed this aside. Much later, he was staggered to discover that an official government study of national income had been published in 1924 showing figures on factor rewards. This report had not been released because the government had censored it, not wanting to antagonise employers who felt its dissemination would incite militant wage demands (Clark 1984, 59). Most newspaper reviewers praised Clark’s assiduous research, including the generation of total money income, its distribution among the classes and the contributions made by the productive factors. The increasing role of personal services, transport and distributive trades was also highlighted. He identified the rising proportion of national income taken by salaries. It was interesting that, at this time, Clark did not think the threatened decline in the population would undermine national income, arguing that the gain in productivity from a more mature workforce could be regarded as a form of ‘biological capital’. But Clark’s book did not impress everyone. Sir Alfred Flux, the British Government’s chief statistical advisor, did not agree with Clark’s arithmetical approach of adding up the incomes of the classes; he was wedded to his own method of adding up the net products of agriculture and industry with only the crudest allowance made for services. Sir Arthur Bowley (1933, 372) wrote that ‘There could be no confidence … in the results, especially as the arguments are difficult to follow’. There was a scathing review of the book by Ernest Snow, a mathematician from the

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Royal Statistical Society, who observed that it was not an easy book to review: The main defect of Mr Clark’s work is that he does not seem to possess sufficient critical faculty to criticise his own results as they are reached and … to re-examine the data for the purpose of ascertaining if there is a concealed “snag” in them. In dealing with material of the kind handled in this investigation it is particularly necessary that the results should be examined at every stage and discarded if they lead to conclusions which are obviously untenable. This weakness is prominent almost from the start of the book. (Snow 1933, 110)

Put simply, Snow challenged the whole statistical basis of Clark’s work. But Clark (1933a) would have none of it and defended his methodology in a second article in the Economic Journal with another direct rebuttal appearing in Journal of the Royal Statistical Society (Clark 1933b). Snow was not convinced by Clark’s response where he compared his estimates of national income with those of his predecessors, Sir Josiah Stamp and Sir Arthur Bowley, and also addressed criticisms about his work. Clark pointed out that he was the only statistician to argue confidently that Britain’s national income was far higher in 1929 than it had been in 1924 when everyone else, including government officials, disputed this: ‘I think it is only fair that I should now be able to claim the barren privilege of saying “I told you so!”’ Speaking on behalf of the editorial board of the Journal, Snow was unmoved by Clark’s defence of his extrapolation and estimations, concluding: ‘There is nothing in Mr Clark’s article to change our view that his methods are so faulty that his results must be omitted in any serious discussion on the question of national income’ (cited in Clark 1933b, 658). A more sympathetic and knowledgeable reviewer of Clark’s work was Simon Kuznets (1933, 363–364). He praised The National Income, 1924–1931 as ‘an assiduous, and often brilliant, attempt to fit a vast body of heterogeneous data into a consistent picture of a country’s national income over a disturbed period’ and ‘an effective stimulus towards further analysis and enrichment of available information as well as towards quantitative testing of widely current economic generalizations’. Apart from rebutting Snow, Clark (1933a) exhibited techniques to demonstrate changes in national income using either the expenditure

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method or the income method. This allowed him to make quarterly estimates of national income from 1927 to 1933 and not only to interpret this as a sign of macroeconomic progress but also to discern the nature of consumption and investment expenditures. Clark discovered that consumption was relatively stable and noted how investment in stocks had played a significant role in the recent depression.

National Income and Outlay (1937) This was a more ambitious and more comprehensive undertaking than his earlier effort; the title alluded to expenditure flows. Only two paragraphs were retained from the 1932 publication. The new work met with overwhelmingly positive reviews and Clark was now deemed to be the authority on the subject. In the foreword (Clark 1937, vi), he lamented that, since his last effort, ‘no other writers had made any contribution to the subject of the determination of the national income’. Triggered by a rejection for research assistance from the Rockefeller Foundation, Clark (1937, vii) bemoaned the fact that he had to undertake the estimates single-handedly and to pay for statistical assistance out of his own pocket. Yet this area of work was one of the most important in the field of statistical economics. He called, therefore, for more teamwork to ensure that Britain could match the extent and precision of German and American attempts at measuring national income. For effect, he added ‘If the saying is true, that economics is eventually capable of benefitting the human race as much as the other sciences put together, it must be equipped not only with scientific spirit, but also the financial resources, of the older social sciences’ (Clark 1937, vii). Echoing his mentor Pigou, Clark opened by reminding readers that the purpose of economics was the study of the possibilities of increasing national income, reducing income inequality and stabilising economic activity. The usefulness of National Income and Outlay lay in its presentation of aggregates such as output, consumers’ expenditure, investment expenditure, government revenue (including for the first time, indirect taxes) and expenditure and macroeconomic relationships. It again measured aggregate economic activity for Britain over the three dimensions, income, expenditure, and production from the years 1929 to 1936. He revised his definition of national income to include the receipts from indirect taxation. For the first time, Clark showed quarterly movements in national income from 1929 to 1936 and demonstrated the importance

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of national accounts as a tool of economic policy. He showed how the current generation had prospered by the mere fact of the changing age profile of the population. He demonstrated technical skill in making some allowance for the services of owner-occupied dwellings and also making a ‘deduction for any demonstrable exhaustion of natural resources’. And he demonstrated an analysis of income distribution and its redistribution through taxation and transfer payments, industrial structure and sectoral value added, cyclical movements in prices and production, as well as the impact of changes in the terms of trade and income from abroad. He also made an allowance for the cost of government services valued at shadow market prices. There were several tantalising insights in the final chapters of National Income and Outlay. The role of accumulation in economic growth, Clark argued, was a necessary but not sufficient condition for economic progress. Clark (1937, 272) summed up his findings: ‘I believe the facts have destroyed the view up till now generally prevalent, that the rate of economic growth was primarily dependent upon the rate at which capital could be accumulated. The very rapid expansion in productivity at the present time is taking place at a time of heavily diminishing capital accumulation’. He found that net investment in Britain fell from 8.1% of national income in 1924, to 7.2% in 1929 and 6.9% in 1935 (Clark 1937, 185). Clark put forward factors such as entrepreneurialism, expertise, skills and technical education to explain rising productivity. Of course, there was still a role for investment to replace obsolete capital. Interestingly he noted that the well-to-do were not saving as much as their predecessors. He also alluded to the fact that economic progress might mean inequality in the distribution of income and also economic instability. The Economist , which had been critical of his 1932 effort, said that Clark’s second attempt was ‘likely to be the standard work for many years to come … this book is a statistical reference book of inestimable value to the economist and, in addition, it provides material for the economic historian and economic theorist. In his breadth of interests Mr Clark shows himself to be a real social philosopher’.7 Roy Harrod hailed Clark as one of the most brilliant and original scholars to came out of Oxford since the First World War. He described his work as ‘[one] of prodigious 7 This is cited in ‘Economics Lecturer Mr Colin Clark’s Standing’, The West Australian, 22 September 1937.

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courage and prodigious industry’ dealing with ‘a knowledge of the wider problems of economics’ and as ‘a treasure house of precious information’. He ascribed the secret of Clark’s success to the fact that he regarded economics as ‘a pastime’ (Harrod 1937, 651). Another reviewer Henry Phelps Brown (1937, 333) in the Economic Journal praised it as ‘a great achievement’ which ‘brings us within sight of the day when the pulse of economic activity will be currently known to us with a fair degree of accuracy’. While Bowley (1937) praised this second attempt for its industry and diligence, he remained unmoved by Clark’s findings and expressed reluctance to accept Clark’s figure-work. The last word should go to the indefatigable Ernest Snow (1937) of the Royal Statistical Society. On this occasion while doubtful about Clark’s long-term projections, was mostly complimentary, marvelling at Clark’s industry and supporting him in his call for more government funding into the collection and analysis of economic statistics. Yet there was still resistance to Clark’s statistical showmanship; some remained wary of his ‘conjectural arithmetic’ (Cairncross 1989, 178). One example of this was a colleague of Snow’s, Henry Macrosty, who in his address as President of the Royal Statistical Society in 1941, warned of the dangers of forming judgements on the basis of imputed sizes and incomes (Tribe 2015). Macrosty had spent his life as a statistician with the Board of Trade and, with his staff, had concentrated on the reliability and accuracy of the information they collected. While Macrosty (1941, 5) approved of Clark’s assiduity and public spiritedness in funding his own research work, he was particularly critical of one of Clark’s subsequent articles in the Economic Journal. This derived the multiplier from national income statistics and quarterly estimates for the trade account from 1929 to 1937 investment, consumption and gross national income. Macrosty was dismissive remarking ‘I simply don’t believe it’. When writing How to Pay for the War (1940), Keynes complimented Clark on his industry: ‘There is no one today, inside or outside government offices, who does not mainly depend on the brilliant private efforts of Mr. Colin Clark (in his National Income and Outlay, supplemented by later articles)’ and later … ‘we all owe to him an immeasurable debt within this field’ (cited in Markwell 2000, 41–42). Keynes also agreed with Clark’s lament about the inadequacy of available economic statistics, a point he had been making since the Liberal Party’s 1929 campaign manifesto Britain’s Industrial Future. Keynes (1940) wrote:

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‘Every government since the last war has been unscientific and obscurantist, and has regarded the collection of essential facts as a waste of money’. Britain only moved to establish the Central Statistical Office at the beginning of 1941.

Clark’s Working Habits What was Colin Clark’s modus operandi? Given the nature of his task, it was work done alone with little collaboration, almost secretive. Austin Robinson (1943, 239) provided a rare insight when he recalled poking ‘my head round Mr Clark’s door in the Marshall Library at Cambridge, trying to get him to explain what exactly he has been doing, and being fobbed off with some quite unintelligible answer while he waits with hand poised to rattle out the next calculation on the machine’. Austin Robinson (1988, 63) would later say that Clark quantified things ‘which we had never hitherto dared to measure’. It helped, too, that Clark had a retentive memory for the statistics he sought out. He played a useful role in the Cambridge faculty and provided technical statistical advice to his colleagues. Two of Clark’s most fertile sources were the Prime Collection at the University of Cambridge and the library at the Royal Statistical Society (Higgins 1989). He was amused when someone described his hunting and gathering of statistics as akin to ‘Squirrel economics’ (Arndt 2000, 7). Sir David Hendry termed Clark’s fossicking as ‘data-mining’.8 There was, though, an element of secrecy to Clark’s work and some reviewers queried the sources of his data. Some observers, like his former student Jean Polglaze, suggested that Clark was almost cavalier in his approach, plucking figures from the air or drawing them from merely casual observation. This was not always meant in a derogatory sense; one authority who worked closely with Clark noted how he could ‘perceive relationships where others might see a blur’; a facility backed up by a phenomenal memory (Peters 1990, 129). Others were less charitable; Alan Prest, who compiled the index to Clark’s The Conditions of Economic Progress , doubted that Clark’s figure-work could be trusted. Prest also recycled the remark made by Harrod that Clark never used to explain where he got

8 D Hendry Colloquium celebrating 100th anniversary of Colin Clark’s birth, Brasenose College, 2005.

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his figures from.9 Yet one observer wrote: ‘No matter what the problem, the wheels in his remarkable brain would turn automatically, to grind out an answer - well considered and firmly based on observed facts’ (Kolsen 1990, 2). In the 1970s Duncan Ironmonger recalls Clark poking his head around his office door wanting to chat about some research he was working on; he recalled that the conversation was peppered with brilliant insights.10

Contesting Malthus Like many social scientists at that time, Clark was certainly intrigued by Malthusianism and the birth control movement; on one occasion, he was open-minded enough to ask for two tickets to attend ‘The Malthusian Ball’ in March 1933 organised under the auspices of ‘The International Birth Control Movement’ (Overy 2009).11 The proceeds for this lavish ball, held at the Dorchester Hotel in London and attended by the great and the good, was used to fund information on birth control but with a marked bias towards eugenics. Its aim was to educate and encourage those who could least afford to have children to have fewer offspring. Clark’s exposure to Young’s ideas of increasing returns in manufacturing trade made him question Malthusian fears. Fears, too, of a world famine expounded in the 1930s by the likes of Sir William Crookes, an eminent international chemist, had failed to arise. At Cambridge the centenary of Malthus’s death in 1935 was celebrated ‘in a rather inappropriate manner’ by a huge banquet at the parson’s old College, Jesus.12 For his own part, Clark delivered his own rebuttal of Malthus in March 1935 in a paper entitled ‘The World’s Food Supply’. It opened with the supposition ‘Was Malthus Wrong?’ In this paper Clark suggested that, instead of the world’s population pressing upon the world’s food supply, ‘it would be nearer to the truth today that the means of subsistence are pressing on the population’. He highlighted some significant increases in agricultural output in Australasia, Europe, Latin America and the Soviet Union. These had occurred, he noted, at a time

9 A. Prest to W. Prest, 23 May 1947, Prest Papers, UMA. 10 ‘Colin Grant Clark 1905-1989’, Clark Papers, Brasenose. 11 E. Summerskill to Clark, 24 February 1933, Clark Papers, Brasenose. 12 C. Clark, ‘Keynes and others-a personal memoir’ 1982, Clark Papers, UQ.

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of rampant protection and dislocation in agricultural markets. In America he observed that there had been an increase in output even without an increase in capital equipment. The paper demonstrated Clark’s early suspicion about the validity of the Malthusian doctrine but also portended his future research interest about the true extent of world hunger as well as his intrinsic interest in demography. He repeated his findings at the British Association for the Advancement of Science in September 1935 when he argued that the world’s food supply had caught up and overtaken the world’s population to the extent that relative food prices were now falling.13 Few seemed to listen. Clark quickly subscribed to the belief that population growth made for a freer and competitive society and that a good volume of well-directed investment kept the economy near full employment. Yet in National Income and Outlay, Clark had dismissed the view that the threatened decline in Britain’s population would act as a drag upon growth. He had obviously changed his mind on the merits of population growth.

Leaving Cambridge When Douglas Copland, the ambitious Dean of the Faculty of Commerce at the University of Melbourne, visited Cambridge in 1936 he was on the lookout for an economist to cover a gap in staffing. Copland knew Keynes well and had been invited to give the 1933 Alfred Marshall memorial Lectures on Australia’s economic rehabilitation from the Great Depression. It is likely that Clark attended the Marshall Lectures and that he would have admired Copland’s verve and style. Copland had designs on luring Austin Robinson to fill the position but Keynes strongly objected because Robinson fulfilled important editorial duties for the Economic Journal . Whether Keynes or Robinson suggested Clark to Copland or whether Clark approached Copland remains a matter of speculation. The idea of spending a sabbatical in Australia had been put to Clark by Herbert Burton, the Australian economic historian who was visiting Cambridge. Clark’s father had always shared memories about Australia; here now was an opportunity for Colin to follow in his footsteps. Whatever the reason, neither Copland nor Clark would have any idea of the impact which the visit would have on the young Cambridge lecturer. 13 ‘From Dictators to Crooners’, Manchester Guardian, 6 August 1935 and ‘Population and Food Supply’, The Times, 6 September 1935, p. 6.

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Professionally, Clark was interested in Australia’s progress in social legislation and its control over financial and monetary policy to prevent the recurrence of economic depressions. Australian economists, too, had a good reputation for being influential and had fashioned an effective antidepression policy involving aspects of cost cutting and modest stimulus (Millmow 2010). Australia had another attraction for a statistical economist: it had ample available economic statistics particularly at the state level dating back to colonial years (Haig 2006). The illustrious Australian economist L. F. Giblin once observed that one could only measure a country’s level of civilisation by its statistics. On the negative side, Australia was an isolated and insular society, distant from London and Cambridge. It was also more commonplace for British economists to visit American rather than Australian cities; indeed, Australia was a long, six weeks voyage away. In 1932, Keynes had refused an offer of 2,500 pounds and an all-expenses paid trip, financed by Australian businessmen, to visit for six weeks and write on any issues of interest (Millmow 2010). After Clark’s appointment was announced in the Australian press, he was expected to arrive in June 1937. He had arranged to take two terms of teaching in Melbourne and one term at the University of Sydney. Clark packed extra suitcases with statistical material drawn from the Prime Collection intended, as he grandly told Copland, ‘to produce a companion volume on international comparisons of national income’.14 For the long boat trip he also took with him some material on Soviet economic performance by Michael Polanyi. Clark was to be paid 450 Australian pounds for four month’s teaching at Melbourne as well as passage for his young family. In a letter that begun with ‘Dear Colin’, Copland explained Australian informality: ‘We all refer to Christian names here and you will doubtless feel more at home if we take you to our bosom even at this distance’, before going on to list the subjects in which he would be lecturing.15 Copland told an associate that Clark’s ‘contact with Australia will probably be quite valuable for him’.16

14 Clark to Copland, 4 May 1936, Faculty of Commerce papers (FECC), University of Melbourne (UMA). 15 Copland to Clark, 29 December 1936, FECC, UMA. 16 Copland to B. Ruml, 15 December 1936, FECC UMA.

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Clark was sad to leave Cambridge for Australia; his friend and benefactor, Keynes, had heart problems and had gone to a sanatorium in Wales to recuperate ‘which rather puts a gloom on things’.17 This testified to Clark’s affection for Keynes and, as we shall see, he was greatly upset when his great mentor died of the same disease in 1946. When he left for Australia in 1937, Clark would never have guessed that he would not see Keynes again. One can only speculate whether removing himself from the orbit of Keynes had a bearing on Clark’s subsequent research interests and ideology. While he could not farewell Keynes, he did console himself with a long discussion with another of his mentors, Pigou. Clark would later pay homage to him with an essay on his life and practice (Spiegel 1952).

References Arndt, H.W. 2000, ‘Colin Clark’, History of Economics Review, Supplement: 1–5. Bowley, A.L. 1933, ‘Review of the National Income 1924–1931 by C. Clark’, American Economic Review, 23 (3): 371–372. Bowley, A.L. 1937, ‘Review of National Income and Outlay by C. Clark’, Economica, 4(15): 350–353. Bowley, A.L. and J. Stamp, 1927, The National Income, 1924. Oxford: Clarendon Press. Cairncross, A.K. 1989, ‘In Praise of Economic History’, Economic History Review, 42(2): 173–85. Clark, C. 1931, ‘Statistical Studies Relating to the Present Economic Position of Great Britain’, Economic Journal, 41(163): 343–369. Clark, C. 1932, The National Income 1924–31. London: Macmillan. Clark, C. 1933a, ‘The National Income and the Theory of Production’, Economic Journal, 43(170): 205–216. Clark, C. 1933b, National Income and Net Output of Industry’, Journal of the Royal Statistical Society, 96(4): 651–659. Clark, C. 1937, National Income and Outlay. London: Macmillan. Clark, C. 1978, ‘Australia’s Wrong Turnings’, Quadrant, 12(12): 5–10. Clark, C. 1984, ‘Development Economics: The Early Years’, in G.M. Meier and D. Seers (eds.) Pioneers in Development. Oxford: Oxford University Press: 59–77. Coyle, D. 2014, GDP: A Brief But Affectionate History. New Jersey: Princeton University Press.

17 Clark to M. Clark, 2 June 1937, Clark family letters.

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Haig, B. 2006, ‘Sir Timothy Coghlan and the Development of the National Accounts’, History of Political Economy, 38(2): 339–375. Harrod, R. 1937, ‘Review of National Income and Outlay by C. Clark’, The Oxford Magazine, 20 May, 651–652. Higgins, C. 1989, ‘Colin Clark: An interview’, Economic Record, 65(3): 296– 310. Kolsen, H.M. 1990, ‘Colin Clark: A Personal Tribute’, Economic Analysis and Policy, 20(1): 2–3. Keynes, J.M. 1940, How to Pay for the War. London: Macmillan. Keynes, J.M. 1983, Volume XII of the Collected Writings of John Maynard Keynes, Economic Articles and Correspondence. D. Moggridge (ed.) Macmillan and Cambridge University Press for the Royal Economic Society, London. Kuznets, S. 1933, ‘Review of the National Income, 1924–31 by C. Clark’, Journal of the American Statistical Association, 28(183): 363–364. Lepenies, P. 2016, The Power of a Single Number: A Political History of the GDP. New York: Columbia University Press. Macrosty, H.W. 1941, ‘Economic Statistic-Retrospect and Prospect’, Journal of the Royal Statistical Society, 104(1): 1–14. Maddison A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. Markwell, D. 2000, ‘Keynes and Australia’, Reserve Bank of Australia Discussion Paper 2000-04. Millmow, A.J. 2010, The Power of Economic Ideas: The Origins of Keynesian Economic Management in Interwar Australia 1929–1939. ANU Press. Overy, R. 2009, The Morbid Age. London: Allen Lane. Patinkin, D. 1976, ‘Keynes and Econometrics; On the Interaction Between the Macroeconomic Revolutions of the Interwar Period’, Econometrica, 44(6): 1091–1123. Peters, G. 1990, ‘In Memoriam: Colin Clark’, Journal of Agricultural Economics, 41(1): 129–131. Phelps Brown, E.H. 1933, ‘Review of the National Income, 1924–31, by C. Clark’, The Oxford Magazine, 9 February: 415–416. Phelps Brown, E.H. 1937, ‘Review of National Income and Outlay by C. Clark’, Economic Journal, 47(186): 333–335. Robinson, E.A.G. 1943, ‘Review of The Economics of 1960 by C. Clark’, Economic Journal, 53(210): 238–242. Robinson, E.A.G. 1988, ‘The National Institute; The Early Years’, National Institute Economic Review, 124: 63–66. Snow, E.C. 1933, ‘Review of the National Income 1924–1931 by C. Clark’, Journal of the Royal Statistical Society, 96(1): 110–114.

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Snow, E.C. 1937, ‘National Income and Outlay by C. Clark’, Journal of the Royal Statistical Society. Spiegel, H.W. 1952, The Development of Economic Thought: Great Economists in Perspective. New York: Wiley. Tily, G. 2009, ‘John Maynard Keynes and the Development of National Accounts in Britain, 1895–1941’, Review of Income and Wealth, 55(2): 331–359. Tribe, K. 2015, The Economy of the Word. Oxford: Oxford University Press.

PART II

1937–1952 Australian Idyll

CHAPTER 5

Great Southern Land

When Clark arrived in Australia in June 1937 he walked into instant celebrity; Australians had a world-famous economist within their midst. He would measure up to the acclaim and sometimes overstep it. Within six weeks of arriving he was offered a university chair at one of Australia’s six major universities. On the voyage out, Clark had read up on Australia, knowing that Australian economists had a greater appreciation of aggregate economic concepts than their British counterparts. The economist, Allan G.B. Fisher greeted Clark and his family when the RMS Strathnaver docked at Fremantle on 15 June 1937. A kindred spirit, Fisher was credited as the man who confirmed Sir William Petty’s speculation that an increase in material progress came with a rise in tertiary services and a commensurate decline in manufacturing. Fisher’s thesis, contained in his 1935 book The Clash of Stability and Progress , would, at the time, have been entirely acceptable to Clark since it argued against putting more resources into rural production rather than services and manufacturing. Clark always acknowledged Fisher as the originator of the term ‘tertiary industries’, though he had himself examined the services industries in Britain in an unpublished paper in 1932. Two years later, he gave a lecture telling how the use of machinery freed labour to take up employment in services or what he called ‘luxury trades which were becoming

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_5

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the mainstay of our economic life’.1 Two-thirds of Britain’s work force was employed in these trades and this could be regarded as economic progress. Clark quickly found Australia impressive because of the greater diffusion of wealth there than in Britain. He began to rethink how he would spend his sabbatical. He was intrigued by Queensland which was the only Australian state to have unemployment insurance, a measure he had advanced in the 1935 general election campaign. One of his first articles in his new country was a critique of two forms of social insurance drawn up for Australia by two visiting English civil servants. Clark (1937a) felt that the Englishmen had not disclosed the merits and defects of the British system and whether it was entirely suitable for Australian conditions. Clark’s time in Australia would see a remarkable spurt of output over a 15-year period. Australia, and more especially, Queensland, would become not just a land of milk and honey for his young family but for him personally, a revelation, a place of spiritual awakening that would influence his economics. Remarkably, he would achieve all this while holding down a high-level executive post within the Queensland Government. Neither of these developments was part of the original intention; Clark was expected back at Cambridge by October 1938 and he was still heavily involved in policy work for the British Labour movement. The Australian press quickly found Clark good copy. In Fremantle, his first message for his hosts, echoed by other British economists was about the worrying economic consequences of a faltering population growth rate, both in Britain and Australia, upon their economies.2 Two weeks later, in Melbourne he warned that, with the Australian birth rate falling below replacement levels, the country must populate or perish since economic progress was impossible without population growth. He suggested that this was the main reason why Australia had lost its ranking of once having the highest living standards in the world.3 He added that it was a grave mistake to presume, as many English people did, that a small and declining population made for economic security.4 Apart from his own research, Clark was echoing what Keynes said, in his Galton

1 ‘Displacement of Men by Machinery’, Birmingham Post, 5 June 1934. 2 ‘Populate or Perish: Economists Warning’, The West Australian, 16 June 1937. 3 Ibid. 4 ‘Birth Rate Decline: Economists Warning’, The Age (Melbourne), 23 June 1937.

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Lecture, that population growth was necessary to underpin investment and consumption demand, which would fortify a free enterprise economy (Keynes 1937). Keynes, himself had once been a fervent Malthusian with passages in The Economic Consequences of the Peace reflecting that bias; some even joked that J.M. stood for ‘Jeremiah Malthus’. But that was all in the past. Clark arrived in Melbourne on June 21, 1937 and told the press that, while the productivity of Australian agriculture was unmatched, the country’s standard of living was not as high as in Western Europe and that it would be of some regret if Australia fell behind in ‘the economic race’.5 Melbourne, if not Australia, had been doubly fortunate to receive another emissary from Keynes when one of his best students, Brian Reddaway, arrived there in January 1936 to taken up a two-year appointment as a research fellow to Professor Giblin at the University of Melbourne. Having these two young English economists present would have fitted in with Copland’s aspiration to make Melbourne the Cambridge of the South Pacific. On the day Clark arrived in Melbourne, Copland rather startled him by advising that his first class on statistical method would commence the next morning at 8 o’clock. A few days later, Clark gave an address to the Commerce Students Society at the University of Melbourne on population growth. Copland went along and reported that ‘It was a masterpiece of presentation, not too difficult, but full of meat, and as far as I could see accurate and moderate in tone’.6 A month later, speaking at the University Labour Club on the political situation in Britain, he found his hosts ‘open minded’ on most matters because of the comparative youth of the population whom he found ‘refreshing and interesting’ as well as less reserved than the English.7 His friend and mentor, Hugh Dalton would feel the same way after spending a month in Australia a little later (Pimlott 1985, 251). Clark also praised the commerce course at Melbourne which he considered a good compromise between the cultural and vocational ideals of a university course. Economics courses in Australia had a more practical aspect

5 ‘Economic Race’, The Mercury (Hobart), 23 June 1937. 6 Copland to C. Janes, 23 June 1935, FECC, UMA. 7 Alan Trengove, ‘Colin Clark Feels We Have Expelled Him’, The Courier Mail (Brisbane), 9 January 1962.

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than in Europe where he considered courses there had become too theoretically-inclined.8 Toadying to the Australian press baron Keith Murdoch, Copland told him of his visitor: Colin Clark is pretty radical. I think he will give you a close-up view of the internal organisation of the BLP [British Labour Party] but I gathered … that he was a little optimistic as to the capacity of the Party to win an election and to put over its policy once it got on the Treasury benches … Still Clark is a very interesting fellow and an able economist whose personal views do not enter his teaching.9

Indeed, Copland was very pleased with his visitor. He told an Australian state politician who wanted better economic statistics that ‘[w]e are finding him most stimulating. He has a flair for statistical devices and would be helpful in a discussion of the new work that is being done in the statistical office’.10 He told the NSW State Statistician that Clark was ‘a rare find in that he has an unerring instinct for the right figure. Apart from his knowledge of economic theory, he is one of the most ingenious persons with statistics I have ever come across’.11 Clark had lost none of his socialist leanings. He praised Australia’s wage arbitration system which had just restored the wage levels after they had been cut in 1931 during the Great Depression.12 He spoke of the new wisdom, of how economic instability was caused by variations in investment spending. This reflected his article in the then latest issue of the Economic Journal, one of the first attempts at using an economic model to forecast the business future (Clark 1937b). It amused him that the Chancellor of the Exchequer, Neville Chamberlain, observed that ‘You can no more control the business cycle than you can control the weather’ (Clark et al. 1989, 2). His latest article predicted that Britain was heading for an economic slump because investment spending had reached a peak 8 ‘The Function of a University: (Christchurch), 5 February 1938.

Cambridge

Economist’s

Views’,

The

Press

9 Copland to Murdoch 22 August 1937, FECC, UMA. 10 Copland to B.S.B. Stevens 25 August 1937, FECC, UMA. 11 Copland to T. Waites 13 October 1937, FECC, UMA. 12 ‘Court Gives Reasons for Wage Increase Pre-depression Level Regained’, The Herald

(Melbourne), 23 June 1937.

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by the end of 1936. Clark wrote about how the ‘incentive to invest’ was governed by expectations of profit. In his model, he predicted that a slump was likely in Britain unless the government took action with extra public spending. However, the British government and its economic advisors disregarded these forecasts. When Clark (1938, 443) was proved right, he urged British policymakers to devote more attention to national income statistics and the conclusions that could be drawn from them. By September 1937 Clark was writing articles in the Australian press warning of another slump in economic activity due to external factors.13 Specifically these factors had to do with Britain’s investment boom coming to an end while ‘the serpent in the American garden’ was rising costs, together with a lack of investment outlets. Leslie Melville, the economic adviser to the Commonwealth Bank, then Australia’s central bank, was antagonistic about Clark’s pronouncements, fearing that he was ‘talking Australia into a depression’. When Clark visited Melville at the Bank to get some corroboration on unemployment figures, Melville bluntly told him ‘This is your recession, Colin’ (Cited in Millmow 2010, 234). As Clark continued to make waves, Copland relayed to Keynes that: ‘Colin Clark is a great success here and we would like to keep him. Adelaide offered him the Chair of Economics but, on reflection, he did not accept’.14 It followed after Clark’s well-received lecture on ‘British Prosperity and Rearmament’ on 27 July at the University of Adelaide. He had prefaced his opening remarks by describing himself as ‘ a slightly unorthodox economist, but one who believes economics ought to be of use in the world’. When Keynes heard from Copland he wrote back, ‘I hope very much you will fail in taking away Colin Clark from us. He is too much needed here’.15 Copland replied with a tinge of prophecy: ‘At the moment you need not fear for Colin Clark. He is going to Western Australia for part of the next academic year prior to returning to Cambridge. In the course of time, however changes may occur in the personnel of the Schools of Economics and I should not be surprised if Clark turned his eyes to Australia, if a suitable opportunity occurred.’16

13 ‘Is Another Slump Coming?’, The Age (Melbourne), 21 September 1937. 14 Copland to Keynes 14 September 1937, FECC, UMA. 15 Keynes to Copland 28 October 1937, FECC, UMA. 16 Copland to Keynes 17 December 1937, FECC, UMA.

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Copland had read it right; just two months after arriving in Australia, Clark agreed to undertake eight months of teaching at University of Western Australia (UWA) to conclude in August 1938.17 Fisher had recommended Clark’s appointment to his Vice-Chancellor, Hubert Whitfield, having told his guest that ‘Perth is the more fertile and attractive field for the labours of an economist’.18 Fisher had told Whitfield that Clark was ‘a first class man’ and that his presence was ‘a very valuable stimulus to Australian economists’.19 In order to take up that appointment, Clark wrote to his friend Paul Douglas at the University of Chicago informing him that after much ‘internal wrestling’ he had accepted the Perth assignment because this would allow him the ‘opportunity of seeing this rather isolated country with a peculiar set of economic problems of its own’.20 Douglas had met Clark in Cambridge in 1931 and was the inspiration behind the Cobb-Douglas production function. He had already arranged a substantive and remunerative lecture tour of American universities but Clark’s decision to go to Perth put paid to that idea. Clark reasoned that he could easily catch up with Douglas in the near future. It seemed, then, that Clark was already becoming entranced by Australia. He admired its opportunities, classlessness, the openness of its people, climate, physical space and abundant resources and, not least, its natural beauty. In one lecture to the local university economics and history society he reflected on Australia’s economic future. There were two interesting aspects to this. Clark felt that Australia’s economic future was linked to its tertiary industries and their efficiency. While he knew that secondary industries were a burden for the primary sector it was not fair to say that they were inefficient. The second significant point of his talk was to note again that Australia’s population growth rate had slowed. It was necessary for this to increase if the country was to maintain the maximum return from the capital invested. As such, Clark advocated that generous family allowances on a progressive scale be introduced.21 It was Queensland, though, that really captured Clark’s attention. In a lecture to the Constitutional Club in Brisbane in November 1937 he 17 ‘Economics Lecturer’, The West Australian, 22 September 1937. 18 Fisher to H Whitfield, nd, Clark personnel file, UWA Archives. 19 Fisher to Whitfield 23 August 1937, Clark personnel file, UWA Archives. 20 Clark to P. Douglas 23 December 1937, Clark Papers, Brasenose. 21 ‘Our Economy’, The West Australian (Perth), 3 May 1938.

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advised that the appropriate response to a slowdown in global economic activity was an increase in public works financed by loan expenditure and cheap money. Clark told his audience that Queensland, with barely a million people, was the richest Australian state, indeed richer than anywhere else in the world, except for some favoured parts of the United States. Average income per head in Queensland then was 406 pounds, compared to an Australian average of 356 pounds, mostly due to the high and regulated prices Queensland received for its sugar crop.22 All this was music to the ears of Queensland Premier William (Bill) Forgan Smith who was chairing the lecture. Clark had been introduced to Forgan Smith in a letter from Attlee, now leader of the British Labour Party.23 Following a request from the economist James Brigden, Clark spent time in Queensland perusing the state’s product figures. Of the experience, Brigden commented: … CC [Colin Clark] is certainly a tonic. I have never met a man so intent on the pursuit of his objective, nor so resourceful and undismayed by obstacles in getting there. I have thought myself sufficiently adventurous, and at times not a little naïve, but this man makes me seem timid, to say nothing of belonging to a past generation.24

Meanwhile Clark wrote to his wife that Queensland was ‘a wonderful country and I shall have a lot to tell you about it’.25 What was also attractive to Clark about Queensland was that the people regarded the state government in Brisbane as more important to their lives than a federal parliament that sat in far-off Canberra. This parochialism about the state was deep-rooted and Australia-wide but, in the case of Queensland, it was even more entrenched (McQueen 1978). Facing a state election campaign in 1938, Forgan Smith wanted economic counsel to take on the Federal Treasury which was resistant to the very idea of expansionary fiscal policy. Debates over the amount of loan-funded public works by the states took place at semi-annual meetings of the Australian Loan Council between the Commonwealth and the six state governments. Forgan Smith had the 22 ‘English Economist Utters Warning: Another Depression Appears to be Coming’, The Telegraph (Sydney), 25 November 1937. 23 Clark to M. Clark 26 November 1937, Clark Family letters. 24 J. B. Brigden to R. Wilson 27 November 1937, Wilson Papers, NLA. 25 Clark to M. Clark 30 November 1937, Clark Family letters.

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services of Brigden, who had been appointed to the Queensland Bureau of Economics and Statistics in 1929; however, Brigden was not an energetic supporter of fiscal expansion. The Bureau, largely an engineering department, had been established by the previous conservative government to offer advice on economic matters, including public works. It was also charged with acquiring and disseminating economic information (Murphy et al. 1980). It could be said that Clark, by his advocacy, was drumming up interest in his talents. His voice was an authentically Keynesian one, pushing the case for public sector stimulus because of an anticipated collapse in private investment spending. He had already quizzed Commonwealth Bank adviser Leslie Melville as to why Australian economists had prescribed an austere belt-tightening during the Great Depression thereby worsening budgetary imbalances. Melville replied that they had little choice, since Australia had no credit and no latitude to embark on a round of fiscal expansion. Even Keynes, in a commentary on the Australian economic position in May 1932, had praised the purposefulness of the economists’ plan for ‘saving the economic structure of Australia’ (Cited in Millmow 2010, 134). To Clark this was an interesting revelation about how Keynes’s mind was evolving on macroeconomic policy. By 1932 Keynes accepted that budget deficits and government spending had a multiplier effect all of their own; yet he was reluctant to prescribe it for Australia because of possible adverse effects on the balance of payments and business confidence. It brought to mind Keynes’s striking metaphor ‘What can you do if a man vomits when you give him the only medicine which will cure him?’26 Intuitive reaction against deficits can be strong in certain cases. In 1932 Keynes felt that what Australia needed was an increase in international prices, brought about by the major powers stimulating their economies, and thus to reject the idea of another round of cost-cutting or a further devaluation. In this sense, Keynes let down his Australian colleagues who wanted devaluation to allow more room for further spending on public works (Millmow 2010, 135–137.). After finishing his teaching at Melbourne, Clark moved to Sydney for his second teaching assignment. It was here that he met the Australian agricultural economist, John Crawford, who was attempting to estimate Australia’s national income. An economist with the Rural Bank of NSW,

26 Clark to Joan Robinson 14 May 1981, Clark Papers, UQ.

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Crawford was also a part-time lecturer in economics at the University of Sydney. He had done some preparatory work on Australia’s national product which Clark wanted to update. The ensuing volume, entitled The National Income of Australia, was completed by the end of December 1937 and published in September 1938. It contained a ‘provisional’ estimate for the Australian income multiplier having a value of two and that the multiplicands could come from autonomous sources such as investment, exports and government spending. In 1938 Clark had re-estimated the multiplier value from British national income statistics as varying between 1.5 and 2 (Tily 2009, 343). However, in Australia, exports were the driving factor, while what Clark called the marginal propensity to import reduced the value of the multiplier. Clark proudly sent the results of his money income multiplier to Keynes asking him to show this version to Joan Robinson and Kahn and challenging him with ‘I can sail my multiplier much further into the wind of full employment than you can yours’ (Keynes 1983, 802). Keynes preferred the estimates to be expressed in terms of employment. Some of Clark’s findings were reproduced in an issue of the Economic Journal article entitled ‘Determination of the Multiplier from National Income Statistics’ (Clark 1938). What Clark did not know was that the original paper had agitated Keynes on presentational and conceptual grounds; he told Austin Robinson: ‘ As so often happens with his stuff, it seems to be full of mistakes, obscurities and misapprehensions, some of them by no means vital, but in the aggregate very tiresome to the reader’ (Keynes 1983, 802). Nor did Keynes like Clark’s assumption that the marginal propensity to consume was constant at all the stages of the business cycle (Markwell 2000, 42). Moreover, Keynes felt that his multiplier was, by definition, an instantaneous creature and had nothing to do with time lags. Another breach with Clark’s work came when Keynes wrote the pamphlet How to Pay for the War (1940). Keynes wanted to know how much of the cake would be left for private consumption once military spending by the state was deducted. To determine this, he estimated potential industrial output if all resources were fully employed. This exercise brought the realisation that government expenditure contributed to national income just as much as private consumption and investment expenditure. In 1939 Keynes and Rothbarth focused upon final taxable income as the key to operating macroeconomic policy rather than Clark’s construct of the income available to the private sector. In his analysis Clark

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had always treated government spending as intermediate consumption that should not be tabulated (Lepenies 2016, 48–90). The last chapter of The National Income of Australia urged continued domestic expansion to keep the Australian economic recovery from faltering. One Australian economist, Frank Mauldon, hailed the work as ‘very imaginative and daring, full of points about which there may be endless arguments, but a very definite contribution notwithstanding’.27 Clark had been in hurry to put the finishing touches to The National Income of Australia. Crawford, who had largely written the book, had gone to America in 1937 on a scholarship with the US Department of Agriculture. Against his express wishes, Clark sent the manuscript off to the publishers. Nonetheless, Crawford still allowed that, however imperfect, it was a ‘path-breaking’ work in enticing the Australian government to improve their collection of economic statistics.28 This view was shared by H.C. ‘Nugget’ Coombs (1938, 115). What was important was that the book informed readers that a form of economic statecraft was now at hand. Marshall once noted that if the state did something reasonably well it could be traced to an idea of some insightful individual (Seldon 1977, 4). Now Clark was about to take a working holiday in New Zealand in order to improve estimates of that country’s national income. His visit there would raise some dust.

References Clark, C. 1937a, ‘Bacon and Eggs for Breakfast’, Australian Quarterly, 9(4): 24–31. Clark, C. 1937b, ‘National Income at Its Climax’, Economic Journal, 47(186): 308–320. Clark, C. 1938, ‘Determination of the Multiplier from National Income Statistics’, Economic Journal, 48(191): 435–448. Clark, C. and J.G. Crawford, 1938, The National Income of Australia. Sydney: Angus and Robertson. Clark, C., B.D. Holland and N.K.C. Fletcher, 1989, ‘Australian Business Fluctuations’, Discussion Paper in Economics, University of Queensland. Coombs, H.C. 1938, ‘Review of the National Income of Australia by C. Clark and J. G. Crawford’, Australian Quarterly, 10(4):114–115.

27 Mauldon to Copland 27 September 1938, Copland Papers, NLA. 28 ‘Miscellany of interests’, Sir John Crawford Papers, NLA.

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Fisher, A.G.B. 1935, The Clash of Stability and Progress. London: Macmillan. Keynes, J.M. 1937, ‘Some Economic Consequences of a Declining Population’, The Eugenics Review, 29(1): 13–17. Keynes, J.M. 1940, How to Pay for The War. London: Macmillan. Keynes, J.M. 1983, Volume XII of the Collected Writings of John Maynard Keynes, Economic Articles and Correspondence. (ed.) D. Moggridge, Macmillan and Cambridge University Press for the Royal Economic Society, London. Lepenies, P. 2016, The Power of a Single Number: A Political History of the GDP. New York: Columbia University Press. Markwell, D. 2000, ‘Keynes and Australia’, Reserve Bank of Australia Discussion Paper 2000–2004. McQueen, H. 1978, ‘Queensland: A State of Mind’, Meanjin, 38(1): 41–51. Millmow, A. J. 2010, The Power of Economic Ideas: The Origins of Keynesian Economic Management in Interwar Australia 1929–1939. ANU Press. Murphy, D. J. and R.B. Joyce and C. Hughes (eds.), 1980, Labor in Power: The Labor Party and Governments in Queensland, 1915–1957 . St Lucia: University of Queensland Press. Pimlott, B. 1985, Hugh Dalton: A Life. London: Harper Collins. Seldon, A. 1977, ‘Introduction’ to C. Clark, Poverty Before Politics. London: Institute of Economic Affairs: 3–6. Tily, G. 2009, ‘John Maynard Keynes and the Development of National Accounts in Britain, 1895–1941’, Review of Income and Wealth, 55(2): 331–359.

CHAPTER 6

Forsaking Keynes

When Clark arrived in Perth in March 1938 to undertake his lecturing assignment, an even more prestigious job awaited him in Brisbane, one enticing enough for him to turn his back on Cambridge and the glittering company of Keynes. What were the circumstances behind this decision? Lepenies (2016, 34) speculates that Clark felt that his work had been largely unrecognised by his peers at Cambridge and by bureaucrats in Whitehall. This is corroborated by Maddison (2004) and by what Richard Stone told Patinkin (1976) about the resistance of the British Civil Service to the practical importance of Clark’s work. Evidence of this disaffection can be found in the introduction to National Income and Outlay (1937) where Clark complained, again, about the lack of financial and personal support for his work. It was a mentality that led Prime Minister Harold Macmillan, decades later, to complain that British governments operated in a statistical mist. But overall it was his friend Hugh Dalton, who was to play the decisive role in convincing Clark to turn away from his homeland.

The Role of Dalton Clark met Dalton in Melbourne not long before he was to head off to New Zealand on 26 January 1938 to spend a month there studying that country’s national income statistics. Dalton was visiting Australia as © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_6

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part of a visiting British parliamentary delegation to celebrate the 150th anniversary of British settlement. Like Clark, he was inspired by Australia, especially its arbitration system, its classlessness and the physical health of its people. The two met at the University of Melbourne with Dalton describing the campus as ‘a frightful hotpotch of materials and styles’. He wrote in his diary of how he advised Clark to stay in Australia for four or five years, observing: ‘He seems quite happy here. Although he still looks odd even against a less exacting background’.1 A few days later Clark told Dalton that he had decided to stay in Australia.2 This became of great consequence when, a week later, Dalton met the Queensland Premier Forgan Smith in Sydney for the celebrations. Forgan Smith had only just lost Brigden to Canberra where he would become the Director of the National Insurance Commission. When the Premier heard that Clark was going to stay on he spoke to Dalton about arranging a job for him; an offer that Dalton would advise Clark to accept.3 Both politicians had agreed that Clark was the right man to push for domestic expansionism within Australia.4 Dalton then engineered matters by sending a cable to Clark in Wellington informing him of Brigden’s resignation and that Forgan Smith wished to meet with him urgently to discuss an appointment the job.5 Dalton wrote in his diary that the job would be ‘good’ for Clark and would ‘add to his value in England later on … I hope there will be no hitch’.6 In a subsequent letter to Clark while he was still working away in Wellington, Dalton encapsulated six reasons why the Queensland post was compelling. First, the job was interesting from an economist’s viewpoint of ‘making things happen’. Second, living conditions there, including the climate, were ‘infinitely’ better than in the ‘foggy old slum of the mother country’. Dalton’s third point was more blunt: ‘You have a most inadequate status at Cambridge, Keynes should have wangled you a Fellowship

1 H. Dalton travel diary, 21/1/1938, LSE. 2 Dalton travel diary 24/1/1938. 3 Dalton travel diary 30/1/1938. 4 Clark to B. Pimlott February 1981, Clark Papers, UQ. 5 Dalton to Clark 9/2/1938, Clark Papers, Brasenose. 6 Dalton travel diary, 7/2/1938, LSE.

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and not merely treated you as a statistical convenience’.7 Fourth, the odds of Clark winning the constituency of South Norfolk in the next British general election were unlikely. Fifth, there was the great opportunity for Clark’s Australian work to be also used in Britain, if and when, he returned. Finally, there was the likelihood of war breaking out in Europe. All this, Dalton surmised, was good cause ‘for taking a job out here, and staying some years and giving Cambridge and London a kick each in the pants.’8 When Dalton duly caught up with Clark in Wellington he again pushed him to accept the Queensland job ‘but he didn’t need much pushing. He will probably stay out here three years’.9 To the annoyance of his hosts, Clark cut short his time in Wellington and took the first ship to Brisbane; en route to Brisbane he grandly wrote to Marjorie ‘Your husband seems to be incapable of leading a quiet life’.10 Meanwhile, Clark had caused so much controversy in New Zealand that some people were happy to see the back of him.

New Zealand Interlude Impressed by Clark’s credentials, the New Zealand Finance Minister, Mr Walter Nash, had, in late 1937, invited him to Wellington on behalf of the New Zealand government to re-estimate the country’s national accounts with the help of local economist F. B. Stephens. Clark was given one month in which to undertake the assignment. He found that New Zealand’s national income, assuming services were included in calculations, was far greater than existing estimates. Yet it was his statement that New Zealand was one of the lowest-taxed nations in the world that set off an explosion. Clark had mentioned this to a conservative newspaper unaware of ‘what a box of dynamite’ it would soon become.11 Clark found from his analysis of New Zealand’s national accounts that

7 Dalton to Clark 28/1/1938, Clark Papers, Brasenose. In contrast, Brian Reddaway whilst in Australia in 1938, received an unsolicited offer of a fellowship from Clare College (Reddaway 1995). 8 Ibid. 9 Dalton travel diary 17/2/1938, LSE. 10 Clark to M. Clark 19/2/1938, Clark Papers Brasenose. 11 Clark to M. Clark 19/2/1938, Clark family papers.

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her farmers were ‘the best-off in the world’. Clark attributed this ‘happy situation’ to the scientific outlook of the farmer, high returns from specialisation and the natural fertility of the soil. Simply put, the New Zealand farming community which comprised 20% of the population took 30% of national income (Clark 1938b). Albert Tocker of Canterbury College opposed Clark’s findings and indeed argued that New Zealanders were actually overtaxed. He wrote to Clark seeking advice on the disparity between his and the official figures.12 Clark suggested that the low taxation take was due to widespread evasion or ‘swindling’.13 He later told Nash: ‘I doubt if anywhere in the world will be found such an insatiable lust for money as in the bosom of the New Zealand farmer’ (cited in Endres 2007, 50). Like Tocker, the New Zealand Leader of the Opposition, Adam Hamilton was caustic about how Clark could make an assessment of New Zealand’s income and taxation within the space of a month and how he had arrived at the conclusion that her farmers were the best off in the world.14 Two interest groups entered the fray. The New Zealand Farmers Union and the Associated Chambers of Commerce dragged up earlier criticisms of Clark’s first book attacking his ability and reliability.15 He had his own defenders, including the economist Ralph Souter from the University of Otago, who listed Clark’s publications.16 Other correspondents mentioned that he was a member of the Cambridge school. On another front, Clark’s advocacy, in radio broadcasts, for increasing expenditure on public works to compensate for a possible decline in the Dominion’s export volumes was also attacked.17 He felt that the loss in overseas values to New Zealand from a possible decline in exports could also be alleviated by subsidising dairy farmers to keep their incomes stable. Both expedients

12 Tocker to Clark 19/2/1938, Clark Papers, UQ. 13 ‘The National Income: Mr Colin Clark Replies to Prof Tocker: Widespread Tax

Evasion Alleged’, The Christchurch Press, 2/4/1938. 14 ‘Economist’s Views Questioned’, The Press (Christchurch), 19/2/1938. 15 ‘National Income Mr Clark’s Figures’, Evening Post (Wellington), 15/3/1938 and

‘Mr Colin Clark as Economist’, The Press (Christchurch), 14/3/1938. 16 ‘A Cambridge Economist and Our National Income’, Otago Daily Times (Dunedin), 5/3/1938. 17 ‘Utter Nonsense; Visitor’s Remarks on Spending Money on Public Works’, Evening Post (Wellington), 24/2/1938.

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were attacked as fallacious by Hamilton.18 Clark (1938b, 9) felt that New Zealand had made a ‘tremendous upward surge of economic progress’ over the past six years. When a newspaperman asked him if New Zealand’s economic policy of insulation, of exchange controls and stabilising the income of its primary producers were sound, Clark assured him that they were before adding, ‘No other country in the world has made such a bold departure from the old-fashioned fatalistic outlook towards depressions, or has taken such positive steps to promote income and employment’.19 This showed that Clark was sometimes prepared to ditch free trade but also that he was an interventionist. An impressed Nash offered Clark a job as economic advisor and told Copland that ‘I am only sorry that he did not stay longer in New Zealand’.20 The New Zealand Prime Minister, Michael Savage, had already hailed Clark as one of the world’s leading economists.21 However a less impressed politician, William Endean, told a political meeting that Clark’s finding about New Zealand’s tax levels was nonsense and thundered ‘The Country would be better off if they forgot the economics of universities and their products’.22 Firing back, Clark penned a satirical article lamenting how some of New Zealand’s conservative politicians were akin to ‘a veritable museum of economic errors’. He listed ‘fifteen fine specimens’ of these errors including ‘Mercantilism’, ‘Artificial prosperity’, ‘Malthusianism’, ‘Physiocracy’ and ‘The productive and unproductive fallacy’.23 After he arrived back in Australia Clark wrote to the Christchurch newspaper The Press explaining his figure-work for farmers’ incomes for the edification of both Tocker and the general public.24 Besides overly rich farmers there was something else about New Zealand that intrigued Clark; it was, as he told Keynes (1983, 799), the 18 ‘Labour Policy: Mr Hamilton’s Analysis Reply to Economist’, Evening Post (Wellington), 2/4/1939. 19 ‘Farmers’ Share of Income. Economists Expects NZ to Surmount the Next Stump’, The Press (Christchurch), 17/2/1938. 20 W. Nash to Copland, 23/2/1938, Copland Papers, NLA. 21 ‘National Income; Mr Clark’s Figures’, Evening Post (Wellington), 1/3/1938. 22 ‘University Economics; Best Forgotten’, Evening Star (Wellington), 22/2/1938. 23 ‘The Country Would Be Better Off Without the Economics of the Universities and Their Products’, Tomorrow, Clark Papers, UQ. 24 ‘Mr Colin Clark on Taxation’, The Press (Christchurch), 26/3/1938.

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conservation of the countryside in the form of national parks, including a publicly-run tourist service to access such wilderness. Nash had a parting gift for his guest, asking Clark about the likely future for New Zealand, specifically whether she should focus upon agricultural exports or diversify into manufacturing. Clark cryptically responded that it all depended on the prices of agricultural exports, but he would mull over his answer (Healey and McFarlane 1977). He had noticed how New Zealand enjoyed the highest standard of living in the world because of its agricultural productivity, low tariff policy and a large services sector (Clark 1938b, 17).

Telling Keynes Bad News Meanwhile, Dalton, en route back to England and unsure of whether Clark had actually accepted the Queensland position again wrote to him urging ‘It was about time you finished with academic life and began to make things happen’.25 This was a familiar refrain for Dalton who, despite his academic background, was more interested in action than theory26 ; for example he had shown little interest in the theory of the multiplier (Winch 1971, 355). Before going off to New Zealand Clark told Keynes he was having ‘an excellent time’ in Australia ‘where economics ranks after cricket as a topic of interest’. One part of his letter alerted Keynes: I am reaching the conclusion I want to stay in Australia. People have minds which are not closed to new truths … and with all the mistakes Australia has made in the past, I still think she may show the world, in economics, politics, education, and technology in the next twenty years. (Keynes 1983, 799)

In his response, dated 5 March 1938, Keynes was ‘dismayed’ by Clark’s news, ‘though not taken entirely by surprise’. He urged him not to rush into a decision and suggested that he come back to Cambridge, stressing ‘It is very necessary to lay the foundations for a proper department of statistical realistic economics at Cambridge. If such plans are met with discouragement, then it would be difficult to dissuade you from going 25 Dalton to Clark 9/3/1938, Clark Papers, Brasenose. 26 Clark to B. Pimlott 1981, Clark Papers, UQ.

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away. But I do hope you will come back and test the possibilities of satisfactory work here’ (Keynes 1983, 800–801). Was Keynes offering Clark the opportunity to be head of this new department? That seemed to be the inference; Clark had asked to be kept informed about a possible position of chair (Castles 2014, 280).27 Meanwhile Keynes took the precaution of hiring David Champernowne as a replacement for Clark (Marcuzzo and Rosselli 2013). By the time Clark had received Keynes’s letter he had, of course, already accepted the position with the Queensland Government. An apologetic Clark told Keynes that, insofar as Cambridge was concerned, he was ‘very sorry’ before adding that, in relation to any possible position at Cambridge, he had already turned down a professorship at Adelaide which paid 1,100 pounds, ‘but then Queensland made their offer’. He had accepted it because: ‘I thought it was too remarkable an opportunity to be missed for putting economics into practice. My job is to advise the Premier on practically everything connected with economic matters, to plan the public works programmes, and to manage the state statistical office … I believe you yourself would have thought twice before rejecting an opportunity like that for putting some of your conclusions into practice’ (Keynes 1983, 801). As an entrée into this new world of practical economic advice Clark had been invited by a trade union official to give evidence before the Western Australia State Court of Arbitration in Perth in its inquiry into the basic wage. He argued that the state’s basic wage was inadequate for a young family.28 In his evidence he rejected the idea that primary production was the most important factor in the creation of wealth. And he noted that high wages, prevalent in Queensland, had not only failed to attract secondary industry but had also driven it away. The President of the Arbitration Court, Justice Dwyer, in handing down his decision, said Clark’s presentation was ‘evidence of importance’.29 Clark’s appointment in Queensland was officially announced on March 10, 1938. His duties, as Queensland’s most senior public servant, would be three-fold: Director of the Bureau of Industry; State Statistician; and 27 In 1939 Keynes requested the Faculty of Economics to propose that the General Board of the Faculties support the establishment of a Department of Applied Economics. Established after the war, the new department was headed by Richard Stone. 28 ‘State Basic Wage’, The West Australian (Perth), 30/4/1938. 29 ‘A Leading Economist’, Westralian Worker (Perth), 7/4/1939.

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Financial Advisor to the Queensland Treasury. He later likened it to being ‘The Grand Poo-Bah’ from the Gilbert and Sullivan comic opera ‘The Mikado’.30 The contract, for a biblical stretch of seven years, was for a then dazzling salary of 2,000 Australian pounds (1,500 pounds sterling) per annum. By contrast, the Premier’s salary was 1,450 pounds; departmental heads in the Queensland public service earned 1,200 pounds per annum while the basic weekly wage for a working man was still under 5 pounds (Carroll 1978, 431). This level of remuneration allowed the Clarks to hire a live-in maid. But it was more than just the money which attracted Clark; he got on well with Forgan Smith. There was something in the Premier’s life and philosophy that made Clark see him as a kindred spirit, so much that he would later dedicate his book, The Conditions of Economic Progress , to Forgan Smith as ‘a far-seeing patron of economic science’. In his youth, Forgan Smith had been a Clydeside painter and decorator and shipyard worker, radicalised by the likes of Keir Hardie and other socialists. He had studied economics at the University of Glasgow. Suffering from a bronchial condition, he migrated to Australia while still a young man. An autodidact, Forgan Smith was a natural-born politician rising through the ranks of the Australian Labor Party to become Premier of Queensland in 1932 (Carroll 1978). He would remain Premier for ten years until September 1942. He liked to keep his ministers on their toes and, perhaps with Clark in mind, told Dalton (1957, 156) ‘When I promote a young man, all the old men walk quicker to their work the next day’. Besides being an early advocate of Keynesianism, Forgan Smith had an old-world view of pastoralism, seeing rustic life as superior to urban life and steering the economy towards primary production (Evans 2007, 182). This would have suited Clark’s growing interest in distributivism (see Melleuish 1999). Forgan Smith’s rejection of industrialism was encapsulated in 1932 when he declared ‘No matter how much secondary industries may be established in Queensland, this state will continue for all time to be a primary producing state … primary production is the natural occupation for mankind’ (Murphy et al. 1980, 196). Forgan Smith dismissed comparisons with South Australia and its job-generating manufacturing sector by declaring that Queensland had the highest wage system, the best

30 Clark interview with Barbara Blackman, 1986, NLA.

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conditions of labour and the lowest unemployment in Australia (cited in Costar 1988). In other words, Forgan Smith’s stance was at odds with the Federal Labor Party which keenly supported protectionism. Countering this was the fact that Forgan Smith represented an electorate where the sugar cane industry was predominant with assigned land marked out for that industry (Murphy et al. 1980); there was also a minimum support price for sugar. Clark (1962, 87) would later write that it was ‘the only instance in history’ where a Labour government gave explicit support to the creation of a landed aristocracy. He kept these observations to himself. Meanwhile, to expedite his departure for Brisbane, Clark wrote to UWA Vice-Chancellor Whitfield explaining that while bound to still do a term’s teaching in Perth he would need to leave earlier than expected. He suggested a possible ‘substitution’ for the second term in Syd Butlin whom he had taught at Cambridge.31 Forgan Smith also wrote to Whitfield asking for Clark’s early release and appreciating his efforts to do so.32 One inkling Cambridge had of Clark’s decision was when Dalton told him how ‘amused’ he was to hear that the first ‘they’ knew of his non-return was his article in the New Statesman. Dalton felt this was ‘ready-made proof’ that ‘Cambridge … treated you like a helot’.33 The New Statesman issue in which Dalton’s article appeared was dated May 7, 1938. However, Dalton was being rather mischievous; Clark, as we have seen, had already written to Keynes informing him that he had chosen to remain in Queensland. A month later, he resigned as the Labour Party candidate for South Norfolk, a decision accepted with regret by local party officials.34 According to Dennis Robertson, Clark’s decision to stay in Australia dropped a ‘bombshell’ in Cambridge. It meant that ‘realistic research in Cambridge had suffered a severe blow’. But Robertson exclaimed ‘Well, I don’t blame you and congratulate you heartily. It ought to be extremely interesting and give you plenty of scope’.35 However, Robertson’s comments about Clark’s defection being a ‘severe blow’ is at odds 31 Clark to Whitfield 28/2/1938, Clark file, UWA. 32 Forgan Smith to Whitfield 1/3/1938, Clark file, UWA. 33 Dalton to Clark 19/3/1938, Clark Papers, Brasenose. 34 ‘Mr Colin Clark Resigns as Labour Candidate’, Norwich Mercury, 9/4/1938. 35 Robertson to Clark 26/6/1938, Clark Papers, UQ.

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with Keynes’s reluctance at times to fully value Clark’s empirical work (Patinkin 1976) or, indeed, the emphasis that Cambridge economists placed on abstract theory. The negative reaction, too, by British authorities to Clark’s work on national income and economic forecasting can be seen as a subtle factor in his remaining in Australia. The decision to stay in Australia was the start of an important new phase in Clark’s life. He excitedly told Copland that he was busy trying to finish his ‘gigantic book on international comparisons of national income’ and how the Queensland appointment would signify his ‘farewell to academic life (for the present at any note) because I expect Forgan will keep me pretty busy. I shall enjoy working under him’.36 One could argue that removing oneself to the other side of the world was a bad career move for a brilliant young economist. This was not how Clark saw it. First of all, there was the generous salary which would enable the family debt to Lord Meston to be wiped clean. Second, he liked how Australian economists practised their economics to be ‘of practical value to the human race … with a respect for observed facts in preference to long chains of theoretical reasoning’ (Clark 1940, ix). In his view, economists had harmed their subject by attempting to reach the same scientific standards and exactitude as the physical sciences. Thirdly, as a neo-natalist, Clark had been a member of the British Population Investigation Committee founded by Carr-Saunders in June 1936 and aimed at reversing falling birth rates in Britain; Clark saw Queensland as an ideal opportunity to reverse the depopulation he had seen in Britain. In that sense Queensland could become, as the press reported it, a ‘state watched by rest of world’.37 Though he did not know it, Clark was about to embark upon the most academically prolific stage of his career. Despite occupying three official positions, his duties were to be relatively light. They afforded time for serious research even when on official duty. More importantly, he was on the same wavelength as his overseer, Forgan Smith.

36 Clark to Copland 27/4/1938, Clark Papers, UQ. 37 ‘State Watched by the Rest of the World’, The Courier Mail (Brisbane), 6/5/1938.

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The Attraction of Queensland Forgan Smith spared no expense for his prize economist, bringing him and his family from Perth to Brisbane on a special charter flight, an honour unheard of at the time for a mere official. The flight took 36 hours to reach Brisbane; during the journey, Clark would have peered out the window at the unending, brown and orange-hued land with its endless blue horizon. When the Clarks arrived at Eagle Farm aerodrome they were fêted, with the local press eager to meet Brigden’s replacement. Clark did not mind the fuss. He was described as ‘a young man of slight figure’ but with a ‘commanding voice’ that made for ‘a striking personality’; he justified his decision to come to Queensland by reminding the press about his father’s time in the state. He described Brigden as ‘a hard man to follow’ and lauded him for having ‘brought economics into the realm of practical life in a way that had not been done in any other country’. Brigden, he said, had made the Bureau of Industry a unique piece of Australian administrative machinery, ‘an organ of thinking economics.’ Clark then explained to the press why he had decided to settle in Queensland: … Australia was a country where economics was being developed as a practical science and not as a server of theoretical speculations … Australian people deserve credit for their keen and intelligent interest in economics. I have not been in any other country where the people and the press discuss economic questions so widely and intelligently. And I think Australia will be one of the first countries to solve the very complex economic problems that confront the world.38

When asked to enumerate these problems, Clark emphasised, most of all, economic security. He felt that a young country, like Australia, could afford a reasonable amount of loan finance. He then reiterated his earlier warning that with the trade cycle having reached, in his estimation, a turning point, and Australia having contained loan expenditure to relatively modest levels, it was now time to increase it. He also spoke of the multiplier benefits of such action. On Queensland’s economic prospects, Clark wanted more attention given to primary industries while the ‘natural healthy and unforced growth of secondary industry’ should also 38 ‘Depression Can Be Avoided’ Says Colin Clark, New Industry Bureau Chief’, The Telegraph (Brisbane), 6/5/1938.

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be allowed. He praised Forgan Smith for a recent radio talk in which he had stressed that the state could correct the downtrend in population growth by promoting economic stability and adequate incomes for men and women. The rest of the world, proclaimed Clark rather fancifully, was watching Australia and Queensland, in particular, to see what she could make of her remarkable natural and economic endowments.39 Ten years later, Clark told a Brisbane audience that Australia could at most, with all resources utilised, support a population of 25 million but that she would remain insignificant in world affairs.40 She had a role to play in feeding the world, he said, while its manufacturing sector would become uncompetitive compared with the impending industrialisation of the Orient. Meanwhile at Cambridge, Keynes had not entirely given up on Clark, even though as we have seen he now had statistical assistance from Erwin Rothbarth (Cuyvers 1983, 630). Keynes had noticed Clark’s new ‘big book’ on international comparisons and was ‘glad to know that your mind still roams the world’.41 In How to Pay for the War (1940), he had praised Clark for his earlier statistical work; Keynes sent him a copy of the booklet reminding him ‘…we have not yet forgiven you for your desertion … so do come back’ suggesting that with Rockefeller money there would be plenty of opportunity for meaningful work with the Department of ‘realistic economics’ which had just been established.42 In response, Clark now gave a fuller explanation as to why Queensland had captured his soul: When you leave England for Australia you get a strange feeling you have somehow jumped ten years into the future, and when you come to Queensland you jump ten years further. It will be twenty years before Britain is as socially advanced as Queensland, however high the Labour Party’s aspirations. Queensland is a predominantly rural and small enterprise economy, with a very equalitarian distribution of income and property, very generous social services, compulsory Trade Unionism, and all matters of wages, hours and working conditions judicially controlled by the Arbitration court, which now has such prestige that both sides always accept its decision. Unlike the other states, Queensland is practically free

39 ‘State Watched by the Rest of World’, The Courier Mail (Brisbane), 6/5/1938. 40 ‘Australia Limit, 25 m’, The Courier Mail (Brisbane), 29/11/1949. 41 Keynes to Clark 24/2/1940, Clark Papers, UQ. 42 Ibid.

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of strikes. Once a year the Arbitration Court reviews all the statistics of the state, hears arguments from both sides and then determines the basic wage which controls all other wage rates. Queensland has a more or less permanent Labour Government. Between 1915 and 1920 they undertook a series of strange experiments in State ownership. The result was to leave the Queensland Labour Party much more intellectually mature than the British Labour Party or the other Australian labour parties. Many of these ventures continue today as producer co-operatives, which is the form of most of the key industries in Queensland.43

By ‘mature’ Clark (1981, 201–202) meant that, after a costly experiment with nationalisation, the Queensland Labor Party had opted instead for producer co-operatives and would not seek outright nationalisation under any circumstance. Australia had, unlike Britain, effective forms of land taxation at federal state and municipal levels of government. Municipal rates on the unimproved value of the land as Henry George had proposed had kept land prices low and encouraged development.44 Clark (1958b, 164) observed that there were no other countries in the world than Australia and New Zealand where Henry George’s ideas had so much influence. Simply put, Queensland was a socialist economist’s nirvana.

Distributivism There was something else that attracted Clark to Queensland. The State’s wealth lay in its soil, in agricultural produce, fodder for livestock, forest and minerals. During the thirties Clark had found Distributivism—an economic ideology popularised by the Catholic writers, G. K. Chesterton and Hilaire Belloc—increasingly attractive. Distributivism advocated a wider distribution of property, a rejection of the evils of urban life and encouraged a return to the soil; it opposed both primal capitalism and even the ideal of a managed capitalism. Primal capitalism, it was argued, led to concentrations of wealth and a form of wage slavery; regulated capitalism was little better, leading to the establishment of a political elite and a centralised bureaucracy. Communism, too, Clark vehemently denounced. The Distributivists held that individual freedom and social 43 Clark to Keynes 10/11/1941, Clark Papers, UQ. 44 Clark to Harrod 11/4/1947 RES, LSE.

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liberty could only be guaranteed through the widest possible dispersal of property (Duncan 1991, 140–142). In short, the means of production should be dispersed to ensure freedom and dignity and to prevent the dehumanising effect of industrialism. Clark liked what Pope Leo XIII had said in 1891 about ‘The condition of the working classes’ and what Pope Pius XI had said in 1931 ‘On the Reconstruction of the new Order’. Distributivism also had a measure of romanticism about it with connotations of medieval guilds, craftsmen and restoring rural communities (Costar and Strangio 2004). Of course, the Distributivists were accused of being romanticist, outlandish, sometimes clad in homespun clothes and characterised by a sense of ‘dottiness’ in their thinking (Marr 2010, 279). As an undergraduate, Clark had attended a meeting where Belloc had spoken about his book The Servile State (1912) which argued that the fear of unemployment made labour submissive. Some local inspiration for Clark’s blueprint for Australia came from the voluminous writing on the Australian environment by the geographer Griffith Taylor of the University of Sydney (Castles 2014). Taylor envisioned Australia’s future as an agricultural producing nation using dry farming and irrigation resulting in an ‘intense cultivation’ producing ‘a yeoman class… and promote decentralisation’ (cited in Laurent 2005, 8). With all this as a background, the Queensland Government’s rural bias in economic policy, favouring decentralisation and with an underlying faith that the state’s future lay as a primary producer, resonated with Clark. There was also a vast hinterland waiting to be developed, particularly in the north of the state which would also suit Australia’s defence preparedness. It would be Clark’s brief to provide the statistical analysis and theoretical argument to underpin the state’s economic strategy (Kenwood 1988, 112). Apart from his well-paid job, Clark quickly settled down to enjoy what the Australian lifestyle had to offer: good food, sunshine, space, good housing and the absence of an oppressive class system. Clark was astonished at how well-fed the local population was; meat consumption was almost double that of their British counterparts (244 pounds per capita compared to 126 pounds). The Queensland position also allowed him to enjoy his pursuits of gardening, bushwalking, camping and travelling to remote areas. These activities allowed him to further develop his appreciation of the natural environment. He seemed captivated by the scale and promise of Australia. He might have imagined himself like the local explorer, John Stuart Love, who, having seen Northern Australia,

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wrote: ‘It is a strange, hollow, unreal country a land of great silences; of wide, unpeopled, places; of far-off dreamy sky-lines … a land in which it seemeth always afternoon’ (cited in Irving 2014, 390). Much later, in 1948, Clark was a member of a party that escorted a team of British officials looking for suitable land in tropical Queensland for growing peanuts. This was a plan to solve an anticipated global shortage of both food and edible oils. While the delegation found no suitable land on which to grow nuts, Clark came up with the alternative idea of using the plentiful land to grow sorghum as fodder for pigs which, in turn, would provide animal fats and food (Herbert 1991). This idea also proved to be impracticable. There was yet another attraction of Australia for captivating Clark: the bountifulness of Australia which, to his mind, seemed almost to defy the principle of diminishing returns. Later, in reviewing a book about Australian rural industries, Clark (1956, 377) recalled the apocryphal tale of the Cambridge economic historian Charles Ryle Fay, travelling by train in Canada and watching the cultivated area gradually melt away. Eventually Fay reached the last plot of cultivated land and sent off a postcard to Alfred Marshall remarking that he had, at last, seen ‘the marginal producer’. In Australia, too, one had to travel into the back of beyond to stumble across that same marginal plot. It struck Clark that the principle of diminishing returns might not apply in Australia simply because all the good cultivable land had not been reached (Kenwood 1988). Frederic Benham, an English economist at the University of Sydney in the 1920s, was of the same persuasion, unlike his Australian colleagues. As we shall see, Australia’s agricultural abundance also resonated with Clark when, later in his career, he pondered the issue of global food supplies. It is possible that Clark’s tramping and meandering through the vast Australian countryside gave him a somewhat over-optimistic feel for its productivity. After all Queensland was seven times the size of the British Isles. In one episode, he colourfully regaled his old friend John Parker about the experience of walking along the Great Dividing Range, near the border between Queensland and NSW: I am crossing the range at the height of nearly 4000 feet so it is pleasantly cool even at midday. When I piddle on top of the range one half drains to the Brisbane River and the Pacific Ocean, the other to the Darling and the Murray and eventually reaches the sea in South Australia. There are few places in the world, except perhaps at the top of the Himalayas, from

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which you can distribute your wine so widely … People told me that the distances were too long and the climate too hot and the country too dull to do any walking in Australia, but that isn’t true. There is magnificent walking if you don’t mind sleeping in the open and carrying 2 or 3 day’s supply of food, and are careful about water.45

When Clark ventured into North Queensland for the first time he was struck by the luminosity of the landscape, the pristine beaches and the friendliness of the people: ‘The sea and sky are an intense blue and the hills are covered with a very dark green tropical scrub. The soil on the plains is bright red, like Devonshire, and covered by very bright green sugarcane … And the people - it is like being in Norfolk again. Country people are always more friendly than town people, but these are particularly delightful’.46 He spoke of a future family holiday enjoying the beaches, cruising the islands and how it would be a ‘fairyland’ for his children. As noted, Clark considered Australia and New Zealand as special cases where the principle of diminishing returns did not readily apply because the two countries were sparsely settled. This was especially so in the fertile coastal regions of Queensland which Clark knew best. Moreover, he was insistent that these regions of recent settlement were, if anything, denuded of labour to the extent that food production suffered (Kenwood 1988, 113). Adding to the excitement of a new country was that Marjorie had just given birth to their second child, Nicholas Forgan Clark, on December 28, 1937.47 Nicholas’s middle name indicated how much Clark had been inspired by the Premier he served. Marjorie and Colin had always been intent upon a large family and now a generous government salary made this possible. They would always worry, however, about how to afford education for their children. On one occasion he proposed giving them royalties from his books; on another he contemplated buying a farm, 45 Clark to Parker November 1945, Parker Papers, LSE. 46 Clark to M. Clark 22/7/1938, Clark family letters. 47 Nicholas would soon be joined by Christopher (1940), Antony (1941), Bernard

(1942), Maurice (1944) and Oliver (1947). David, the youngest of the eight sons, was born in August 1951. Delightfully, the last of the brood was a girl, Cecily, born in England in 1953. On congratulating him on the birth of his third child, Christopher, Keynes wrote that he ‘would not complain if you depart from the law of averages still further’.

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hiring his sons, and paying them wages ‘and make a deduction from my taxation…There’s agricultural economics for you!’

The Bureau of Industry Clark set a relentless pace at the Bureau of Industry which was located in the Italian Renaissance style Queensland Treasury Building. Chilla Bulbeck (1987, 8) has written that, under Clark’s watch, the Bureau was influential in furnishing economic advice to the Queensland Government. She also argued that, while the motivation behind Clark’s advice derived from his Distributivist philosophy, there seemed a conflict between his work as an economist and his plans for Queensland (Bulbeck 1987, 10). This divide was most obvious in his support of agriculture at the expense of manufacturing. Clark was reluctant to support manufacturing projects which required protection but had no objection to those industries that enjoyed natural protection (Murphy e. al. 1980). He gave open encouragement to the development of the services sector which he took as a sign of a mature and rich society (Grattan 1956, 380); this was something his detractors overlooked (Bulbeck 1987, 11).

Colin Clark, Director of the Bureau of Industry, Brisbane, Queensland Enjoying his platform, Clark took the opportunity to give speeches and highlight the work of the Bureau so as to enlighten and educate Queenslanders. He adopted a strong media profile, so strong in fact that he was frequently caricatured by cartoonists and commentators alike in the press as a number-crunching genius. His first public address as Director emphasised the importance of human resources over natural resources. He told his audience of the three-fold classification of national income and that Australia employed 50% of its labour force in services with agriculture

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and manufacturing sharing the remainder equally. He spoke, too, of how manufacturing was hampered by a lack of scale economies.48 One of Clark’s other public duties was to publish a monthly circular, entitled Economic News. For the next fourteen years it became a vehicle for Clark’s views on a range of economic and social matters (Perkins and Powell 1990). One edition, on the resources at the disposal of the Axis powers Germany, Italy and the Soviet Union in early 1941, was later published in The Times. An impressed J. K. Galbraith would later remark that Queensland ‘must be the only political unit in the world which provides its citizens with economic comment of this order’.49 He was not to know, however, that after 1940 Clark used Economic News to disseminate his own religious-economic views with material on marriage, fertility, birth rates and the need for rural industries (Jackson 1968, 75–80). Clark pleased Forgan Smith when he argued that the net effect of Commonwealth transactions with Queensland between 1927 and 1940 had been to withdraw income and employment from the state rather than to create it. It drew a rebuke from Federal Treasurer Arthur Fadden who dismissed Clark’s ‘ingenious calculations’ as ‘sheer parochialism’.50 In September 1940 Frank Cooper, the Queensland Government Treasurer, became the first Australian politician to use estimates of national income in bringing down a state budget (Crossman 1997, 4). Clark was certainly the first official to bring a slide-rule into a meeting of the Australian Loan Council (Groenewegen and McFarlane 1990, 112). In fact, it was argued that Clark’s facility with his slide-rule allowed Queensland to gain an advantage over delegates from the other states. One premier remonstrated that he would not come back to another conference until he, too, had one of those slide rules!51 However, even with its economic maestro, Queensland found that there was strong resistance from the Federal Treasury and the Commonwealth Bank to an expansionary loan policy (Kenwood 1988, 110). A 1940 item in Economic News noted that Queensland’s productivity rate had barely risen over the past five years because its tertiary sector

48 ‘Human Resources More Important Than Natural Resources’, The Telegraph (Brisbane), 30/5/1938. 49 J. K. Galbraith to Clark 16/1/1952, Clark Papers, UQ. 50 ‘Federal Treasurer Rebukes Mr Colin Clark’, The Telegraph (Brisbane), 16/11/1940. 51 ‘Figures Wizard Boon for State’, Sunday Mail (Brisbane), 3/2/1946.

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had dragged down productivity gains in manufacturing and agriculture. Clark identified the existence of too many retail shops as a leading cause of this.52 There is no doubt that Clark revelled in being part of a small circle of oligarchs, rather than public servants, who ran Queensland’s affairs: ‘We were rather like a family party, we knew each other and no official co-ordination was needed’ (Clark 1986, 20). This meant for him an entrée to Brisbane high society, such as it then was. His old friend John Parker wrote ‘I hear that you are at the very top of Queensland “society” and you are both enjoying yourselves very much … It must be pleasant to be in that sunny climate far away from the dangers of war (unless the Japanese make themselves inconvenient)’.53 Clark assured him there was no ‘society’ in Brisbane except for the officials of the Australian Workers Union (McQueen 1979). The bureaucratic elite would gather to dine at the Johnsonian Club in downtown Brisbane. Then, very much a provincial city, with a population of just over 300,000, Brisbane was really a large country town with limited cultural amenity. For a man who craved sparkling, witty company, Clark may well have found Brisbane, and more broadly Queensland, a hardship posting. Intellectual circles were small and fragmented then and cultural life was underdeveloped. Most of Queensland’s senior public servants did not have university education (McQueen 1979, 44). Clark might have felt like Benham a decade earlier in Sydney when he complained that lunch-time conversation with his colleagues was ‘either non-existent or about sport’.54 John Douglas Pringle (1958), an English newspaper editor who came out to Australia in the early 1950s, also made unflattering observations about the cultural life in the two larger cities of Melbourne and Sydney; he barely mentioned Brisbane. There were accounts of Clark emerging from the Treasury building at lunchtime, attired in a rumpled linen suit, munching his sandwiches as he wandered through the city streets and peered at the colonial architecture. His exotic range of headgear to protect himself from the fierce Queensland sun gave him away; it was the

52 ‘Mr Clark Tells Why State’s Living Standard Has Been Stationary’, The Telegraph (Brisbane), 4/5/1940. 53 Parker to Clark 28/12/1938, Clark Papers, UQ. 54 Benham to E. Cannan 21/1/1938, RSE, LSE.

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cause of some local merriment to newspaper cartoonists when he began wearing a ten-gallon hat. In an age before air conditioning was the norm in workplaces, the steamy humidity of Brisbane made working conditions unpleasant. So oppressive was this humidity, Clark observed that it made womenfolk look ‘a bit washed out’.55 He and Marjorie settled in a nine-roomed riverfront property in Toowong, an inner-city suburb of Brisbane. Some of the funds came from selling the farm in Cotley. A little further up their new residence on the river was the University of Queensland. The university was then small and, while it had strength in agricultural science and engineering, it played little part in state affairs. When Clark first visited the campus at St Lucia in 1937 to look over the construction of the Forgan Smith Building, he reported that it was a ‘lousy’ institution with most of the staff looking like ‘jailbirds’.56 One exception was the Scottish-born economist, John Gifford, who had undertaken a Rockefeller scholarship to study at the Kiel Institute in Germany. Clark would later praise Gifford’s textbook Economics for Commerce (1942) for its non-mathematical approach since at the time most economics students in Australia were Arts students.57 After the war Clark attacked Australian universities for their mediocrity and cultural and intellectual deficiencies. He blamed the agreeable climate and the fact that the best and brightest were attracted overseas never to return.58 Occasionally, Clark would speak out against some aspects of Australian life. For instance, he launched in an issue of Economic News a scathing attack on breweries and their role in encouraging heavy drinking: ‘Many hotels have been perverted into horrible machines for grinding out profits for the brewers at the expense of the drunkenness and degradation of their customers.’ In particular, he attacked the infamous Australian tradition of the ‘six o’clock swill’ where exclusively male drinkers drank furiously before public houses closed at 6 p.m. The other restraint on drinking was to limit the number of public houses. And, amusingly, Clark saw that this licensing system, designed to promote temperance, actually had the opposite effect and was the unintended

55 Clark to Marjorie Clark nd, Clark family letters. 56 Clark to Marjorie Clark September 1937, Clark family letters. 57 ‘The Teaching of Economics’, Economic News 11(9). 58 ‘Mr Colin Clark Slates Aust Universities’, Queensland Times, 7/10/1948.

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result of ‘an unholy alliance’ between brewers and prohibitionists. He motioned that ‘[t]he prohibition of drinking was just as intemperate an act as was over-drinking’.59 Clark proposed overhauling the licensing laws to increase competition and reorganisation of the trade to permit drinking with meals.60 He later regarded breweries as some of ‘the most powerful and wealthy monopolies’ in Australia.61 Clark was prepared to tell this in person to the Queensland Temperance League bringing the gathering ‘to the edge of their seats’.62 All this recalls what David Clark said in his memoir of his father, namely that he had a sense of fun, loved intellectual conversation, as well as drinking and singing at convivial gatherings. Clark also took particularly delight in attacking ‘wowserism’, a popular term of derision in post-war Australia directed at obsessive puritanism.

Paying Tribute to Australian Economists In August 1938 Clark was invited to give the Joseph Fisher Lecture at the University of Adelaide. The lecture was entitled ‘Australian Economic Progress against a World Background’ and a prelude to his thoughts in The Conditions of Economic Progress . Clark (1938a) had already unveiled his new measuring rod of ‘international units’ to gauge real income per head across nations. He selected an unusual outlet to launch his innovation, the Hamburg economics journal Weltwirtschaftsliches Archiv, with the harmless sounding title ‘The internal comparison of national income’. However, it seems he placed it there as a special message to the Nazi dictatorship: that German living standards were only half of those in America and a third lower than in Britain. His analysis drew the fire of the Reich Statistical Office (Tooze 2007, 138). Clark had kept an eye on the Nazi economic machine and abhorred its policies against minorities, including intellectuals. In an earlier visit to Nazi Germany he had, as a favour to a friend, smuggled out bundles of Reichmarks in contravention of the Reich

59 ‘Drunkenness and the Drink Trade’, Economic News, July 1942. 60 ‘Hotels Grind Out Brewery Profits Says Colin Clark’, Sunday Mail (Brisbane),

16/7/1944. 61 ‘Brewery Monopoly Under Fire by Colin Clark’, The Telegraph (Brisbane), 26/3/1952. 62 ‘Lecturer Gives Temperance League a Shock’, The Argus (Melbourne), 27/3/1952.

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Capital Flight Tax, then in place.63 He later told one of his sons, Bernard, that ‘there is nothing so innocent as a rucksack full of dirty clothes, or not quite full as the bottom was filled with notes’. Foreshadowing the contents of his book The Conditions of Economic Progress (1940), Clark uncovered some astonishing disparities in the level of real income recorded between countries. His figures showed that both Australia and New Zealand were the only two countries where the average real income of primary producers matched those of industrialised countries; indeed, New Zealand boasted one of the highest standards of living after America. Startlingly, Clark also found that most of the world’s population lived in abject poverty. His empirical work again cast doubt on the application to Australia of the principle of diminishing returns. Clark found that the Malthusian fear of overpopulation was not symmetrical; industrialised countries with low rates of population growth did not necessarily enjoy superior economic progress. However, rapid population growth in largely agricultural countries was accompanied by marked declines in the standard of living (Clark 1938b, 12). Countries could break free of this Malthusian devil by capital accumulation and growth. Echoing Petty and Ibn Khaldoun, he regarded a growing population as a sign of a flourishing society. Praising the work of Fisher, Clark (1938b, 21) called for a more intensive study of the services sector. He urged that that there be a ‘balance’ between the three sectors of the economy noting, though, that the real incomes of secondary and tertiary producers were eroded by protection. Starting off his lecture, Clark (1938b, 8) pointed out how economic history had shown that to escape the tyranny of diminishing returns it was necessary to have capital investment placed in secondary and tertiary industries. Clark (1938b, 21) argued that Australian secondary industry needed to be more productive and that there was no reason ‘why we should rest content until we have achieved the same abundance of manufactured goods as they have achieved in those countries’. Demonstrating that he was not a ruralist, Clark advised against more labour being allocated to agriculture citing the ‘niggardliness of nature’; most of the good land had already been taken up, indicating that there was likely to be abandonment of marginal lands ‘where cultivation was too optimistically undertaken in the past’. Future progress in agriculture would only come

63 Information supplied by Bernard Clark.

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from more investment and improvements in scientific technique but the sector was likely to see ‘comparatively little expansion in employment’ (Clark 1938b, 22). In short, Clark was laying out reasons for diversifying the economy because agricultural expansion was likely to face difficulties in land settlement and in finding new export markets (Jones 1966, 145). He conveyed the same message about the primacy of manufacturing and services for economic growth in two concurrent works, firstly his co-authored work with Crawford and in The Conditions of Economic Progress . In his honours thesis, M. A. Jones (1966, 146–147) makes the interesting observation that, despite these findings and Clark’s undoubted gravitas, he made little attempt to persuade the state government to implement a policy designed to encourage manufacturing in Queensland. One reason for his reluctance was that complex manufacturing was likely to be urban-based and centralised and this conflicted with his preference for decentralisation (Jones 1966, 148). On that note Clark saw potential for secondary and tertiary activities to be based in rural areas (Jones 1966, 148–149). In his Fisher Lecture, Clark warned that Australia faced macroeconomic challenges in the near future. While the idea would be repugnant to fiscal conservatives, he advocated another dose of loan expenditure in response to lagging export prices. As a young, industrialised country Australia offered investment opportunities, Clark argued, better than Britain or America. That said, he observed that, even at the peak of the cycle, Australia had 7% unemployment attributable to structural factors. In concluding his lecture, Clark paid tribute to his new colleagues and proclaimed optimism about Australia’s future: As a returning migrant from the old world, and knowing many European countries, I would say that, other than Sweden, I know of no country in the world for which I have such high hopes as I have for Australia, as a country in which the resources of economic science should suffice to counter depression. In Australian Universities … economics is taught and studied as a true applied science, seeking practical remedies for depression and other ills which confront us, eschewing on the other hand the theoretical scholasticism of European universities, or any partisan adherence on the other. In no other country is the public so well informed and so critical on economic questions as in Australia. (Clark 1938b, 31)

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The lecture was well received for its comprehensiveness, reach and innovative use of comparative statistics. While Allan G. B. Fisher, who received a copy of the lecture found it ‘interesting’ and evidence of Clark’s ‘brilliance as a statistician’ it also came ‘with a certain rashness’ which led him to be wary of the conclusions.64 In another lecture, this time on ‘The Economist and Rearmament’ given at the University of Western Australia in April 1938, Clark argued that rearmament could be financed by taxation when there was full employment and by borrowing when there was unemployment (Petridis 2009). He felt that Copland’s view that state government expenditure be ‘scaled down’ to allow increased Commonwealth spending upon defence was ‘entirely wrong’.65 Clark said that both State and Commonwealth funding could increase because there still was enough slack in the economy to accommodate them. Copland admonished the younger man for misrepresenting his views and for breaking an apparent convention amongst Australian economists: ‘I always take the view that … economists in this country should not start squabbling in public amongst themselves … The economists of England have to some extent rendered themselves futile before the public by indulging in controversy’.66 While he regretted his dissent, Clark emphasised that their views were not all that dissimilar and involved ‘a question of judging in what phase of the trade cycle we now are’.67 It could be argued that Clark knew his Keynes better than Copland or any other Australian economist but that this bickering was a first sign of what would become Clark’s estrangement from the leaders of the Australian economics profession. At this time there were official overtures in train to attract Clark back to Britain. On a visit to Australia to attend the British Commonwealth Relations Conference in 1938, Ernest Bevin, the trade union leader and future Labour politician, told Clark that he was sorely needed back in Britain68 ; later, in 1943 Clark received an invitation to join staff at the

64 A. G. B. Fisher to J. La Nauze 8/10/1938, La Nauze Papers, NLA. 65 ‘State Loan Expenditure Should Not Be Cut Down’, Worker, 19/4/1938. 66 Copland to Clark April 1938, Copland Papers, NLA. 67 Clark to Copland 27/4/1938, Copland Papers, NLA. 68 Barbara Blackman interview with Clark 1986, NLA.

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British Embassy in Washington serving under Lord Halifax.69 By referring the matter on to the Premier, Clark fudged the issue; his contract with the Queensland Government stipulated that he had to give a year’s notice, and that, in any case, Cabinet was reluctant ‘to disturb the existing arrangement at the present time’. Queensland was determined to hold on to their man. Presumably Clark could have pulled rank but was obviously content to stay put. Meanwhile, Clark marked the year before the outbreak of the Second World War with a publication that attempted to gauge the economic performance of the Soviet Union. Before that, he showed a certain naiveté, given the dire international situation of 1939, by forecasting in Economic News that the prospects for a revival in world trade were good despite ‘windy’ talk about national self-sufficiency.70 Admittedly Clark agreed there was political anxiety in Europe but that this disguised the fact that the world economy was entering a new upward trend. For Australia this meant a possible repeat of rising commodity prices during the trade expansion that occurred before the First World War. Some of Clark’s future research agenda, infused with distributivist themes, came through in a Bureau of Industry’s Annual Report to the Queensland Parliament in 1939 which suggested that a population of one million for Brisbane in the near future was undesirable. The big metropolitan ideal, Clark wrote, is not necessarily the big national idea—it did not follow that the rapid growth of capital cities was a sign of national progress. The report argued that over-concentration on metropolitan growth was at the expense of rural development. So far, Queensland had largely avoided the problem of congested cities by having a decentralisation policy (Kenwood 1988). However, this was more by accident than design since Brisbane geographically lay in the south-east corner of the state, far removed from the coastal ports that served its agricultural and extractive industries. It meant that Brisbane was not the focus of Queensland economic life (McQueen 1979, 41–42). Furthermore, the state government’s regionalism policy was motivated by ‘the reality of Queensland politics’ which demanded that state Labor governments already had to acknowledge the heavy weighting given to

69 Premier Cooper to Clark 28/5/1943, Clark Papers, UQ. 70 ‘Australia May Be on the Verge of Era of Marked Economic Expansion’, The

Telegraph (Brisbane), 29/3/1939.

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rural electorates (Kenwood 1988, 115). This political bias towards rural areas led to economic conservatism, that is, a belief in primary industry and rejection of urban-based manufacturing (Jackson 1968, 23). As a Distributivist, Clark felt that the centralisation of economic effort in the big cities, with their corresponding industrial and political pull, was detrimental to balanced and rural development. In advancing this view, Clark, while supported by Forgan Smith, was making a rod for his own back by taking on big city interests and mainstream Australia.71

References Belloc, H. 1912, The Servile State. London: T.N. Foulis. Bulbeck, C. 1987, ‘Colin Clark and the Greening of Queensland: The Influences of a Senior Public Servant on Queensland Economic Development: 1938 to 1952’, Australian Journal of Politics and History, 33(1): 7–18. Carroll, B. 1978, ‘William Forgan Smith: Dictator or Democrat’, in Murphy and Joyce (eds.) The Premiers of Queensland. St Lucia: University of Queensland Press: 398–432. Castles, I. 2014, ‘Measuring Economic Progress: From Political Arithmetick to Social Accounts’, in A. Podger and D. Trewin (eds.) Measuring and Promoting Well-Being. How Important Is Economic Growth? Canberra: ANU Press: 271–280. Clark, C. 1937, National Income and Outlay. London: Macmillan. Clark, C. 1938a, ‘Internationale Vergleich der Volksein kommen’ (International Comparison of National Income)’, Weltwirtschaftliches Archiv, 47(1): 51–76. Clark, C. 1938b, ‘Australian Economic Progress Against a World Background’, in Joseph Fisher Lecture in Commerce. Adelaide: Hassell Press. Clark, C. 1940, The Conditions of Economic Progress. London: Macmillan. Clark, C. 1956, ‘Review of Rural Industries in Australian Economy by J. Shannon’, Economic Record, 32(63): 377–380. Clark, C. 1958b, Australian Hopes and Fears. London: Hollis and Carter. Clark, C. 1962, ‘Economic Growth’, in J. Wilkes (ed.) Economic Growth in Australia. Angus and Robertson: Sydney: 1–29. Clark, C. 1981, ‘The IEA and the Fabians: Comparison and Contrast’, in A. Seldon (eds.) The Emerging Consensus…? London: IEA. Clark, C. 1986, ‘The Bureau of Industry’, in D. Fraser (ed.) Administrative History in Queensland. Brisbane: Royal Australian Institute of Public Administration.

71 ‘Future Growth of Brisbane Is Undesirable’, The Telegraph (Brisbane), 14/11/1939.

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Costar, B. 1988, ‘Smith, William Forgan (1887–1953)’, in Australian Dictionary of Biography, Vol.11. Melbourne: Melbourne University Press. Costar, B.J., and P. Strangio, 2004, ‘B. A. Santamaria: “A True Believer”?”, History Australia, 1(2): 256–278. Cuyvers, L. 1983, ‘Keynes’s Collaboration with Erwin Rothbarth’, Economic Journal, 93(371): 629–636. Crossman, P. 1997, ‘Plus Ca Change: Problems Faced by the Queensland Government Economic Advisor’, Economic Analysis and Policy, 27(1): 1–42. Dalton, H. 1957, The Fateful Years; Memoirs 1931–1945. London: Frederick Muller. Duncan, B. 1991, The Church’s Social Teaching: Rerum Novarum to 1931. Melbourne: Collins Dove. Evans, R. 2007, A History of Queensland. Cambridge University Press. Endres, A.M. 2007, ‘Colin Clark’, in J.E. King (ed.) A Biographical Dictionary of Australian and New Zealand Economists. Cheltenham: Edward Elgar: 49–54. Gifford, J.K. 1942, Economics for Commerce. Brisbane: University of Queensland. Grattan, H. 1956, ‘Colin Clark: A Conservative as Radical’, The Antioch Review, 16(3): 374–384. Groenewegen, P.D. and B. McFarlane, 1990, A History of Australian Economic Thought. London: Routledge. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. Herbert, W. 1991, ‘Vale Colin Clark’, World Review 30(3): 60–63. Irving, S. 2014. ‘Governing Australia: The Problem of Northern Australia’, Australian Historical Studies, 45(3): 388–406. Jackson, W. 1968, ‘The Government and Economic Growth in Queensland, 1946–1951’, BA (hons), University of Queensland. Jones, M.A. 1966, ‘The Government and Economic Growth in Queensland, 1930–1940’, B. Ec. (hons), University of Queensland. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress. London: Macmillan: 107–123. Keynes, J.M. 1940, How to Pay for the War. London: Macmillan. Keynes, J.M. 1983, Volume XII of the Collected Writings of John Maynard Keynes, Economic Articles and Correspondence, ed. D. Moggridge. London: Macmillan and Cambridge University Press for the Royal Economic Society. Laurent, J. 2005, Henry George’s Legacy in Economic Thought. Cheltenham: Edward Elgar. Lepenies, P. 2016, The Power of a Single Number: A Political History of the GDP. New York: Columbia University Press.

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Maddison, A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. McQueen, H. 1979, ‘Queensland: a State of Mind’, Meanjin, 38(1): 41–51. Marcuzzo, M.C. and A. Rosselli, 2013, Economists in Cambridge: A Study Through Their Correspondence, 1907–1946. London: Routledge. Marr, A. 2010, The Making of Modern Britain. London: Pan Macmillan. Melleuish, G. 1999, ‘Distributivism: The Australian Political Idea?’, Journal of Australian Studies, 23(62): 20–29. Murphy, D.J., R.B. Joyce and C. Hughes (eds.), 1980, Labor in Power: The Labor Party and Governments in Queensland, 1915–57 . St Lucia: University of Queensland Press. Patinkin, D. 1976, ‘Keynes and Econometrics; on the Interaction Between the Macroeconomic Revolutions of the Interwar Period’, Econometrica, 44(6): 1091–1123. Petridis, R. 2009, ‘Depression, War and Recovery: Western Australian Economics, 1935 to 1963’, Paper given at 22nd HETSA conference, Notre Dame University. Perkins, J.O.N. and A. A. Powell, 1990, ‘Colin Clark, 1905–1989: An Affectionate Memoir’, Economic Record, 66(4): 329–341. Pringle, J.D. 1958, Australian Accent. London: Chatto and Windus. Reddaway, W.B. 1995, ‘Recollections of a Lucky Economist’, Banca Nationale de Lavoro Quarterly, 48(192): 3–16. Tooze, A. 2007, The Wages of Destruction. London: Penguin. Winch, D. 1971, Economics and Policy. London: Fontana.

CHAPTER 7

Three Classic Contributions

While a civil servant at the Bureau of Industry, Clark astonishingly produced three books over a four-year period. Before war administrative tasks were thrust upon him, Clark managed to publish all of them before 1942. The first, The Conditions of Economic Progress (hereafter Conditions ) was completed in 1939 after five years of intense preparation. Clark had put the final touches to it whilst working at the Bureau. Sometimes he had to meet the demands of the minister and drop the manuscript but, for the most part, he had little administrative responsibility and enormous latitude to complete his academic work. One such task relating to ‘Conditions ’ had Clark filling out a large sheet of paper with a thousand squares listing some thirty countries and the components of their GDPs (Herbert 1991). As he laboured over the manuscript, Clark saw an opportunity to spin out a brief appraisal of the economic performance of the Soviet Union and to inquire whether it was a superior economic system to capitalism.

A Critique of Russian Statistics (1939) After being dubbed ‘the way of the future’ by such figures as George Bernard Shaw and Sidney and Beatrice Webb, Russia had been a source of fascination for socialists everywhere and Clark was no exception (Overy © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_7

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2009). Brian Reddaway and Keynes had also been intrigued by Russia; Clark was already working on the subject before he took the Queensland position. When shown an early draft, Keynes said it was his ‘best effort so far in making bricks without straw’ but cautioned that ‘some of your orders of magnitude might not turn out right’, given the secrecy of the Soviet state. Keynes warned ‘There must necessarily always remain a considerable doubt about the accuracy of the data’.1 That said, Keynes felt the paper was too long for the Economic Journal and recommended that it be sent to the Royal Statistical Society. Events turned in Clark’s favour. The paper was published by Macmillan as A Critique of Russian Statistics in July 1939, just a month before the Nazi-Soviet non-aggression pact. This political development brought Clark’s work to the fore; he was rewarded for his speed, verve and statistical virtuosity. It was the first comparative statistical estimation of the Soviet experiment and looked at national income per capita between the years 1913 and 1937 (Dobb 1940). Michael Polanyi felt the report was of ‘great significance’ by ‘an authoritative statistician’ though the study was unable to evaluate the results of the Soviet experiment’.2 On the title page, Clark used, as an inscription, Dalton’s telling observation after visiting the Soviet Union in 1932: ‘I think it is a disaster for the idea of planning that Russia should have been the country where it has been tried out’. Otherwise impressed by what the Soviet Union was trying to achieve, Dalton requested that his name not be invoked so the comment remained anonymous.3 It was one of the few normative comments in a book which was not a partisan study but a dry, technical inquiry into the economic position of Russia and her standard of living taken at three historical junctures: in 1913 before the First World War; in 1928, before the introduction of the first Five Year Plan; and in 1934, midway through the Second Five Year Plan. Clark found that the Russian official figures were not totally deceptive though he had not used them first-hand. Rather, he subjected them to tests of internal consistency and, by comparing them with those of other countries, particularly Britain, sought to determine Russia’s economic progress. Clark confirmed that

1 Keynes to Clark 23 July 1938, Clark Papers, UQ. 2 ‘Review of A Critique of Soviet Statistics’ by Michael Polanyi, Polanyi Papers,

University of Chicago. 3 Clark to B. Pimlott 13 March 1980, Clark Papers, UQ.

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Russian national income per head had barely risen from 1913 until the period 1934–1937, when it shot up by 42% due to bountiful harvests and surging industrial growth. From his explorations, Clark detected that Russia was still under the thumb of the ‘Malthusian devil’ with ‘large stretches of infertile soil’ coupled with ‘still fertile marriage beds’.4 In short, there was ‘concealed unemployment on a massive scale’. Nor were there full bellies; the Russian diet was actually poorer than it had been in 1913. In other words, Russia was ‘a poor and hungry country’ with ‘comparatively limited natural resources’. This key finding meant that there were ample reserves of manpower which could be absorbed into industry or the armed forces without affecting the agricultural sector. Clark found it ironic that Soviet Russia was struggling with population increases while the West seemed to be rejoicing in its depopulation. He also found that the rate of industrialisation was not any quicker during the period of the First Five Year Plan, from 1928 to 1934, than it had been during the Tsarist period. In other words, socialism had not worked. He concluded, however, that there had been an increase in real income per capita since 1934, propelled by the production of armaments and by bountiful harvests. After the Second World War, Clark would return to the task of unravelling misrepresentations about Soviet economic performance as part of his wider interest in development economics.

The Conditions of Economic Progress (1940) In terms of personal effort and ingenuity this was Clark’s most spellbinding work. After the 1940 edition, there were subsequent and wholly reworked versions in 1951 and again in 1957. This suggests that it was Clark’s magnum opus; citation data and book sales confirm that it was indeed a classic. While the timing of publication, on the cusp of the Second World War, was not helpful the preface revealed much about the author, especially his approach to economics. Phyllis Deane, who reviewed both the 1951 and 1957 editions, said that the later versions were ‘essentially the same book … the framework of the first edition expanded by the addition of the miscellaneous ideas, notes and tables needed to keep

4 Ian Bowen ‘The New Steamroller’, The Spectator, 14 July 1939, Clark Papers, UQ.

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the original results up to date’ (Deane 1958, 371). This feature, at least, allows us the convenience of discussing all three versions in sequence.

The First Edition The first edition of The Conditions of Economic Progress, described as path-breaking, saw Clark working on territory that would be later called development economics (Speich 2011, 23); (Arndt 1987). The closest competitors as originators of this line of thought would be Paul Rosenstein-Rodan (1944) and Arthur Lewis (1954). More importantly, the first edition opened up a whole new vista of applied economics about the determinants of growth and distribution in the long run and why there were differing rates of growth for the thirty economies under Clark’s microscope. He described it as ‘a comparative study of the investigations which have been made in all the principal countries into national income, and economic factors bearing upon national income’. In the opening pages he rejected the idea that economic progress meant the maximum possible growth per head in the output of goods and services. It was more subtle, making allowance for, leisure, the distribution of incomes, macroeconomic instability and also the depletion of natural resources (Clark 1940a, 1–26). In the preface, where he revealed how he approached economics, Clark attacked the lack of a scientific approach by English academic economists. He felt that their preference for the theoretical over the scientific approach to economics was futile: ‘It would be laughable, were it not tragic, to watch the stream of books and articles, attempting to solve the exceptionally complex problems of present-day economics by theoretical arguments, often without a single reference to the observed facts of the situation’. This was a life-long theme of Clark’s, that example was better than theoretical concept. For Clark, economic research could only be achieved by ‘the careful systemisation of all observable facts, the framing of hypotheses from these facts, prediction of fresh conclusions on the basis of these hypotheses, and the testing of these conclusions against further observable facts’ (Clark 1940a, vii). He (Clark 1940a, 26–27) also rejected the ‘rather ignorant sophistication’ of economists that one could not compare the levels of income between individuals or communities or between times and places. He brought, then, to the economics of his time a fresh, robust empirical approach to the discipline.

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On that note Clark suggested there was only room for one or two grand theorists in each generation, ‘men of transcendental powers of reasoning’, and suggested that the great body of economists apply themselves to building the temple of economic science ‘with the discovery of new facts’. And it was that mentality and industrious practice which made Clark ‘a great, rather than just a good, economist’ (Powell and Perkins 1990, 330). However, was Clark being a little disingenuous in picturing himself as a mere collector and analyst of economic data than a theorist? One of his Labour Party colleagues, Evan Durbin, had earlier queried him on this: ‘By the way, Colin, why do you pretend to a respect for academic economics on the grounds of your lack of authority? You must know both that economics is in such a muddle that anyone can say what they think; and that “professional economists” are no more clearer than people like yourself whose approach is more empirical. It is embarrassing to be regarded as an “authority’”.5 The Conditions of Economic Progress was hailed as ‘a landmark in the field of applied economics’ (Deane 1951), for ‘blazing the trail’ (Plant 1940) while his friend Paul Douglas (1941) acknowledged its epic sweep, describing it as ‘a tour-de-force of statistical economics’. The Australian grazier and Cambridge economics graduate Alan Ritchie, who had, with Copland’s encouragement, entertained Clark on his pastoral estate in Western Victoria, told him that his book showed how economics ‘should be made to sit up and be useful’. He told Clark that for his ‘attempt to put some life into statistics you should be praised above other economists’.6 Two of Britain’s greatest economists at the time also effusively praised the book. Lionel Robbins considered it one of the ‘great books of this century’7 while John Hicks described it as ‘the most ambitious book on economics that had ever been written’ in the sense that it took the world and all history as its province.8 Clark’s former mentor, G. D. H. Cole, observed that it ‘brings under review an immense mass of statistical information for practically every important country of the world and makes an heroic attempt to co-ordinate this information so as to arrive

5 E Durbin to Clark, March 1931, Clark Papers, Brasenose. 6 A.B. Ritchie to Clark 21 April 1943, Ritchie Papers, UMA. 7 Clark to Marjorie Clark 20 November 1947, Clark family letters. 8 ‘Review of The Conditions of Economic Progress’, The Manchester Guardian, 8 May

1951.

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at an approximate measurement of the relative wealth and income of all the leading countries and of the tendencies manifest in them towards economic progress’.9 In Conditions Clark wanted to demonstrate the long-term essentials necessary for a country to achieve material progress which, following Pigou, he equated with an improvement in economic welfare. The focus was on how changes in demand led to economic development. Clark was an ‘optimist’ in the sense that ‘the scientific method’ of marshalling data along with the ‘absolute truth of figures’ showing economic progress was all that mattered (Reimann 1941, 15). Technically, the book’s main achievement was to compute the relative value of money in different countries or, more strictly, to establish the comparative real income per capita in thirty countries in terms of an artificial currency unit of constant purchasing power. That is, incomes were computed in terms of an International Unit equivalent to the amount of goods and services which one dollar would buy in America over the average of the decade 1925–1934. It became, in Clark’s mind, the best way of measuring the comparative real products of different countries instead of merely using exchange rates which understated the purchasing power of money and so understated the income and production of poorer countries. While the price data were incomplete Clark discovered astonishing differences between levels of real income between countries. He was the first economist to present comparable estimates of real income across countries (Castles 2014). Arndt (1979) complimented him for presenting convincing statistical evidence that revealed a ‘gap’ between rich and poor countries and helped awaken western opinion to the problem of underdevelopment. Moreover, before the arrival of United Nations data Clark’s figures were widely quoted (Arndt 2000b). Ian Castles (1999, 16) wrote that few economic research projects have yielded such power as this finding. What Clark (1940a, 2–4) found was that the world was still ‘a wretchedly poor place… Oft repeated phrases about poverty in the midst of plenty, and the problems of production having already been solved if only we understood the problems of distribution, turn out to be the most untruthful of modern clichés’. In short, most of the world’s 9 Cited in ‘Economic Progress: Colin Clark New Work’, The West Australian (Perth) 23 August 1940.

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economies were underdeveloped, meaning that, even if all productive resources were employed, there would still be widespread poverty. Only a few industrialised countries—America, Britain, Germany, France and Germany—produced half of the world’s output. He conceded that overpopulation in a poor agricultural country could be ‘disadvantageous’ (Clark 1940a, 6). In short, Clark wrote, ‘The age of plenty will still be a long while in coming’. Hayek cited this line in The Road to Serfdom (1944), lauding Clark’s virtuosity with statistics and for being of ‘progressive views and strictly scientific outlook’ For. Clark, the major cause of global poverty was attributed to a lack of capital expended on machinery, knowledge and skills and accessing natural resources (Plimsoll 1941, 108). The wider ambit given to capital showed that Clark was reassessing its role in economic progress. Looking at what he called ‘the morphology of economic growth’, Clark confirmed Petty’s generalisation that, with economic progress, agriculture showed a relative decline in both employment and national output as manufacturing grew more quickly. Eventually manufacturing would be supplanted by the rise of services where employment levels had not yet reached their maximum. This structural change reflected the degree of development and maturity of an economy. Clark (1940b, 176) labelled this process ‘Petty’s Law’. The rise of services was based on the ‘hierarchy of needs’ hypothesis where services satisfied higher needs than goods as personal income grew. The reallocation of the factors of production within the economy related to the interplay of both price and income elasticities for the products of all three sectors, together with the respective labour productivity for each sector (Clark 1949). If there was a gap between a nation’s real income and its potential real income then this was mostly attributable to the disparity between savings and investment. Clark also found, no doubt inspired by his earlier work with Allyn Young and G.T Jones, that large-scale production plants did not increase output per head; this was determined more by the relative rate of growth of the industry as a whole. In short, there was no tendency towards an ‘optimum’ size of plant; in fact, increasing returns to scale could well be associated with a declining average size of the firm. Young had spoken more of the cost savings to be made by ‘the economies to be reaped by the progressive sub-division and specialisation of processes. While big economies could prosper from this, so too could smaller economies which

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engaged in international trade by specialising in a number of manufactures or services. When Conditions was first published it created a storm in demonstrating the usefulness of a quantitative approach in measuring economic performance between countries. Despite its grand ambition and leap into a new form of analysis, the graph-laden book was something of a disappointment in presentation, analytical punch and reasoning (Maddison 2004). The book revealed that while Clark’s academic work was brilliant and overwhelming in its detail, it was inclined to be disordered, often poorly presented and marred by poor referencing (Maddison 2004, 27). In fact, Maddison (2004, 27) attributes Clark’s lack of recognition as a leading figure in the history of macro-measurement on his clumsiness and a lack of attention to detail and presentation. He lamented that had Clark ‘concentrated his efforts and been less impatient to cover so many problems, his impact would have probably been much greater’. Clark (1940b, 269) readily admitted to one critic, L.F. Giblin (1940), that it would have been a case of increasing returns had he spent more time labelling his tables. Reviewers fretted at its disorderly and fragmented nature, the paucity of headings, the maze of tables, together with the lack of an index and bibliography (Peters 2001). Erwin Rothbarth (1941, 120) identified another area of weakness in Clark’s work, namely of ‘not reaching the highest level of achievement … the product of close theoretical penetration of complex parts.’ While applauding it as a pioneering effort, Rothbarth found the book ‘annoying’ in its presentation, ambition and ‘vagueness of purpose’—that is, whether it was a handbook of national income statistics or a treatise on the nature of economic progress. This criticism was echoed by reviewers of later editions. Plant (1940, 37) felt Clark was being ‘precious’ in his attack on the economics profession and underestimated the work being done in the field which he had used as scaffolding. He was being equally precious about those who did not share his distinction between theory and science. As we shall see, these offending passages were deleted from the next edition because of an impetus in economics research towards empiricism. This had been triggered by the Second World War but also by the gathering realisation that the post-war challenge for economists was to address long-run problems of production and growth (Clark 1951, vii).

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Subsequent Editions While the two subsequent editions had an identical structure to the first edition, they were entirely rewritten though they still remained, in nature, a voluminous reference book rather than a treatise on economic development. The 1951 edition struck one reviewer as lying ‘nearer to the United Nations Statistical Yearbook than to Adam Smith’s Wealth of Nations (Brown 1952, 79–80). Pressing the point, A.J. Brown suggested that the title of Clark’s book was a misnomer, proposing instead ‘Materials for the Study of Economic Progress and How to Begin’. Another critic suggested the book be called The Chronicle of Economic Progress because of its surfeit of statistical material and absence of general conclusions (Breimyer 1958, 55). John Hicks also alluded to this, saying that Clark had ‘tried to do too much’ and the book ‘nearly ceased to be readable so rapidly are we whizzed from one scene to another and from one table to another’.10 Certainly, the successive editions of Clark’s book were rich in facts and figures. While R.G.D. Allen (1951, 432) found it ‘an extraordinary compilation … of a tireless and ingenious economic statistician’, he felt readers were rather swamped by a jumble of tables without the commensurate synthesis and conclusion. He warned: ‘We are no longer so willing to accept that situation’. Trevor Swan (1951, 240) felt that the new data hid ‘the freshness and originality of the theses’ advanced in the first edition which was ‘a classic’. The general reaction, then, to the subsequent editions of the book was that, while the statistical material had been updated and expanded upon, they were not received with the excitement and wonder as the first edition. This was simply because other economists had started to work in the same field, collating statistical material. The old criticism, of falling between two stools, was echoed in a review of the third edition of Conditions where Phyllis Deane (1958, 371), lamented that, despite Clark’s encyclopaedic knowledge of the subject, the book was limited in making ‘an effective analytical insight’. She was also critical that Clark’s display of ‘reckless statistical courage’, appropriate for the first edition some eighteen years ago, now looked cavalier given the better statistical material and more sophisticated techniques available (Deane 1958, 371). Another belated reviewer said the lack of a theoretical edge was because of Clark’s ‘intense empiricism’ (Ruttan 1965, 20). Another critic, ranging 10 John Hicks ‘Economist’, The Manchester Guardian, 8 May 1951.

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over most of his works, summed them as ‘at once brilliant and obtuse, stimulating, observant, even penetrating but at the same time myopic and confused’ (Bowen 1962, 99). On matters of style, Clark was frequently accused of lacking a conceptual framework and suffocating the reader with a surfeit of material including graphs, tables, scatter diagrams and functions. Horace Belshaw (1958, 102) found the third edition a major ‘disappointment’ in that Clark made no follow-up statement on the state of economics. More comment in the preface, perhaps ‘as an agent provocateur’, would have been good material for many a graduate seminar in development economics. Nor did Clark spell out the additions and changes in data and interpretation in the new edition. Phyllis Deane (1958, 371) found the third edition ‘disappointing’ given Clark’s accumulated knowledge and breadth of experience; he had failed to limit himself to part of the field in which he could make ‘an effective analytical contribution’. Deane (1958) was also annoyed that earlier criticisms, including poor presentation and an even greater surfeit of statistical material relative to the text, were still evident. Even George Peters (2001, 7), who, as a research assistant, had helped Clark with this edition says that some of the ‘key messages’ had to be ‘dug out’ from the text as they were enclosed in huge tables. Given these criticisms, one might well ask why Clark bothered to put out subsequent editions of the book. There were good reasons for doing so. For the second edition he felt a complete rewrite of the book was justified, because ‘the whole aspect of economics teaching and research … had now been transformed’ into inquiring into growth and their underlying causes which was ‘now recognised as the essential subject-matter of economics’ (Clark 1951, v). Given this, he deleted his attack on research techniques, now arguing that there was an imbalance ‘even a danger that we may concentrate so much of factual economics that we may neglect necessary theoretical studies’. Moreover, two branches of economics that were being neglected or, in his mind, ‘perverted’ were public finance and international economics. Here Clark reminded readers how easily government spending could be increased by craven political interests and how international trade was being warped by scale economies and mercantilism. If increasing returns were widespread in a modern industrialised economy, as Clark believed, it logically compromised the case for upholding competitive private enterprise as an economic policy.

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Increasing returns, too, made a nonsense of many of the ‘treasured theorems’ of mainstream economics such as factor price equalisation or growth rate convergence between regions (Thirlwall 2019, 498). In the third edition, Clark upgraded his measuring rod of the international unit to take into account the fact that in very poor countries there was considerable difficulty in expressing the value of the national product in the country’s own currency. He already knew that United Nations figures of real income per head were grossly misleading because they were calculated at exchange rates hopelessly out of relation to the real purchasing power of money in the countries concerned and so greatly exaggerated the difference between poor and rich countries. Moreover, in poor countries the style of living and scale of relative values were quite different from those of developed countries. For instance, most of the household incomes in poor countries were spent on basics such as food, fuel and shelter with a high degree of self-sufficiency in domestic services. Therefore, a new measuring rod was needed for poor countries. Clark (1954) baptised this as the Oriental Unit with the numeraire being what one Indian rupee would buy of goods and services in 1948; the new ratio was that five Oriental Units equalled one International Unit.

The Economics of 1960 (1942) Motivated by Walter Nash’s query about the economic fate of New Zealand, this short volume, finalised in May 1941, again saw Clark take the world as his oyster. More formally, his intention was to project using an econometric model ‘the most probable course of world populations, industrial development, prices, capital movements and interest rates over the next twenty years’. The key feature of the book was to take a Ricardian faith in the primacy of long-term trends that unfold in their own peculiar manner and quite unaffected by short-run factors like the trade cycle and political upheavals. The book famously predicted that, after the war, the terms-of-trade would turn in favour of primary producing countries, an argument that went against that outlined in the first edition of Conditions. Clark’s new prophecy was predicated on the belief that there would be an increased supply of manufactures on world markets as the old industrialised economies began to rebuild their economies. Moreover, since 1935 there had been a global reversal in the downward trend in population meaning an increased demand for food. At the same time, Clark foreshadowed the industrialisation of countries such as China, India

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and Eastern Europe would starve their rural sectors of capital and labour. This would amplify the oversupply of manufactures and, at the same time, exacerbate the shortage of primary products. Added to these geo-political developments was the fact that agriculture was still subject to diminishing returns while manufacturing enjoyed increasing returns to scale. To those critics who felt that relying upon agricultural exports was an unwise development strategy, subject to adverse swings in both income and price elasticities, Clark had two responses. First, he argued, it was unlikely that the demand for primary products would turn down, given the magnitude and size of the developing countries and their basic inability to supply their people with primary products. Secondly, agrarian production allowed considerable flexibility in what to produce and offered an inbuilt lesson in not to overspecialise in those products subject to inelastic demand (Kenwood 1988, 113–114). Paradoxically, the rise in export prices for food meant that for countries like Australia, where most of the employment was either in agriculture or services, it would reduce agricultural employment. This was because the rise in prices creates an additional demand for locally produced services which therefore compete keenly for labour with agriculture.11 The other argument underlying Clark’s (1942) projections was his view that the post-war years, certainly up to 1960, would be a period of capital hunger. Capital accumulation by developed and developing economies alike meant that most nations would enjoy sustained full employment during the post-war period. To clarify, Clark was arguing that economic progress advanced in long-run cycles rather than being interrupted by trade cycles and was, therefore, steady. It was a heartening prognosis: there would be no secular stagnation but, in fact, another period of economic optimism with abundant capital and trade flows. This expansion was predicated on Clark’s thesis using a reformed Kondratieff’s cycle, which related to price movements only. Subsequent thinking adorned it with cycles in over-investment and under-investment in fixed capital (Clark 1942). He posited that there were cycles of over-investment and under-investment that resulted in periods of capital hunger and capital satiation, each spanning around 25 years. The world, then, was set for a period of reconstruction and capital hunger especially after the destruction caused by war. Consequently, he looked forward to a resumption

11 Clark to Keynes 10 January 1945, RES, LSE.

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of trade and investment accompanied by a big shift towards manufacturing as well as an intensified flow of labour to secondary and tertiary sectors. It would therefore be an upbeat era, he predicted, marked not by economic restrictionism but a flowering of economic liberalism with marked increases in global trade and, most particularly, investment. Indeed, the only thing that could stop this process was isolationism and protectionism. But even here Clark insisted these forces would be overwhelmed. While Jan Tinbergen hailed it as a ‘milestone in the development of econometrics’12 he remained unconvinced by the conclusions drawn from Clark’s calculations on capital scarcity and surplus (Tinbergen 1944). While he agreed with Clark’s conclusions. Keynes complained to Roy Harrod about ‘the extreme absurdity’ of them.13 This pertained to Clark’s prophecy that Britain would face an adverse terms of trade yet must engage in international capital investment as in the past. Also disappointed with the book was his former student Richard Stone (1943, 24), who felt it was ‘regrettable that such a celebrated writer can bring himself to publish so misleading and inadequate a study’. Stone criticised Clark’s model both on a theoretical and factual basis, accusing him of being slipshod in some of his work and dogmatic in his conclusions. These were strong words from a former student. Sceptical about Clark’s faith in the remedial power of economic forces, G.D.H. Cole (1942, 70) was moved to accept it less as ‘an essay in prophecy than as a pointer towards a sane world economic policy’. Austin Robinson (1943) found the work ‘exasperating’ on three counts. This was, first, because Clark did not think out the full implications of his statistical calculations, secondly, because it yielded paradoxical results without justifying them and, third, because it was obscure on some points. Nor was he convinced by the book’s final results about the expansion of secondary and tertiary industries or, indeed, that the global economy would be in a better place by 1960. Clark’s old nemesis, Ernest Snow (1942) of the Royal Statistical Society, poured cold water over his supposition that the Second World War would have only a small permanent impact on overall economic trends. However, Snow conceded that

12 Tinbergen to Clark 15 January 1947, Clark Papers, UQ. 13 Keynes to Harrod 9 July 1942, JMK/Harrod letters and memoranda, University of

Tokyo.

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the author had raised discussion of prominent economic issues likely to prevail by 1960. Another incisive criticism of Clark’s analysis came from George Schwartz. While Clark insisted that political and social factors, and even trade cycles had little impact on progressive long-term trends, in the last chapter of his book he advanced the case for economic sanity. Yet Clark had earlier argued that ‘malpractices’ such as tariffs, devices and restrictions would be overcome by long-term economic forces (Schwartz 1943, 123). A young man when he wrote it, Clark boldly proclaimed that by the time 1960 came around there was a very good probability he, too, would still be around. When that moment came, however, Clark had left behind most of its forecasts but not the underlying engine of analysis.

References Allen, R.G.D. 1951, ‘Review of The Conditions of Economic Progress by C. Clark’, Economica, 18(72): 432–433. Arndt, H.W. 1979, ‘Colin Clark’, in David L. Sills (ed.) International Encyclopaedia of the Social Sciences, Biographical Supplement, Vol. 18. New York: The Free Press: 121–124. Arndt, H.W. 1987, Economic Development: The History of an Idea. Chicago: Chicago University Press. Arndt, H.W. 2000b, ‘Colin Clark as a Development Economist’, History of Economics Review, Supplement: 6–14. Belshaw, H. 1958, ‘Review of The Conditions of Economic Progress by C. Clark’, Kyklos, 11(1): 103. Breimyer, H.F. 1958, ‘Review of the Conditions of Economic Progress by C. Clark’, Agricultural Research, 4: 55–56. Brown, A.J. 1952, ‘Review of The Conditions of Economic Progress by C. Clark’, International Affairs, 34(1): 87–88. Bowen, I. 1962, ‘Review of British Trade in the Common Market’, Australian Quarterly, 34(4): 99–102. Castles, I. 1999, ‘Vice President Note’, Dialogue, 18(1): 7–22. Castles, I. 2014, ‘Report on Human Development: Lies, Damned Lies and Statistics’, in A. Podger and D. Trewin (eds.) Measuring and Promoting Well-being. How Important Is Economic Growth? Canberra: ANU Press: 341–367. Clark, C. 1939, A Critique of Russian Statistics. London: Macmillan. Clark, C. 1940a, 1951, 1957, The Conditions of Economic Progress. London: Macmillan. Clark, C. 1940b, ‘Rejoinder to ‘Economic Progress’, Economic Record, 16(2): 270.

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Clark, C. 1942, The Economics of 1960. London: Macmillan. Clark, C. 1949, ‘Theory of Economic Growth’, Econometrica, 17 Supplement, 112–116. Clark, C. 1954, ‘The Poverty of Nations’, Encounter, 2(3): 30–36. Cole, G.D.H. 1942, ‘The Economics of 1960’, Nature, 150: 69–70. Deane, P. 1951, ‘Review of The Conditions of Economic Progress’, Journal of the Royal Statistical Society, 114(2): 265–266. Deane, P. 1958, ‘Review of The Conditions of Economic Progress by C. Clark’, Economic Journal, 68(270): 370–371. Dobb, M. 1940, ‘Review of A Critique of Soviet Statistics by C. Clark’, Science and Society, 4(1): 85–90. Douglas, P.H. 1941, ‘Review of The Conditions of Economic Progress by C. Clark’, Journal of the American Statistical Association, 36(215): 443–444. Giblin, L.F. 1940, ‘Economic Progress’, Economic Record, 16(2): 262–270. Hayek, F. 1944, The Road to Serfdom. Chicago: University of Chicago. Herbert, W. 1991, ‘Vale Colin Clark’, World Review 30(3):60–63. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress. London: Macmillan: 107–123. Lewis, W.A. 1954, ‘Economic Development with Unlimited Supplies of Labour’, The Manchester School, 22(2): 139–191. Maddison, A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. Overy, R. 2009, The Morbid Age. London: Allen Lane. Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist’, Working Paper No. 69, Queen Elizabeth House, University of Oxford. Perkins, J.O.N. and A. A. Powell, 1990, ‘Colin Clark, 1905–1989: An Affectionate Memoir’, Economic Record, 66(4): 329–341. Plant, A. 1940, ‘Review of The Conditions of Economic Progress by C. Clark’, International Affairs Review, Supplement 19(1): 36–37. Plimsoll, J. 1941, ‘Review of The Conditions of Economic Progress’, Australian Quarterly, 13(1):104–109. Reimann, G. 1941, ‘Comparative Economic Progress’, The Saturday Review, January 11, p. 15. Robinson, E.A.G. 1943, ‘Review of The Economics of 1960 by C. Clark’, Economic Journal, 53(210): 238–242. Rothbarth, E. 1941, ‘Review of The Conditions of Economic Progress by C. Clark’, Economic Journal, 51(201): 120–124. Rosenstein-Rodan, P.N. 1944, ‘The International Development of Economically Backward Areas’, International Affairs, 20(2): 157–165.

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Ruttan, V. 1965, ‘Growth Stage Theories and Agricultural Development Policy’, Australian Journal of Agricultural and Resource Economics, 9(1): 17–32. Schwartz, G.L. 1943, ‘The Economic Future’, The Spectator, September 17, 123. Snow, E.C. 1942, ‘Review of The Economics of 1960 by C. Clark’, Journal of the Royal Statistical Society, 105(4): 352–353. Speich, D. 2011, ‘The Use of Global Abstractions: National Income Accounting in the Period of Imperial Decline’, Journal of Global History, 6(1): 7–28. Stone, R. 1943, ‘The Fortune Teller’, Economica, 10(37): 24–33. Swan, T. 1951, ‘Review of The Conditions of Economic Progress by C. Clark’, Economic Record, 27(2): 240–243. Thirlwall, A.P. 2019, ‘Nicholas Kaldor’, in R.W. Dimand and H. Hagemann (eds.) The Elgar Companion to John Maynard Keynes. Cheltenham: Edward Elgar: 494–499. Tinbergen, J. 1944, ‘Review of the Economics of 1960 by C. Clark’, Review of the International Statistical Institute, 12(1): 1–4.

CHAPTER 8

Spiritual Awakening

Some of Clark’s friends in England, including John Parker, believed that he had chosen to stay in Australia to escape the military tensions gathering in Europe.1 G.D.H. Cole joked that he could think ‘of even more powerful reasons than the scenery’ as to why Clark stopped off ‘at the other end of the world’.2 There was some truth in this as Clark had pacifist tendencies but it ignored the other reasons why Clark elected to stay in Australia. In any case, as events unfolded, Japan’s downward military thrust through South-East Asia in 1942 meant that Brisbane was soon on the frontline. Air raid shelters were built on city streets with Brisbane considered a likely target after the bombing of Darwin in February 1942. The local population had to surrender a whole host of customary freedoms. Until 1942, Clark seemed almost insouciant about the war. He had spent the period finishing off his third major work, The Economics of 1960. In a commentary in Economic News in January 1942, Clark had time to articulate his political philosophy noting how governments in Australia were controlled by economic interests which needed to be brought under democratic control. Australia, he noted, had rightly rejected economic 1 Parker to Clark 22 March 1938, Clark Papers, Brasenose. 2 GDH Cole to Clark 20 December 1938, Clark Papers, Brasenose.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_8

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liberalism; the right policy, he argued, was one where the general lines of economic life were planned by the state and the details filled in by private enterprise. If unchecked, economic liberalism left the weak at the mercy of the strong and led to a concentration of monopoly interests. It was, then, a middle way between totalitarianism and vested business interests.3 However, this stance would soon be altered as Clark gravitated towards a more straitened worldview.

On the Front Line In July 1942 General Douglas Macarthur, the Supreme Commander of Allied Forces in the South West Pacific Area, moved his headquarters to Brisbane, not far from the Queensland Treasury building. Brisbane was to become the staging post for the allied offensive against the Japanese. By 1944 the population of Brisbane temporarily doubled when it became a garrison for American and allied troops based there. A few months before Macarthur moved to Brisbane, Clark was appointed the Queensland Deputy Director for the Commonwealth Department of War Organisation of Industry (WOI). He took leave from his state duties. Stuart Macintyre (2015) has suggested that the WOI job was not as imposing as it sounded with state directors taking a leisurely view of post-war planning. Kenwood (1988, 111) suggests that the main role of this federal department in Queensland was the control of building activity. While Clark was easily the most distinguished economist in Australia at the time, his appointment was barely acknowledged by economists serving in Canberra. It seems remarkable that, given his expertise and his experience with the EAC, Clark was not invited to participate on the Finance and Employment Committee, chaired by Giblin and established in 1939 charged with advising the Australian government on the economic measures needed to wage war. It might have been that Clark was preoccupied in Brisbane. Another view was that while Clark was approached by senior economists, he had become somewhat detached from them. The nub of the issue was that Clark was alienated from Canberra because, to him, it increasingly represented the centralisation of resources that accompanied national political power. It was, therefore, during 3 ‘Proper Control of Economic Interests Here’, The Telegraph (Brisbane), 10 January 1942.

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the war that this estrangement between Clark and other Australian economists became readily apparent. He told Roy Harrod, for instance, that Australia’s economists were all in favour of the centralisation of power because it created jobs for them in Canberra.4 Their advocacy for a balanced economy, including a significant manufacturing sector, was another point of difference. The perception grew then that Clark had withdrawn from the Australian fraternity. However, Clark did participate in a conference of Australian economic officials, held in Canberra in March 1945, to discuss an early draft of what would become the White Paper on ‘Full Employment in Australia’ (Cornish 1981). He wanted the document to uphold that expenditure policy be all about preventing depressions. On a later draft he told Coombs that he was against economic controls, not just because of constitutional limitations but also on grounds of efficacy (Cornish 1981, 128). Clark urged policymakers to pursue export growth unreservedly, stating that an appreciation would deal with any inflationary pressures. There was no more communication on the White Paper after that. Certainly, as we shall see, Clark’s views on post-war reconstruction differed markedly from Coombs and the like. Later, at an economics conference in Sydney in 1952, he brazenly told his colleagues that they were too partial in ‘telling politicians what they wanted to hear’ instead of the truth.5 Relatedly, he warned against a growing and hereditary bureaucracy in Canberra due to a lack of alternative employment for public servants in that city.6 A more considered critique was of the politicisation of the civil service.7 Meanwhile, Clark would wear the grim times of wartime austerity well, dispensing with the family car, much to the annoyance of wife Marjorie. Petrol rationing would have swayed Clark’s decision. And, at one stage, much to the bemusement of the local press, he even took to wearing no socks. He also sported an ‘austerity suit’ in his travels around Queensland. One of his first forays into war economics was in March 1942 when Northern Australia squarely faced the threat of Japanese invasion. Clark

4 Clark to Harrod 3 May 1945, RES, LSE. 5 ‘An Economist Hits at Economists’, Newcastle Morning Herald, 26 August 1952. 6 ‘Are We Heading for a Hereditary Bureaucracy?’, Smith’s Weekly (Sydney), 26 August

1950. 7 ‘Is Australia Run by Public Servants?’, West Australian, 9 April 1952.

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expounded a plan, not unlike the Soviet’s period of war communism, to put Australia on a complete war footing. This encompassed the elimination of all non-essential activity and the doubling of labour engaged in war production to one million. He also wanted to discontinue, for the duration of the emergency, the use of all money; citizens were to be put on rationing.8 More conventionally, Clark was attracted to Keynes’s deferred consumption plan as the best approach to war finance. Consistent with his views on decentralisation and agrarian development, Clark, with Forgan Smith, bitterly opposed the centralisation of federal power when the Curtin Labor Government commandeered income taxation from the states in 1942 (Crossman 1997). He saw this as weakening the power and financial autonomy of the states including, as Peter Crossman (1997) pointed out, the right to collect and analyse their own statistics. Forgan Smith insisted that, if state governments no longer needed to fund their own expenditure, they would lose their sense of financial responsibility. This argument was given further expression in the 1942 Annual Report of the Bureau of Industry in which Clark predicted inevitable inflation when wealth was extracted from national income to meet the cost of war. As Keynes’s deferred consumption plan was dropped, Clark felt that inflation would soar to 20% but that this could be mitigated by increased taxes or government borrowing. He noted that it had never been known for a Government to reduce taxation in wartime in order to enhance its popularity; nor did Clark feel that the supporting comprehensive price control would do any good. Indeed, he considered it an ‘accountant’s nightmare’, especially when the federal government was injecting further purchasing power into the economy. An attempt to establish price control over every commodity was, he concluded, ‘foredoomed to failure’.9 Annoyed, the Commonwealth Prices Commissioner, Douglas Copland, simply ignored Clark’s arguments.

8 ‘This Would Be Paradise to Life Under Jap Rule’, The Courier Mail (Brisbane), 12 March 1942. 9 ‘Dangers in Federal Finance Policy’, The Courier Mail (Brisbane), 12 November 1942.

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Metamorphosis In another outburst, Clark caused further trouble when he said there was no need to call upon married women to aid the war effort. He particularly opposed the ‘cock-eyed’ idea of locating crèches and kindergartens near factories because of the risk of children being indoctrinated by communist thought.10 In another breach with Canberra economists, he rejected the idea that the Commonwealth Government should have more legislative powers at the end of the war because of the supposed difficulty of reabsorbing demobilised soldiers back into civil life.11 In a 1943 article in Economic News, he noted that totalitarian ideas were gaining ground in the Commonwealth Public Service: ‘Ambitious young men, engaged as wartime temporaries, envisage a total regime with permanent and important jobs for themselves; the wire-pulling type of departmental heads intrigues to suppress any parliamentary criticism of bureaucratic activities’.12 The fact that Clark himself was a high-level official, and an influential one at that, did not dissuade him from his attack upon the Canberra bureaucracy.13 In short he was developing an instinctive feel for what would later become known as the economic theory of politics: a hard-edged world where politicians and bureaucrats were not selfless, benevolent figures, unconcerned with personal aggrandisement, but were, in fact, corrupt and venal empire-builders. Fabianism, too, was in his sights. Reflecting on his early exposure to Fabianism he now dismissed it as ‘[t]he idea that the entire conduct of the world could be handed over to any upright, benevolent, humane, intelligent and cultivated Civil Service, and really only conceivable in a country like England, and over the period 1880 to 1920’ (cited in Milburn 1958). After 1945 Clark disparaged Fabianism as ‘a cranky religious movement’ that took hold in Edwardian times under the stewardship of George

10 ‘Crèche Plan Communist’, The Courier Mail (Brisbane), 19 February 1943. 11 ‘Re-employment Bogey’, Cairns Post, 4 December 1942. 12 ‘Menace of Bureaucracy’, The Daily Telegraph (Sydney), 22 September 1943. 13 The son of Premier Ned Hanlon told the press that his father felt Clark could, if

given free rein as an administrator, become the ‘first class bureaucrat that Mr Clark himself spends much of his time abusing’, ‘Dead Premier’s Son Replies’, Truth (Brisbane), 15 February 1953.

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Bernard Shaw and Sidney and Beatrice Webb.14 He would have heartedly agreed with Keynes’s advice that British Labour politicians dispense with the idea of being ‘secretaries of an outworn creed, mumbling mossgreen demi-semi Fabian Marxism …’ (cited in Diamond 2015).15 No doubt Clark’s reaction had to do with the fact that Fabianism was responsible for the ever-increasing and centralised power of the state. As for his own earlier contributions to the NFRB, he would later dismiss it with the comment ‘the less said the better’ before adding, as an afterthought, that one of its members had been the Soviet double-agent, Kim Philby.16 All this suggested a fundamental change in Clark’s outlook. What was it?

Turning to Rome We have a clue as to this change in an October 1943 newspaper report that described Clark as a ‘leading Catholic economist’. A Communist newspaper described him as not only as ‘a well-paid public servant of Queensland right-wing Labor’ but also, intriguingly, ‘an ideologist of clerical reaction’.17 These descriptions drew attention to a sea change in his philosophical outlook but were then probably taken as merely representative of his unconventional ways.18 But there was much more to it than this. In 1940 Clark was received into the Roman Catholic Church. This was due largely to the efforts of his Jesuit instructor, Father Maurice Fitzgerald (1907–1996) of St Ignatius Church in Toowong. It was a development that stunned even his wife Marjorie; his eldest son Gregory, 14 ‘Social Credit and Strange Early Bedfellows’, The Courier Mail (Brisbane), 6 October 1971. 15 In July 1943 Clark received a puzzling letter from Sidney Webb thanking him for his letter of condolence on the death of his wife, Beatrice. The letter was, in fact, meant for C.M. H. (Manning) Clark then a schoolteacher in Geelong and later one of Australia’s greatest historians, who had written an effusive appreciation of Beatrice’s work. Webb, who would have known Clark in the 1930s and the fact that he had gone out to Australia, mistakenly addressed his reply to him. One could imagine Clark, at his breakfast table in Brisbane, choking over this implicit reminder of his Fabian past. I am indebted to Australian historian Ross Fitzgerald for this vignette. 16 Clark to Carpenter 23 October 1972, Clark Papers, UQ. 17 ‘Reaction Well Served by Queensland Economist’, The Workers Star (Perth), 1

October 1943. 18 ‘Queensland Economic Enigma’, Smiths Weekly (Sydney) 12 June 1943.

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then a young child recalls furious rows between his parents over the matter. The Clarks would no longer be part of the Anglican Church. Marjorie eventually converted but her faith was never as staunch as Colin’s. When Keynes heard about Clark’s conversion he was alleged to have remarked ‘He was always gullible’ (Crocker 1981, 35). For his part, Clark always said very little about it; when asked by journalists and friends alike about embracing Catholic doctrine he would merely say ‘I believe it to be true’. He told Gregory that ‘It was simply a matter of faith’. His exposure to the writings of Chesterton, Belloc, Evelyn Waugh and Catholic social thought were an ever-present influence and diversion; the relative dearth of intellectual life in Brisbane, too, left him with ample time for reflection, to re-focus his life and purpose. He had also explored other Christian religions before settling upon Rome. This is all the material we have on Clark’s conversion. In a rare reflective piece in 1970, Clark said that his faith had not wavered with his only regret being that the church had dropped the Latin liturgy in the celebration of the Mass.19 There is, therefore, an element of mystery to Clark’s transformation. One hypothetical question is to ask whether Clark have undergone the same experience had he remained at Cambridge? Meanwhile his conversion made for awkward moments. His Australian academic collaborator John Crawford once made a faux pas about Clark’s religious beliefs. After arriving back from America in September 1940, Crawford, after listening to Clark interrupted him with the remark ‘Colin, you sound like a spokesman for the Vatican’. It was met with a great silence: Crawford blurted out ‘Well, come on, what have I done?’ Clark replied, ‘My dear Jack, I announced my conversion last week’. Crawford doubled the embarrassment when he went on to tell Clark how lowly he thought of anyone who could intellectually accept Catholic doctrine. The episode was a good representation of how other Australian economists might have felt. To them, Clark now entertained the views of a zealot. Another colourful example of Clark’s increasing extremism occurred sometime later when he made intemperate remarks, broadcast on Australian radio in late 1944, about contraception. Clark had been invited to speak in a national radio debate on the subject ‘Population Unlimited?’ with three other speakers including the federal politician, Enid Lyons (1977, 82–83) who was also a devout convert to Catholicism. Clark was

19 P. Manning ‘What Do Catholics Believe?’ The Bulletin 14 March 1970, p. 40.

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asked to give her some statistical support (Wyndham 2012, 357). The program was arranged by William MacMahon Ball, a political scientist at the University of Melbourne and controller of short-wave broadcasting for the Commonwealth Department of Information (Wyndham 2012). Unfortunately, logistics prevented him from screening what Clark was going to say. Incensed by Dr. Norman Haire’s comments about ‘cowlike’ quality of women who had large families Clark broke into a religious ‘diatribe’ and made frequent reference to the ‘perversion’ of contraception devices saying it was only a ‘debased minority’ of Christians who did not share his views on birth control (Wyndham 2012, 351–352). Implicitly, he was arguing that birth control methods led to marital breakdown and impaired family life. Lyons (1977, 86) recalled that Clark sounded like an ‘old-time Redemptorist’ and that she sensed rising resentment amongst the live audience. Undaunted, Clark told his audience: ‘The natural sexual love between men and women and its natural consequence, the bearing of children, is one of the finest and most beautiful things on this earth, and that is why its perversion is so unnatural’. Trading on an old fear, Clark then warned that, if Australians did not have enough children, the country would be ‘submerged under a flood of uninvited immigrants but more probably the country will be taken over from us by violence.’ Haire, a specialist in gynaecology and obstetrics, was outraged by Clark’s views, complaining of his ‘filthy superstition’. Press reports of the broadcast confirmed Lyons’ observation that Clark’s contribution sounded like ‘an embittered prelate of the Roman Catholic faith’.20 Writing after the broadcast, an incensed McMahon Ball, who had organised the program, reproached Clark saying his contribution had been ‘ strident, ill-tempered, and discoloured with spleen. What has the Queensland climate done to you? If you merely wanted to give effective expression to your religious convictions, surely you could have done that more forcefully by displaying some of the urbanity and graciousness that used to mark your temperament’.21 These were cutting words; the reference to Queensland was not just a pointer to the humid climate but also to the simplified society that it then

20 ‘Scientific v Emotional View of Birth Control’, The Workers Star, 22 September 1944. 21 McMahon Ball to Clark 25 August 1944, Clark Papers, UQ.

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was. At a cultural and social level Queensland’s embrace of ‘regional agrarianism’ encouraged ‘insularity, limited horizons, suspicion … conformity and educational backwardness fed by a belligerent anti-intellectualism’ (Evans 2007, 207). Not the only one, McMahon Ball closed by saying he was ‘worried’ about Clark. Speaking on behalf of many, Ball reminded Clark that it was a ‘pity’ that his religious obligations ‘made it necessary to break your moral obligations to those outside your Church.’ Ball was confident that, in the future, Clark could still put the Church’s viewpoint ‘with more vigour and effectiveness by showing a little more sensibility to the feelings and convictions of Protestants’.22 Turning to Rome marked a critical change in Clark’s career, especially in his social and economic outlook and in his professional associations. His acceptance of the interwar papal encyclical Quadragesima Anno (1931 ended his socialist beliefs. It was, of course, already quite apparent he had moved away from the mindset of his colleagues who had been mobilised for war administration duties in Canberra. As such, Clark was fortunate that he could perform his duties for the WOI in Brisbane. The existential crisis that culminated in Clark’s conversion had been sparked by fears that Christian civilisation was threatened by militant secularism in the form of communism and fascism (Duncan 2001, 43). In an issue of Economic News, in April 1944, Clark pondered the three alternatives on offer: communism; the slave state of a planned economy disparaged by Belloc; and, lastly, unstable financial capitalism. In his Fabian years Clark had denounced the excesses of the latter. The conversion to Catholicism suggested a new economic vision and offered up a companion to help achieve it.

A New and Important Friendship In 1943 Clark addressed a group of Catholic businessmen at the Australian National Secretariat of Catholic Action (ANSCA) in Melbourne about likely post-war trends.23 B. A. ‘Bob’ Santamaria was then its Assistant-Secretary and the body was supported by Archbishop of Melbourne Daniel Mannix (Duncan 2001, 21). Santamaria had been a

22 McMahon Ball to Clark 11 September 1944, Clark Papers, UQ. 23 ‘Leading Catholic Economist Sees Steady Rise in Standards’, Catholic Weekly

(Melbourne), 2 September 1943.

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law student at Melbourne and became a member of the Campion Society, a Melbourne-based study group of young Catholic students. Instead of pursuing a lucrative legal career, Santamaria invested his energies with the Church in its struggle against communism and laissez-faire capitalism (O’Farrell 1992, 399). The Spanish Civil War strongly affected Santamaria who denounced both capitalism and communism but now squarely saw the latter as the greater evil in undermining both Christianity and the social order (Costar and Strangio 2004). In 1942 Santamaria recommended to Mannix, and other leaders within the Catholic Church, the establishment of an official but secret national campaign to battle communist elements within the Australian trade union movement (O’Farrell 1992, 397–398). Membership of the Communist Party was then at its height and, indeed, higher on a per capita basis than in Britain (Macintyre 2015, 379–380). Moreover, communist control of the unions was also significant. Even before they first met during wartime, Clark and Santamaria were singing from the same hymn book, espousing the virtues of Distributivism, traditionalism, a longing for an idyllic rural society and utter hostility to communism (Melleuish 1999, 25–26). Santamaria would have a considerable influence upon Clark. They were to become lifelong friends despite Santamaria’s eccentric notions about economics and economic policy (Melleuish 1999, 27). By his own admission, Santamaria said that his knowledge of economics would ‘hardly fill a thimble’ and it was to Clark that he turned for assistance (Morgan 2007, 555). Despite his fondness for rural life, it was suggested that Santamaria had never actually set foot on a farm. Rightly or wrongly, the association with Santamaria would impair Clark’s standing with Australian economists, especially the former’s advocacy for the rural dispersion of the population. As a result, Samuel Wadham, an agronomist at the University of Melbourne, even accused Clark of not being an economist (Doig 2002, 261). Was it the case that doctrinal faith and romantic idealism would now dilute Clark’s earlier expressed strictures about the pursuit of empirical realism? Having chosen to align himself with extreme doctrinal elements within the Catholic Church, Clark would face a continuing tension between scientific integrity and faith. Indeed, this would intensify in the post-war debates about population growth and their impact upon economic progress. In Clark’s later works, critics would admonish him for sometimes making

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ex-cathedra statements about policy without supporting data or information (Neutze 1983). However, Clark felt that when it came to faith versus ethical practice as an economist, the latter took precedence; he had too much integrity to allow his empirical work to be influenced by Catholic teaching. It was interesting, though, that when taking stock of his career Clark omitted his association with Santamaria during his three oral history interviews; nor is there any correspondence with Santamaria within his papers.24 We do know that Clark’s ideas, especially his prophecy about agricultural prices and rural development, flowed into the social policies underpinning the National Catholic Rural Movement (NCRM), which had been founded in 1940 (Santamaria 1981, 51; Henderson 1982, 57; Murray 1970). Apart from opposing communism, the NCRM was essentially about encouraging the spiritual, moral, social and economic revival of the family farm in Australia so that it could resume its role as the nation’s most important industry (Truman 1960, 130). Big cities would be shunned in this reorientation of Australian life. In its sociological make-up the Movement resembled a sect, that is, a group of ‘dedicated men who were determined to put a Catholic social programme into political action; they were setting out to reform the existing social order according to doctrine or set of principles’ (O’Farrell 1992, 397). To the more moderate members of the Catholic Church, the sect was regarded as a destructive force, destroying what had already been built in the pursuit of some ridiculous utopia (O’Farrell 1992, 397). Santamaria (1942) obsessed about the perennial issue of rural depopulation in Australia and how closer land settlement, peopled by European migrants, might correct it. The NCRM’s rural policy would later invoke the ridicule of one Governor-General of Australia Sir William McKell, who dismissed it privately as ‘a sheep, a goat, three acres and a migrant’ (Morgan 2007, 554). This intellectual bond between Santamaria and Clark was quite instrumental in shaping the last quarter of the latter’s career.25 There is no doubt that, from the 1940 onwards, Clark’s outlook on the Australian economy, together with his social and political views, echoed Santamaria’s

24 However, in the Santamaria’s papers, held in the State Library of Victoria, there is a stream of letters from Clark. 25 ‘A Tribute to Colin Clark’, News Weekly (Melbourne), 16 September 1989.

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(1981, 57). In his thesis on the economic policy of the Queensland Government, William Jackson (1968, 41) confirmed that there was ‘a striking similarity’ between Clark’s views and those of the Catholic Social Studies Movement. Jackson (1968, 78) also observed how, during the post-war period, the Bureau of Industry’s Economic News expressed alarm at the concentration of industry in Brisbane and took an anti-city view in many issues. The publication focused upon decentralisation, population trends, closer settlement and future of the primary industry. At the time, the Queensland Government upheld decentralisation to limit the drift to the cities and force the utilisation of the state’s natural resources. However, it was revealed that by 1947 that there were, in fact, not millions of acres suitable for settlement (Jackson 1968, 42). Overall, the wishes that Clark and the Queensland Government had for closer settlement were dashed. Nor, for all the talk about putting more people on the land, did Queensland’s agricultural production rise substantially during the period 1946 and 1951 (Jackson 1968, 563). Another scholar, Michael Jones (1966), has drawn attention to how, in the late 1930s, Clark entertained a somewhat ‘confused’ view of Queensland future development in that he enunciated a role for manufacturing though that development would take place in regional areas. However, in the post-war years, Clark focused purely on an expansion of the agricultural sector. The emphasis on primary production was predicated, as we have seen, on Clark’s prophecy that the terms of trade would shift in favour of food rather than manufactures. There was also a defence aspect to this strategy in that the empty hinterland would be populated (Jones 1966, 151). What manufacturing there was in regional areas would be of a processing nature with country towns serving as ‘centres for building, commerce, education and similar service industries’ (Jackson 1968, 77). Evidence of this reorientation in Clark’s outlook was captured in a number of articles in Economic News. One example was an article in 1945, entitled ‘Decentralisation and Centralisation’, which argued that war had inflicted ‘fearful damage’ on the decentralisation policy.26 Drawing a biological parallel, Clark equated ever-growing large cities to a ‘cancered organ which eventually kills the body of which it is a part’ (Jones 1966, 149).

26 Economic News, November 1945, p. 4.

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A New Vision More clues to Clark’s thinking on post-war reconstruction can be gathered from an address he gave to the Second Conference of the University Catholic Societies in February 1943. The theme of the gathering was ‘The Impact of Christian thought on Australian Reconstruction’.27 As an invited speaker, Clark opened by suggesting that fascism, communism and capitalism were all moving in the same direction. Interestingly, he regarded the 1942 Beveridge Plan for universal social security as a ‘temporary plaster’ on the evils of poverty and insecurity and decay of capitalism.28 A collective form of social security, he held, led to a highly centralised and intrusive bureaucracy.29 It was a startling admission for one who had earlier wanted a better system of relief for the unemployed. It showed, too, how Distributivism had completely won over Clark. Using some of the findings from The Economics of 1960, Clark vouched that Australia should exploit its resource endowment as a primary producer to feed the world which would, in turn, end her ‘economic isolation’.30 Put simply, Australia had to share her food and raw materials with the whole international community that needed them. In the post-war world he envisaged that Australia would develop closer trade relations with Japan, China and Russia. Moreover, Australia had a moral responsibility to throw open the country to East European migrants provided they were willing to learn English and had skills. Ending the White Australia immigration policy was also discussed. Expressing scepticism about commitments to full employment, Clark believed that sinister but powerful financial interest groups profited from the gyrations of the business cycle.31 The only stable society, Clark argued, was one based upon a universal distribution of property.32 He upheld that ‘The right ordering of 27 ‘Australian Federation of University Catholic Societies’, Southern Cross (Adelaide), 5 March 1943. 28 ‘Colin Clark’s Warning Against Slavery’, The Worker, 1 March 1943. 29 ‘Dreams of Post War Utopia Shattered’, The Courier Mail (Brisbane), 30 December

1943. 30 ‘Australian Federation of University Catholic Societies’, Southern Cross (Adelaide), 5 March 1943. 31 ‘Dangerous Theories of Social Security’, The Advocate (Melbourne), 7 June 1944. 32 ‘Colin Clark’s Warning Against Slavery’, The Worker, 1 March 1943.

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economic life demands that the main part of the means of production should be owned, not by a small class of capitalists or slave owners, nor by the State, but by the people themselves’. This, then, was Clark’s nirvana: a family-orientated society, decentralised politically and economically, made up of small-scale producers and not all necessarily agrarian-based (Bulbeck 1987, 12; Duncan 2001, 113). This was, of course, straight from the principles of Catholic Social Thought. Another, sometimes overlooked, aspect of Clark’s vision was that he was against ‘the over-development of economic life’ which left ‘the weak at the mercy of the strong’ and led to ‘commercialisation of society’ and the production of goods for profit, rather than ‘to be useful or beautiful’(Bulbeck 1987, 12).

Property and Economic Progress (1945) Many of these views were later encapsulated in his pamphlet Property and Economic Progress, published by the Melbourne-based Catholic Social Guild (Clark Clark 1945). Capitalism, Clark argued, was repugnant because it required a reserve army of unemployment to maintain its structure and enforce discipline. But he also felt that the post-war commitment to full employment echoed Belloc’s warning of workers becoming slaves in the name of permanent employment; workers would lose their dignity under such arrangements. Here was one reason why Clark did not offer much input into the making of the Commonwealth Government’s, Full Employment in Australia (Macintyre 2015). He did seem to favour nationalisation of insurance and even private banks, channelling Belloc’s views about a wealthy oligarchy dominating the commanding heights of the economy (Duncan 2001, 113). Henderson (1982, 71–72) suggests that, while somewhat ambivalent about nationalisation, Clark proposed that it be pursued for sectors such as banking, public services and transport since the ‘retention of the ownership of any of these industries in private hands gives to a small and irresponsible group of capitalists a control over the economic lives of others which is entirely unjustified’. Too much ownership of the country’s wealth in the hands of a minority was as bad as communism. As communities became more affluent, Clark said, ‘a steadily diminishing proportion of their expenditure is for necessities and an increasing proportion for the amenities of life’. To that end, he presented data showing how both agriculture and manufacturing were losing labour to the services sector. It was services, he argued, which held out the greatest opportunity for contractors and property owners

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to prosper: ‘The whole trend of the times is now working in favour of a restoration of individual ownership of the means of production’. He envisaged similar opportunities for small-scale proprietors and craftsmen in the manufacturing sector (Clark 1945). Clark identified three hostile forces which threatened this economic progress. The first was the tendency to regard the expansion of government employment as a good thing. The second was the nefarious role of advertising which emphasised want creation and, in turn, fuelled mass production and economies of scale. The last inhibiting factor was war and military expenditure which also underpinned mass production and enabled large producers to carry sway with governments (Clark 1945). Apart from Belloc and Chesterton, the intellectual inspiration for Property and Economic Progress sprang from the Papal Encyclical Quadragesima Anno issued by Pope Pius XI in May 1931, forty years after Pope Leo XIII had issued Rerum Novarum. The 1931 Encyclical on economic and social affairs also spoke of the dangers to human freedom and dignity imposed by both capitalism and totalitarianism. The role of the state, it decreed, should be limited to guiding, watching, stimulating and restraining. The encyclical also attacked the influence of advertising especially where it tried to emotionalise or motivate the sale of a product or service. At the political level, Quadragesima Anno encouraged decentralisation, intoning against higher authority for usurping functions which could be efficiently performed by smaller and subsidiary authorities (Yuengert 2014, 159). Clark drew from this well of thought, especially with regard to fiscal governance in a federal-state arrangement. In a public lecture given in Brisbane, he described the Commonwealth Grants Commission, designed to give all the Australian states and territories fiscal equivalence, as ‘one of the most disastrous misconceptions in the field of public finance the world has ever seen’.33 Stressing that this was a personal view, Clark held that such arrangements, including the spending and the process of transfer from one level of government to the other, were wasteful and irresponsible. It went against the principal of Subsidiarity. Catholic social thought, too, spoke of the Principal of Subsidiarity where welfare provided to distressed families was orchestrated by municipal authorities or voluntary associations rather than by the State. Indeed,

33 ‘Mr Colin Clark Discusses Taxation’, Queensland Country Life, 17 August 1950.

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there was no longer a case for the state to collect taxation and fund welfare, especially when this was done to attract political support. To underpin this support network, it was vital that that state should ensure a sound and stable currency, that is, low inflation to prevent the erosion of savings. In short, Clark subscribed to an ideological, romantic Catholicism, a property-owning democracy of independent contractors and craftsmen making provision for their own families. In his review of Property and Economic Progress, Santamaria described it as ‘one of the most really important pieces of constructive writing in the social field in the last ten years’, but he was critical that Clark had underplayed the role of agriculture in favour of services.34 It is speculative to suggest that Santamaria put Clark up to the idea about creating larger rural communities in Australia, or at least in Queensland. Such a vision was rendered when Clark gave evidence before the 1950 Queensland Royal Commission on Pastoral Lands Settlement. It was true that Clark’s forecasts about high prices for farmers in the post-war era provided a more respectable economic basis underlying the NRCM campaign than merely placing people into rural areas. He knew, too, that rural workforces historically declined as economies matured. How then could economic progress be reconciled with the idea of keeping people in a rural-based, decentralised economy? To some, Clark’s advocacy of the rural sector suggested that he was losing his sense of proportion, but his worldview was, to repeat, similar to Catholic philosophy as contained, for example, in a pamphlet entitled For Freedom written by Santamaria in 1942 (Duncan 2001, 46). That pamphlet contained commitments to decentralisation, rural settlement, the principle of a family wage and the suggestion that the growth of huge cities led to social antagonism and class consciousness. Country towns were better places to bring up children; by contrast, big cities were magnets for single women to take up careers and forgo wholesome family life. Clark soon held that the larger the city, the smaller the family and the poorer the conditions under which the family was raised. He was prepared to support improved educational facilities in rural areas to ensure that young people did not drift off to the big cities.

34 ‘B A Santamaria Economic Progress and Agriculture’, The Advocate, 25 July 1945.

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Some of these themes had, of course, been coalescing in his mind since he first came to Queensland but now he had an overarching framework on which to hang them. The American historian and journalist Hartley Grattan, who befriended Clark in Brisbane in 1937, best captured the startling change in him. It had taken some time to unfold but it now involved a rejection of Fabian socialism and Keynesianism and the construction of an alternative social outlook. To put it mildly, Clark was a ‘man of notably restless mind … a man with the mind of a radical’ who had gravitated ‘to the elaboration of a new position at the middle-of the-road’ and then ultimately ‘to a radical-conservatism’ (Grattan 1956, 377). Clark spoke his mind with the zeal of the convert and used Economic News to broadcast some of his views. He was also fast accumulating enemies with his forthrightness and, to some observers, was eroding his objectivity. By 1944 he had alienated fellow economists and big city interests as well as lobbyists, graziers, brewers, unionists, manufacturers, engineers, federal public servants, federal and state politicians and, not least, married women. His quite antediluvian attitudes about the role of women in twentieth century society reflected his Edwardian upbringing; this, too, would land him in hot water in the future. At war’s end Clark considered the idea of Australia as a great manufacturing country to be a ‘mirage’, seeing instead 20 bounteous years for rural industries.35 Using his latest work, The Economics of 1960, Clark told Australians that, after the cessation of hostilities, there would be a glorious 20-year period of trade expansion with the terms of trade greatly favouring agricultural-exporting countries. The farmer, he proclaimed, would be more prosperous than the manufacturer.36 In advocating an agrarian future for Australia, Clark was partly going against his own findings in Conditions where the growth of secondary and tertiary sectors was seen as signs of economic maturity (Kenwood 1988, 119). Given his prophecies, Clark was disappointed to learn that the Department of Post-War Reconstruction had announced no policy for pastoral or agricultural production; instead the ‘fashionable talk’ was about industrial self-sufficiency and how the protection of manufacturing would

35 ‘20 Years of Prosperity’, Daily Mercury (Hobart), 14 May 1946. 36 ‘Our Future Lies in Agriculture’, The Daily Telegraph (Sydney) 13 September 1943.

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discriminate against the primary sector.37 However, Macintyre (2015) disputes this view insisting that the Rural Reconstruction Commission gave considerable support to pastoral production. While Clark liked to hear that his prophecy of a rising terms-oftrade for primary exporting countries annoyed his colleagues, he was irritated that his advice fell on deaf ears. He was annoyed, too, that many economists who read The Economics of 1960 did not digest it because it was at odds with their political preconceptions and their preoccupation with industrialisation; they came to the conclusion that his findings must be wrong. There were concerns, too, about Clark’s reliance on agriculture, construction, services and local industries in country towns to absorb the demobilised labour. However, one area on which Clark and the policy-making authorities did agree was that Australia’s immediate post-war economic problem was to generate enough exports to pay for her imports. The period of the Second World War had therefore been eventful for Clark. He had undergone a spiritual conversion that represented an inflection point in his career. Whether it was for better or for worse was open to debate. Many, however, would argue it was the latter, specifically, that Clark’s zealous devotion to Catholic social policy and teaching underscored his analysis and shaped his outlook. This new devotion, as we shall see, would come at some cost to his career. For his part, Clark always denied that his Catholic faith had anything to do with his views on population growth; he had been an advocate for population growth since the 1930s. In August 1945 Clark was also released from his Deputy-Director duties with WOI. His successor John Gifford, who had worked with Clark, said he ‘ran the branch like a true university, a real republic of learning where there are no yes-men, but every man feels feel to express his opinion’.38 The Minister for War Organisation of Industry, John Dedman, also praised Clark for his services, noting that Queensland had been on the front line and that the resources of the state were taxed by wartime occupation of troops that had no parallel in the history of Australia. 37 ‘Disturbing Hints on Fate of Agriculture in Australia’, Southern Cross 8 September 1944. 38 Statement on Clark’s resignation by John Dedman, Minister for Post-War Reconstruction, 12 June 1945, Clark Papers, UQ.

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This appointment marked the last time Clark was engaged by the Australian Government. It hardly mattered; he returned to his duties with the Queensland Government but had time to contemplate. With the problem of mass unemployment and the trade cycle largely solved thanks to Keynes, Clark began to reflect upon the economics of location, in particular, the optimal size of cities, a subject which revived his old interests in decentralisation, urban systems and good living.

References Bulbeck, C. 1987, ‘Colin Clark and the Greening of Queensland: The Influences of a Senior Public Servant on Queensland Economic Development: 1938 to 1952’, Australian Journal of Politics and History, 33(1): 7–18. Clark, C. 1942, The Economics of 1960. London: Macmillan. Clark, C. 1945, Property and Economic Progress. Melbourne: Catholic Social Guild. Crocker, W. 1981, Travelling Back: The Memoirs of Sir Walter Crocker. London: Macmillan. Costar, B.J. and P. Strangio. 2004, ‘B. A. Santamaria: “A True Believer”?’ History Australia, 1(2): 256–278. Cornish, S. 1981, Full Employment in Australia: The Genesis of a White Paper, Working Paper in Economic History, ANU. Crossman, P. 1997, ‘Plus Ca Change: Problems faced by the Queensland Government Economic Advisor’, Economic Analysis and Policy, 27(1): 1–42. Diamond, P. 2015, New Labour’s Old Roots; Revisionist Thinkers in Labour’s History. Exeter: Imprint Academic. Doig, R. J. 2002, ‘The National Catholic Rural Movement and ‘A New Deal’ for Australia: The rise and fall of an agrarian movement’, Charles Sturt University, Ph.D. thesis. Duncan, B. 1991, The Church’s Social Teaching: Rerum Novarum to 1931. Melbourne: Collins Dove. Duncan, B. 2001, Crusade or Conspiracy. Sydney: UNSW Press. Evans, R. 2007, A History of Queensland. Cambridge University Press. Grattan, H. 1956, ‘Colin Clark: A Conservative as Radical’, The Antioch Review, 16(3): 374–384. Henderson, G. 1982, Mr Santamaria and the Bishops. Sydney: Southwood Press. Jackson, W. 1968, ‘The Government and Economic Growth in Queensland, 1946-1951’, BA (hons.) UQ. Jones, M. A. 1966, ‘The Government and Economic Growth in Queensland, 1930-1940’, B. Ec. (hons.), UQ.

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Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938-52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress: Essays in honour of Colin Clark. London: Macmillan: 107–123. Lyons, E. 1977, Among the Carrion Crows. Adelaide: Rigby. Macintyre, S. 2015, Australia’s Boldest Experiment: War and Reconstruction in the 1940s. Sydney: New South. Melleuish, G. 1999, ‘Distributivism: The Australian Political Idea?’, Journal of Australian Studies, 23(62): 20–29. Milburn, J.F. 1958, ‘The Fabian Society and the British Labour Party’, Western Political Quarterly, 11(2): 319–339. Morgan, P. 2007 (ed.), B. A. Santamaria: Your Most Obedient Servant, Selected Letters, 1938-1996. Melbourne: The Miegunyah Press. Murray, R. 1970, The Split: Australian Labor in the Fifties. Melbourne: Cheshire. Neutze, M. 1983, ‘Review of Regional and Urban Location by C. Clark’, Economic Record, 59(165):194–195. O’Farrell, P. 1992, The Catholic Church and Community: An Australian History. Sydney: UNSW Press. Santamaria, B.A. 1942, The Fight for the Land: The Program and Objectives of the National Catholic Rural Movement. Melbourne: NCRM. Santamaria, B.A. 1981, Santamaria: Against the Tide. Melbourne: Oxford University Press. Truman T. 1960, Catholic Action and Politics. Melbourne: Georgian House. Wyndham, D. 2012, Norman Haire and the Study of Sex. Sydney: Sydney University Press. Yuengert, A.M. 2014, ‘Roman Catholic Economics’ in P. Oslington (ed.) Oxford Handbook of Christianity and Economics. Oxford: Oxford University Press: 153–176.

CHAPTER 9

Two Revelations

The Optimal Size of Cities Having seen the worst of urban blight when undertaking his survey of the poor in London and Liverpool, Clark had entertained a lively interest in improving city design and living. In 1934 he had written an economic report on Welwyn Garden City in Hertfordshire which had been established as one of Britain’s earliest experiments in modern urban planning. His thinking drew on the wisdom of Belloc and also Aristotle, who had once said that the prime function of the city, apart from commerce and minimising crime, was the sharing of ‘the good life’ by its citizens. This thinking originated from Clark’s work on location theory, transport and urban density on which he had been working before the war. It was during wartime that Clark revisited the issue of the liveability of cities with a subsequent article published in Econometrica in 1945. He argued that the principal function of a city was the provision of the full range of services, including commercial, educational and cultural facilities and sheltered manufacturing such as food processing and construction materials, all of which were dependent upon an effective transport system (Clark 1945a, 112). Following work done by K. S. Lomax (1943), on the optimal administrative size of a city, Clark proclaimed that, on commercial criteria, a city need be no larger than 150,000 and certainly not any larger than 200,000 if car ownership was considered. He had confirmed © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_9

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Lomax’s findings that municipal costs rose quickly once population approached big city levels (Kenwood 1988, 118). He told Keynes of his ‘drastic conclusion’ about the ideal size of a city. This alone, he contended, would justify spending ‘a lot of money on redistributing the population to smaller towns. But the planners seem intent upon re-building the big cities in all their glory’.1 Clark also expressed his fears to Dalton that, with rising car ownership, ‘the explosive effects of modern traffic conditions may create cities like Los Angeles, which is not really a city at all, but a series of disjointed fragments stretching over a hundred miles or more’.2 It was a captivating insight; he feared the preconditions for such sprawl taking root in Australia’s cities. It was not long before Clark’s views got him into trouble with the Lord Mayor of Brisbane when he argued that the population of the city should be kept within certain limits as a way of dealing with traffic congestion’.3 Despite the outrage, Clark had been one of the first economists in Australia to undertake a survey to measure vehicular traffic flow and to calculate a toll for a newly constructed bridge; he showed an acute awareness, too, of how lengthy commuting times caused fatigue and affected worker productivity.4 He suggested making cars more expensive or putting restrictions on the use of them, both of which were dismissed by the mayor. 5 After the war Clark continued to declare that big cities had ‘had their day’ and predicted that, in place of crowded cities, children of new generations would be housed in scattered rural communities.6 Events began to swing a little in his favour. With Cold War hysteria gaining hold, there was justification for a greater regional dispersion of industry and population.7 Faced with the prospect of atomic war, Clark mooted that cities would need to be limited to a population of 100,000 with houses being diffusely

1 Clark to Keynes 10 January 1945, RES, LSE. 2 Clark to Dalton 10 August 1944, RES, LSE. 3 ‘Brisbane Is Dead, Doesn’t Know It’, The Telegraph (Brisbane), 22 April 1948. 4 ‘Counting the Costs of Traffic Congestion’, Sydney Morning Herald, 23 December

1970. 5 ‘Lord Mayor Is Critical of Bureau Report’, The Telegraph (Brisbane), 23 June 1943. 6 ‘End of Big Cities’, The Australian Worker, 2 June 1948. 7 ‘Colin Clark Warns of City Danger’, The Courier Mail (Brisbane), 28 August 1947.

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located, five to an acre of building land.8 This idea, at the height of the Cold War and fears of Soviet expansion, was fanned by his friend, the vehemently anti-communist federal politician William (Bill) Wentworth. Later speaking on migration and the development of Australia’s resources before the 1951 Federal Congress on Regional and Town Planning, Clark proposed his idea of spreading the nation’s population into regions of no more than 250,000 people.9 In Australia, where capital cities had always attracted the bulk of the population, Clark’s advocacy for ‘atomic’ urban planning and decentralis ing population and industry was regarded as fanciful and never taken seriously by governments. Urban planners and geographers were a different matter. This rebuff did not stop Clark from arguing that big cities would become intolerable places to live in due to congestion, pollution, noise, rising levels of crime and bureaucratisation. In 1951 he gave force to this in the Journal of the Royal Statistical Society, drawing upon his observations of the urban patterns in 36 American and European cities. Clark’s (1951a) key finding was to show that population density fell exponentially the further the distance from the city centre. Simply put, in the outer suburbs with cheaper land, there was less pressure to have compact populations. Clark (1951a, 491) boldly claimed that the fall-off in urban density ‘appears to be true for all times and places studied, from Los Angeles to Budapest’. As mass transport systems improved and became cheaper to use, cities would become less compact with an associated tendency to ‘sprawl’ outwards. He would later find that the economic dependence of the outlying regions of a big city upon the central business district (CBD) diminish. This was a recipe for further sprawl at a faster rate into pristine countryside. These findings held true until the late twentieth century renaissance or urban renewal of inner cities attracted people back to live in high-rise CBD apartments. However, Clark (1960, 415) astutely had an inkling that this development was in prospect, predicting that business interests, inner city property owners, insurance companies and city councils, alarmed at the flight of people to the suburbs, would lobby Governments to reverse the

8 Amid the hysteria of the Cold War, Clark went too far in his anti-communist crusade by expressing his fears of ‘a Super Pearl Harbor’ suggested that local Communist Party sympathisers could plant atomic bombs in western cities on behalf of the Soviet Union; ‘Soviet War Plans; Economist Fear’, Sydney Morning Herald, 23 November 1949. 9 ‘Atom Attack: Lesson of Decentralisation’, The Mail (Adelaide), 11 August 1951.

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process by proposing high-density tower blocks and housing projects to be both encouraged and subsidised. Apart from its research ambit, the paper opened a new audience for Clark to address in the form of urban designers, geographers and traffic engineers; the paper was highly cited in urban planning literature. Clark believed that the location of industry and population was decided by concentrations of purchasing power, along with the adequacy of transport and communication. The fact that his research lent support to Clark’s normative strictures against the evils of urbanisation were not referred to by those who tested his empirical model. In the 1950s and 1960s, Clark would flesh out his idyllic view of urban life. He abhorred the high-rise tower blocks being constructed in British cities at the time, believing that most people wanted to live in low-density housing of about 6,500 persons per gross square mile with amenities such as parks and gardens. He derided the reasoning of those who said that erecting tower blocks saved precious agricultural land.10 Here Clark was prepared to override market forces by imposing taxes on high-rise apartment blocks on the grounds of negative externalities. In a newspaper article he said that the construction of high-rise towers satisfied ‘the cupidity’ of developers, ‘the pomposity’ of politicians and ‘the megalomania’ of architects.11 Moreover the occupants of these towers, especially children, suffered from being unable to play in open spaces. Clark was also prepared to use variations in payroll tax on matters of industrial location to prevent cities from becoming larger than 500,000 in population. One problem here was that serviceshad to be consumed at the point of production. In his urban planning, Clark would find a kindred spirit in the Australian historian and political scientist, Hugh Stretton (1971) who along with many other advocates for open spaces, made the case for low-density suburban living, surrounded by greenery. In Clark’s world an ideal metropolis of 500,000, with 6,500 persons per gross square mile, would, at that density, have a radius of 5 miles. The design of this ideal city would resemble the five petals of a flower with public administration buildings and sporting fields in the city centre; 100,000 people would live in each of the five precincts which would be being largely self-contained for shopping and social purposes. Each of the townships would be interlinked by freeways which would be built

10 ‘Houses or High Flats’, Financial Times (London), 3 December 1954. 11 C. Clark, ‘The Child on the Balcony’, Sydney Morning Herald, 3 December 1970.

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around them. The land surrounding the five townships would be restored to native countryside or bush. As mentioned, Clark was prepared to levy variations in taxes to combat economic externalities caused by decisions on industrial location or residential development. Ironically, the best representation of this ideal in the Australian context was the place Clark liked least, Canberra, Australia’s national capital. Another oversight of his argument was just how dependent such a metropolis would become on cars. At a personal level Clark had lived up to his own words, moving his fast-growing family to a farm overlooking the Brisbane River. He bought the four-hectare riverfront property, on Sunset Road, Kenmore, in November 1948 for just over 2,000 pounds. Named ‘Wyalla’, it allowed the seven Clark boys to enjoy an idyllic, fairyland life. The property had previously been a dairy farm with a small house. The Clarks extended it using the best local building supplies. The farm was never really a commercial proposition because Clark was fully engaged in official duties however, the animals, including cows, pigs and chickens, provided food for the family and milking duties were allocated among the boys.

Picture of the Clark Family of Seven Boys 1947.

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The Natural Limits of Taxation Another line of argument by Clark, first enunciated in 1944, was to warn of excessive inflation if the federal government accepted extensive post-war expenditure commitments.12 It was Ned Hanlon, the man who succeeded Forgan Smith as Queensland Premier, who first planted this seed in Clark’s mind. Alarmed at the mooted post-war expenditures on social welfare suggested by economists such as H. C. Coombs, the Director-General of Post-War Reconstruction, and his chief economist Trevor Swan, Hanlon chillingly reminded Clark that it had been excessive taxation and encroaching bureaucracy that had been the undoing of empires and countries in the past.13 Clark had always held an interest in taxation and the supply of work; he remembered Dennis Robertson’s remark that he would only agree that taxation was having a perverse effect upon effort if he saw businessmen playing golf on a Wednesday (Higgins 1989, 308). After examining his statistical handbooks to see if there was anything in Hanlon’s argument, Clark found an empirical relationship between excessive taxation and inflationary pressure. However, initially he could see reasons for it. Later he was astounded to find some further intellectual pedigree for this relationship in an incidental dictum Keynes made in 1923 about the value of the French franc, namely, ‘The level of the franc is going to be settled in the long run, not by speculation or the balance of trade but by the proportion of his earned income which the French taxpayer will permit to be taken from him to pay the claims of the French rentier’ (Clark 1945b, 372). Another antecedent that Clark recalled was the Fabian pamphlet ‘A Socialist Budget’ he wrote in the 1930s which had touched on taxable capacity (Haney-Powell 1983, 9). Put simply, excessive rates of taxation led to inflation. Clark contended, that at full employment, the state could collect, at the most, 25% of net national income in taxation. If states tried to extract more than this, he argued, an inflationary process would be triggered which made the exercise self-defeating. How exactly did high taxation bring about inflation? Understanding taxation’s negative impact upon labour effort and saving was relatively straightforward. Once taxation reaches a certain point, it led people to 12 ‘Inflation Danger’, Cairns Post, 22 September 1944. 13 ‘The Late Ned Hanlon and Queensland Labour’, Truth (Brisbane), 8 February 1953.

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swap leisure for work. In short, raising taxes has a cost-push effect that needs to be considered even if it also restrains aggregate demand; this was Clark’s basic insight (Perkins 1992, 2). The inflationary pressures arose on the supply side. Less understood was the pernicious way in which expenditure increases when production slowed down. Companies also would have a tax-induced incentive to be reckless and to incur all manner of deductions for advertising, expense accounts and staff bonuses because these could all be charged against the Exchequer. Moreover, they would be less resistant to granting wage increases to staff because the higher costs would reduce the firm’s taxable income. All this would add to an inflationary spiral with higher prices inducing another round of wages increases. Another effect of high taxation was that it changed the political equilibrium; politicians would grow complacent about inflation, seeing it as the easier way out of reducing public debt. Many could not understand how, under Clark’s schema, government expenditure could have an inflationary impact if it was fully funded by an increase in taxation. His explanation was that government expenditure created immediate demand but that the commensurate tax impost upon private expenditure was delayed as consumers dipped into their savings. There was a precursor to this story. Clark (1935) had worked on the issue of taxation with some Cambridge economists in a paper prepared for the Fabians. As he regaled to a 1952 Chicago University roundtable discussion upon ‘The Limits of Taxation’, the conclusion reached was that the maximum level of feasible taxation was 25% of national income to permit the British Labour Party to carry out its program. However, in the post-war era, with a new expanded electoral platform, the Labour Party dropped this position; Dalton, now Chancellor of the Exchequer, gently mocked Clark as ‘a dangerous reactionary’ because he dogmatically clung to the same ratio.14 To be fair, Clark conceded that people might tolerate a higher level of taxation as their living standards improved. There was an overt political economy aspect to Clark’s model. He defended the tax limit with the argument that there is ‘a transfer of allegiances’ by influential elements of the community towards inflation. When taxation reaches 25% level of net national income, he argued that, after a lag of around three years, government expenditure was likely,

14 Clark to H. Grattan 12 June 1950, Grattan Papers, University of Texas.

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during a period of inflation, to rise less than the general price level and national income. In short, the real burden of government expenditure was reduced by inflation; in this way there was a ‘transfer of allegiances’ from the deflationary to the inflationary side so as to reduce the burden of the public debt. But there would also come a time, Clark believed, when business and government leaders, concerned at rising inflation, would swing economic policy towards stabilisation. Without sharing political allegiances, Clark’s argument was analogous to Michal Kalecki’s (1943) argument that financial interests would bridle at maintaining full employment since it changed the power balance of the labour-capital divide. It is informative to look at how Clark’s paper was first received by Keynes, then the editor of the Economic Journal. It was quickly despatched to his colleague Richard Kahn for assessment. Kahn’s initial reaction was that it should not be published: ‘not only is it quite balmy in its theoretical and sociological foundation, but its use of statistics is slapdash!’ But Kahn did admit the article contained a good deal of statistical information which is interesting in itself. He then advanced some suggestions that might ‘transform’ Clark’s article. Kahn observed that, with more expenditure on welfare, there was a virtuous correlation by which an increase in government expenditure raises prices and so relieves the budgetary situation. Kahn felt Clark dismissed too lightly the fact that rising standards of living might also raise the taxable limit.15 Under his own name, Keynes effectively recycled Kahn’s critique before adding his own criticism. While he found the paper an ‘interesting and fruitful subject’, Clark’s idea would be spoiled by the current ‘halfbaked’ form it took. Keynes noted ‘ I am sure there is something very interesting to be made of it … I should guess that your figure of 25% as the maximum tolerable proportion of taxation may be exceedingly near to the truth. I should not at all be surprised if we did not find a further confirmation in our post-war experience of your empirical law’. However, he added the caveat: ‘There is, however, at work a virtuous correlation by which an increase in government expenditure, particularly if it leads to a deficit, raises prices and so reduces the budgetary problem. Surely that is a highly relevant element in the situation’.16 Keynes also wanted Clark

15 Kahn to Keynes 25 April 1944, RSE, LSE. 16 Keynes to Clark 1944, RSE, LSE.

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to ‘tone down’ his quotation about the value of the French franc being ultimately determined by public finance as he did not intend it to be a generalisation. Clark did so and, while, repeating Keynes’s 1923 prophecy about public finance and the value of a currency, made sure that Keynes did not claim general validity for it.17 In his reply, Keynes noted that Clark’s ‘statistical inference’ was still ‘precarious. Nevertheless, as a practical proposition I should be strongly disposed to agree with your two main conclusions, namely, that 25% taxation is about the limit of what is easily borne and that we shall need a 50% price rise after the war to maintain a proper equilibrium between monetary and non-monetary factors’.18 Keynes later referred to Clark’s observation as ‘pseudo-scientific; but with some sound empirical base’ (cited in Meltzer 2005, 42). Pseudo-scientific or not, Clark never wavered from his figure of 25%, and, in the inflation-ravaged 1970s, would frequently invoke this comment by Keynes to demonstrate his support for curbing excessive government expenditure as the ultimate cure for inflation. Keynes’s letter assumed added poignancy since it was the last letter Clark received from him before his death in April 1946. The new joint editor of the Economic Journal, Roy Harrod, liked Clark’s article so much that he promised to ‘find a place for Maynard’s views on the depreciation of the franc’ in the biography he was preparing on Keynes (Harrod 1951 [1972], 373–374).19

American Reactions Despite initial fuss, the article did not make much international headway until Clark published a simplified version for an American audience. This was entitled ‘The Danger Point in Taxation’ and appeared in Harper’s Magazine in December 1950. In this contribution Clark (1950) explained that the anti-inflationary powers of taxation had a limit. 17 Clark to Keynes 10 January 1945, RSE, LSE. 18 Keynes to Clark 9 March 1945, RSE, LSE. This important letter is not in the Keynes

Papers at Kings College, Cambridge nor in The Collected Writings of John Maynard Keynes. Keynes had written the letter from the UK Treasury. The letter was later published by Clark in a number of his publications to give credence to the view that Keynes supported his 25% criterion. 19 Harrod to Clark 21 July 1947, Clark Papers, UQ.

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The article attracted the interest of both American policymakers and economists. In reply to Grover Ensley, the Staff Director of the Congressional Committee on the Economic Report to the President, Clark emphasised that the 25% figure was ‘a round figure rather than a precise limit’, but thought a figure of 27% had him ‘willing to bet’ on a further increase in money wages and subsequent inflation.20 Walter Heller from the University of Minnesota discussed Clark and the economic limits of taxation in hearings before the Congressional Joint Economic Committee in January 1952. In his submission, using American data, Heller nit-picked the empirical inconsistencies within Clark’s hypothesis before concluding that there was no proof that there was a taxation threshold level at 25%, 35% or higher percentages of national income where inflation actually accelerated (Congressional Joint Committee on the Economic Report of the President 1952, 319). In contrast, Paul Douglas (1952), supported his old friend’s hypothesis but would later change his mind. The article also prompted two American economists, Joseph Pechman and Thomas Mayer (1952), to appraise the Clark hypothesis. They sifted through Clark’s empirical evidence, pointing out some of the weaknesses and flaws in his analysis. While they agreed that there were probably fiscal limits to taxation, these could not be reduced to ‘a rule of thumb’ (Pechman and Mayer 1952, 242.) It was on the theoretical plane, however, that they most criticised Clark’s contention. They argued that he did not take into account both the expenditure and receipts sides of the government budget and thus failed to show how government spending could directly contribute to inflation. Moreover, there were times when an increase in government expenditure was the leading factor behind inflation, not a rise in taxes which intended to counteract the inflationary impact of government expenditure. Increasing taxes usually delivers a contractionary impact, they argued, since it deters spending more than it curtails incentive and the willingness to work (Pechman and Mayer 1952). These generally accepted principles of popular Keynesian fiscal policy flew in the face of Clark’s contention and what he knew of Keynes’s beliefs. He took umbrage at their review, telling Seymour Harris, editor of the Review of Economics and Statistics, that the two authors had approached the subject with

20 Clark to Grover Ensley 18 January 1952, Clark Papers, UQ.

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the ‘pedantic literalness’ that made him despair about ‘the progress of statistical economics’.21 In his rejoinder, Clark (1954, 101) qualified his hypothesis by saying the process took three years to unfold, so one had to compare taxation in one year with the trend of prices in later years. Clark defended his work by stressing that he was focusing upon the long-run factors that underpinned inflationary forces and, on that score, many critics conceded he had a point (Hotson 1979, 280). Clark also suggested that budget deficits made voters aware of their future tax obligations and that tax rises could trigger a wages push. Despite these caveats, the consensus within the economics profession was that Clark’s ‘limit’ argument had been effectively demolished by the separate investigations of Heller and Pechman and Mayer. Moreover, his point where higher taxation exerted an adverse effect upon workers and also business executives was not conclusively proven (Haney-Powell 1983, 54). Clark (1954, 101) felt that by overlooking his argument economists were giving legislators ‘the green light’ to go ahead with extravagant spending and heavier taxation. He was correct, too, in stressing the importance of political influences behind economic policy.22 In a subsequent radio debate on taxable capacity featuring Clark, Senator Paul Douglas and Heller the latter took the view that higher taxation did little economic harm and felt Clark was in danger of becoming ‘a fiscal Savonarola’ (Heller 1952).

Australian Reactions Clark used his tax limit postulate as one reason why Australia’s inflation rate was out of control in the early 1950s.23 He pushed the case for lower taxes while Copland argued for the very opposite. Most of Clark’s Australian contemporaries did not agree with his 25% hypothesis. There was one instance, in 1952, when Heinz Arndt, an ardent Fabian, engaged Clark in a public debate at the Australian National University over his so-called ‘proofs’ for his 25% tax limit. A year earlier, Arndt had 21 Clark to Stuart Harris 29 July 1952, Clark Papers, UQ. 22 Wood, G. 2005, ‘Comments on Colin Clark Colloquium’, Brasenose College,

Oxford, mimeo. 23 ‘Disaster Threat Seen in Present Tax Policy’, The Daily Telegraph (Sydney), 25 February 1947.

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taken exception to Clark criticising the federal government for drastically increasing personal taxation rates. Arndt insisted: The question of the effects of taxation on the incentive to produce is essentially a matter of judgement. No doubt, beyond a point, taxation of marginal income has such effects but we have no concrete knowledge of their magnitude. It was very doubtful whether taxation has hitherto been a significant contributing factor to low production and whether even substantial increases in personal income taxation would make an appreciable difference to people’s willingness to work.24

The subsequent debate between the two economists attracted a large crowd; Arndt recalled that only a few in the audience supported Clark but that he still declared the contest a ‘draw’.25 While he realised he was isolated, Clark took heart from the fact that, twenty years earlier, he had been, with Keynes, one of the few economists urging the government to spend in order to lift the economy out of the slump. After encapsulating his arguments against Clark’s ‘proofs’, Arndt sent off a paper to the Economic Journal.26 However Harrod was unconvinced by it: ‘It occurs to me that you may slightly overestimate at your end the amount of attention given to Colin Clark’s view’. He explained that while Clark was well-known in England ‘he is not in such a dominant position that it would seem to be in proportion to devote a whole journal article to the criticism of this particular position’. This was not his reason, though, for rejecting Arndt’s article; Harrod felt that Arndt was flippant about Clark’s thesis and disputed his view that most readers would regard inflation as a device by which taxpayers may at will reduce the burden of taxation. In fact, Harrod considered that mechanism quite plausible and reminded Arndt that Keynes subscribed to it.27 Arndt contacted American economist Pechman over the issue, sending him his paper. Pechman thanked him, noting that they shared criticisms of Clark. While Pechman and Mayer had succeeded where Arndt had not, Pechman made the telling observation that he doubted whether they had succeeded fully in ‘disabusing the public from its acceptance of the Clark 24 Sydney Morning Herald, 6 August 1951. 25 H. Arndt to G. Firth 1 September 1952, Arndt Papers, NLA. 26 Arndt to Harrod 19 May 1952, Arndt Papers, NLA. 27 Harrod to Arndt 4 June 1952, Arndt Papers, NLA.

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thesis. As you may know, the thesis was accepted rather uncritically by the press here and I suspect that an article in an economics journal is not sufficient to overcome its popularity’.28 In short, Clark knew how to make an emotive appeal. As mentioned, Clark’s taxation limit did not win wide support among his Australian colleagues. Indeed, a 1964 research report into Australian taxation system, written by a quartet of local economists, concluded that Australians were relatively under-taxed. Arndt (Downing et al. 1964) described ‘the 25% law’ as ‘discredited … having been given a decent burial’ by Pechman and Mayer’s rebuttal. Using arguments first raised by Benjamin Higgins (1953), Richard Downing et al. (1964) pointed out that the burden of taxation could only be judged in the light of the services afforded by the tax revenue. Further, the empirical proofs of Clark’s dictum were violated by countries like West Germany which enjoyed a high growth rate and low inflation rates even with taxes amounting to 37% of GNP. This was confirmed by Peter Groenewegen (1982), who noted that Clark had increasingly used Keynes’s imprimatur to push the idea of a ‘natural’ tax threshold even though Keynes was notorious for changing his mind when circumstances changed. Yet the mystical 25% rule would not lie down and die. It was revived when the British political scientist, C. Northcote Parkinson (1960), following correspondence with Clark, announced a second law to rival the famous first, namely that ‘Expenditure rises to meet income’. He considered Clark’s article ‘just what I need’ and, citing his dictum, went on to say that, with taxation taking almost 40% of national income, there was a growing consensus that Britain was taxing itself to death.29 Parkinson (1960, 73) added, however, that few were prepared to nominate at what point taxation had to be checked and, even fewer, prepared to agree on absolute taxation limits; this was a view shared by E. Cary Brown (1954) speaking on behalf of the economics profession.

Channelling the True Keynes Clark never wavered from his 25% ‘law’, simply because it was an integral part of his attack on the Leviathan of big government where politicians

28 Pechman to Arndt 10 November 1952, Arndt Papers, NLA. 29 C.N. Parkinson to Clark 17 March 1959, Clark Papers, Brasenose.

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of all persuasions were disposed to higher levels of spending and taxation; he felt that economists had a public duty to point this out. But the 25% tax threshold was also an attack on those who, he felt, were inappropriately applying the thinking of Keynes to entirely new economic conditions. Here Clark had in mind Keynes’s (1946) posthumous lament about some of his ideas had become vulgarised and how much ‘modernist stuff, gone wrong and turned sour and silly is circulating in our system’. Keynes (1946, 186) wanted the classical medicine of free trade, convertible currencies and sound fiscal and monetary policy upheld, otherwise ‘we may drift one from expedient to expedient and never get really fit again’. Clark’s view of Keynes was one that was sceptical of achieving the levels of unemployment mooted by the Beveridge Report. In the same vein, Clark abhorred the fashionable symmetrical ‘Keynesian’ belief that, in a state of over-full employment or labour shortages, there should be also rising taxes and a budget surplus; Keynes had been careful never to authorise this. When the Australian government took this very action in 1952, Clark accused its economic advisors of falling prey to ‘bastard Keynesianism’.30 It was thought that high taxes would reduce purchasing power and correct any tendency towards over-employment and inflation. No-one seemed to realise that, while high taxes might curb the boom in the short run, over the long run they could cause costs to rise. Clark (1958, 19) also pointed out that Keynes was never an advocate of limitless taxation. From his perspective it was ‘a dangerous idea’ to use taxation for any long period of time to curb aggregate demand in line with aggregate supply when the real solution lay in promoting free trade and lower taxation. Moreover, politicians and public servants might use this fiscal largesse to build up their bureaucracies. Clark told American businessmen that the root cause of the decline in the value of the dollar since the war had been the high rate of taxation on American corporations; this made them more receptive to rising costs, which could be declared as allowable tax deductions and charged against the Treasury. It was, of course, only a short step for Clark to use his taxable capacity argument to rail against excessive government spending, particularly on social welfare and the National Health Service.

30 ‘Taxes Should Be Reduced Further’, Sydney Morning Herald, 19 August 1952.

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Another ‘grotesque’ interpretation of Keynes was that circulated by Alvin Hansen who posited that mature economies with static populations faced ‘secular stagnation’ because of the paucity of private demand, particularly investment, and therefore required an immense permanent program of government spending and greater regulation of economic activity (Clark 1958, 18). Previously, the American economy had been stimulated by rapid population growth and the exploitation of new frontiers (Winch 1971, 258). Clark did not like Hansen’s gloomy prognosis of American population growth and the closing of the frontier because it made government regulation and public spending more acceptable to American society. Indeed Clark felt there was ‘a logical and historical relation between stationary population and state regulation of economic life’ and that it must be resisted.31 It was a view that had inveigled interwar British economic thought, especially the belief that, with population growth ebbing, statism was preferable to free markets. Only the impetus of population growth, Clark argued, would impel countries into creating a more productive economy. One interpretation of Keynes’s doctrines that Clark had ‘deep approval’ of was the summation provided by Harvard economist John H. Williams (1948). He told Williams that there was ‘a bewildering variety of bad doctrine’ circulating as Keynesian economics in America and that ‘if Keynes were alive today, he would be the first man to junk it’.32 Clark was naturally upset on hearing of Keynes’s death and devoted two memoirs to him, one written in 1946 in Economic News and published elsewhere, the other upon the release of Harrod’s biography in 1951. In the first memoir, Clark (1947, 20) expressed his fear of impugning the master: ‘The more you know of Keynes, the harder it is to write about him. This would be true even for one who is not bound by feelings of almost filial piety to the memory of a most generous benefactor’. Clark would never revise his high opinion of his mentor and would admonish those who invoked the name of Keynes in saying ‘This is what Keynes would have done’; he would respond ‘I knew Keynes quite well and he would certainly have said nothing of the kind’(Kolsen 1991, 64). His barb was directed not just at expedient politicians but

31 Clark ‘Do Population and Freedom Grow Together?’, Fortune 1960: 2017. 32 Clark to J.H. Williams 8 March 1948, Clark Papers, UQ.

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also at Cambridge post-Keynesians. Besides making frequent reference to Keynes’s (1946) posthumous article in the Economic Journal, Clark reminded people that Keynes was cautious about the possibilities of economic management and always in favour of unfettered individualism and decentralisation because it permitted ‘the maximum devolution of economic responsibility’.33 Clark always claimed that when Keynes died in April 1946, papers left on his desk suggested he was working on the sustainable limits of taxation.34 He certainly prized his last letter from Keynes supporting his 25% fiscal limit. It was from Clark (1964), too, that the apocryphal story of Keynes’s remark that ‘I am not a Keynesian’ first arose. This had followed after a meeting in 1943 with Abba Lerner and others about the power of ‘functional finance’. When questioned about the veracity of the remark, which had long been misattributed, Clark could only tell Don Patinkin (1982, 50) that it came from ‘an indirect source now regrettably forgotten’ (Colander 1974). In his review of Harrod’s biography of Keynes in Economic News, Clark (1951b) reminded readers how Keynes felt that there had been something of a degradation of public life especially in the craven behaviour of politicians. The disquietude about public mores and the activities of politicians using public money to bribe the electorate shaped Clark’s own worldview.35 As mentioned earlier, Clark was dismissive of Hansen’s ‘mature economy’ thesis which he believed contained crypto-Marxist undertones. Having read Clark’s review, which observed that there was a great deal of ‘frustrated or suppressed Marxism in American intellectual life’, J.K. Galbraith was mystified by Clark’s accusation.36 Clark explained that by ‘Marxist’ he meant those who, apart from having a materialist conception of history, entertained the ‘monstrous falsehood’ that all human actions, political, cultural or religious arose from economic causes.37 Only British intellectual society, Clark held, had shaken off such Marxist fetters.

33 ‘Keynes a Memoir’, Clark Papers, UQ. 34 Barbara Blackman interview, 1986. 35 ‘John Maynard Keynes’, Economic News, 20 June–July 1951. 36 Galbraith to Clark, 16 January 1952, Clark Papers, UQ. 37 ‘Australian Attacks the Monstrous Falsehood’, The Herald (Melbourne), 18 July 1953.

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When it came to the durability of Keynes’s doctrines, Clark was always keen to remind devotees of Keynes about a prophetic conversation he had with him in 1930. Apparently, Keynes had been trying unsuccessfully to convince a conservative committee of public servants and bankers that there was an element of truth in his ideas; it was likely that Keynes was referring to his work serving on the Macmillan Committee on Finance and Industry. As they walked away from the meeting Keynes grumbled ‘At least 20 years out of date - government departments. Always are! But 20 years from now, in 1950, for instance, government departments all over the world will be talking about my doctrines and by that time they will be quite obsolete and dangerous’.38 While Keynes was referring to his analysis in A Treatise on Money, the words were burnt into Clark’s soul. While Clark believed that most of Keynes’s doctrines would turn out to be ‘impermanent … the overthrow of Say’s Law was his most permanent achievement’.39 For the most part, Clark felt that Keynes’s thought was not holy gospel. Nor did he fully accept Keynes’s notion of the multiplier, or the vulgarisation of it in first-year economics teaching, arguing as did Dennis Robertson, that its effect was not immediate but subject to time lags (Healey and McFarlane 1977). Despite being an acolyte of Keynes, Clark saw the merits of fiscal restraint and, equally, the dangers of over-spending by the public sector. Keynes had never addressed how a likely increase in post-war government expenditure on welfare would affect economic outcomes. By the 1960s, Clark still professed that it was still too early to make an assessment of Keynes’s economic thought. He cautiously added that, while Keynes’s method of analysis had dealt with the tragic unemployment of the 1930s, his ideas now ‘may have become irrelevant or positively misleading’ (Clark 1964, 53). Towards the end of his life, Clark (1983) was drawn to discussing the legacy of Keynes. In reviewing the first volume of Robert Skidelsky’s biography of Keynes, Clark (1984, 83), as one of the last remaining contemporaries of that Cambridge cluster of economists that gathered around Keynes recalled that his mentor was really ‘an Edwardian elitist and that his ideal world lay in the past, in the world of Edwardian liberalism, of humane conventions, moderate programs, and hopeful reforms’.

38 ‘Economic Stabilisation at Home and Abroad’, August 1951, Clark Papers, UQ. 39 Clark to E. Durbin 1935, Clark Papers, Brasenose.

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In an unpublished screed entitled ‘The Teaching of Economics’ written in 1976, Clark focused upon how he felt Cambridge had taken economics down the wrong road. A shorter version had appeared earlier in an Australian publication where Clark (1975, 75) lamented that economics in Cambridge was ‘in sad confusion’ thanks to the ‘malign influence’ of Piero Sraffa. The problem began, he held, after the death of Keynes; Cambridge economics became all the more ‘inward looking and selfcentred’.40 Keynesian economists had seen it as their duty to always advocate increasing demand with highly exaggerated estimates of productive capacity. Clark recalled how, in 1937, Keynes wrote that a policy of an all-round increase in aggregate demand was inappropriate given occupational and regional labour shortages. This mentality of infinite capacity was embedded after the publication of Lord Beveridge’s Full Employment in a Free Society which Clark claimed was largely the work of Nicholas Kaldor. The idea was sown of running the economy hard so as to create a permanent shortage of labour. While Beveridge and Kaldor recognised it meant rising pressure on wages and prices, this could be dealt with by ‘incomes policies’; to Clark this meant government regulation of wages and prices.

References Beveridge W.H. 1944, Full Employment in a Free Society. London: Allen and Unwin. Brown, E.C. 1954, ‘Review of the Limits of Taxable Capacity’, American Economic Review, 444(3): 448–450. Clark, C. 1935, A Socialist Budget, NFRB No. 22, London: Victor Gollancz. Clark, C. 1945a, ‘The Economic Functions of a City in Relation to its Size’, Econometrica, 13(2):97–118. Clark, C. 1945b, Public Finance and Change in the Value of Money’, Economic Journal, 55(220): 371–389. Clark, C. 1947, ‘Lord Keynes’, Twentieth Century, 1(4): 20–25. Clark, C. 1950, ‘The Danger Point in Taxation’, Harper’s Magazine, December: 67–69. Clark, C. 1951a, ‘Urban Population Densities’, Journal of the Royal Statistical Society, 114: 54:(4): 490–496. Clark, C. 1951b, ‘John Maynard Keynes’, Economic News, 20: 6–7, 1–8.

40 ‘The Teaching of Economics’ 1976, Clark Papers, UQ.

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Clark, C. 1954, ‘Mr Colin Clark on the Limits of Taxation: A Rejoinder’, Review of Economics and Statistics, 36(1): 102. Clark, C. 1958, ‘What’s Wrong with Economics?’ Encounter, 10(4): 15–23. Clark, C, 1960, ‘The Effect of Industrial Development in Rural Areas’ Chartered Surveyor, February–March. Clark. C. 1964 (1970), Taxmanship. London: Institute of Economic Affairs. Clark, C. 1975, ‘The State of Economics’, Quadrant, 19(8): 73–76. Clark, C. 1983, ‘Recollections of Keynes’, Economic Papers, 2(3): 33–41. Clark, C. 1984, ‘J.M. Keynes: Edwardian Elitest’, Quadrant, May, 80–83. Colander, D. 1974, ‘Was Keynes a Keynesian or a Lemerian?’ Journal of Economic Literature, 22: 1572–1575. Congressional Joint Committee on the Economic Report of the President, Minutes of Evidence, 1952, Washington. Douglas, P.H. 1952, Economy in the National Government. Chicago: University of Chicago Press. Downing, R.I., H. W. Arndt, A.H. Boxer and R.L Mathews 1964, Taxation in Australia: Agenda for Reform. Parkville: Melbourne University Press. Groenewegen, P.D. 1982, ‘Problems and Prospects of Public Sector Growth’, Occasional Paper, No. 27, Canberra: Centre for Research on Federal Financial Relations. Haney-Powell, B.A.1983, ‘Inflation and Taxable Capacity: Some Recent Evidence’, MA Thesis, Eastern Illinois University. Harrod, R. 1951 (1972), The Life of John Maynard Keynes. London: Penguin. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: an Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. Heller, W. 1952, ‘How High Can Taxes Go?’ Proceedings of the Annual Conference on Taxation Under the Auspices of the National Tax Association 45: 243–256. Higgins, B. 1953, ‘A Note on Taxation and Inflation’, Canadian Journal of Economics and Political Science, 19(3): 392–402. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record. 65(3): 296– 310. Hotson, J. 1979, ‘Inflation and the Rise of the Government Sector: An Analytical Survey’, Eastern Economics Journal, 5(3): 379–401. Kalecki, M. 1943, ‘Political Aspects of Full Employment’, The Political Quarterly, 14(4): 322–330. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress. London: Macmillan: 107–123. Keynes, J.M. 1946, ‘The Balance of Payments in the United States’, Economic Journal, 56: 172–189. Kolsen, H.M. 1991, ‘Vale Colin Clark’, World Review 30(3): 63–67.

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Lomax, K.S. 1943, ‘The Relationship Between Expenditure per Head and Size of Population of County Boroughs in England and Wales’, Journal of the Royal Statistical Society, 106(1): 51–59. Meltzer, A.H. 2005, Keynes’s Monetary Thought: A Different Interpretation. Cambridge: Cambridge University Press. Parkinson, C.D. 1960, The Law and the Profits. London: Penguin. Patinkin, D. 1982, Anticipations of the General Theory and Other Essays on Keynes. Chicago: University of Chicago Press. Pechman, J.A. and T. Mayer, 1952. ‘Mr Colin Clark on the Limits of Taxation’, Review of Economics and Statistics, 34(3): 232–242. Perkins, J.O.N. 1992, ‘Public Finance and Macroeconomic Policy’, Economic Analysis and Policy, 22(1): 1–19. Stretton, H. 1971, Ideas for Australian Cities. Melbourne: Georgian House. Williams, J.H. 1948, ‘An Appraisal of Keynesian Economics’, American Economic Review, 38(2): 273–290. Winch, D. 1971, Economics and Policy. London: Fontana.

CHAPTER 10

Macroeconomics and the Pursuit of Ruralism

The Post-war Australian Economy Colin Clark realised, well before any other Australian economist, that one perennial problem of post-war Australia was not deflation, but inflation. Another was its chronic balance of payments deficit. In May 1947 he gave evidence before the Commonwealth Court of Conciliation and Arbitration, declaring that Australia was in an economic boom and that the introduction of the 40-hour week would exacerbate inflation. He was proud to be the only economist to warn of the negative consequences of this ruling just as he was proud to be the only economist opposing the establishment of a local car manufacturing industry. Called as an independent witness and expert on productivity, Clark told the Court that the rate of increase in production of goods and services had slowed alarmingly. He explained that the fruits of economic progress could come in four ways: an increase in wages; an increase in incomes; shorter hours; or lower prices. Australians had to choose just one. But, before deciding this, policymakers had to ensure the economy was healthy. The main source of wealth, he argued, was an increase in the actual quantity of goods and services produced.1 Clark overlooked the potential for industrial conflict 1 ‘Production Only Way to Economic Security’, Maryborough Chronicle (Queensland), 14/5/47.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_10

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when trade unions were impatient for an increase in wages and a reduction in working hours (Sheridan 1989). In Queensland the immediate postwar years were marked by an explosion in industrial disputation that was heightened by a communist presence within certain trade unions (Evans 2007, 200–204). As alluded to earlier, there were serious differences between Clark and his Australian peers. In what was his last letter to Keynes, Clark reported how his relationship with them had soured: As a prophet of greatly improved terms of trade for primary produce I ought to be very popular in Australia, but I am not. Everybody has his mind set on making Australia a manufacturing country. Not many people have realised that if we exclude importsof manufactures, we shall lose our ability to export primary produce … The interests of the rest of Australia differ from those of Sydney and Melbourne, but these two cities have a strong political pull. Queensland and the rest of Australia are the States which have the greatest interest in export trade and also have the greatest possibilities of further development.2

Over a decade earlier, Fredric Benham had uttered similar sentiments, complaining about his struggles ‘in comparative isolation and darkness’ against import duties, wage fixing and other devices which Australian economists continued to support.3 Meanwhile one Queensland state politician dared to attack Clark for not being ‘a practical economist’. Clark quickly defended himself by reminding this critic how, in 1945, he told Coombs, the federal government’s chief economic planner, and Ronald Walker, head of the National Security Resources Board, that Australia’s best hopes lay in agricultural exports, not manufacturing. Official circles were reminded of the ‘burdensome surpluses’ of primary produce that had plagued the 1930s (Crawford 1954, 173). Pointing to interwar export prices, Coombs said he would plan on the basis of low export prices.4 Contrary to this, Clark argued that primary producers and the whole country would have been much better off if they had listened to his

2 Clark to Keynes 18/2/1946, RSE, LSE. 3 Benham to E. Cannan 29/12/1927 RES, LSE. 4 ‘Colin Clark Defends Advice’, The Courier Mail (Brisbane), 19/11/1949.

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advice. During the war Clark had first expressed fears that Australian postwar planners wanted to discourage agricultural and pastoral production in favour of manufacturing.5 Clark (1958) felt that the support of Coombs and other economists for the introduction of the 40-hour working week would spirit labour away from rural areas. Since 1938 the rural labour force had fallen from 520,000 to 450,000 while the manufacturing work force had risen from 540,000 to almost 900,000.6 Clark also attacked the ‘deep-seated, almost emotional obsession with industrialisation’ held by Australian economists.7 The post-war planners’ dreams of an industrial Australia were ‘feather-headed’.8 He was scathing, too, about the prospects of Australia becoming a net exporter of manufactures to Southeast Asia, given Australia’s distance from markets, the low density of population, high transport and wage costs and relatively poor productivity. Australian manufacturers showed little sign of enjoying increasing returns; while Australia had a larger share of its labour force in manufacturing than the United States the the productivity was about one-third of the American level. Clark had also found that the real product per man hour in Australian manufacturing was the same as it had been 25 years earlier, an observation shared by Copland.9 Clark could also invoke the words of former High Court judge, Justice Henry Bournes Higgins who said at the turn of the twentieth century: ‘You will not be able to make Australia a manufacturing country, unless you first produce a proletariat which is poor enough to be willing to work under the conditions which manufacturers will require’ (cited in Clark 1958, 69). Yet by the middle of the twentieth century the manufacturer had become ‘the spoiled darling of every government in Australia’.10 In another colourful metaphor Clark likened conventional economic opinion in Australia to a speculator who

5 ‘Discouraging Agriculture; Federal Post-war Policy’, Queensland Country Life, 13/7/1944. 6 ‘Factory Force Too Big Says Economist’, Sydney Morning Herald, 18/9/1951. 7 C. Clark, ‘The Australian Crisis; Penalties of Over Industrialisation’, Manchester

Guardian, 7/3/1952. 8 ‘Feather Headed Planning’, Daily Telegraph (Sydney), 13/8/1951. 9 ‘Our Output Static for Years’, The Herald (Melbourne), 18/10/1950. 10 ‘Peep into 1960 by Provocative Critic of Manufacturing Policy’, The Herald (Melbourne), 28/2/1949.

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found the market turning against him but reluctant to cut his losses and start afresh. At the 18th Summer School of the Australian Institute of Political Science, held in Canberra in January 1952, the future of the Australian economy was discussed. Clark appeared as a discussant. After bemoaning that Australia’s manufacturing had been allowed to prosper due partly to the accident of war and political expediency, he laid the blame with the planners within the Department of Post-War Reconstruction (Holder 1952). He proposed using differentials in taxation as the means to promote agriculture and other desirable forms of economic activity. However, Trevor Swan incisively dismissed Clark’s critique suggesting instead that the economic developments within Australia over the last decade would have occurred irrespective of what anybody could have done (Holder 1952, 103). Swan pointedly reminded Clark that he had said essentially the same thing in his The Economics of 1960, namely, that ‘long-run economical equilibria work themselves out entirely independently of social and political factors’. This explanation struck Swan as being far more plausible than ascribing it, as Clark did, to the prevailing views of a certain school of economic thought. Much of Clark’s disconnect with conventional economic opinion had, as we have seen, first been sown in 1940. This became stronger in 1942 when Clark became the unofficial economic advisor to Santamaria and his National Catholic Rural Movement (NCRM) (Allan 2015). He alienated his fellow economists on a range of topics, from resisting moves for the welfare state to the desirability of pursuing full employment. While it could be argued that Santamaria had some influence over Clark, others such as Robert Murray (1970) said it was Clark who was, in fact, the primary influence due to his ‘ideological, romantic Catholicism’. Gerard Henderson (1982, 65) believes that Clark had a great influence upon Santamaria during the 1940s. In his memoirs, Santamaria (1981), too, claimed that apart from being a life-long friend, Clark’s economic analysis ‘had a powerful influence on the thinking and policies of the NCRM’. Whatever the causation, many Australian economists found it hard to accept how Clark, the great empiricist of economic progress, could align himself with Santamaria and his fanciful schemes. However, Clark saw no reason why scientific method could not be reconciled with religious

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traditionalism.11 That is, he still invested proper empirical and economic analysis into his research (Murray 1970, 115).

Creating a Rural Nirvana Clark’s grand vision for Australia found greater currency in 1952 when the Catholic Church circulated a Social Justice Statement, Food or Famine? It was written by Santamaria but with content inspired by Clark’s work. The foreword suggested that, with a rising population, Australia faced the grim reality that ‘within a few years she may not be able to feed herself’ (Henderson 2015, 203). It was a scaremongering assessment, given that Australia was exporting a considerable amount of agricultural produce. The consequence was ‘famine’, with ‘the very survival’ of Australia at stake. Clark suggested it could be arrested by raising produce prices to give farmers a sufficient income, lower taxes, improved techniques of production and migration to fertile lands.12 The Statement called, first, for recognition of the primacy of agriculture in the Australian economy before outlining a number of measures to encourage production, including a change in the immigration intake ‘from an urban to rural type’. The Statement also proposed a ‘large scale plan of land settlement based upon a system of working proprietors, rather than on wage-earners’ and that governments ‘should exercise their power to prevent the further growth of the great industrial cities’ (cited in Henderson 2015, 203). Most of Australia’s new migrants congregated in the big cities where conditions were more congenial. Food prices were kept low for the benefit of workers and consumers in the cities. Henderson points out that while the Catholic Church accepted the Statement, the Church overlooked the failure of past rural settlements in Australia. Samuel Wadham from the Faculty of Agriculture at the University of Melbourne also ridiculed the aspirations of the NCRM. Speaking at a NRCM convention, Clark dismissed Wadham as ‘not a valuable guide’ adding that he ‘had no qualifications as an economist whatsoever’ (Truman 1960, 138; Henderson 1982, 82).

11 ‘Economist with a Human Touch’, The Daily Telegraph (Sydney), 28/7/1951. 12 ‘Nightmare Forecasts of Starvation in the Future’, The Telegraph (Brisbane),

17/8/1949.

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Placing immigrants on the land was not a new idea, having been attempted through the Empire Settlement scheme in the 1920s. In the 1940s the NCRM presented the same arguments before the Commonwealth Rural Reconstruction Commission (1943–1946), set up by the Curtin Labor Government. The Commission was charged with advising policy for ‘the reorganisation and rehabilitation of the Australian rural economy during the post-war period’ (Doig 2002, 261; Macintyre 2015, 168). Wadham was one of the four Commissioners but easily the most forceful and opinionated. During its hearings the Commission took evidence from Clark in his formal role as the State Statistician for Queensland. He gave a guarded performance about post-war trade for primary goods; he rarely ventured into discussing controversial issues such as decentralisation or rural governance. He left that to Santamaria. Clark did, however, advance evidence that the extended family farm was more efficient than large commercial farms. He added that in America large scale ‘capitalist’ farming had disappeared and been replaced by family farms or partnerships. When Santamaria gave the NCRM’s statement of evidence to the Commission in October 1943, Wadham took issue with a reference to Clark’s book on Soviet economic statistics which showed that, despite that country’s economic performance, the lot of the peasantry had barely improved. He also pricked Santamaria’s conscience about how young children, freely seen as an asset on the family farm, could be exploited. He was bemused by Santamaria’s assertion that farmers should be given preferential financial assistance. Santamaria also explained how, under the principal of Subsidiarity, state governments should divest themselves of all authority in favour of municipalities, associations and workers. Privately, Wadham found the NCRM submission ‘incomprehensible’. He told a correspondent that ‘[i]t suits the Catholics and is convenient “sob stuff” to cloud the issue and prevent the inevitable development of more efficient methods of land use and better farming’ (cited in Macintyre 2015, 171). This comment gets to the nub of his earlier criticism of Clark in aligning himself with such a cause. While he was a Christian Socialist and believed in co-operation and economic efficiency, Wadham derided the notion of family farms and the ambition of peopling the land, saying ‘We have been bamboozled by empty spaces and the size of the continent’ (Davison and Brodie 2005, 6). He believed that the NCRM

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scheme was no different from earlier schemes and the idea that a back-tothe-land campaign made for a morally superior society was simplistic. He colourfully reminded the leaders of the NCRM that the so-called wholesome joys of running a family farm, especially during harsh winters, were illusory. The Commission upheld the view that the post-war world would see overproduction and falling prices for agricultural commodities (Doig 2002, 258). It also rejected the idea of closer land settlement and putting more people on the land (Henderson 2015, 204). Ambitious plans for rural reconstruction, Wadham insisted, needed to take account of the limitations imposed by shallow soil and poor rainfall as well as of the harm done by over-grazing and over-cropping (Davison and Brodie 2005). Australia had already seen the soldier settlement schemes after World War One marred by physical unsuitability and financial incompetence. Further, rural settlers did not have the same income, services or amenities as those in the cities. This issue resurfaced with Clark’s detailed blueprint of land settlement given before the 1950 Queensland Royal Commission on Pastoral Lands Settlement, where he appeared as the first witness.13 His plan envisaged the formation of settler co-operatives to allow the creation of farming communities of around 110 farms each, with three men per farm, all of which would be close to townships of 1,500 to service the new farming areas. He envisaged putting a quarter of a million new settlers on the agricultural and pastoral areas of Queensland. Clark wanted these farms to be not just be self-sufficient but producing for export. Settlers, including European migrants, were to be placed in communities of a few hundred on areas marked out in draughtboard design. Each farm would have 750 acres of arable land and farmers would have some form of drought insurance. Each of these micro-towns and villages would operate on a co-operative basis (Jackson 1968, 41). Overall, this scheme would absorb some 243,000 settlers into the Queensland hinterland over a ten-year period (Jones 1966, 150). That meant a three to four-fold increase in the State’s rural population (Kenwood 1988, 114–115). While the scheme was astonishing, Clark’s proposal was more elaborate than a simple ‘back to the land’ mantra. He envisaged that there would be well-planned regional towns to support

13 ‘Economist on State Rural Development’, The Telegraph (Brisbane), 17/10/1950.

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both ancillary industries and universities (Henderson 1982, 60). Clark also told the Commission that any risks taken in the policy of rural settlement would be ‘trifling’ compared to the risk of delay. The perennial fear of a military threat hanging over Australia’s empty spaces was invoked (Jackson 1968, 40).14 But ‘of far greater importance’ to Clark was world opinion that Australia was making little attempt at developing its resources; there was ‘a case’ for handing the land over to Asian settlers (Jones 1966, 151). Jones suggests Clark used this resort to disguise his real motives which were founded on religious beliefs. One Queensland Minister said that Clark’s migrant co-operative land settlement scheme was a ‘pathetically foolish’ idea; the Minister also doubted whether these migrants would know much about growing crops and acclimatising themselves to Australian conditions.15 In October 1952 the Menzies Government rejected the Catholic Church’s proposals for land settlement schemes despite direct representations from Santamaria. Menzies found the proposed method of farming ‘quite inadequate to provide the standard of living common in Australia’ (Henderson 2015, 206). State governments, too, were equally lukewarm about Santamaria’s land settlement schemes. This was a portent of what would happen in the 1960s when the concept of urban and economic decentralisation began to gain traction. Another issue on which Clark fundamentally differed from his colleagues was their wanton support for tariff protection. In an address to the 1946 ANZAAS Conference in Adelaide, Clark argued that Australia’s rate of economic progress was slowing because it fostered ‘a number of uneconomical industries.’ Proponents of protection had said that it would accelerate the growth of population and real income but, in reality, it was doing the reverse.16 Clark wanted Australia to reduce its tariffs to kill off inefficient industries and to free up labour to move to more productive pursuits, either in agriculture or services. Clark also wanted Australia to revoke the British imperial preference scheme for the sake of Australia’s primary industries. Under that scheme, Australia’s dairy products and beef

14 ‘Colin Clark Warning to Pastoral Inquiry’, Townsville Daily Bulletin, 18/10/1950. 15 ‘Colin Clark’s Advice Deprecated’, The Telegraph (Brisbane), 4/10/1952. 16 ‘Uneconomic Industries Are Slowing Our Progress’, The Telegraph (Brisbane), 28/8/1946.

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were sold to Britain at well below world prices. Instead Clark wanted Australia to choose a multilateral world market approach.17

Exposing Leviathan At the end of 1947 Australia was beset by inflationary pressures caused by buoyant exports and a strong capital inflow; Clark further warned of the dangers of an inflationary spiral due to rising wages. The situation was exacerbated in 1949 when the Chifley Labor Government unwisely followed Britain by devaluing the Australian pound against the American dollar (Cornish 1993). Subsequently, the Korean War boom led to a surge in wool export prices in an economy already suffering from excess demand pressures and over-full employment. Wages were increasing at 20% per annum. The logical solution was an appreciation of the Australian pound against Sterling. The Menzies Government responded to the boom with a deflationary budget in August 1951, involving tax hikes, tighter credit and expenditure cutbacks. Clark welcomed the strategy but not the means to achieve it. Tax hikes, he knew, meant holding back production in the short term which would be inflationary over the long term. Clark repeated his mantra that the true source of Australia’s inflation problem was excessive taxation, both direct and indirect taxation needed for government spending, much of which, he argued, for social security. Higher taxes, Clark added, led to demands for higher wages which employers would willingly grant. This meant that wages rose faster than real production, causing prices to rise and, in turn, fuelling further wage demands. In Australia’s case, the practice of wage indexation merely exacerbated the problem: wages should be indexed to production, not prices (Clark 1958, 261–264). Clark felt a lower level of government expenditure was the true cure and provided figures showing that welfare was responsible for one third of total federal spending.18 He explained that excessive taxation had a deleterious effect upon productive effort. Unless the government reduced its expenditure there would be a persistent upward pressure on wages and prices until either expenditure was cut or until rising prices reduced the real burden of the government’s spending.

17 ‘Claims Australia Better Without Preference’, The Courier Mail 24/5/1946.

(Brisbane),

18 ‘Disaster Threat Seen in Present Tax Policy’, The Telegraph (Brisbane), 25/2/1947.

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Clark’s fulminations against the dangers of excessive taxation led him to speak of Australia having ‘a paper prosperity’ rather than ‘a prosperity in goods.’19 The problem continued to absorb him and, from 1950, he mooted the idea of an expenditure tax instead of income taxation, circulating this idea in a public lecture to Queensland accountants.20 Such a solution, he argued, would be one way to restrict the practice of one government spending the proceeds of taxation raised by another level of government. Cutting federal government outlays would also allow a reduction in public service numbers, where he claimed some 100,000 positions were redundant. At the time there were 200,000 federal public servants, five times bigger than in 1939.21 By 1950, one in four Australians was employed in the public sector, a figure that began to concern economists.22 Canberra was a resource-sapping monster and had to be contained. Like ‘a shrewd and knavish sprite’, Clark continued to wage war upon the size of the Australian Public Service.23 He also said that there were about 250,000 ‘redundant’ workers in the manufacturing sector that would have become apparent had Australia appreciated its currency in 1950.24 That labour could then be released to more productive agricultural sector. Continuing along this theme. in a paper entitled ‘Taxation and Living Standards’ and co-authored with Bill Herbert Clark spoke of how Australia had undergone ‘a bureaucratic revolution’ which affected the whole structure of its taxation and living standards.25 This had been stealthily achieved, he argued, given the complexity of the economy and the move towards a welfare state. However, this Leviathan came at some expense. Apart from its cost and effect upon productivity, Clark pointed out that welfare had to be paid for by its recipients. It was an illusion, he said, to believe that the rich were being ‘soaked’ to provide social benefits to the poor. There were also the administrative costs to weigh up;

19 ‘Taxes or Goods’, The Courier Mail (Brisbane), 6/2/1950. 20 ‘Tax Spending, Not Income’, The Courier Mail (Brisbane), 15/8/1950. 21 ‘Some Home Truths on Local Problems’, The Catholic Weekly, 23/7/1953. 22 ‘One in Four in Employ of Government’, Warwick Daily News, 10/7/1951. 23 ‘Puck Among the Bureaucrats’, Sydney Morning Herald, 17/7/1953. 24 ‘Put 350,000 into Different Jobs’ The Courier Mail (Brisbane), 11/10/1950. 25 ‘How to Cut Taxation’, Sydney Morning Herald, 17/7/1953.

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in short, the welfare system was a drag upon the economy. Clark overlooked any consideration of improvements to human capital. What was needed, he argued, was a reduction in the size of the federal bureaucracy and a restriction of welfare only to those in genuine need. Clark’s strictures on ‘the confidence trick’ of the welfare state presaged a new line of thought which would find a more receptive audience in England rather than Australia.26 In curbing inflation, Clark was always dismissive of wage and price controls; indeed, all such controls held back production when the root cause, he argued, was underproduction. Competition was Clark’s remedy to keep prices low but only by a substantial reduction in taxation together with an appreciation of the Australian pound. His arguments against price control as a means of tackling inflation antagonised federal Labor politicians. Others noted that Clark’s forthright arguments against the Chifley Labor Government’s plans for price controls and his recommendation for a reduction in the size of the federal public service echoed arguments circulating in America.27

Attacking Wage Rigidity In the Economic Record, Clark (1950) prophesized that Australia’s rate of inflation was set to soar because ‘political expediency is going to compel us to remain in a permanent state of over-employment’. Alarmed by the ongoing double-digit inflation, he argued that, if left untreated, this would lead to a loss of Australia’s economic sovereignty and possibly the appointment of an American Commissioner with powers of control over public expenditure, taxation and monetary policy. This was a strange remark and an oblique reference to 1931 when Australia was at risk of defaulting on her overseas loans. It would not be the last time that Clark prophesied disaster for Australia.28 In an address to the NSW Branch of the Economic Society of Australia in August 1951, Clark took the radical step of suggesting the Commonwealth Court of Conciliation and Arbitration end wage indexation. This,

26 ‘It Is Cheaper to Do the Job Ourselves’, The Daily Telegraph (Sydney), 19/7/1953. 27 ‘Time Colin Clark Was “Pulled Up with a Jerk”’, Tribune (Sydney), 21/1/1948. 28 ‘Can Australia Take the Medicine to Beat Inflation?’, The Courier Mail (Brisbane), 20/2/1951.

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he argued, would be one way of short-circuiting the inflationary cycle. His faith in arbitration had taken a beating after workers in Queensland pressed for even higher wages than their minimum award rate (Evans 2007). The other justification for the move was that cutting the link between food prices and wages would allow Australia to export more primary products. While Clark’s dramatic forecasts about inflation did not eventuate because of fiscal measures implemented by the Menzies Government, his warnings about wage rises perpetuating inflation did register on some of the justices who presided over Australia’s centralised wage determination process. Apparently, Clark had been conferring with some of them and they, too, were concerned at the rapidity with which Australian costs were increasing. As he later told Harrod, Clark reminded the justices of Keynes’s sardonic reference to the Australian wages system in his General Theory, namely, that the indexed link between wages and prices imparted a ‘violent’ instability into the economy.29 Clark had come a long way from once praising Australia’s centralised wage fixation system to now saying that it prevented Australia from making necessary economic adjustments. He had also discarded his sentiments about workers requiring good relative wages to have and sustain large families. Even after he had left Australia, Clark remained a spectral figure in the minds of the Arbitration Court justices. Ultimately, it would lead to the end of wage indexation in September 1953 when Justice Sir Raymond Kelly, the Chief Judge of the Commonwealth Court of Conciliation and Arbitration, steered the Full Bench to that outcome (Dabscheck 1983); (Murray 1970, 117). Kelly, a staunch Catholic with aspirations to be a social engineer, shared Clark’s and Santamaria’s vision of a rural idyll. Earlier, after conferring with employers and unions about Australia’s significant inflation problem, Kelly had circulated one of the strangest documents in Australia’s industrial relations history; this was a memorandum containing some 14 points that formed part of a stabilisation plan designed to achieve lower inflation (D’Alpuget 1977, 126–128). By his candour, Kelly hoped to convince both parties to participate in his co-operative plan (Dabscheck 1983, 136–138). While the press described it as ‘The Kelly plan’, it was inspired by Distributivism and, just possibly, the input of Clark and Santamaria (Hagan 1981, 287; D’Alpuget 1977, 127).

29 Clark to Harrod 27/11/1961, Clark Papers, UQ.

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Certainly, Kelly’s blueprint gave force to Clark’s vision for Australia with an immigration program aimed at putting migrants on the land. Kelly also wanted a wage cut implemented over three years, a longer working week, fewer holidays, a mandatory cut in the incomes of shareholders, lower tariffs and bounties for manufacturing.30 The cut to shareowners’ dividends would be placed in a National Development Fund to be used for loans to aid primary producers. Unionists dismissed the practicality of the plan. Economists felt that the burden of adjustment fell disproportionately on the shoulders of workers and shareowners but little upon the business sector. While unionists accused Kelly of overreaching his authority, employers were encouraged by his stand. Shortly after, in June 1952, they formally applied to the Court in the Basic Wage Case for a reduction in wages and the end of quarterly adjustment to wages because they argued that cost of living adjustments directly contributed to inflation. In doing so, the Court overturned 30 years of tradition where wages had kept pace with rising prices (Hagan 1981). Clark took comfort that his advice, especially that of aligning wages with productivity, played some part in the Court’s deliberation. He told Harrod that the Australian judges did not think it practicable to abolish the system of automatic wage indexation ‘until they were in somewhat smoother water.’31 That his influence lay behind the Court’s judgement has been disputed by Dabscheck (1983, 139– 140) who judged that Chief Justice Kelly was his own man with little time for meddling academics. While Clark had been ahead of his time in arguing for productivity-geared wages, the Court, in its judgement, expressed caution about the practicality of this approach, especially upon how to measure it (D’Alpuget 1977, 125).

Self-Appraisal Having the courage of his convictions, Clark had boldly proclaimed that he would still be around in 1960 to see if his forecasts in The Economics of 1960 proved correct. However, when that moment of critical reflection

30 ‘Judge’s 14 Point Plan Fails to Please Unions, Employers’, The Examiner (Launceston), 7/2/1952. 31 Clark to Harrod 27/11/1961, Clark Papers, UQ.

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came, Clark, rather shame-facedly, chose not to take up the opportunity.32 It had been a different matter, a decade earlier. when Clark (1952) reviewed his forecasts and found that most of his projections about trends in trade, commodity prices, population and agricultural productivity all held up.33 His air of vindication, however, would disappear not long after. He had grievously overestimated the tyranny of diminishing returns in agriculture and underestimated the positive impact of technological progress in all sectors. Simply put, he had assumed both agricultural technology and social organisation as fixed when these variables could respond positively if there was population pressure. Much later, Clark (1984, 72) candidly admitted how ‘little went right and how much went wrong’ in The Economics of 1960 and ‘that it served as a warning to those engaged in long-period projection’. In particular, his prophecy of a prolonged improvement in the terms-of-trade for primary goods began to go haywire after 1951 when agricultural prices began to slide. He told Arthur Lewis that poorer countries were not improving their status simply because lending countries were not making enough effort to distribute capital.34 He had also over-estimated the elasticity of demand for food and vastly underestimated the inherent productivity of the agricultural sector in both developing and developed countries due to technical innovations such as fertiliser and new strains of high-yielding grains (Higgins 1989). In short, the makings of a global oversupply of agricultural produce were being laid. That oversupply would materialise when the developed countries started to offload their agricultural surpluses on to international markets. Clark’s prophecies came unstuck over two of his assumptions, that political and social upheavals, as well as the trade cycle itself, would exert little impact on long-term economic trends. Rosenstein-Rodan (1942) had warned about placing too much faith in economic determinism. There was also some naiveté in Clark’s projection that Asian economic development would be well advanced by 1960 or that both America and the Soviet Union would become grain importers. Indeed, America was soon to become a major food exporter (Pyatt 1984, 82).

32 De Jouvenel to Clark 22/2/1963, Clark Papers, UQ. 33 Clark to Arthur Lewis 15/6/1951, Clark Papers, UQ. 34 Ibid.

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Clipped Wings In 1947 Clark was made Under-Secretary of the newly-created Department of Labour and Industry serving under a new Minister, Vince Gair. However, it was hardly a promotion but rather an attempt to rein in Clark. A secondary industries division was established within the department to investigate the possibility of extending existing industries and encouraging new ones (Bulbeck 1987). Gair and Clark did not get along (Stevenson 2007). The minister had already relieved Clark of his State Statistician duties.35 Casting a wary eye over his charge, one curt memo from Gair to Clark read: ‘In future, please let me know when you leave the office, and if I am not here or engaged, advise my Private Secretary that you are going out, to where you are going and how long you are likely to be’.36 As acting Premier, Gair received from Clark an unsolicited letter in 1947 outlining a new economic approach for Queensland. This called for the establishment of a new ministry of state development which would provide for the coordination for migration, rural development, industry, mining, transport and work (Stevenson 2007, 130). However, Gair had other ideas. A few years later Santamaria inflamed matters when he wrote to Gair urging him to persuade his federal Labor counterparts to ditch Coombs’ plans for the industrialisation of Australia and replace them with Clark’s dreamy blueprint of a decentralised, primary producing economy (Morgan 2007). As the Queensland Government stalled on implementing parts of Clark’s blueprint for the state the world began knocking on his door.

References Allan, L. 2015, ‘Colin Clark and the Movement’, Recorder, No. 283: 5–6. Bulbeck, C. 1987, ‘Colin Clark and the Greening of Queensland: The Influences of a Senior Public Servant on Queensland Economic Development: 1938 to 1952’, Australian Journal of Politics and History, 33(1): 7–18. Clark, C. 1950, ‘The Budget and the Basic Wage’, Economic Record, 26(51): 179–185. Clark, C. 1952, ‘Halfway to 1960’, Lloyds Bank Review, 24(April): 1–13.

35 ‘May Be Vacancy for Statistician’, The Telegraph (Brisbane), 21/2/1947. 36 Gair to Clark 11/6/1947, Clark Papers, UQ.

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Clark, C. 1958, Australian Hopes and Fears. London: Hollis and Carter. Clark, C. 1984, ‘Development Economics: The Early Years’, in G.M. Meier and D. Seers (Eds.) Pioneers in Development. Oxford: Oxford University Press: 59–77. Crawford, J.G. (ed.), 1954, Wartime Agriculture in Australia and New Zealand 1939–1950. Stanford: Stanford University Press. Cornish, S. 1993, ‘The Keynesian Revolution in Australia: Fact or Fiction?’, Australian Economic History Review, 33(2): 42–68. D’Alpuget, B. 1977, Mediator. Melbourne University Press. Dabscheck, B. 1983, Arbitrator at Work. Sydney: Allen and Unwin. Davison, G. and M. Brodie, 2005, Struggle Country: The Rural Ideal in Twentieth Century Australia. Melbourne: Monash University Press. Doig, R.J. 2002, ‘The National Catholic Rural Movement and “A New Deal” for Australia: The Rise and Fall of an Agrarian Movement’, Charles Sturt University, Ph.D. thesis. Evans, R. 2007, A History of Queensland. Cambridge University Press. Hagan, J. 1981, The History of the A.C.T.U . Melbourne: Longman Cheshire. Henderson, G. 1982, Mr Santamaria and the Bishops. Sydney: Southwood Press. Henderson, G. 2015, Santamaria: A Most Unusual Man. Melbourne: The Miegunyah Press. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Holder, R.F. 1952, Australian Production at the Crossroads. Sydney: Angus and Robertson. Jackson, W. 1968, ‘The Government and Economic Growth in Queensland, 1946–1951’, BA (hons), UQ. Jones, M.A. 1966, ‘The Government and Economic Growth in Queensland, 1930–1940’, B. Ec. (hons), UQ. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress: Essays in honour of Colin Clark. London: Macmillan: 107–123. Macintyre, S. 2015, Australia’s Boldest Experiment: War and Reconstruction in the 1940s. Sydney: New South. Morgan, P. (ed.), 2007, B. A. Santamaria: Your Most Obedient Servant, Selected Letters, 1938–1996. Melbourne: The Miegunyah Press. Murray, R. 1970, The Split: Australian Labor in the Fifties. Melbourne: Cheshire. Pyatt, G. 1984, ‘Comment’, in G.M. Meier and D. Seers (eds.) Pioneers in Development. Oxford University Press: 78–83. Rosenstein-Rodan, P.N. 1942, ‘Review of the Economics of 1960 by C. Clark’, International Affairs Review Supplement, 19(10): 543–544.

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Santamaria, B.A. 1981, Santamaria: Against the Tide. Melbourne: Oxford University Press. Sheridan, T. 1989, Division of Labour: Industrial Relations in the Chifley Years, 1945–49. Melbourne: Oxford University Press. Stevenson, B.F. 2007, ‘Queensland’s Cold War Warrior: The Turbulent Days of Vincent Clair Gair, 1901–80’, Griffith University, Ph.D. thesis. Truman, T. 1960, Catholic Action and Politics. Melbourne: Georgian House.

CHAPTER 11

The Tarmac Economist

In the post-war years, while still working for the Queensland Government, Clark became the first of a new breed: the international consulting economist. In the space of seven years, he travelled around the world six times, accumulating contacts. This was to be expected because Clark was at the height of his fame. In September 1947 he was given permission by the Queensland Government to attend the World Congress of the International Statistical Institute in Washington which was held in conjunction with the annual conference of the Econometric Society. There he would participate on discussions on the worth of data on comparative national income (Speich 2011, 17). At the conference he reported that data on the Soviet Union gave a misleading guide to its status as a world power. He told delegates that the Soviet Union was ‘poverty stricken … with a distressingly low level of welfare’.1 Two years later, in 1949, Clark calculated that American productivity levels were eight and a half times higher than Russian levels. His findings, to be contained in the second edition of Conditions, made the front page of The New York Times.2 Some Australian communist unionists were upset over Clark’s exposé of Soviet living standards, 1 ‘Poverty Stricken Soviet Russia’, Worker, 27/10/1947. 2 ‘Soviets a Backward Country’, The Daily Telegraph (Sydney), 22/8/1949.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_11

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asserting that he drew some of his data from disreputable sources such as Nazi statistics.3 After Washington, Clark journeyed to the University of Chicago where he gave a seminar at the Cowles Commission on the social implications of economic growth.

England On his return journey from Washington, Clark took the opportunity to visit England before going on to the Netherlands, India and Sri Lanka. Officially he was visiting those countries to investigate world markets and population trends; in Britain it was to promote more immigrants to come to Australia. Personally, it was a chance for him to revisit some of his old friends and old haunts. The Labour Party had swept into power at the July 1945 general election; it was the first British Labour government with a clear-cut majority. While Clark had, at the time, sent congratulations to several of his colleagues including Attlee, Stewart, Dalton and Durbin, he seemed rather disengaged from what his old comrades were fomenting in post-war British socialist economic thought (Brooke 1989). Nor had he taken much interest in the derivation of Britain’s new national accounts which two of his associates, James Meade and Richard Stone, had pioneered. This was possibly because the two had moved on from Clark’s earlier research efforts (Cuyvers 1983). Evan Durbin informed Clark that the Attlee Government was blessed with an embarrassment of riches in economic talent but that the forced policy of austerity had made the government unpopular.4 Hugh Dalton, now Chancellor of the Exchequer, entertained him as one of his last guests at Number 11, Downing Street; Dalton had resigned from that post just a few days earlier, after making indiscreet disclosures about the forthcoming budget. ‘Politics is a very hard mistress’, mused Clark.5 But what Clark did not know was that Dalton was keen to resign following the humiliation of Britain suspending the convertibility of sterling after just five weeks (Dell 1997, 92). Dalton noticed how Clark looked hale and hearty, a product of Australia not having the austere food rationing Britain was still experiencing. A year earlier Dalton

3 ‘Clark’s Nonsense or Wavell’s Facts’, Tribune, 26/11/1949. 4 Durbin to Clark 6/8/1948, Clark Papers, Brasenose. 5 Clark to M. Clark 20/11/1947, Clark family letters.

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had again reminded Clark that Queensland was a far better proposition than ‘sitting up, doing sums, without a Fellowship, for Keynes and Pigou at Cambridge’; he also told him that he found it difficult ‘why anyone, knowing both countries and having a really free choice should prefer the U.K. to Australia and particularly to Queensland.’6 Sharing lunch with the Daltons in the House of Commons the next day, Clark expressed his views on Britain’s economic problems, not least about coping with the issue of sterling convertibility and the external account. When Ruth Dalton suggested that Clark should be in London rather than Australia, her husband replied that ‘[i]t was a false sense of values which made everybody want to congregate in London’ and that Clark could do ‘far more’ in Queensland than he ever could in England. Clark later wrote to Marjorie: ‘I’m sure he is sincere. Is he right?’ He need not have asked, for as he peered out the window at a dreary London in the fog, he knew that Dalton was indeed right.7 Ironically, the man who succeeded Dalton as Chancellor, Sir Stafford Cripps, had also offered Clark a job as an economic advisor when they met in Washington only to be told that that he could not possibly agree with his views on taxation. In response, Cripps wryly told Clark that when it came to Englishmen there were no limits to the taxation they would put up with! (Clark 1976, 16). After visiting the Daltons, Clark was invited to call upon Prime Minister Clement Attlee for a chat. They had, of course, been comrades in the Labour movement during the 1930s. Attlee also told him that the Labour Party had an ‘abundant supply’ of economists. He turned a tin ear to his guest’s call for lower taxation, wage restraint and desisting from labour direction whereby employers alerted the authorities about job vacancies. Clark was horrified by this latter policy, complaining that soon ‘England would not be a free country anymore’. It was living proof, he thought, of what Belloc had predicted in The Servile State. Clark would have been more impressed by Attlee’s intention to deal with the shortage of housing by building of a number of new towns in the countryside around London. He still found Attlee ‘charming, modest, thoughtful, quiet and decisive as he was 17 years ago, when I was his secretary’.8

6 Dalton to Clark 10/1/1946, Clark Papers, Brasenose. 7 Clark to M. Clark 20/11/1947, Clark family letters. 8 Ibid.

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They met again in 1955. While in London, Clark also caught up with John Strachey, the Minister of Food, who impressed upon him that Australia needed to produce more food. To that end, Strachey spoke of the British Government’s plan to grow more sorghum and peanuts in North Queensland. Clark gave a seminar at Cambridge where he met Richard Stone and Alan Prest. Later, Prest told his brother Wilfred that he ‘didn’t realise [Clark] was quite so mad’ and that his presentation was ‘brilliant, but slipshod’. He went on to tell of ‘an amusing scene’ when he, Stone and Clark were dining in one of the more exclusive restaurants in Cambridge: ‘Mrs [Joan] Robinson was there at another table and yelled out across the room “Is it seven boys or seven girls?”’9 Clark might have detected that the Cambridge faculty was beginning to fracture into two opposing camps following Keynes’s death and was relieved to be free from it. When Clark visited London, he called upon the Australian-born economist Robert Hall. It met with a similar reaction to Prest’s. Hall, once a Fellow at Oxford but now Director of the Economics Section within the Cabinet Office, found Clark’s views on British economic policy ‘very stimulating, but fuller than ever of wild ideas…But on the whole I felt he was not aware of what was going in England at all’ (Cairncross 1989, 124–125).

India and Development Economics Clark had also arranged to visit India on the trip back to Australia to consult with the Indian Planning Commission on its economic development program. The invitation would have come from Prasanta Chandra Mahalanobis as part of his ‘brain irrigation’ scheme for eminent economists to offer theoretical advice on India’s development (Saith 2008). It was the first of Clark’s thirteen visits to that country. The first allowed him to meet and query Mahatma Gandhi about India’s economic development. This was just a few weeks before Gandhi’s assassination in January 1948. Clark told Marjorie that Gandhi was a ‘sweet old man’ who took a keen and sceptical view of economics.10 Clark was positively delighted

9 A. Prest to W. Prest 1/12/1947, Prest Papers, UMA. 10 Clark to M. Clark 30/11/1947, Clark family letters.

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with Gandhi’s free market views and would later regale Indian audiences about just how conservative the Mahatma was. He argued, for instance, that Indian workers were slothful and that the Nehru Government should ‘Drop rationing and price control and every Indian will have to work harder, which he could well do’ (Clark 1962, 421). Gandhi was also dismissive of Indian businessmen who were more interested in speculation and money-lending, than actual production. While Gandhi favoured industrialisation, Clark was heartened to hear that Gandhi was also a proponent of decentralisation, asserting that villages must not be dependent on big cities for the necessities of life (Healey and McFarlane 1977). The other outcome of the visit to India was that Indian planners told Clark that only a modest growth rate of 0.5% of GDP per capita was possible for the country over the medium term. However, India was to do far better, notching an increase in production per capita of three times that rate. When he returned to Australia, Clark resumed his campaign against industrialisation remarking that the local standard of living was comparatively high but lower than it was 20 years ago because of ‘our keenness to start and continue uneconomic industries’.11 The remainder of Clark’s years in Queensland until 1952 would see him undertake at least one lengthy overseas assignment every year. In 1950 he again travelled to India where he met Nehru. While Clark found Nehru almost an Englishman in manner and deportment, when he asked why cows should not be slaughtered for meat, an incensed Nehru, now in Indian mode, admonished him (Higgins 1989, 306). The mission to India spoke of Clark’s growing interest in development economics. In August 1949, he was given permission by the Queensland Government to attend a United Nations Scientific Conference on the Conservation and Utilisation of Resources at Lake Success, New York (UNSCCUR). The idea of the conference came from President Truman concerned about a possible paucity of resources in the post-war world (Jundt 2014). The conference planners felt that Clark was the world’s most appropriate authority to give the opening plenary address to what was, in fact, the first scientific conference organised under the auspices of the UN (Castles 1999, 170). The organisers gladly paid his fare and accommodation expenses. The main theme of the UNSCCUR was to

11 ‘Lower Living Standard’, The West Australian (Perth), 22/12/1947.

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allow some 500 scientists to discuss ‘the problem of man’s fight against depletion and poverty and his struggles to find new ways of improving the use and conservation of the wealth of the earth’.12 It was Clark’s first foray into the post-war debate on the global balance between food supplies and population capacity.13 In his address Clark (1950) struck a note of guarded optimism by suggesting that the annual real quantity of farm products could be increased by 1.5% outmatching therefore the 1% growth in global population: ‘On the face of it’, he observed, ‘we have the problem beaten’.14 He had come to these findings after dividing the world into 35 regions and looking at population projections using fertility and mortality rates and comparing them with estimates of labour force, those involved in agriculture, levels of real income and the production and consumption of farm products. It was in his eyes ‘a crude ascertainment’ but enough to suggest optimism. In doing so, he dismissed the need for population control as a form of veiled racism by some developed countries (Clark 1950). Clark had aimed his conclusions at such publications as the Road to Survival (1948) by the ecologist William Vogt who predicted that the world could not support three billion people except at coolie standards. While not disputing Vogt’s strictures on the importance of conserving the natural environment, Clark said improvements in agricultural techniques would increase food production (Castles 1999, 19). Any seeming shortage of food was not due to excessive population growth or a lack of land; it was because authorities were not prepared to allow farmers a relatively higher price for their produce. In passing he accused agriculturally-bountiful countries, such as Australia and Argentina, of needlessly starving their agrarian sectors of labour by engaging in ill-founded industrialisation policies (Jackson 1968, 79); this contributed to a worldwide shortage of food.15 Australia, which produced 2% of the world’s food, would be cast in a bad light with the rest of a hungry world. He bemoaned the poor status of the farmer who had

12 ‘Scientists Will Pool Their Knowledge at UN Conference’, SMH 19/8/1949. 13 ‘UN Honours Colin Clark’, The Telegraph (Brisbane), 9/2/1949. 14 James Rorty ‘Hunger Is Obsolete’ Commentary, February 1950. 15 ‘Beef and Butter Could Earn Dollars’, The Courier Mail (Brisbane), 19/2/1952.

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become ‘the poor relation’ within the economy; ‘he must become a wealthier, more influential, and more respected member of society’.16 At the UNSCCUR Conference, Clark (1950) told delegates that it would take over 20 years to attract labour back to the land to meet the world’s increasing demand for food. He antagonised Australians by suggesting that they should eat less butter and milk so that more of these foodstuffs be exported. The way to achieve this was to let food prices find their own level by scrapping home consumption schemes for such produce. After the conference Clark worked for six weeks on a Food and Agriculture Organisation (FAO) committee reviewing world markets for farm products from developing countries. It was chaired by J. B. Condliffe with one of the committee members being J. K. Galbraith serving in agricultural economist mode. Clark received another invitation to speak on vocational education and apprenticeships, this time at UNESCO in Paris in 1950. Upon his return, he told press reporters at the airport: ‘If I knew any country where the prospects for youth were brighter than they are in Australia I would have gone abroad and taken my seven boys with me’.17 A photograph of Clark, surrounded and embraced by his blond-haired sons, accompanied the story. However, the growing disillusionment Clark felt with the Australian political and economic establishment would reach a climax in January 1952 when he resigned from the Queensland Government. It was because it no longer shared his views on rural development, the revival and renewal of country towns and promotion of primary industry. The disenchantment had been growing especially after Hanlon fell gravely ill in mid-1951. Hanlon, like Forgan Smith, had always invested political capital in supporting decentralisation and rural development (Kenwood 1988, 115) (Knight 1978, 444). Hanlon’s health problems left Gair as Acting Premier and the new man envisaged an economic policy directed towards urban-based manufacturing. Gair was not prepared to allow the Queensland Government to continue to ‘float on the tide of high world prices’ for the state’s exports (Jackson 1968, 114). Reading the political tea leaves, Clark was very receptive to the idea, when it was put to

16 ‘The Farmer Must Be Given New Standing’, The Telegraph (Brisbane), 24/8/1949. 17 ‘Colin Clark Finds World Still Hungry’, The Telegraph (Brisbane), 4/8/1950.

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him, of becoming the Director of Indonesia’s Central Economic Planning Bureau.18 The Queensland Government approved Clark taking a six-month secondment in 1951. Unfortunately, the appointment did not materialise because Indonesian trade unionists opposed the idea of having a foreign economist heading the bureau. Undaunted, Clark received a further invitation to undertake research with the FAO reviewing world markets for farm products. He spent two months in Rome in late 1951 before returning to Brisbane in December. By the time Clark returned events had turned against him.

A Dramatic Resignation In the week Gair became Premier, Clark resigned from his official position with the Queensland Government. He made a spectacle of it by announcing it in the small, unprepossessing country town of Dalby, some 130 miles west of Brisbane. The half-hour speech, broadcast on radio and reported in the press media, revealed his increasing differences of opinion with the Queensland Government. He explained the choice of venue: It is no accident that I am speaking in Dalby. I believe that the salvation of Australia will not be found in Sydney, Melbourne, Brisbane or Adelaide and, least of all, Canberra. It will be found in hundreds of small, vigorous country towns like Dalby, towns of citizens who can think for themselves and can strike out on an independent line in national affairs.19

Sounding more like a politician than an economist, Clark insisted that it was his duty to help while there was still time to get Australia back on the right economic policy ‘because we have got very dangerously off the track’. He attacked the over-development of manufacturing, blaming both state and Commonwealth governments and politicians of all persuasions. All Australian governments, he said, had failed to boost food potential and this would soon earn Australia the contempt of the world. City politicians were only interested in making sure their electorates had supplies of cheap food. In a puritanical outburst, Clark again told Australians that they must eat less: ‘We are not entitled to go on guzzling meat and dairy products 18 ‘Mr Clark on Loan’, The Telegraph (Brisbane), 18/7/1951. 19 ‘Governments Attacked by Colin Clark’, Warwick Daily News, 19/1/1952.

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when the world is extremely short and when Australia will soon have nothing to export’. To achieve this, Clark again suggested cutting the link between wages and food prices, an issue that both employers and the Commonwealth Government never seriously contemplated. This, he argued, was the only way of restricting food consumption besides relaxing all price controls on food. He went on to attack the Queensland Government for ‘timidity’ in its land settlement policy, suggesting that hundreds of thousands of people, including European immigrants, could be settled in a few years on huge areas suitable for closer settlement.20 Clark later admitted that it was this issue and the suppression of agrarian production in general, which had triggered his resignation. He had earlier championed new rural communities, such as Dalby with a population of about 2,000 people, one half of whom were rural workers, the other half tradesmen, as the exemplar in putting migrants on the land. Having studied topography and weather patterns, Clark felt that there was enough natural rainfall on untapped regions in the hinterland to allow the grazing of cattle or growing crops without having to resort to expensive irrigation schemes. The Dalby venue for Clark’s speech was in the constituency of a disaffected former federal Country Party politician, Charles Russell. While Clark emphasised that he was not entering into politics, the former politician’s right-wing views aligned perfectly with Clark’s. Russell provided Clark with offices in Brisbane in which to carry on his new career as an economic commentator and consultant. It seems that Clark made a good living from his economic consultancy and journalism to compensate for the loss of his public service salary. One tabloid newspaper described Clark as one of ‘the greatest economists of his generation’ and ‘a man of great independence of mind with theories beyond the grasp of many politicians’. It also suggested that Clark was in cahoots with Russell.21 It was an accurate claim since Clark was sympathetic to the beliefs of Russell’s group, the Australian Democratic Union (ADU) whose objective was not to be another political party but rather to influence public opinion. The identifiable enemies of the ADU were socialism and bureaucracy. As vice-president of the body, Clark wrote the preface to the movement’s manifesto. Its policies included:

20 ‘Nation Off Track’, The Courier Mail (Brisbane), 19/1/1952. 21 ‘Link with Grazier Russell Denied’, Truth (Brisbane), 13/1/1952.

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to restore the importance of primary production within the Australian economy and to have all habitable land in Australia fully settled; to reverse the withdrawal from the land; to lower taxation by reducing government administration; and to confine social welfare to those who were most in need. Other policies were to float the Australian pound, to commit to full employment and to control all forms of business monopoly. Clark’s puritan brand of austerity puzzled many Australians. One Communist paper, The Tribune, pilloried the ‘world-famed economist’ for his mantra of ‘Eat less, work more!’22 The paper was equally scathing of Clark’s wish to convert Australia from a balanced industrialised economy to an agrarian one. Unions pilloried him for being ill-informed about the ability of the land to yield more food and about the very idea of putting European migrants into co-operative land settlements. After Clark resigned, Premier Gair reminded the public that some of his economic advice had not always been correct. He reminded them, for instance, that Clark had advised the Queensland Government not to develop coal resources because atomic energy would be used instead; he had also told farmers to switch from sheep to cattle because there would be no prosperity in wool (Stevenson 2007). Gair added that Clark’s dissent would not be his last.23 He was right; Clark had signed contracts with The Courier-Mail, a leading Queensland newspaper, to comment upon ‘vital economic problems’ as well as a Sydney newspaper group.24 A string of commentaries, syndicated to other Australian newspapers, flowed from his pen. While land resettlement was not supported by any Australian economist it was probably more significant that they were reluctant to support Clark in his call for the Australian economy to specialise in the export of primary products. Two exceptions were Crawford (1954, 176) who agreed with Clark that Australia’s post-war agricultural sector was starved of labour and Wadham who agreed that Australian agricultural production was deficient (Holder 1952). Some Australian economists, such as Arndt (1954, 170), doubted Clark’s forecast of a huge improvement in the terms-of-trade, extending towards 1970. They remembered how Australian wheat and wool prices

22 Tribune, 27/2/1952. 23 ‘Gair Tilts at Clark’, The Telegraph (Brisbane), 19/1/1952. 24 ‘Colin Clark Joins the Courier Mail’, Sunday Mail, 13/1/1952.

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fell calamitously during the Great Depression. Undaunted, Clark told a conference of Australian economists in August 1952 that the country had to increase its agricultural output with local farmers receiving world prices for their produce.25 Economists doubted whether Australia could actually sell enough agricultural exports to pay for her hefty imports of manufactures and other materials. In the 1950s Australia actually lifted its agricultural production by some 50% in spite of a declining rural work force. As mentioned, Clark had erred by equating increased production with increased manpower and had overlooked the possibility of technological improvements (Murray 1970, 117). He was not oblivious, though, to the reality of periodic drought and flood because he had closely studied the Australian climate and soil. That being the case, Crawford (1962, 33) would remind Clark that, even if Australia became a successful and sustainable agricultural exporter, she might still face tariffs on her produce. The gulf between Clark and other economists widened when Australia imposed comprehensive quantitative controls on imports in March 1952 following a blow-out on the trade account. As ‘an indefatigable free trader’, Clark feared that Australia would adopt import controls which would ‘provide the maximum number of jobs for officials and the maximum amount of graft for a certain type of politician’ (Arndt 1992). In Queensland Clark had sometimes been ‘a moderate protectionist’, especially when it was difficult to export Australian farm products.26 But now, in the 1950s, his journalism, with its ‘extravagant prophecies of gloom’ and ‘stimulating half-truths’, caught the critical eye of ANU economist Heinz Arndt. One could hardly not notice it since Clark felt that imposing import controls was akin to ‘a life sentence’, fearing they would never be relaxed.27 Arndt accused Clark of over-reacting and misrepresenting the Federal Government’s intentions in deploying import controls; they were resorted to, he said, not because of low political motives or an unwillingness to get rid of uneconomic industries but as a pragmatic response to Australia’s trade deficit woes.

25 ‘Expansion of Agriculture; Economists Say Need Urgent’, Sydney Morning Herald, 27/8/1952. 26 Address to Chatham House, 17/3/1953. 27 ‘This Is a Life Sentence’, The Herald (Melbourne), 13/3/1952.

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Other senior Australian economists including Copland, Downing and Swan supported the controls as a more effective means of correcting the country’s trade deficit than outright deflation.28 For his part, Clark remained vague about how he would curb imports other than to repeat platitudes such as ‘producing more, consuming less’ and securing a better price for Australia’s primary produce. While Arndt liked Clark’s idea of publicly auctioning the import licences, he derided claims that the controls would perpetuate inflationary pressures.29 However, Clark was confident that Australia, having made ‘a first class mess’ of its economy, would soon, ‘on its knees’, turn to primary production as its saviour.30 His prophecy, given before an annual convention of the NCRM, proved correct but it would take very much longer than he expected and a form he could hardly have imagined.31 Meanwhile Clark recycled his grim prophecy that Australia’s inflation problem would all end in crisis.32 In another commentary, he told his readers that it was ‘absurd’ that a naturally rich country like Australia should be borrowing from abroad. The fact that Australia had a 3% population growth rate was no excuse for her plight since much of the capital had gone into urban-based development, including manufacturing. Australia should, he said, have had a more exportable surplus but this had been stymied in part by state governments doing nothing to encourage rural settlement. The other impediment to mustering an export surplus, he argued, was that Australia received low prices for its rural exports under the imperial preference trading scheme.33 Another hobby horse of Clark’s was to criticise extravagant irrigation schemes. He attacked a proposed dam project on the Burdekin River in Far North Queensland as ‘fantastic’, saying that the funds would be better used to develop Queensland’s natural rainfall lands using

28 ‘Economist Advocates Rapid Import Restriction’, The Canberra Times, 16/9/1955. 29 ‘Restriction of Imports’, Sydney Morning Herald, 18/4/1952. 30 ‘Colin Clark on Australia’, Goulburn Evening Post, 19/5/1952. 31 ‘Australia Will Come on Her Knees to Save Economic Chaos’, Dungog Chronicle,

7/6/1952. 32 ‘Prepare to Ditch; Prediction on Aust Economy’, The West Australian (Perth), 8/5/1952. 33 ‘It’s Absurd That We Should Be Borrowing’, The Courier Mail (Brisbane), 3/7/1952.

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windmills and wells (Stevenson 2007).34 He objected to the project because its supporters argued merely on the gross product to be farmed, without taking into account inputs used. His general position on irrigation schemes was only to consider the direct economic costs and benefits. Proponents of the Burdekin Dam project said that Clark had ignored the hydro-electric power and flood mitigation made possible by the scheme. For all his ‘great academic knowledge’, they said, Clark knew little about development projects and their potential value.35 Another grandiose scheme was John Bradfield, the designer of the Sydney Harbour Bridge, idea to dam three rivers in Northern Queensland and have their flow diverted inwards to the parched territory of the State’s west. Bradfield felt it was possible to use monsoonal rainfall of the tropics to irrigate inland areas and grow crops such as flax, cotton and maize. On a whimsical note Clark proposed a cheaper alternative; ‘Load the coastal waters into half -pint milk bottles and fly them inland’ (Herbert 1991, 63). In an article wittily entitled ‘Has Australia got water on the Brain?’, Clark warned what happens when ‘the professional megalomania of the engineer is allied to the trickery of the politician to disseminate the falsehood that any extension of agricultural production in Australia must depend upon irrigation’.36 Free spending, vote-buying politicians became a favourite target for ridicule (Clark 1958, 88–92). Not surprisingly, Clark had also been critical of the cost-benefit analysis underpinning the iconic Australian project, the Snowy Mountains Hydro-electric Scheme. With Clark no longer a government employee, key members of the Queensland Government tore into him. His Dalby speech attracted considerable reaction.37 One cabinet minister said that if Clark’s advice, particularly on rural settlement, had been adopted in Queensland it would be in ‘a deplorable state of economic development’ near enough to international ‘peasant standards’.38 Another concern of Australian economists of the time was that Clark’s blueprint required massive government intervention, particularly 34 ‘Fantastic Dam Plan’, The Courier Mail (Brisbane), 22/5/1952. 35 ‘Colin Clark Makes Inglorious Bow-Out’, The Worker, 6/10/1952. 36 New Commonwealth, 18/3/1954. 37 ‘Colin Clark’s Bomb’, Sunday Mail (Brisbane), 20/1/1952. 38 ‘Duggan Hits at Clark’, The Courier Mail (Brisbane), 14/6/1952.

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in preventing capital flowing to the non-farm sectors of the economy. Arndt (1954, 168) added that few Australians were prepared to abandon their urban lifestyle to move to rural districts even when offered attractive salaries. There were also, as mentioned, continuing demands for a balanced economy with a strong manufacturing sector, especially when the war had exposed Australia’s vulnerability by interrupting critical imports. However, there was some support from one or two Australian economists for Clark’s arguments about macroeconomic policy. Douglas Copland, for instance, shared Clark’s view that Australian economists took too zealous an interpretation of Keynesian economics in pursuit of full employment. Both became outspoken critics of over-full employment but their methods to mitigate it differed. However Copland churlishly did not respond when Clark offered him the opportunity to chair a conference of economists to discuss Australia’s economic problems.39 When the University of Queensland economist John Gifford told Copland that Clark ‘was a little bit too fond of striking and making sometimes paradoxical statements’, Copland advised him to let Clark ‘pursue his own course. He is a lonely figure but by no means on a mountain top and I think he will rather misfire on a great many things.’40

Leaving Australia Clark’s fervour about building a new Australia became academic when it was announced in July 1952 that he had been appointed as Director of the Agricultural Economics Research Institute at Oxford University. He would commence there in 1953; after nearly fifteen years Queensland was to lose its ‘world famous’ economist. Clark’s first public response after the announcement was to state that he still believed Australia’s future depended on agriculture, not manufacturing and that a program of social services funded by taxation was unworkable. He noted ‘The politicians, of all parties, with unanimity and enthusiasm think the exact opposite. We must now wait for two or three years to see whether the politicians or I are

39 Clark to Copland, August 1951, Clark Papers, UQ. 40 Gifford to Copland, 21/4/1952 and Copland to Gifford in response, Copland

Papers, NLA.

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proved right by events’.41 He signalled that he was prepared to return to Queensland if requested and, to that end, kept his links with both Russell and his involvement in a small, economic consultancy established with Bill Herbert.42 Clark first met Herbert at the University of Melbourne in 1937. One observer suggested that Herbert gave ‘practical interpretation to the flashes of inspiration which were characteristic of Colin Clark’ (Russell 1976, 175). Herbert and Clark worked with Trevor Swan on constructing an economic model, based on simultaneous equations, which would be suitable for macroeconomic forecasting. Clark (1949) had lavishly praised Swan’s model as being true to Keynes’s method of estimation, showing consumption, investment and imports as functions of national income; exports, public expenditure, and tariff levels were shown as exogenous variables, making it possible to explain movements in national income over a ten-year period. The model also came with lags and expectations to add to its Keynesian authenticity. It was this latter aspect that Clark focused upon in his forecasting work. Before his departure for Oxford, Clark fired one last salvo, this time on the issue of centralisation and public finance. He found the idea of fiscal federalism, embodied in the Commonwealth Grants Commission, to be symptomatic of the wrong path for Australia. He began to circulate the idea that state and local governments be given full financial responsibility for raising their necessary revenue by taxing their own electors.43 This culminated in what Arndt called an ‘astonishing’ public address by Clark in Sydney entitled ‘The Organisation of a New State’, delivered under the auspices of a body called the Australian Decentralisation and New States Movement. This address, advocating decentralisation and the formation of new states with full financial authority and constitutional approval, fitted in with the Catholic Church’s doctrine of smaller entities having their own economic governance. Clark had in mind entities of 250,000 people functioning as a state under the Australian constitution, giving its citizens a reasonable organisation for their economic and cultural requirements (Henderson 1982,

41 ‘Economist Colin Clark for Research Post at Oxford’, The Courier Mail (Brisbane), 26/7/1952. 42 Ibid. 43 ‘Economist Discusses Finance Problem’, The Warwick Daily News, 18/8/1950.

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60).44 This recommendation of constitutional reform, together with his advocacy for land settlement schemes, had some of Clark’s contemporaries fearing that he was becoming detached from economic reality. Even Clark admitted, in this last public address, that he had accepted the Oxford appointment to allow him to return to the sober academic work which he had neglected. Another of Clark’s more detached moments from mainstream economics came in the form of an introduction to a pamphlet on the Catholic Church’s interpretations of usury (Kelly 1945). One reviewer noted that Clark ‘embarrassed’ Kelly by saying that his book might bring about ‘a fundamental change in social science’ (La Nauze 1946, 322). That is, the book might encourage the end of interest-taking including the idea that ‘government loans … be interest free’ (Clark 1945, xiii). Here, in another place, Clark (1947, 25) was arguing what Keynes had said about the ‘euthanasia of the rentier’, the idea that there were moral and economic arguments for interest-taking to be curtailed. Moreover, Clark was concerned at the amount of funding needed to service the level of public debt; he felt the issue of budgetary problems posed by huge national debt interest would, in the future, bring about a discussion on the ethics of usury (Clark 1945, xii). While this did not eventuate, he still expressed concerns about perennial budget deficits. Henderson (1982, 61) found Clark’s stance on eliminating interest-taking as ‘rather odd and certainly naïve’. A further defence on Clark’s behalf was that, if the economy was near full employment, any government borrowing to fund expenditure would merely cause inflation; government expenditure in such circumstances should be funded from current taxation. Clark made an exception for periods of slump when he argued that it was right and desirable for the central bank to create funds for government expenditure. He felt that profit, rather than interest, was a better way of guiding capital to where it was most valued. Put in context, it is interesting to reflect that Clark should have written these observations on usury in the same year that he wrote on tax limits and the optimal size of a city. It was possible that Clark’s talents as an economist could well have been retained by Australia. At the time he left the Queensland Public Service, the Ritchie Research Chair in Economics at the University of Melbourne was vacant. Clark was given some consideration by the

44 ‘Need New States Says Colin Clark’, Daily Examiner (Grafton NSW), 1/10/1952.

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selection panel but the chances of him being appointed were small, given prevailing attitudes in the Melbourne establishment about placing Catholics in influential positions. Clark had already been mooted as a possible candidate to fill that chair in 1948. At the time Copland derided the idea: Some of the Melbourne people have suggested Colin Clark, but I cannot take really kindly to that idea. I don’t feel that Colin would be a good appointment. He always has his own road and he would probably not encourage research work in line with the national university, but in the other universities, along the lines of his own thought.45

Sounded out now a second time for the position, Clark told Wilfred Prest, the Truby Williams Professor of Economics at the University of Melbourne: ‘I have, for the present at any rate, got enough engagements to keep me fully occupied in Queensland.46 Nonetheless, Prest asked Dennis Robertson about Clark’s suitability for the post. It drew an equivocal response: ‘I am always pleased to see Colin Clark when he turns up on one of his meteoric visits and throws some new and confident prediction about the future of the human race … But I don’t really know him very well, or find it easy to form an idea how easy he would be to work with’.47 Richard Downing, with an eye on the prize, was relieved to hear that Clark was not interested in coming to Melbourne, telling Gerald Firth, who held the economics chair at the University of Tasmania: ‘I think it is a good thing to have escaped Colin Clark – he gets steadily madder and more bigoted’.48 Clark’s resignation from his job with the Queensland Government was widely reported in England. A mystified Robertson queried Prest about it: ‘It was a serious thing to throw up a job with 8 (is it?) hungry sons on his hands’.49 Indeed it was and the kitchen-table correspondence between Marjorie and Clark throughout the 1950s and 1960s would frequently revolve around the household budget and paying school fees for their

45 Copland to Firth 15/11/1948, Copland Papers, NLA. 46 Clark to Prest 15/1/1952, Prest Papers, UMA. 47 Robertson to Prest 28/1/1952, Prest Papers, UMA. 48 Downing to W. Prest 12/2/1952, Downing Papers, UMA. 49 Robertson to W. Prest 28/1/1952, Prest Papers, UMA.

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brood. In Australia, the cost of living, including school fees, had been much lower than in England. When hearing of Clark’s appointment at Oxford, Gerald Firth told Downing, who had, in fact, just been elected to the Ritchie Chair, that ‘It was probably a good thing … His recent behaviour here has occasioned a whispering campaign reflecting on his sanity. Unfair but not surprising.’50 Walter Crocker, someone closer to Clark, had also noticed a change in his friend’s demeanour: I thought Colin Clark had a good deal of interest and importance to say on economic matters in Australia; but in other respects, he struck me as being unrealistic. His Catholicism no doubt gives him a certain anchoring, but it leads to blindness and casuistry in some respects. He took the line, for instance, that there is really no population problem in India! And he ranted about what he called the revival of Malthusianism in the world.51

The reaction of Australian intellectuals to Clark’s departure was therefore not regret but general relief. Yet regardless of his doctrinal views, Clark’s output as an economist easily surpassed that of his Australian peers, including Trevor Swan. In mid-1952, with Clark about to shake the Queensland dust from his boots, he had more than a few logistical nightmares to sort out. He had arranged to deliver a series of lectures at the Committee on Social Thought and the Department of Economics at the University of Chicago. Meanwhile Marjorie and the eight boys would sail to England and, once there, arrange accommodation in Oxford. The Clark household effects for shipment amounted to some 36 suitcases and trunks, as well as half-a-ton of Clark’s books and papers. On the verge of departing Australia, Clark still found it a wrench; he told the press: ‘I want to come back to Australia if the politicians will have me. Both the State and Federal Governments disagree with me. I can’t fight single-handed.’52 In another blast at Australian political leadership,

50 Firth to R. I. Downing 5/8/1952, Downing Papers, UMA. 51 Crocker to Copland 16/7/1952, Copland Papers, NLA. 52 ‘Sea Travel Economics: Colin Clark’s Problem’, The Courier Mail (Brisbane),

18/8/1952.

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he warned that if Australia did not make proper use of its resources the country would be taken from them by force.53 The family farm at Kenmore was to be auctioned with Clark supervising its sale. However, it did not sell, and a caretaker was appointed. Did Clark wish that his time back in England might not be long? He even suggested to Marjorie that he could still make a living in Brisbane if the Oxford position did not work out or if the family found life in England unbearable.54 He had already rejected, in 1947, the offer of a visiting professor at the University of Chicago because, as he told Marjorie, the salary was inferior to what he had been paid in Brisbane.55 In any case he had strong objections to bringing up his family in a big city, like Chicago. When he had visited England in 1947, he had been told that he ‘ought to regard the honour of an English appointment as sufficient in itself and not expect a salary over 1,500 pounds.56 Clark was having none of it. With a big family he needed a position that was well-remunerated and allowed him the opportunity to earn supplementary income. But before he took up his Oxford appointment he would, for five months, savour academic life at Hyde Park.

References Arndt, H.W. 1954, ‘Economic Development: Some Lessons of Australian Experience’, Weltwirtschaftliches Archive, 73: 162–170. Arndt, H.W. 1992, ‘Stubbornly Defending the Free Trade Position’, Economic Analysis and Policy, 22(2): 117–126. Belloc, H. 1912, The Servile State. London: T.N. Foulis. Brooke, S. 1989, ‘Revisionists and Fundamentalists: The Labour Party and Economic Policy During the Second World War’, The Historical Journal, 32(1): 157–175. Cairncross, A.K. 1989, The Robert Hall Diaries 1947–1953. London: Routledge. Castles, I. 1999, ‘Vice President’s Note’, Dialogue, 18(1): 7–23. Clark, C. 1945, ‘Introduction’ in J. P. Kelly op. cit. ix-xiv. Clark, C. 1947, ‘Lord Keynes’, Twentieth Century, 1(4): 20–25.

53 ‘Grim Warning by Departing Aust. Economist’, The Examiner (Launceston), 2/10/1952. 54 Clark to M. Clark late 1952, Clark family papers. 55 Clark to M. Clark 18/10/1947, Clark family papers. 56 Clark to M. Clark 22/11/1947, Clark family papers.

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Clark, C. 1949, ‘A System of Equations Explaining the United States Trade Cycle, 1921 to 1941’, Econometrica, 17(2): 93–124. Clark, C. 1958, Australian Hopes and Fears. London: Hollis and Carter. Clark, C. 1950, ‘World Resources and World Population’, in Proceedings of the United Nations Scientific Conference on the Conservation and Utilisation of Resources. New York: United Nations: 15–28. Clark, C. 1962, ‘Future Sources of Food Supply: Economic Problems’, Journal of The Royal Statistical Society, 125(3): 418–448. Clark, C. 1976, ‘Keynes on Taxation’, Quadrant, 20(6): 15–17. Crawford, J.G. (ed.). 1954, Wartime Agriculture in Australia and New Zealand 1939–1950. Stanford: Stanford University Press. Crawford, J.G. 1962, ‘Discussion’, in J. Wilkes (ed.) Economic Growth in Australia. Angus and Robertson: Sydney, 30–33. Cuyvers, L. 1983, ‘Keynes’s Collaboration with Erwin Rothbarth’, Economic Journal, 93(371): 629–636. Dell, E. 1997, The Chancellors. London: HarperCollins. Healey, D.T. and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. Herbert, W. 1991, ‘Vale Colin Clark’, World Review, 30(3): 60–63. Henderson, G. 1982, Mr Santamaria and the Bishops. Sydney: Southwood Press. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Holder, R.F. 1952, Australian Production at the Crossroads. Sydney: Angus and Robertson. Jackson, W. 1968, ‘The Government and Economic Growth in Queensland, 1946–1951’, BA (hons), UQ. Jundt, T. 2014, ‘Dueling Visions for the Postwar World: The UN and UNESCO 1949 Conferences on Resources and Nature, and the Origins of Environmentalism’, Journal of American History, 101(1): 44–70. Kelly, J.P. 1945, Aquinas and Modern Practices of Interest Taking. Brisbane: Aquinas Press. Kenwood, A.G. 1988, ‘The Use of Statistics for Policy Advising: Colin Clark in Queensland, 1938–52’, in D. Ironmonger, J.O.N. Perkins and T. Van Hoa (eds.) National Income and Economic Progress: Essays in Honour of Colin Clark. London: Macmillan: 107–123. Knight, K. 1978, ‘Edward Michael Hanlon: A City Bushman’, in Murphy and Joyce (eds.): 433–458. La Nauze, J. 1946, ‘Review of Aquinas and Modern Practices of Interest Taking’, Economic Record, 22(2): 321–322. Murphy, D.J. and R.B. Joyce, 1978, Queensland Political Portraits. Brisbane: University of Queensland Press. Murray, R. 1970, The Split: Australian Labor in the Fifties. Melbourne: Cheshire.

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Russell, C.W. 1976, Country Crisis. Brisbane: W.R. Smith and Peterson. Saith, A. 2008, ‘Joan Robinson and Indian Planning: An Awkward Relationship’, Development and Change, 39(6): 1115–1134. Speich, D. 2011, ‘The Use of Global Abstractions: National Income Accounting in the Period of Imperial Decline’, Journal of Global History, 6(1): 7–28. Stevenson, B.F. 2007, ‘Queensland’s Cold War Warrior: The Turbulent Days of Vincent Clair Gair, 1901–80’, Griffith University, Ph.D. thesis. Vogt, W. 1948, Road to Survival. New York: William Sloane.

PART III

1953–1969 A Gypsy Scholar at Oxford

CHAPTER 12

Research Leadership

Chicago While at the University of Chicago in the autumn of 1952, Clark gave a series of lectures on ‘The Development of Backward Economies: Taking Account of Population Problems’. He also participated in a small discussion group on the increasing specialisation of modern economic life and its cultural and educational implications. In November he gave a seminar to the Cowles Foundation on ‘A new theory of industrial location’. Apart from befriending Milton Friedman, Chicago provided an opportunity for Clark to meet some young econometricians and also Theodore Schultz, one of America’s leading agricultural economists. Schultz and Clark were on the same wavelength about the need to correct the diminished role for agriculture in strategies for economic development; Schultz was at the forefront in arguing that agriculture would help industrialisation. In 1932 he had raised the possibility that agriculture might yield increasing returns rather than Marshallian diminishing returns; he attributed the increase in output to specialisation as well as advances in technology and innovation. Schultz would trump Clark again when he published Transforming Traditional Agriculture (1964), arguing that traditional agriculture was efficiently based and could further lift productivity by technical and human ingenuity if economic incentives were available.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_12

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While in Chicago, Clark was probably enticed to stay on. He also had offers of lecturing engagements from America universities which seemed ‘to be well supplied with money’. He added, however, ‘I’m rather tired of America. The people are very friendly and hospitable, but it is such an ugly noisy country’.1 Sometimes the remuneration proved too hard to resist; he told Marjorie ‘I’m staying here so late, not so much that my work is important, but that I am being so well paid for it.’2 He also showed some entrepreneurial flair and, following in his father’s footsteps, became an intermediary for one of the big Chicago beefhandling companies. Clark was still keenly interested in the possibility of Australia exporting chilled beef to America which offered more lucrative returns than for the British market which Australia had to supply due to a trade agreement. In this aspect he was years ahead of his Australian counterparts (Murray 1970, 115). Clark met the businessman and entrepreneur William Wood Prince, who ran the Union Stock Yards, then the largest livestock market in the world. If the proposed venture had been successful it would have made Clark extremely wealthy.3 His hopes, however, were to be dashed. Clark was brusquely told by a public relations adviser to Union Stock Yards that the publication of economic forecasts always led to trouble for anyone associated with them and that ‘We aren’t in the trouble-making business - we’re in the money-making business.’4 Regardless, Clark still provided economic forecasts for Prince in the mid-1950s.

Oxford Reclaimed How Clark ended up winning a post at Oxford needs some explanation. In 1951 he had spent time at the FAO in Rome investigating the critical relationship between global population and food supplies. Here was a subject in which he could use his statistical skills and make as much of a global impact as Keynes did in dealing in stabilising modern capitalism. It would embrace his work on demography, economic development and agricultural productivity.

1 Clark to M. Clark, 10/12/1952, Clark family papers. 2 Clark to M. Clark, late 1952, Clark family papers. 3 Clark to M. Clark, 23/6/1956, Clark Family papers. 4 Clark to M. Clark, 29/2/1957, Clark family papers.

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Before heading back to Australia, Clark met Charles Orwin, the founder of the Agricultural Economics Research Institute at Oxford who served as director from 1913 until 1945. Orwin was a firm believer in free trade. So, too, was his successor, Arthur Ashby, who was to retire as director at the end of 1952. Ashby had broadened the ambit of the Institute to consider problems of economic development, particularly in West Africa. The position of director was duly advertised in the English press, including The Economist. The appointee would be expected to have an interest in agricultural economics as well as being an acknowledged expert in economics. A handful of applications was received, none of which was outstanding. John Hicks, the Drummond Professor of Economics, was asked by the Rector of Lincoln College, Walter Oakeshott, to contact Clark and inquire whether he might be interested in the post. At the time Clark was still based in Brisbane, undertaking a range of jobs including journalism, economic forecasting and consultancy. He had not thought to apply but, interested, fired back some queries to Hicks about the position; Hicks urged him to submit an application. Clark duly did, listing his earlier appointments, his work with the New Zealand and Queensland Governments, the UN and FAO together with some snippets of his academic research. In his application letter he candidly informed the authorities that his knowledge of British agricultural policy was ‘15 years out of date’ and that his focus had now been on international economic problems. Hicks had already told him that the Institute was now taking more of a world-wide view with an agenda beyond British farming. Quaintly, Clark closed his application by noting that he had kept livestock in both England and Australia so he had ‘some familiarity with the practical side of agricultural life’.5 Clark might have added that he had a serious interest in agricultural economics and global food production as well as in decentralisation, rural sociology and the sustainability of country towns. The application, dated 10 May 1953, was cabled to Oxford. Ten days later, the Governors of the Institute announced that they had found their man. They might have known of Clark’s earlier views on British agriculture, including his ability to demonstrate the true net worth of the sector by using international prices (instead of domestic prices), and net of 5 Clark application to Directors of AERI 10/5/1952, AERI Papers, Oxford University Archives.

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imported inputs. Clark heard of the job offer by cable while undertaking consultancy work in Pakistan reviewing that country’s development plans under the technical co-operation programme of the Colombo Plan. After a day’s deliberation, Clark chose to take the Oxford post.6 While both ‘surprised and honoured’ by the appointment, he stressed that his decision to accept the position was provisional on there being no ‘insuperable difficulties’ moving his large family to Oxford.7 Much later, he would agree that, considering his earlier career in national accounting, the job was ‘a rather strange’ appointment. Clark had a professional reputation in the study of long-run economic change, not agricultural economics per se (Peters 1990, 130). What was equally strange, though, was the idea of Clark returning to England. He had earlier told Harrod who, had offered to look for work for him, that he would willingly come back to England, ‘a country for which I have great affection’, before asking ‘but would I fit into it?’; interestingly, he added that he had always felt ‘a bit of a misfit’ at Cambridge.8 When Clark returned to England in 1953 many of his old friends and mentors, such as Dalton, Jay, Gaitskell, Parker and Robbins as well as those with whom Clark had worked at Cambridge, could not comprehend the enormous ideological change in him. Was this really the same man who had gone to Australia all those years ago? Clark would merely say, as he always did, that his views had not changed, it was the Labour party that had changed in the direction of planning and state provision of welfare (Peters 2001, 13).9 Certainly, the British Labour Party had left him on fundamental issues such as nationalisation, taxation and social welfare. Having advised a Labor government for nearly 15 years at the other end of the world, he might have said that he had seen the light. Following Clark’s return, Hugh Dalton arranged for him to speak to the Royal Institute of International Affairs at Chatham House on ‘What is wrong with the Australian economy?’10 After that, contact between the two faded as it did with

6 Clark to M Clark, June 1952, Clark family papers. 7 Clark to Oxford Registrar, 3/5/1952, AERI Papers, Oxford University Archives. 8 Clark to Harrod, 5/5/1945, RES, LSE. 9 A comment Clark told his son David. 10 Address to Chatham House, 17/3/1953.

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other Labour Party figures of his acquaintance.11 It has been said by his admirers that Clark never allowed political differences to cloud his personal relationships; others, though, might have felt differently. Even after his family was settling down in Oxford, Australia remained at the back of Clark’s mind; for his first seven years at Oxford, he seemed rather restless, harbouring designs about returning to Australia to set up a research institute. He told Kuznets about a proposal afoot to build a research institute to inquire into international comparisons of income, productivity and growth.12 Nothing came of it. The wanderlust was understandable—seven of his children were Australian-born and Clark liked to be known or identified as an Australian economist. He even confected the story that he was the son of an Australian and had ‘returned’ to Australia in 1937 (Clark 1958, ix).13 In 1954 he was still engaging in a war of words with the Queensland Premier Gair about the economic case for Burdekin Dam (Stevenson 2007, 133). In that exchange Clark made it clear who was the person most responsible for him leaving Australia: May I point out to Mr. Gair that I would not have resigned a well-paid and interesting job, and left my comfortable home, had I not thought it urgently necessary to protest against his management of affairs.14

Clark caustically suggested that Australian politicians, like Gair, having got their country in an economic predicament, were likely to use massive but unworkable irrigation schemes as a ‘smokescreen’.15 More evidence of Clark’s unsettledness was evident when in 1957 he told his old Oxford friend, Walter Crocker, ‘I enjoy being here, but should prefer to be engaged in controversy in Australia again’. He added that he would rather not work for an Australian university because they were publicly funded and ‘I don’t think any Australian university would like a professor who kept up a sustained criticism of any governmental

11 Dalton to Clark, 22/2/1953, Clark Papers, Brasenose. 12 Clark to Kuznets, 22/2/1957, Clark Papers, UQ. 13 ‘Economist with a human touch’, The Daily Telegraph (Sydney), 28/7/1951. 14 Clark, C. ‘Rejoinder’ New Commonwealth (London), 13/5/1954. 15 Clark, C. ‘Has Australia got water on the brain?’, New Commonwealth, (London), 18/3/1945.

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activity.’16 This stipulation would be swept aside however when, a year later in June 1958, he applied for the foundation chair in statistics at Canberra University College, which was later absorbed into the Australian National University (ANU). A Council meeting held to discuss the applications for the vacancy revealed that Clark was indeed short-listed for the position, along with Harold Lydall and Edward Hannan. Sitting on the Council was Arndt, Melville, now the Vice Chancellor of the ANU, Maurice Belz, from the University of Melbourne, and Pat Moran, Foundation Professor of Statistics in the Research School of Social Science at the ANU. After assessing which candidate would best meet the demand for undergraduate training in statistics in Canberra, including the training of public service cadets for the Commonwealth Bureau of Census and Statistics, the Council decided in favour of Hannan. The Council decided that neither Lydall nor Clark was sufficiently qualified in mathematical statistics for the Chair.17 If Clark had any grievance it was perhaps that he had not been interviewed for the position while Lydall was given that chance in London. A belated interpretation of this episode is provided by the economist Audrey Donnithorne who started at the ANU in 1968. Sharing the same faith as Clark, she noted that the very mention of his name ‘aroused ire’ among the senior economists there largely because of his inability to keep his ‘religion under wraps’ (Donnithorne 2019). Clark (1958) had not helped his cause having just written a fairly intemperate book on Australian society charging that national politics was tainted because of the nation’s embrace of protection. A year later, in 1959, Clark made a concerted bid, with help from his old friend Santamaria for the position of Foundation Dean of the Faculty of Economics and Politics at Monash University in Melbourne. This, too, was unsuccessful as was his apparent attempt to become Vice-Chancellor of the University of Queensland (Morgan 2007, 156). Clark began to wonder whether there was a vendetta against him by Australian authorities, particularly the universities. Santamaria wrote a consoling note: ‘The trend in high administrative-academic circles in Australia is very rigidly set against giving appointments to people with notions like yours and mine’,

16 Clark to W. Crocker 31/1/1957, Crocker Papers, University of Adelaide. 17 Canberra University College Council meeting no 12, 1958, ‘Chair of statistics’, E.J.

Hannan personnel file, ANU Archives.

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before suggesting that Masonic elements lay behind both the Canberra and Queensland positions (cited in Morgan 2007, 157). In lamenting the quality of Australian higher education, the ViceChancellor at the University of Adelaide, A. P. Rowe (1960, 132) had suggested that local universities ‘enlist’ the services of well-known and distinguished academics from Britain; Clark might well have been one such man but there were no takers. Others, however, would politely suggest that the reason why Clark was unsuccessful was because he entertained unreal expectations about his abilities and that there were others who were much better qualified. One way for him to vent his frustrations was to write a modern economic history of Australia. The idea had come from Crocker who urged Clark to write ‘opposing the bogus counsels and policies of these second-rate people who are crazed by urbanisation and industrialisation’.18 By ‘second rate people’, Crocker meant the post-war planners who advised the Australian government. Crocker’s idea resonated and Clark began panning out his economic history of Australia.19 He also continued to comment upon Australian economic and political matters. In one article, in 1956, he savagely attacked seven leading Australian university economists who pushed the case, in a public manifesto, for tax rises to curb inflation.20 Clark would be a regular visitor to Australian shores. On one occasion, attired in a rumpled white suit, he told a gathering of Queensland pastoralists to get out of wool because, with the arrival of artificial fibres, prices would continue to tumble until the 1960s when they would reach crisis point. He was roundly booed, but his prediction would prove to be correct (Russell 1976, 196).

The Agricultural Economics Research Institute (AERI) When Clark’s appointment at Oxford was announced, the Cambridge agricultural economist, Ruth Cohen likened it to ‘dropping a land mine on a quiet back street’ (Healey and McFarlane 1977, 20). However, as we

18 Crocker to Clark, 20/6/1956, Crocker Papers, UA. 19 Clark to H. Grattan, 30/12/1956, Grattan Papers, University of Texas. 20 ‘Economists’ manifesto short-sighted, improvident’, Daily Mirror

7/2/1956.

(Sydney),

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have seen, Clark did have extensive experience in agricultural economics both in Britain and Australia. The more pertinent issue to consider was whether Clark could actually lead and direct an academic institute. That issue can be addressed by examining the nature of the institute that Clark was appointed to head up. Established in 1913 with the aid of a government grant, the Institute was the first body established in Britain specifically designed to study the economics of agriculture. As part of the Faculty of Agriculture and Forestry at the University of Oxford, it was a quasi-independent body with its brief encompassing ‘the study of the economics of the production, distribution and consumption of agricultural products and rural industrial conditions’.21 There was a focus on production functions and marginal returns to factors for farm units and estimates of a production function for British agriculture. Other studies investigated land economics, the marketing of agricultural produce, the distribution of income, supply elasticities, the relative incomes between industry and agriculture and rural social organisation. Besides overseeing these projects, Clark researched the likely effect on Britain’s terms of trade of expanding her exports of manufactured goods as against the factors affecting the demand for food. The latter study included demographic studies concerned with population trends and estimates of the income elasticity of demand for food. Much of his research output appeared in the journal Journal of Farm Economics, which the Institute published. Overall, the Institute’s focus had moved from the farm as a business to agriculture as a sector of the economy and the contribution it could make to the balance of payments and terms of trade.22 The Institute had a staff of seventeen economists, many of whom had been there before Clark was appointed. Some prominent economists on the staff included A. G. Antill, Derek Healey, Roger Dixey, J.R. Bellerby, Margaret Haswell, and G.R. Allen. The Institute was also charged with training both domestic and international students in agricultural economics. Clark taught a class in the broad issues of population, global food supply and land use (Peters 2001). In effect, he was now head of a university department with its own statute, financed out of university funds, and was obliged to present an annual report on the activities of

21 K. E. Hunt ‘The Work of the AERI’; AERI, Oxford University Archives. 22 Ibid.

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the Institute. A prestigious Monday seminar was organised which featured illustrious figures such as Harrod, Hicks and Beveridge. In his seventeen years as Director of the Institute (1953–1969), Clark interpreted his research duties very broadly, looking at wider issues of demand, prices, international trade, resource allocation and the location of economic activity. As such, he engaged in a number of issues beyond the Institute’s purview of British agricultural economics. He was well qualified, too, to lead the Institute, not least, because of his work on agricultural economics, food supply and demographics. He had already been exposed to issues of agricultural economic development in Australia, especially agricultural production in dry areas. He had also closely examined trends in agricultural production in the first edition of Conditions . Clark told his friend Bill Wentworth that he suspected he had been invited to Oxford because ‘I began to take an interest in the economic problems of the ancient world’; by that meaning developing economies.23 A decade after he became Director, the Institute celebrated its halfcentury. At the celebration Clark reminded the gathering that he and both of his two predecessors, Ashby and Orwin, were committed free traders. He added: For all of us, the question has not been solely one of improving economic productivity important though that be; still less of the theoretical analyses whereby economists can prove that by means of protection one country can sometimes enrich itself economically, at the expense of others; but of a profound revulsion from the idea that a rich and powerful country should be mean enough to employ such devices at the expense of poorer and weaker countries.24

The position would be an education for Clark. It furthered his understanding of the processes of economic growth, more particularly the role of the agricultural sector in that process, as well as the economics of irrigation and the dynamic interaction between food supplies and global population.

23 Clark to Wentworth, 23/7/1952, Clark Papers, UQ. 24 ‘The Agricultural Research Institute’, The Oxford Magazine, 28/2/1963, AERI files,

Oxford University Archives.

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Given his work on Conditions and his consultancies in India, Pakistan, and Sri Lanka, Clark was already well entrenched in the field of development economics. Now under his leadership, the Institute expanded its interest in this field without neglecting its ongoing research. In an address to the Agricultural Economics Society, Clark (1962, 231) defended ‘diverting research interests to international problems’ because he was aware of ‘a certain redundancy’ in work on agricultural economics in Britain. By that he meant there were now fourteen universities engaging in studying farm economics, financed by the Ministry of Agriculture. Moreover, British agricultural policy was a fairly limited area of interest for him. Clark was sceptical of the sector’s overall contribution to the economy; the increase in the volume of output by British farmers since 1930 had been offset by the increased quantity of commodities, such as fertiliser and equipment used up in the production process, when outputs and inputs were valued at world prices. Ideally, Clark wanted British agriculture to employ a smaller labour force with lower costs, larger farms, a focus upon the country’s natural advantages and less reliance on the public purse in the form of guaranteed prices. He derided claims that the farm sector should be assisted for fear of the terms-of-trade shifting against Britain. In a 1955 BBC radio broadcast, Clark defended assistance, within reason, for British farmers in order to reduce food imports and, more importantly, as a means of distributing the population away from the cities; he believed that rural communities made a contribution of special cultural value to national life. By guaranteeing agricultural prices, he felt that farmers were being treated like children, but he endorsed the idea of maintaining villages and country towns and bringing people into closer contact with nature. Yet, he felt that lower taxes should be imposed on farmers because depreciation and other taxable deductions had led to over-mechanisation, especially in the number of tractors.25 However, Clark stopped short of supporting the nationalisation of land. He had seen that policy applied to grazing land in Queensland and it would, he argued, encourage greater waste. The main problem, he said, was that the rents which farmers paid were artificially fixed and below the economic value of the land. As a result, farmers had no incentive to produce as much as they could from the land. If farmers wanted guarantee against falling prices Clark suggested some form of insurance under

25 ‘Too Much Farm Equipment’, The Manchester Guardian, 1956.

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a producers’ cooperative might be considered. By the early 1960s, with ‘the acute threat of agricultural overproduction’ arising in many western countries, Clark argued that even less assistance be accorded to British farmers.26 Given his ability to contribute original thought in many fields of applied economics, some figures at Oxford would later lament that Clark had not been given a full chair in economics (McCrone 1989). His term as Director would result, according to George Peters (2001, 9) his onetime research assistant, in a renewed surge in activity. He wrote on many fields in many areas, sometimes at the same time, but without losing the threads to ongoing projects. These fields included urban planning, location economics, taxation, social welfare policy, trade policy, higher education, and both British and Australian economic policy. The main focus of these activities, though, was to remake himself as a development economist with a particular interest in refuting the neoMalthusian beliefs that had captivated post-war British and American minds. Since 1945 there had been a marked increase in global population, due to improvements in health, and this was triggering alarm. Would the world be able to feed its teeming millions? The cardinal error of the neo-Malthusians, Clark had long contended, was their assumption that the capacity of a country to support a population was fixed. In the postwar world he argued that this population explosion was matched by an even more unprecedented wave of economic expansion in all but a few countries. As well as journal articles, reports and essays, Clark published four major academic works during the Development Decade of the 1960s. The works spanned demography, irrigation, subsistence agriculture and, of course, economic development. Two of these works, The Economics of Subsistence Agriculture (1964) and Population Growth and Land Use (1967), will be given attention as they signposted his campaign against those urging population control and his concern with reckless, unchecked urban expansion. Clark returned to work in Britain at a critical period in its economic history. It was a time when there was great concern in academe, industry and government about Britain’s inflation, recurrent balance of payments deficit and anaemic rate of economic growth. By that time Clark had

26 ‘Too Much Food, Too Many Famers’, The Statist, 31/5/1963.

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become one of the first radical conservatives, later describing his philosophy as classical economic liberalism. He became one of the first of the so-called ‘micro’ men, having gone ‘back to basics’ in his economics and, to that end, assisted in the creation of the Institute of Economic Affairs (IEA) (Middleton 1998, 157). He spoke out against the post-war Keynesian consensus, arguing that Keynes would never have approved all that was zealously promulgated in his name; a view shared by Austin Robinson (1972, 541). We will turn to these pamphleteering activities in the next two chapters. In the last two chapters of Part Three we shall concentrate on how he contested fears of resource exhaustion and environmental catastrophe which had resurfaced in earnest in the 1960s. Before we turn to his activities at the Institute, it is useful to note that Clark continued to engage in macroeconomic model-building and forecasting, a practice which earned him money, but also controversy.

An Eye for Trouble Clark had made accurate earlier forecasts about British economic fortunes in 1938 and had also foreshadowed the devaluation of sterling in 1949. Once again resident at Oxford, he commented on the parlous state of the post-war British economy which faced an adverse terms-of-trade and loss of income from overseas assets. Faltering productivity, a relatively poor economic growth rate and labour shortages did not help matters. In a publication for his old school, Winchester, Clark spoke of the stark economic choices facing Britain.27 To pay for her rising import bill, the country had either to export more or contemplate considerable emigration of her people. In late 1954, he scoffed at a forecast by Chancellor of the Exchequer, Rab Butler that Britain could double her standard of living within the next 25 years; he argued that excessive taxation stood in the way of such progress.28 He was proved utterly wrong on this. And, as in Australia, Clark was pilloried when his bleak forecasts sometimes went awry. After just a year at the Institute, Clark fell into further controversy, this time on the international stage, and the Australian press gleefully reported

27 ‘Britain’s Economic Future’, The Wykehamist, 27/7/1953, Clark Papers, UQ. 28 ‘Doubts on UK future’, The Courier Mail (Brisbane), 4/12/1954.

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on it. It started when he made bold forecasts in the Manchester Guardian, in November 1953, that the American economy was heading for a slump, with output to fall by ten per cent and unemployment to soar to six or seven million.29 Soon he was invited to New York to present his forecasts to 1000 eager American business executives gathered at the Hotel Astor. American press reports stated that the ‘Australian’ economist retained his composure as the audience turned the heat on him.30 Clark cited a number of factors conspiring to drive the American economy into serious trouble. The four danger signs, as he saw them, were: a contraction in money supply; a build-up in inventories; a likely fall off in investment spending; and rising construction costs. He used his American trade cycle model, which had been published in Econometrica, as the mathematical proof for his forecasts (Clark 1949). Some of it was reproduced in the press in the form of an intricate flow chart displaying the key linkages and dynamics between sectors of the American economy.

29 C. Clark ‘Danger Signs of Slump’ Manchester Guardian 16–17/11/1953. 30 ‘Colin Clark-to Critics’, The Courier Mail (Brisbane), 23/1/1954.

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Critics were quick to point out the key institutional differences between the American economy in 1954 and that of 1929. For a start, the banking and credit structures were stronger as was the depth of economic expertise. On that note, Clark told his American audience that there were ready means to avoid a crash. He advised the Eisenhower administration to forget about balancing the budget and to make a 20 billion cut in income taxes which would necessitate a hefty budget deficit.31 In the forum at the Astor, sponsored by the National Industrial Conference Board, Clark shared the floor with the Russian émigré economist, Professor W. S. Woytinsky of John Hopkins University. Making light of Clark’s reputation as an econometrician, Woytinsky argued against forecasting based upon a mathematical model of the economic system which established rigid relationships between parts of the economy. Clark moderated his warnings about the coming bust saying that it would be a recession rather than a depression, a fact which was noted by the press. By mid-1954, with unemployment rising only slightly, Clark was being ‘counted out’ over his dire prophecy.32 Despite his bluster, there was no recession nor slump. Notwithstanding Clark’s service in alerting American economic authorities, he ended up discredited by the whole affair, especially with his new-fangled mathematical model of the American economy. The US magazine Business Week, ran a four page profile on Clark called ‘Man Looking for Trouble’.33 Now the same magazine billed him ‘The man who guessed wrong’.34 Yet his earlier beliefs about the use of statistical techniques and economic theory to forecast the economic future remained unshaken. In 1955 Grover W. Ensley, Executive Director of the Joint Economic Committee, US Congress, asked Clark to provide ‘a post-mortem’ on his 1954 forecasts. Defiant, he responded saying that his economic forecasts were ‘better than most’ including Woytinsky’s, and that his prediction of a low point in economic activity in September 1954 was quite accurate. Apart from undertaking private forecasting for American companies, Clark became, in 1959, the Director of Research at The Econometric

31 ‘Clark Says Heavy Cuts Necessary’, Sunday Mail (Brisbane), 31/1/1954. 32 ‘US Slump Forecast Disproved’, SMH, 14/7/1954. 33 ‘Economist Colin Clark Is a Man Looking for Trouble’, Business Week, 30/1/1954. 34 ‘The Man Who Guessed Wrong’ Business Week 7/8/1954, 119–120.

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Institute Inc., a New York-based economic consultancy founded by Charles F. Roos. It became well-known for the forecast and measurement of economic trends, advising some 500 companies throughout the United States. This position would necessitate many trans-Atlantic flights between London and New York with long absences from Oxford. At one stage, in 1958, Clark spent five months in New York and was asked to develop a research institute for Roos. This would have meant leaving Oxford but Clark found the idea of working in New York unenticing: ‘Like almost everything else in New York, it depends upon an uneasy balance of forces between the Jewish and Irish elements’.35 He had earlier told Marjorie that in America ‘[t]he businessman is everything, both in money and prestige.36 The extra income from this consultancy was needed to pay for the children’s education in England. Six of the boys – Chris, Antony, Maurice, Bernard, Oliver and David - would attend Downside School, a Benedictine boarding school in Somerset. Clark had so arranged his financial affairs in such a way that fees from his lecturing and consultancy work flowed directly to the local Benedictine order; this was then transferred to the order in Britain. Following Roos’s sudden death, the venture came to nothing. One upshot was that he later co-authored a book on economic forecasting with two American academics (Spencer et al. 1961).

A Troublesome Student As Director of a research institute, Clark was also expected to supervise postgraduate students. There were a number of successful supervisions including Australasian such as Max Neutze, on location and land use, and Ian Shannon, on Australian rural industries. One of Clark’s first attempts at supervision in Oxford resulted in an unseemly spat with a young, headstrong Australian Rhodes Scholar who would later become Prime Minister of Australia. There could not be two more obstinate personalities in the same room than Colin Clark and Bob Hawke. The young Hawke was initially delighted to have ‘one of the foremost economists in the world today’ as his overseer (cited in D’Alpuget 1984, 56). However, after several interviews with Hawke, Clark felt that Hawke had no great

35 Clark to W. Herbert, 15/3/1959, Clark Papers, UQ. 36 Clark to M. Clark, 17/8/1947, Clark family letters.

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interest in economics. Moreover, he believed that Hawke’s thesis on ‘The economics of wage determination’ would not be a theoretical work; he recommended instead a research project on wage determination in Australia with a clear reference to arbitration. Clark concluded that Hawke’s proposed research topic was of no interest to him since it was not economics but Australian political history. Hawke recalled the moment in his memoirs: ‘Mr. Hawke, that is a matter that would be of no interest to me, but what is more important, it would be of no interest to the University of Oxford’. Mortified by Clark’s abruptness, Hawke recalls Clark’s ‘blatantly dishonest attempt to divert me from this area of research’ and that he subsequently ‘sought to denigrate my work as a scholar’ (D’Alpuget 1984, 57). Hawke’s venom was fuelled by his discovery that Clark had been involved with Santamaria’s NCRM and its plan to transform Australia into an agrarian, decentralised society. Hawke also learned later that Clark had been, as he put it, the ‘evil genius’ behind the Arbitration Court’s 1953 decision that ended automatic quarterly adjustment of wages (D’Alpuget 1984, 58). It was said that Hawke never forgave Clark. Four years later Clark gave his own version of events when his oldest son, Gregory, asked what exactly the spat had been about. Clark replied: ‘(Hawke) turned up in Oxford with a know-it-all-already attitude and thought that if we just showed him one or two more tricks of the trade, he could be a complete authority on wage fixing. We found, not only that he did not know any economics at all, but that he was far too stubborn to learn any. So, we got him to drop his thesis … and write a thesis in the sub-faculty of politics, which we thought would be easier’ (cited in Niall 1998, 254). Much later, Clark denied that he had told Hawke that ‘Oxford would not be interested in his thesis’, saying, in fact, ‘The examiners in economics would not be interested’. After submitting his dissertation, Hawke obtained his Bachelor of Letters but was unforgiving about Clark. Many years later he recalled ‘I find it difficult to be at all unbiased when speaking of the man … an individual who regards an interview with a student as an opportunity for a pedantic exercise in which he delivers himself of certain pronouncement with an air of papal infallibility’. In her biography of Hawke, Blanche D’Alpuget (1984, 58) notes that Clark would later refer to Hawke as ‘that economic drongo’ but provides no reference.

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There were to be a number of ironic sequels to this tale. The first was when Hawke became the advocate for the Australian Council of Trade Unions in presenting its submission in the 1959 Basic Wage Enquiry before the Full Bench of the Commonwealth Conciliation and Arbitration Commission. Reflective, perhaps, of what Clark had said of his shallow education in economics, Hawke arranged to be tutored by three of Australia’s most distinguished university economists, Horrie Brown, Eric Russell and Wilfred Salter. Hawke likened the experience to doing a university economics degree course in a matter of weeks. This might have lent proof to Clark’s assessment that Hawke’s command of economics was a little threadbare. His advocacy, with Russell and Salter giving evidence, led to the Commission overturning the ruling laid down in the 1953 National Wage Case and restoring quarterly cost of living adjustments to Australian wages (Hagan, 1981, 294).

References Clark, C. 1949, ‘A System of Equations Explaining the United States Trade Cycle, 1921 to 1941’, Econometrica, 17(2): 93–124. Clark, C. 1958, Australian Hopes and Fears. London: Hollis and Carter. Clark, C. 1962, ‘Agricultural Economics—The Further Horizon’, Journal of Agricultural Economics, 15(2): 218–231. Clark, C., and M. Haswell. 1964, The Economics of Subsistence Agriculture. London: Macmillan. Clark, C. 1967. 1977, Population Growth and Land Use. London: Macmillan. D’Alpuget, B. 1984, Robert J Hawke: A biography. Melbourne: Penguin. Donnithorne, A. 2019, China in Life’s Foreground. Melbourne: Australian Scholarly Press. Hagan, J. 1981, The History of the A.C.T.U. Melbourne: Longman Cheshire. Healey, D.T., and B. McFarlane, 1977, ‘Colin Clark Reminisces: An Unscripted Discussion’, University of Adelaide, Economics Working Paper 12. McCrone, G. 1989, ‘Obituary of Colin Clark’, The Brazen Nose, A College Magazine, 24: 69–70. Middleton, R. 1998, Charlatans or Saviours? Economists and the British Economy from Marshall to Meade. Cheltenham: Edward Elgar. Morgan, P. 2007, (ed.) B. A. Santamaria: Your Most Obedient Servant, Selected Letters, 1938–1996. Melbourne: The Miegunyah Press. Murray, R. 1970, The Split: Australian Labor in the Fifties. Melbourne: Cheshire. Niall, B., and J. Thomson (eds.) 1998, The Oxford Book of Australian Letters. Melbourne: Oxford University Press.

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Robinson, E.A.G. 1972, ‘J.M. Keynes: Economist, Author, Statesman’, Economic Journal, 82(326): 531–546. Peters, G. 1990, ‘In Memoriam: Colin Clark’, Journal of Agricultural Economics, 41(1): 129–131. Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist’ Working Paper No. 69, Queen Elizabeth House, University of Oxford. Russell, C.W. 1976, Country Crisis. Brisbane: W.R. Smith and Peterson. Rowe, A.P. 1960, If the Gown Fits. Melbourne: Melbourne University Press. Schultz, T.W. 1964, Transforming Traditional Agriculture. Chicago: University of Chicago Press. Stevenson, B.F. 2007, ‘Queensland’s Cold War Warrior: The Turbulent Days of Vincent Clair Gair, 1901–80’, Griffith University, Ph.D. thesis. Spencer, M.H., C. Clark, and P.W. Hoguet, 1961, Business and Economic Forecasting. Irwin; Illinois.

CHAPTER 13

The Man Who Smashed Convention

We have been trained as politicians of all parties to regard the state as a benevolent Father Christmas. Are we such children as all that? —Colin Clark, Welfare and Taxation (1954a)

While at the Institute Clark was about to stir up controversy over government spending, especially on the denationalising and decentralisation of welfare. It was the first of the academic fireworks in the form of pamphlets he planted underneath the prevailing orthodoxy. His allusion to Father Christmas was to visualise the welfare state as ‘a stealthy and sinister Father Christmas who comes around on Boxing Day to collect the entire cost of the gifts he had handed out, together with a substantial commission for himself for having organised the distribution’. In a pamphlet, Welfare and Taxation issued by the Catholic Social Guild in May 1954, Clark told working men and women that, under the Beveridge’s welfare reforms was a malignant Christmas gift because they would end up paying more in taxation than they received in social benefits. The pamphlet created a furore in the British newspapers by suggesting that, if the welfare state was dismantled and families left to manage their own affairs, they would end up better off. Overall, he argued, the economy would also benefit from this reform with national production rising by 10% in two to three years (Clark 1954a, 60). The National Health Service, which had been introduced in 1948, would be © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_13

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wound back except for those in serious ill-health or victims of accident. In Clark’s schema, the state was to be given the minimum of powers and duties. The intellectual origins for this pamphlet sprang not just from Belloc but from Catholic Social Teaching. Clark’s solution involved a mixture of self-help and voluntarism: The citizen who owns property, educates his own children, insures against serious ill-health, unemployment and old age through independent trade unions and friendly societies which are under his control - such a man will be able to resist any future encroachments on his liberty. (Clark 1954a)

One of the founders of the Institute of Economic Affairs, Arthur Seldon, has said that Welfare and Taxation marked the first intellectual reaction against the welfare state and foretold how a new political movement would rise up against it. As such, one might argue that Clark, with Friedrich von Hayek, was the progenitor of neo-liberal thought or certainly supply-side economics. When the pamphlet was published, one of Clark’s old mentors, Alexander Carr-Saunders, now Director of the LSE, told him ‘I am so glad that you have let yourself go’ before cautioning ‘I wonder how much the world will attend. Not much just yet, in any case, I expect. Perhaps later on’.1 He was right; there was no response from official circles, nor from the populace. Clark genuinely felt that voters were not as enamoured of welfare as politicians made them out to be. While Clark had seen how a concentration of political and economic power created the conditions for a form of slavery or oppression, he did not help his cause with his gloomy hyperbole. He stated that tax rates, then at 40% of Britain’s national income, enfeebled the economy by undermining entrepreneurial spirit and effort. He was equally alarmed at the rate at which government spending was rising, especially the cost of the welfare state and the bureaucratisation that accompanied it. Clark’s 1954 pamphlet was written to persuade workers and their families that the subsidised services of the welfare state were not free as they were funded from the high income taxes they faced. He argued that working class families had paid more taxes in the interwar period but received proportionally more social benefits. This link between transfer payments and increased taxes had been broken in the post-war world 1 Carr-Saunders to Clark, 22/4/1954, Clark Papers, UQ.

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because of the mushrooming of social services and their administration. Clark now estimated that an average manual worker could obtain full medical insurance for his family and arrange for their education expenses by setting aside just 13% of his income. In his plan there would be compulsory private insurance schemes for old age and widowhood, a modest payment for basic education and public subsidy and scholarships for higher education. Clark suggested that lower-level education should be provided by the churches, not the state. Friendly societies would reclaim responsibility for health insurance. Council houses would be able to be bought at fair market prices while rent controls and subsidies would be eliminated. Trade unions would handle unemployment benefits and have the right to require payment from the government if unemployment rose higher than 5%. Clark believed that the average rate of unemployment would hover around 3%. On the revenue side of the budget, Clark (1954a) proposed moderately progressive income taxes on capital and income while death duties would be replaced by land taxes. Sales tax would also be abolished, except for that on cars, coal and petrol; he also thought that some food should bear tax. This was a strange admission given that post-war rationing was still in force and would end only in July of that year, 1954. There was, he said, a moral and economic imperative for a lower rate of taxation and that, as far as possible, taxation and expenditure decisions should be transferred to local authorities. Another of Clark’s recommendations was for a commodity reserve currency to ensure price stability and freedom from cyclical disturbances. With political consensus at the time in favour of state welfare, editorial reviews of his pamphlet were mostly negative. The public had not tired of the experiment of comprehensive welfare. In one instance, Clark appeared on the BBC television program ‘Press Conference’ and was grilled by a panel of critics about his views on privatising welfare and abandoning the National Health Service. He acquitted himself well without appearing aloof but a disarming wry smile. Clark had given himself an almighty challenge. He assumed that most people had had enough of ‘the experiment’ of universal health and welfare and much preferred to arrange their own social services. The Attlee Labour Government, which pioneered these ground-breaking reforms, had been defeated at the 1951 general election. However, the new Conservative Government, led by Winston Churchill, never sought to reverse Labour’s popular reforms. Simply put, expecting people to take

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charge of their own welfare needs was far-fetched.2 It seemed as if societal change was passing Clark by. In the 1954 annual meeting of the Royal Economic Society after the formalities and the election of Lionel Robbins as the new President, there was a discussion on ‘The problems of the social sciences.’ A press report on the meeting portrayed it as some form of debate between Lord Beveridge and Clark.3 Beveridge opened the discussion and expressed concern at the inadequacy of rates of benefit now provided and the increasing number of pensioners seeking recourse to public assistance. He denied that he had coined the phrase ‘welfare state’ and, more importantly, the notion that everyone would be provided for by the state.4 Clark intoned that expenditure on social services was entrenching the nation in an excessive tax burden and centralising administration and the control of it by parliament and the civil services. He was concerned that any increase in national income would be absorbed in increasing services rather than rewarding effort.5 This line of thought, that economic growth would finance increased welfare spending, never came to pass and led to an increased demand upon taxation and pressures on the balance of payments (Clark 1968). Another sympathetic response to Clark’s proposals came from Milton Friedman who found the general approach in Welfare and Taxation ‘congenial’, and stated that few people had examined the welfare state in such a fundamental way.6 Clark’s response to Friedman was an interesting one; he had discerned that, since the Second World War, there had been a slow and steady decline in the moral standards of British politics and society generally and that this explained why he was prepared to vouch for ‘a non-discretionary system and I am willing to pay a considerable economic price for it’.7

2 ‘The Gordian Knot’, The Manchester Guardian, 8/4/1954. 3 Ibid. 4 S.W. Alexander, ‘Mr Colin Clark v Lord Beveridge’, The City Press, 2/7/1954, Clark Papers, UQ. 5 ‘Current Topics’ Economic Journal, 64(225): 629–630. 6 Friedman to Clark, 30/3/1954, Clark Papers, UQ. 7 Clark to Friedman, 9/4/1954, Clark Papers, UQ.

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Clark then presented his idea of a commodity reserve currency in, of all places, New Zealand in 1955 where a Royal Commission on Monetary, Banking and Credit Systems was underway. It was given short shrift by the Commissioners. In reviewing Welfare and Taxation, the Cambridge economist, Claude Guillebaud (1954, 578), noted that, while Clark’s schema had been harshly criticised in the press, he was entitled to envisage his own utopia, before suggesting that the most likely prospect for ‘his proposals as having a possible practical bearing’ would probably be in Catholic Ireland rather than in Britain. Whether this was an intended dig at Clark’s Catholicism is not clear. However, that very issue had cropped up in an article Clark had recently submitted to the Economic Journal entitled ‘Morals and Economics’.8 Harrod had gently reminded him that the majority of the journal’s readers were not Catholics and that Clark could be more tactful by widening his sources on morality: ‘Your present references seem to be largely to Papal encyclicals or scholastic doctrine’. He cryptically added that the article would be far more convincing if it was about reforming economics than in ‘recommending the doctrines of Catholicism’.9 The paper sank without trace and brought to an end Clark’s successful run of submissions to the Economic Journal.

Free Trade In 1954 Clark published Free Trade - an Immediate Remedy for Britain’s Economy, which was circulated by City Press, owned by the publisher, Stanley W. Alexander. This pamphlet briefly retold the political history of the free trade doctrine in Britain and how the National Government discarded it in 1931. This was regrettable, Clark (1954b) held, since Britain had taught the world the concept of free trade. Economists, he noted, had been too preoccupied with developing theoretical models to advocate free trade. Clark (1954b) now argued for its reinstatement, together with a floating exchange rate. Because he considered that departures from free trade always came in times of economic crisis, Clark wanted free trade enshrined as a political principle that would induce richer nations to fulfil their duty to poorer countries but also to keep their

8 Clark to Harrod, 5/12/1953, Clark Papers, UQ. 9 Harrod to Clark, 7/12/1953, Clark Papers, UQ.

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own economies in sound shape. Clark proposed grants to companies and businesses in regions affected by the removal of tariffs. He warned that if Britain continued to adhere to protectionist policies, she would be left behind, in company with Australia and Argentina. But Clark’s advocacy for a recasting of British economic policy fell on deaf ears. It was true, though, that the British economy was bedevilled by exchange rate difficulties that resulted in ‘stop-go’ policies. There was also too much focus on short-term economic management; Andrew Shonfield (1958) bemoaned the lack of longer-term planning, particularly in investment spending. This, in turn, was seen as a contributing factor behind Britain’s growth rate being inferior to that of European nations (Dell 1997).

‘a Complete, Utter, Howling, Disastrous Failure’ Three years later, Clark turned up his criticism of the British welfare state in the pamphlet, The Cost of Living (1957). It came in a bilious yellow cover, appropriate for its choleric tone. It opened by reminding readers that, over the previous decade, the cost of living had risen by 60%, unprecedented for any peace-time decade in modern British history. While the average rate of inflation for the 1950s was 4.7%, with money wages growing at 6%, those living on pensions, savings and endowments were being left behind. These grim developments were directly linked to poor productivity, the continuation of high taxation carried over from wartime and Britain’s embrace of protectionism. Chronic labour shortages compounded this situation. Working himself up into a lather, Clark argued that protectionism and high taxation had, in tandem, been ‘a complete, utter, howling, disastrous failure’. It was time for ‘the experiment’ to be abandoned. Another word for this political order was Butskellism, named after two former successive Chancellors of the Exchequer, Hugh Gaitskell and Rab Butler, who held that office during the 1950s. High taxation, Clark argued, then amounting to 37% of national income, was a huge impediment to business formation and investment. Britain’s trade in export manufactures had fallen below the growth in global trade of manufactures. This was attributable to British industry producing products, for which the demand was largely static. To shake off its lethargy, Clark said, Britain needed to rediscover the benefits of global markets, including the international division of labour, and let inefficient industries wither away.

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He added that British economy would always have an inflationary tendency because Keynesian economists had put the economy into overdrive. Resorting to taxation and a budget surplus to correct this condition would, over the longer term, impair the supply-side of the economy. Turning to university economists, Clark chided them for having assumed a ‘civil service outlook’ in not wanting to criticise the prevailing economic policy; economists were complicit, he said, not just in tolerating inflation, but also in the maintenance of higher levels of taxation and protection. Clark (1957, 23) lamented the ‘intellectual disease’ in modern economics, whereby to speak of ends was to be seen as engaging in value judgement. This ‘dropping of the subject’ might be in accordance with intellectual fashion but was not consistent with the true nature of economics which was ‘the material welfare of mankind’ (Clark 1957, 5). Instead it was intellectually fashionable for economists to engage in extremely recondite theoretical work of little practical value. It was, of course, a familiar charge from Clark but somewhat inaccurate. There was, in fact, a healthy divergence of opinion among British economists about rising prices and the nation’s stuttering economic performance. Clark’s 1957 pamphlet made little public impact; indeed, it was published just months after Prime Minister Harold Macmillan made his ‘never had it so good’ speech. Publicly then, The Cost of Living was a limp failure, like his two earlier pamphlets, it seemed out of tune with the times. A year later Clark (1958) recycled much of these arguments to a wider audience in an article in Encounter entitled ‘What’s wrong with Economics?’ lark’s pamphlets did stir some comment within the financial press; one commentary acutely suggested that the nature of the economy had changed.10 The pamphlet provided a backdrop to what was to unfold three months later, in January 1958, when the Chancellor of the Excheque, Peter Thorneycroft, and two junior Treasury ministers, Nigel Birch and Enoch Powell, resigned from the Macmillan Government because of its refusal to rein in public expenditure. Unsettled by the rise in inflation, the three ministers had adopted a proto-monetarist conviction that the only way to curb inflation and secure the exchange rate was to restrict public sector expenditure with a package of welfare cuts. These cuts, they argued, would take the heat out of wage inflation. Apart 10 ‘What’s Wrong with the Economists?’, The Investors Review, 26/10/1958, Clark Papers, UQ.

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from sharing a commitment to a small state and free market ideology, the three politicians were more aligned with Hayek than they were with Clark. Thorneycroft had always been an economic liberal and was sceptical of Keynesian economics. By contrast, Macmillan, very much in the shadow of Keynes, agreed with his chief economic advisor Roy Harrod, in refusing to countenance austerity. Meanwhile Clark’s outpourings about the state of the British economy and the tendency to overtax effort indicate that he had found something of a congenial home in the newly-formed Institute of Economic Affairs (IEA). And there was another contact across the Atlantic worth pursuing. During one of his frequent visits to New York, Clark encountered the young William F. Buckley, founder and editor of National Review, a conservative monthly magazine that favoured an early form of libertarianism and supply-side economics. Clark would have known that Buckley had written God and Man at Yale (1951) in which he described Keynes’s idea of regulating the economy as taking the high road to collectivism. Clark wrote the first of his half a dozen articles for National Review in 1958, with the first mostly rejecting J.K. Galbraith’s critique of American capitalism enshrined in The Affluent Society (1958). Given Clark’s predilections and networks, he was invited to join the Mont Pelerin Society. He declined, however, because it was too extreme in its embrace of the market and non-recognition of externalities.11 His rejection of it was consistent with Catholic social teaching (Yuengert 2014, 159). One group with whom he did affiliate, however, was the Congress of Cultural Freedom, a body of heterogeneous intellectuals who gathered to confront the collectivist or communist influence around the Western world.12 He spoke at two of their conferences, one in Milan in 1955 on ‘The Future of Freedom’, the other in Tokyo two years later on ‘Problems of economic growth’ confronting the Third World (Coleman 1989, 114).

11 Clark to Santamaria 3/7/1973, Santamaria Papers, SLV. Interestingly Clark’s friend, Bertrand de Jouvenel was a member of the Mont Pelerin Society. 12 The Congress of Cultural Freedom was founded by Arthur Koestler and was apparently funded by the Central Intelligence Agency of the United States. The CIA also funded the literary journal Encounter and the Australian literary journal Quadrant. According to his son David, Colin Clark did not approve of secret organisations and would have been upset when this was disclosed as he contributed to both organs.

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The Soviet Experiment Once More One of the conference themes at the Fifth Congress for Cultural Freedom in Milan in September 1955 was the economic progress of the Soviet Union (Coleman 1989, 110). Among the 150 delegates, drawn from academe and politics, were Hugh Gaitskell, Hayek, W.S. Woytinsky, Arthur Lewis and George Kennan, the former American ambassador to the USSR. Apart from the omnipresence of the Cold War, the conference had been sparked by the Oxford economist, Peter Wiles, who had ‘scandalised’ his peers by claiming that the rate of growth of industrial output in the Soviet Union was greater than that of any Western nation, including the United States.13 Two years earlier, Wiles had published an article in Foreign Affairs along the same lines. Clark’s counter-response to Wiles, soon to appear in Encounter, stated that it was a ‘myth’ that the Soviet Union was growing at six per cent per annum and would overtake America in the future. The basis of Wiles’s supposition was built on sketchy evidence, Clark (1955) argued, and was attributable, in large part, to the post-war recovery generating a higher growth rate. Moreover, the Soviet performance had been affected by a concentration on heavy goods and a huge transfer of the population from the rural to urban sector. Clark said that the huge rise in Soviet industrial output should be re-measured on a per capita basis and, from that perspective, did not look as impressive. Similar estimates to Wiles had come from work undertaken by Gregory Grossman of Harvard University (Clark 1955, 45). Despite the Third World being impressed that the Soviet Union appeared ‘to get things done’, Clark showed that the Soviet growth rate was still hampered by ’the extraordinary failure’ of her agricultural sector to feed its own people (Clark 1955, 47). Chiding Grossman, Clark said that ‘the real connoisseur’ of Soviet statistics drew his conclusions, in part, from figures that were not published. Simply put, the Soviets suppressed unfavourable statistics. He had, of course, already explored this issue in some forensic detail (Clark 1947). Another antic by Soviet statisticians, he noted, was to publish figures in their most obscure form possible, including altering base years, changing definitions and using percentages rather than quantities. He rounded on the work of a number of well-funded American institutions that were producing ‘second rate and uncritical material’ on the 13 ‘Economics in Russia’, The Glasgow Herald, 17/9/1955, Clark Papers, UQ.

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Soviet Union (Clark 1955). Grossman (1956) defended his estimates of Soviet economic growth and said that Clark’s critique of his work and of others was contrived. Apart from American researchers focusing on the Soviet Union to the exclusion of other countries and issues, Clark (1956, 77) argued that they neglected topics such as Soviet population growth, consumption standards and the housing space enjoyed by the average Russian family. As such, they were falling prey to what Soviet propagandists wanted, that is to distract Western eyes away from these areas of weakness. Wiles and other Sovietologists would later revise their assessments of Soviet economic growth but Clark was among the first to debunk claims about the relative superiority of the Soviet economic model.

The Institute of Economic Affairs In addition to writing for the Catholic weekly The Tablet, Financial Times and American and British business magazines, Clark also found outlets in papers issued by the IEA. This was a think-tank he had been involved with at its embryonic stage, serving on an Advisory Council when it was first mooted in 1955 (Denham 2005). The invitation came from the businessman and political aspirant, Oliver Smedley.14 Clark had signed up with another fringe interest group, also organised by Smedley, unimaginatively entitled the Council for the Reduction in Taxation (Cockett 1995, 126). So, his embrace of economic liberalism predated the birth of the IEA. He had already come into contact with the staunch free trader and publisher Stanley W. Alexander, who had published Clark’s pamphlet advocating free trade (Cockett 1995, 70–71). Smedley’s diatribes against protection found support from Alexander; it was said that these two figures were ‘the only active free-traders left in England in the 1950s’ (Cockett 1995, 126). Clark was apparently flying below the radar. Another formative influence behind the rise of the IEA was the Cheap Food League, where Smedley again was the leading protagonist. The aims of the League were fairly straightforward: a great and proportionate reduction in both government expenditure and taxation; sound money; full employment; and, most importantly, free trade including the elimination of all agricultural subsidies for British farmers, including the work

14 Smedley to Clark, 2/11/1955, Clark Papers, Brasenose.

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of marketing boards. Here Clark was at odds with the League in arguing that Britain should import all its food. As an economist, Clark (1962) was wary of the economic cost of producing food for the domestic market. He felt there was a need to assist British farmers on ‘economic’ and ‘social’ grounds arguing that assistance be given to those forms of production in which there was the least difference between British and international prices. On the defence argument, he conceded there was a case but not for indiscriminate assistance. Some of these arguments harkened back to the position Clark held in 1937, that it would be economically more efficient for Britain to import all its food in a completed state except for potatoes, vegetables and some milk.15 He argued then that Britain’s livestock industry, barring sheep, was a liability since imports of fodder and fertilisers exceeded farmers’ output of food. In short, agriculture was a costly liability compared to the defence of Britain when money was better spent on armaments. At that time, critics, including the farming lobby, took him to task but events, in a few short years, gave his argument force. When the Second World War broke out, Britain, with a limited number of ships, could not afford the freight space needed to import fodder for its livestock.16 In the post-war world, Clark held that the ‘strongest’ argument for assisting the farm sector was in dispersing the nation’s population.17 As a Distributivist, he assigned great cultural value to a healthy rural sector which enriched the nation’s social and cultural life. However, while rural life had non-material advantages, aesthetically and culturally, Clark felt that this was more for a philosopher to adjudicate upon than an economist. While he saw evidence of reduced crime and anti-social behaviour in rural areas, Clark drew back from supporting agriculture on this argument alone. Where there was a case for assistance to British agriculture, Clark preferred that it only be for a short time period and that the means of assistance be through subsidies rather than tariffs. Meanwhile, Oliver Smedley had found a kindred spirit in the form of businessman Antony Fisher, who had, in turn, consulted Hayek about creating ‘an anti-Fabian society’ in Britain. Both Fisher and Smedley can claim to be the founding fathers, then, of the IEA. Both insisted that

15 ‘Agriculture: Liability or Asset?’, The Spectator, 23/4/1937, Clark Papers, UQ. 16 ‘Agriculture and Defence’, The Spectator, 1937, Clark Papers, UQ. 17 ‘Should Guaranteed farm Prices Be Continued?’, The Listener, 5/5/1955.

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the Institute be a non-partisan body, upholding the call for economic liberalism purely by intellectual persuasion. The IEA drew its funding not from political parties but from individuals and corporate members. Ralph Harris, a lecturer in political economy at the University of St Andrews, was appointed its first research director (Cockett 1995, 133). He was assisted by Arthur Seldon who became the editorial director at the Institute (Cockett 1995, 135–136). Harris wrote the Institute’s first ‘Hobart’ paper, Pensions in a Free Society. This signalled that the IEA could tackle microeconomic issues and convey its findings in a non-technical, accessible manner to the widest market possible (Cockett 1995, 132). When he was first approached, Clark told Smedley that the purported thinktank had to adhere to four beliefs - free trade, low taxes, sound money and personal liberty. Clark was friendly with Lord Harris, one of the founders of the Institute. However, he later told Santamaria that ‘He is a little too strong for my tastes’, citing Harris’s objections to help distressed economic regions.18 Clark’s enduring position was that the free market was simply a pragmatic solution to the economic problem but that it should be abandoned when it could be shown that it is was not working satisfactorily. One example of this concerned the spatial distribution of economic activity. He favoured heavy taxation on companies that wanted to site industry in heavily-urbanised areas and subsidies to firms which located in less urbanised places.19 His general philosophy on market intervention was that everything should be left unregulated until it could be proven otherwise. Clark would be a useful servant to the Institute, writing, as we shall see, three research papers; another important essay suggested how the Institute could imitate the Fabians in organisation and political influence (Clark 1981, 204). In the six suggestions outlined in his paper, Clark cautioned against immediate results and seeking mass membership; he also advised against extremism and doctrinaire positions, and recommended studying how public administration actually worked.

18 Clark to B.A. Santamaria, 30/12/1979, Santamaria Papers, SLV. 19 C. Clark and G. Peters ‘Location Taxes for Industry’, The Guardian, 26/11/1963.

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References Buckley, W.F. 1951, God and Man at Yale. Washington: Regnery Publishing. Clark, C. 1947, ‘Russian Income and Production Statistics’, Review of Economic Statistics, 29: 215–217. Clark, C. 1954a, Welfare and Taxation. Oxford: Catholic Social Guild. Clark, C, 1954b, Free Trade—An Immediate Remedy for Britain’s Economy. London: City Press. Clark, C. 1955, ‘The Soviet Crisis’ Encounter, 5(2): 43–49. Clark, C. 1956, ‘The Soviet Crisis; Rebuttal’, Encounter, 6 (2): 77. Clark, C. 1957, The Cost of Living. London: City Press. Clark, C. 1958, ‘What’s Wrong with Economics?’ Encounter, 10(4): 15–23. Clark, C. 1962, ‘Agricultural Economics—The Further Horizon’, Journal of Agricultural Economics, 15(2): 218–231. Clark, C. 1968, ‘An Unorthodox Proposal: University Education in the Welfare State’, Encounter, 30(5): 24–29. Clark, C. 1981, ‘The IEA and the Fabians: Comparison and Contrast’, in A. Seldon (ed.) The Emerging Consensus…? London: IEA. Cockett, R. 1995, Thinking the Unthinkable. London: Fontana. Coleman, P. 1989, The Liberal Conspiracy: The Congress for Cultural Freedom and the Struggle for the Mind of Postwar Europe. New York: The Free Press. Dell, E. 1997, The Chancellors. London: Harper Collins. Denham, A. 2005, British Think-Tanks and the Climate of Opinion. London: Routledge. Galbraith, J.K. 1958, The Affluent Society. New York: Houghton Mifflin Harcourt. Grossman, G. 1956, ‘The Soviet Crisis’, Encounter, 6(2): 75–76. Guillebaud, C.W. 1954, ‘Review of Welfare and Taxation by C. Clark’, Economic Journal, 64(255): 576–578. Shonfield, A. 1958, British Economic Policy since the War. London: Penguin. Yuengert, A.M. 2014, ‘Roman Catholic Economics’, in P. Oslington (ed.) Oxford Handbook of Christianity and Economics. Oxford: Oxford University Press: 153–176.

CHAPTER 14

A Critical Eye on British Economic Policy

The French philosopher and political scientist Bertrand de Jouvenel, recognised Clark as a pioneer in economics telling him that ‘all the things being done in economics are things you set going’. He gave further encouragement with the injunction: ‘It would be sinful to those endowed by God to be masters, to bury their talents and forbear to take great steps, on the plea that it would be over bold, a master must be bold’.1 There was no danger of this with Clark; he was always daring. In the 1960s, under the imprimatur of the IEA, he wrote two stirring pamphlets that challenged the conventional wisdom underpinning Western economic policy.

Growthmanship It was Richard Nixon, the Republican Party nominee in the 1960 American presidential election, who coined the term, ‘growthmanship’. Nixon used it to attack his opponent John F. Kennedy, the Democratic Party nominee for President, for making the pursuit of economic growth the mainspring of his campaign. More generally, the term was used as part of the backdrop to the Cold War, of ensuring that the capitalist economies 1 De Jouvenel to Clark, 22 February 1963, Clark Papers, UQ.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_14

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kept their economic ascendancy over the Soviet Union (Boianovsky and Hoover 2014, 198–199). In Growthmanship—A Study in the Mythology of Investment (1961), Clark took to task the ‘confused, contradictory and mischievous thinking’ about economic growth even by enlightened organs such as The Guardian and The Economist which both insisted that Britain must have more of it at any cost. This translated as Britain having to invest more to achieve a higher level of growth and remain competitive in the world economy. In a strict sense, Clark (1961, 3) defined ‘growthmanship’ as ‘an excessive preoccupation with growth, the advocacy of unduly simple proposals for obtaining it and also the careful choice of statistics to prove that countries with a political and economic system which you favour have made exceptionally good economic growth’. The term also applied to the use of statistics to measure growth performance. In post-war Britain there had been continuing public concern that the country’s growth rate was inferior to that of its European counterparts (Tomlinson 2005). It suggested that what was needed was simply more investment and the Labour Party was convinced that this was the answer to Britain’s sagging growth rate. Clark was critical of this logic, arguing that comparing rates of economic growth between different countries and over different times was too simplistic. Data purporting to show that countries with the highest investment rates had the highest growth rates was flimsy. In short, he argued, capital investment was a necessary but not sufficient condition for economic growth. There was no close correlation between investment and growth. Apart from its export industries being unable to obtain enough labour, Britain’s low growth performance was due to more deep-seated sociological factors. Indeed, Robert Solow once observed that when economists tried to unravel Britain’s poor growth rate, it usually ended in ‘a blaze of amateur sociology’ (cited in Clark 1978, 7). Economic growth, Clark (1961) stressed, ‘should be a slow and gradual process’ and attempts at ‘forcing the pace’, with investment drives and attempts to expand purchasing power, merely resulting in waste and, just as seriously, inflation. Empirically, Clark showed that investment in nationalised industries had been wasteful, and it would have been better if that investment had been allocated to advanced industry and services. He was dismissive, too, of claims that the Soviet Union had recorded

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strong growth rates because of high investment ratios. In any case, statistics about capital accumulation and growth were hard to interpret; some data showed that the amount of capital per unit of output could fall, thus discrediting the fashionable view that growth depends on prior investment. Of course, Clark had foreshadowed elements of his argument in National Income and Outlay and more recently in a commentary entitled ‘The Declining Importance of Capital’ (1957) He would also cite the work of the Norwegian econometrician, Odd Aukrust (1959) to help discredit the capital accumulation and growth argument (Clark 1973). The decline in the importance of capital was attributed to the development of capital-saving technologies and the more constant use of capital itself. This perspective could help explain the miraculous recovery of the German and Japanese economies after the Second World War, assisted by factors such as management, entrepreneurialism, scientific knowledge and the quality of labour. In a nutshell, a change in the attitudes of the people themselves, particularly as a result of universal education, was responsible for growth. In saying that, Clark (1973, 10) was merely repeating what Kuznets (1964) had said about knowledge being the key to economic growth. Clark argued that the post-war Japanese economic miracle was, apart from investment in primary and technical education, due more to the doubling of the labour force than any other factor. The fact, though, that the Japanese birth rate began to fall after 1949 with the passing of abortion laws, meant that this miracle was under threat as the Japanese used up their demographic capital. In attacking the obsession with investment, Clark assailed the then fashionable views of capital accumulation and take-off doctrines espoused by W. Arthur Lewis, Walt Rostow and the Harrod-Domar growth model. Capital, he argued, was created by growth rather than growth being a function of capital. Clark suggested that the widely-held belief of capital being the limiting factor in economic growth had been disproved by Indian economic performance in the 1960s. The missing ingredients, he argued, were enterprise and creativity. However, some Indian economists criticised him by arguing that this argument was congruent with his religious views that capital per head did not have much bearing on productivity and material process. They pointedly asked what would happen if each worker had a smaller quantity of capital to work with (Shonfield 1961). Clark seemed to overlook the fact, too, that better

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management was inherently embodied in new capital stock. Maddison (2004, 26), too, felt Clark had been too ‘cavalier’ in his treatment of investment and technical progress in the process of economic growth. A more recent attack came from the Austrian economist Murray Rothbard, who blasted Growthmanship on a whole range of theoretic, technical and ideological grounds and spoke out against the booklet being distributed in the United States (Gordon 2010, 307). In the 1950s Clark sparred with his Oxford colleague, Thomas Balogh, about Britain’s slow growth rate compared to West Germany’s. He insisted that the comparative stagnation of production in Britain was not attributable to flagging investment but to ‘excessive’ taxes. As a self-proclaimed ‘Edwardian economist’, Clark suggested that what was really needed to solve Britain’s inferior growth rate was not more capital investment but a greater focus on education, enterprise and good labour relations.2 He pointed out that it was unrealistic to expect that Britain could grow faster than its long-term average of 3% per annum given the low level of productivity. In a 1961 discussion about British economic growth with the aspiring Labour politician, Anthony Crosland, Clark cited a growing population as the spur to forcing the economic pace. Apart from blaming labour shortages and high taxation, Clark agreed with Crosland that poor management practices were another explanation for this deep-seated problem.3 In his booklet Clark (1961, 14–15) also returned to one of his old theme songs of attacking those ‘Keynesians’ who were now adopting Keynes’s insights with long-period analysis showing the over-riding importance of investment. According to Clark, Keynes was only interested in short-period analysis and dealing with the 1930s crisis of mass unemployment. In promoting growth, Clark invoked the wisdom of the classical economists who stressed that all the factors of production, not merely capital, were important. Productivity growth, he argued, came more from ‘human factors’ such as knowledge, organisation, education and enterprise.4 What was needed, then, was a revival of the competitive spirit, fewer restrictive practices and over-manning by unions and, of

2 ‘Edwardian Economics’, New Statesman, 28 April 1956, Clark Papers, UQ. 3 ‘Forcing the Pace?’, The Listener, 29 June 1961. 4 ‘Growthmanship: Fact and Fallacy’, 1965, Forum of Free Enterprise, Bombay, Clark Papers, UQ.

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course, lower taxation. He envisaged no role for the state as an agent of economic development because it infringed upon individual liberty. In short, he said, it was the human element, not a marked increase in the level of investment as Rostow had posited, that would guarantee a ‘take-off into sustained economic growth’.5 In other words, Clark was parading a more supply-orientated view of growth but not a formally derived one. It would find fuller expression in his next publication.

Taxmanship Clark crystalized his thought on supply-side economics in Taxmanship: principles and proposals for the reform of taxation (1964). This IEA booklet contained his trademark views that high taxation impaired productivity and aggregate supply, as well as his espousal of the 25% tax limit including Keynes’s tacit support for it. Clark was insistent that taxation levels, currently then around 40% of Net National Product, could be reduced if the Beveridge welfare system was dismantled and individuals were allowed to make their own welfare provision. The 25% target could be reclaimed with a new mix of taxes, including an expenditure tax, taxes on capital and company profits, a land tax and a value added tax. The company tax rate should be set at 10%, he argued, and with a self-supporting welfare system, the maximum rate on incomes could set at 50%. There would be rebates for saving; also, since tobacco and alcohol were some of the few luxuries enjoyed by those on lower incomes, excise taxes on these should be removed (Davies 1964). On this occasion, however, Clark proved to be inadequate at salesmanship. There was little popular reaction to the paper as the content was hardly new. Even the IEA, somewhat aghast at what he was proposing, issued a disclaimer saying that it did not necessarily support his views or analysis. When the booklet was re-issued in 1970 the circumstances were more propitious. He argued workers suffered neither money illusion nor tax illusion but were savvy to the value of their post-tax real wage. It meant that tax increases directly fed into wage increases.

5 Ibid.

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The Economic Consequences of Harold Wilson In January 1963 the Leader of the British Labour Party, Hugh Gaitskell, died suddenly after a short illness. Clark had known him at Winchester, then Oxford and also within the University Labour Club; he was someone whom he greatly respected. The same could not be said, however, of the new Leader of the Labour Party, Harold Wilson. In January 1964 Clark attacked ‘the intellectual squalor’ of Wilson’s economic policy.6 While noting that Wilson had once been a research fellow at University College, Oxford, Clark was aghast that the Labour Party was now embracing old doctrines of mercantilism, as well as the notion that services ‘do not really count’ and that ‘only material goods really constitute the national product’. He also attacked the growthmanship credo of the Labour Party that ‘if you want to produce more all that was needed was to invest more’.7 Moreover, the argument that Britain should invest more in ‘essential’ industries such as manufacturing, because this was where technical ‘breakthroughs’ occurred, was erroneous. Clark was appalled at Wilson’s policy of Britain developing home-produced substitutes and that, in Wilson’s words, ‘this should be one of the primary tasks of the new economic planning machinery’. This policy hinted at possible import controls if Britain’s balance of trade continued to deteriorate. Wilson seemed unaware that import controls, including those on food, meant rising costs in a country already facing widespread labour shortages, which would only exacerbate any attempt to increase the rate of growth. Clark also criticised Wilson’s proposal to tax company dividends in order to encourage companies to accumulate undistributed profits. Citing the work of the Oxford economist I.M.D. Little, Clark stated that this policy would encourage companies to engage in wasteful investment spending. Clark concluded by saying that, while still sympathetic to Labour, he felt that the party had gone back to the ramshackle days of Ramsay MacDonald in 1931.8 In a business magazine, Clark discussed the findings of P.J. Verdoorn (1949), an economist with the Netherlands Planning Commission, who had discovered that rapid productivity was usually associated with bigger

6 ‘The Economic Consequences of Harold Wilson’, Clark Papers, UQ 7 Ibid. 8 Ibid.

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markets and in turn, population growth.9 This increased productivity was explained by increasing returns due to economies of scale from a greater sub-division of processes, as well as from the pay-off from learning by doing. Clark had cited Verdoorn in the third edition of Conditions, the first time his work had been in the public domain (Thirlwall 2002, x). One can imagine Clark’s discomfort, therefore, when in 1966 the Wilson Government introduced a Selective Employment Tax on the use of labour in the services industries. This tax was based on the premise that, first, too many resources were pouring into the services sector and, second, that manufacturing was the engine of growth in an economy. The proceeds of the tax were designed to subsidise the manufacturing sector through the granting of investment allowances because, it was argued, productivity gains and economies of scale were more apparent in that sector. All this would augment Britain’s exports drive. Clark saw the Selective Employment Tax as the handiwork of Wilson’s two Hungarian-born economic advisors, Thomas Balogh and Nicholas Kaldor. The latter had used Verdoorn’s principle as justification for favouring manufacturing as an engine of growth. The view that manufactures were more productive and more desirable than services was, in Clark’s thinking, ‘an ancient error’.10 A larger services sector only came with economic maturity. In the same draft, Clark argued that the Wilson Government, elected with high hopes of putting Britain on a sustained growth path and banishing the stop-go cycle, had failed miserably. Clark was also distinctly unimpressed with the Wilson Government’s espousal of a ‘white-heat’ technological revolution and the use of planning and growth targets, likening this to reducing economic policy to medieval alchemy or witchcraft. In particular, Clark was critical of the Macmillan Government’s creation of the National Economic Development Council (NEDC) and the growth target of 4% for Britain. Partly in his sights was his former student, Richard Stone (by this time, the Leake Professor of Finance and Accounting at Cambridge) who, ‘to keep company with the other stargazers’, fed this nominated growth rate into his computable input-output model which formed part of the Cambridge Growth Project. It yielded a scientific prediction or belief that growth would be axiomatic. Clark felt that this type of planning fudged the fact

9 ‘Do We Need a Hundred Million People?’, The Director May 1965. 10 Unpublished draft ‘Economic policy’, 1969, Clark Papers, UQ.

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that there would always be disagreeable choices and limited resources to be faced. It also did not allow for technical change. In that vein, Stone’s ‘scientific diagnosis’ inquiry into Britain’s low growth rate disregarded politics, sociology and other pertinent economic factors. Overall, Clark (1963, 604) said that Stone’s model was too detailed, too rigid and too ambitious to generate meaningful results. Compounding the idealism, Clark thought, was the other ‘mystical belief’ that the likely rise in costs and prices within a growing economy could be contained by an incomes or wages policy. Clark was entirely sceptical about the efficacy of such a policy. Even the Soviet Union, with its fully planned economy and the iron fist of Stalin, Clark protested, had not been able to contain rising wage costs. The simple fact was that if Britain attempted to grow at a rate higher than was capable, then serious shortages of skilled labour would develop.11 One area where Clark did agree with the Wilson Government was on potential membership of the European Economic Community (EEC). In an essay on whether or not Britain should join the Community, written before negotiations broke down, Clark felt that the economic and industrial advantages of membership would be tangible, offering promise of a large and growing market and the realisation of scale economies. However, if Britain was allowed to join, her politicians and economists would see the risk of the ‘thoroughly bad’ Common Agricultural Policy at play and also the ‘Parkinsonian profusion’ of European officialdom within its federal structure (Clark et al. 1962, i). It also went against the Principle of Subsidiarity. In one review, Ian Bowen (1962) pointed out that there seemed to be two Colin Clarks at play here. One version was an English don who, on balance, seemed to be in favour of British engagement with the EEC for political and industrial reasons; the other was an Australian economist who wanted his adopted country exclusively to become an exporter of agricultural commodities, some of which would be debarred from Europe because of Common Agricultural Policy. Another source of social democratic thought that underpinned the Wilson Government was from J.K. Galbraith, who, in 1966, presented the BBC Reith Lectures. His earlier work The Affluent Society (1958) informed these lectures with the message that corporations rather than

11 ‘NEDC, Economics Out of the Hat’, British Industry, May 1965, Clark Papers, UQ.

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the market system dominated the economy.12 Corporations, Galbraith argued, not only determine prices but also decide what they wish to produce instead of finding out what consumers want. By using persuasive advertising, they can profitably dispose of the goods and services they have produced. As such, anti-trust regulation and competition policy was futile. Clark abhorred Galbraith’s imagery of a ‘new class’ of corporate planners and organisation men, working for huge companies and protected from foreign competition by tariffs. The latter aspect would stall genuine attempts at free enterprise in poorer countries. Clark regarded this as ‘a new depth of meanness in politics’ (Clark 1958). He also felt that this showed that Galbraith, like other American economists, did not realise that the days of national isolation were over; international trade and foreign competition also affected American firms. Overall, Clark welcomed Galbraith’s book as ‘a real contribution to economic theory’ and that his depiction about social imbalance was correct. However, he detested Galbraith’s aspiration to deal with the ‘public squalor’ by more public expenditure financed by raising sales tax. For his part, Galbraith welcomed these spirited exchanges with Clark, once telling him ‘Though not without difficulty I’ve managed over the years to persuade myself that one should not receive one’s instruction solely from people with whom one agrees. And I’ve always thought I found more instruction from you than from most.’13 It was debatable whether Clark entertained the same ambit. Despite his criticism of the Wilson Government leading up to the general election of 1970, Clark supported its re-election because Wilson had courageously gone ahead with unpopular measures such as devaluation and cutting the rate of growth in public expenditure.14 Wilson had also dumped the idea of economic planning. The same could not be said of the subsequent Heath Conservative Government (1970–1974) which engaged in a U-turn in economic policy and went for a ‘dash for growth’ with a reckless expansionary policy. If he had remained in Britain, Clark would have condemned such action. However, there would come a time, in the future, when he would be prepared, once again to cross oceans and advise British politicians.

12 ‘Prof. Galbraith’s Crazy Economics’, The Telegraph (London), 20 December 1966. 13 Galbraith to Clark, 17 June 1975, Clark Papers, UQ. 14 ‘Wilson Deserves to Win’, The Courier Mail (Brisbane), 1 June 1970.

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Life as an Oxford Fellow Life at Oxford in the 1960s was idyllic for Clark as he revisited his old haunts and enjoyed rambling through the countryside with his sons. His house in the hamlet of Boars Hill, some five kilometres southwest of Oxford was close to where Matthew Arnold had composed the poem ‘The Scholar Gipsy’ (1853), a tale about a poor Oxford student falling into league with gypsies. After nearly a decade at Oxford, Clark was elected a Fellow of Brasenose College, his alma mater, in October 1961. David Clark recalls that his father would leave the family home, resplendent in a dinner jacket, to spend the evening at the College, sometimes staying over.15 He enjoyed the trimmings of academic life, of High Table with the likes of the Camden Professor of Ancient History, Sir Ronald Syme, the legal scholar Barry Nicholas and the classicist and former Vice Principal of Brasenose, Maurice Platnauer. The Principal of Brasenose, at the time, was the economist Noel Hall, who had been recruited to serve under Lord Halifax in the British Embassy in Washington during World War Two, a position that Clark had declined to take. Hall was ‘a glorious name dropper … adept at public relations’ (Mordaunt Crook 2009, 387). On one celebrated occasion, in March 1964, he authorised the visit of the Beatles to Brasenose to dine with the Fellows in an effort to help a charitable foundation. It was arranged by Jeffrey Archer, then a student at the College. One might well imagine Clark making himself scarce that evening. Two younger dons who recalled Clark at the time were Gavin McCrone, Coge’s Tutor in Economics and later Fellow of the College, and Vernon Bogdanor, who was then a senior tutor in political science and later to become Acting Principal of Brasenose. Bogdanor found Clark a ‘sparkling conversationalist, congenial and friendly’ who often invited colleagues to lunch parties at his home.16 McCrone (1989) recalled how Clark’s mind engaged in flights of fantasy and thinking ‘outside the square’. He recalls how Clark ‘would shoot off surprising ideas around the dinner table very often in the form of rather abrupt conclusions without taking the trouble to explain how he had reached them… He had difficulty in distinguishing between the ideas which made sense and those 15 David Clark memoir of his father Colloquim on Colin Clark, Brasenose College, 2005. 16 Communication with Vernon Bogdanor, August 2018.

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which did not. He was not a practical man, and this must on occasion have led the College Bursar to despair of his intervention on financial matters at College meetings’ (McCrone 1989). At High Table, ‘[h]e would question colleagues closely about their subjects, revealing that he knew things about it which they did not and then suddenly jump to some conclusion which they did not understand’. When he eventually left Oxford, his biggest regret was leaving behind the conversations at High Table. There was also the influence of Max Beloff, Fellow of All Souls College and Gladstone Professor of Government and Public Administration at Oxford. Inspired by the American tradition of an independent university, he and Clark would later engage in a collective effort with forty other academics to establish Britain’s first independent tertiary institution, the University of Buckingham. Clark was opposed to the massive expansion of the university sector as set out in the Robbins Report on Higher Education (1963), including the proposal that colleges of advanced education be transformed into universities. He told A.L. Rowse that Robbins had been ‘a malign influence’ in promoting the enlargement of the university sector.17 This was not elitism but rather a consequence of Clark’s innermost belief that funding higher education was yet another form of middle class welfare foisted upon the great body of taxpayers, many of whom would never dream of attending university (Clark 1968). He was concerned that welfare spending was already exceeding the economic growth rate with much of the public revenue obtained from taxing low-income families. One area Clark (1968, 25) nominated where government outlays could be reversed was funding for higher education. Clark had always been scathing about the positive externalities of university education. He had first expressed these misgivings in the 1950s noting that expanding tertiary education would create ‘an intellectual proletariat’ of educated and politicised but idle graduates, all at the expense of the public purse (Clark 1950a, 40). He was one of the first to propose that universities should, under a student loans scheme, charge fees based on the actual costs of teaching a subject (Clark 1950b). Until his dying days, Clark always envisaged a smaller tertiary education sector, one less wasteful of public monies expended upon churning out a multitude of arts graduates. But ever the contrarian, he proposed

17 Clark to Rowse, 20 January 1975, Clark Papers, UQ.

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that men should be given preference over women in university places since the latter’s career path was bound to be interrupted by raising a family.

References Aukrust, O. 1959, ‘Investment and Economic Growth’, Productivity Measurement Review, 16: 35–53. Boianovsky, M. and K. Hoover, 2014, ‘“In the Kingdom of Solovia”: The Rise of Growth Economics at MIT, 1956–70’, History of Political Economy, 46 Supplement 1: 198–228. Bowen, I. 1962, ‘Review of British Trade in the Common Market’, Australian Quarterly, 34(4): 99–102. Clark, C. 1950a, ‘Educational and Vocational Training’, Twentieth Century, 5(1): 39–48. Clark, C. 1950b, ‘Higher Education in Australia: The Problems’, Twentieth Century, 4(3): 16–34. Clark, C. 1958, ‘The Horrible Proposals of Mr. Galbraith’, National Review, 11 October, 238. Clark, C. 1961, Growthmanship: A Study of the Mythology of Investment. London: Institute of Economic Affairs. Clark, C. 1963, ‘Review of a Programme for Growth’, Journal of the Royal Statistical Society, 126(4): 603–604. Clark, C. 1968, ‘An Unorthodox Proposal: University Education in the Welfare State’, Encounter, 30(5): 24–29. Clark, C. 1973, The Myth of Over-Population. Melbourne: Advocate Press. Clark, C. 1978, ‘Australia’s Wrong Turnings’, Quadrant, 12(12): 5–10. Clark. C. 1964 (1970), Taxmanship. London: Institute of Economic Affairs. Clark, C., H. Frankel and L. Moore, 1962, British Trade in the Common Market. London: Stevens and Sons. Davies, A. 1964, ‘New Taxes for Old’, Investors Chronicle, July 17, 256–257. Gordon, D. 2010, Strictly Confidential: The Private Volker Funds Memos of Murray N. Rothbard. Alabama: Ludwig von Mises Institute. Kuznets, S. 1964. Postwar Economic Growth. Boston: Harvard University Press. Maddison, A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. McCrone, G. 1989, ‘Obituary of Colin Clark’, The Brazen Nose, A College Magazine, 24: 69–70. Mordaunt Crook, J. 2009, Brasenose: The Biography of a College. Oxford: Oxford University Press. Shonfield. A. 1961, ‘Alternatives to Backwardness; Thoughts from Poona’, Encounter, December.

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Thirlwall, A.P. 2002, ‘Foreword’, in J. McCombie et al. (eds.) Productivity Growth and Economic Performance. London: Palgrave: x–xi. Tomlinson, J. 2005, ‘Managing the Economy, Managing the People Britain 1931–70’, Economic History Review, 58(3): 555–585. Verdoorn, P.J. (1949), ‘Factors That Determine the Growth of Labour Productivity’, in Ironmonger, Perkins and Van Hoa (eds.) 1988, 199–207.

CHAPTER 15

The Grand Soothsayer

Introduction Before 1945 it was often feared that the post-war years would be a period of economic depression, with even the likes of Paul Samuelson expressing such concern. Clark knew otherwise, having predicted that the post-war global economy would be marked by capital shortage. Since 1945, the developed economies grew at an unprecedented rate and in synchronised fashion. However, decolonisation and the establishment of new independent states soon turned the world’s focus to what the French demographer and sociologist, Alfred Sauvy, called ‘The Third World’. In the same year that Sauvy coined the phrase, Lord Boyd Orr (1950, 11), the first Director-General of the Food and Agriculture Organisation (FAO), announced that ‘a lifetime of malnutrition and actual hunger is the lot of at least two-thirds of mankind’. At the time the world population was 2.5 billion. Boyd Orr had an interest in malnutrition, especially the relationship between poverty and hunger. He first became interested in the subject during the interwar years when the cause became hunger in the midst of plenty. Boyd Orr grandly moved on to the world stage becoming the first Director-General of the FAO in 1945. The man who would publicly debunk Boyd Orr’s dystopian gloom was Clark. The revelation about the true state of the world’s food supplies reminded Clark of the maxim of © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_15

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the American satirist, Artemis Ward; ‘It ain’t so much the things we don’t know that get us into trouble. It’s the things we know that ain’t so’. In the 1960 s, he would write two significant books on population and development that would diminish fears about the consequence of population growth during the twentieth century.

Development Economics In 1984 Clark was recognised by the World Bank as one of first ten pioneers in development economics. He found himself alongside illustrious contemporaries such as Albert Hirschman, Gunnar Myrdal, Jan Tinbergen, Walt Rostow, Peter Bauer and Sir Arthur Lewis. However, the ceremony where Clark was honoured was marred by some embarrassment. Helen Hughes, the senior Australian economist at the World Bank, who chaired the occasion, reminded Clark of the chauvinist he had been when he had visited University of Queensland some 20 years earlier. Hughes, then a young lecturer at the Department of Economics, was upset when Clark upbraided her for neglecting her children and taking a man’s job. Clark took the censure with good grace (Lodewijks 2007, 437). Even before he took his Oxford position, Clark had been one of the first economists to write on comparative economic development (Arndt 2000b). To that end, Rostow (1990, 387–389) identified several unique contributions made by Clark as a development economist. They can be summarised as: first, increasing returns and the public sector’s role in economic development; second, the stages of agricultural productivity and rural-urban migration of labour; and, third, how population growth was a boon in promoting an increase in real income per capita. He also advanced hypotheses about subjects such as the determinants of investment, the fiscal limitations of taxation, short and long-term economic cycles as well as trends in relative prices and the terms-of-trade. However, Rostow overlooked Clark’s work on transport and land use, on how the revolutions in land transport from the eighteenth century onward had overturned agricultural and industrial practices and urban development. For instance, the arrival of the railways meant that big cities could now have a greater concentration of industry than before. At a practical level, Clark was one of the first economists to have undertaken field work in the developing countries.

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One of Clark’s first public duties as Director of the AERI was to give the eleventh Montague Burton Lecture on International Relations, at the University of Leeds. This lecture continued his interest in considering economic development on a global scale. He chose as his topic ‘The Have and the Have-not Countries’, using his International Unit of measurement to separate out developed from developing countries. Clark (1950a) had already done a similar exercise in an obscure journal article with an article entitled ‘Economic Life in the Twentieth Century’. One finding from the Burton address was that economic progress could only be measured by taking a long-term perspective and that differences in natural resources account for very little in comparison with differences in human effort. Geographical position, transport and communications were also important in determining economic progress. The two main messages from his lecture were that economic development can only come from slow and gradual growth over a long period and that economic progress could easily be diverted by wayward policies. While Clark dismissed notions, then fashionable, that rich countries had created poverty within the poorer countries, he did, however, condemn Western indifference towards the latter. Clark felt that underdeveloped countries needed help to prevent them from becoming resentful of Western countries. In this respect Clark did not just mean the expertise from visits of overseas experts but flows of capital as well. To that end, he proposed a new international treaty whereby all the rich countries would pledge to maintain a steady flow of capital to the have-not countries. The latter, in turn, would pledge two things: first, to keep their currencies readily convertible; and second, not to resort to seizing the assets of foreigners. Clark proposed an international bank, similar to that which Keynes had envisaged at Bretton Woods, financed by the rich countries that all had a lending quota to fulfil. Clark’s work at the Institute, especially in the 1960s, focused on issues such as agricultural economic development, land reform, the global supply of farm products, population growth and the prospects for developing countries. The results of his research would again thrust him into the international spotlight, not as a Jeremiah but as a credible optimist amidst a sea of pessimism. There was a long antecedence to his views on development and defeating global hunger.

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The Balance Between Global Population and Food Supply As we discovered, since 1935 Clark had been studying the agricultural productivity and food consumption patterns of poor and rich nations alike; in his capstone work, Conditions he began to realise that that there was enormous potential for labour productivity within agriculture. His trips to the new settler lands of New Zealand and Australia reminded him of the potential of major food exporting countries. He would lead the crusade against the post-war neo-Malthusians over their pessimism about food and resources, arguing that this was in defiance of increasing returns and improvements in agricultural technology. Clark turned Malthus’s key prophecy, about food supplies being overtaken by population growth, on its head by arguing that a greater population put pressure on farmers to improve their production technology which, in turn, lifted agricultural output. He insisted that only Ireland and Bangladesh had, in modern times, seen the Malthusian devil of ‘vice and misery’ at play, and only because external imperial powers had blocked their natural course of development (Clark 1973, 95). Malthus and his followers never contemplated the promise of increasing returns, of how agricultural land could be refreshed each year with fertilisers and how this was quite compatible with larger populations. Similarly, manufacturing and transport take place under conditions of increasing returns. In short, Clark argued that the fabric of human history was not as the neo-Malthusians had anticipated. It was Clark’s work on food production and its relation to population growth, together with his positive view of the world’s reserves of resources, which marked him out as a populationist. If there had been a post-war ‘population explosion’ as the American demographer and sociologist Kingsley Davis proclaimed, Clark could contend that there had also surely been a far greater ‘wealth explosion’.1 Such optimism did not spring from his religious beliefs; he could support his position with a welter of statistics and draw on the weight of economic history to back his

1 ‘Agricultural Production Advancing Faster Than Population’, The Boston Evening Globe, 30 September 1969.

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position.2 Technology and economic progress, he argued, were turning in mankind’s favour. Even a country with dire economic prospects could turn its situation around. India began to secure meaningful economic progress, including an increase in agricultural production despite several policy blunders. Chastened by India’s economic performance, and other statistics he had gathered measuring economic progress, Clark ensured that the preface to the second edition of Conditions (1951) discussed how scale economies were more apparent than decreasing returns in most spheres of economic activity from agriculture to industry. The influence of Allyn Young, and of a more uplifting vision of economics in terms of resources and productivity, became apparent; economics was no longer the dismal science. Even in cases where diminishing returns and static productivity threatened starvation, Clark argued how human history showed that when societies were confronted with population pressures, the hold of conservative agrarian interests could be broken by technical improvements that led to increased output. Those countries that did not respond to the population challenge would sink into a condition of rural overpopulation and subsistence. Channelling the historian, Arnold Toynbee’s ‘challenge and response’ interpretation of history, Clark argued that unequivocal increases in population forced societies to adopt technically more efficient production techniques in order to feed more mouths. The key point was that, contra Malthus, the increase in output kept ahead of population growth. Clark (1967) did not deny that technological changes in agriculture were, in initial stages, a disagreeable and difficult process and also socially disruptive. Most of the techniques that brought the agricultural revolution had already been known but were only resorted to once population growth occurred. Before population pressures arose, tribal societies with low population densities were content to subsist on a ‘cut and burn’ handcultivation with low and short-lived yields. This form of agriculture using was practised over a large part of the world. Mankind, Clark argued, was inherently lazy and conservative until forced by an increase in population density to make productive improvements (Clark 1973, 86). He was delighted to find some passages in Malthus (1817) which lent support: ‘If it were possible for each married couple to limit by a wish the number of their children, there is certainly 2 Clark to Secretary, International Justice and Peace Commission, 18 September 1973, Clark Papers, UQ.

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reason to fear that the indolence of the human race would be greatly increased; and that neither the population of individual countries, nor of the whole Earth, would ever reach its proper and natural extent’. In the annals of economic history Clark had found evidence of this phenomenon of population as a spur to growth, from the ancient Greeks, the Dutch in the seventeenth century and the Meiji restoration in nineteenth century Japan. The ancient Greeks had overcome the problem of their population outrunning their agricultural resources through diversification and trade expansion. The Japanese managed to increase agricultural and fisheries output faster than the rate of increase in population by developing a new strain of rice, using fertilisers and by the motorisation of their fishing fleet. They also implemented reforms in governance and education, not least about new agricultural methods. The effort to pioneer through agricultural and industrial improvements was, though, difficult for any society undergoing such change. Countries that outran their agricultural resources, such as Britain in the nineteenth century, could industrialise and import foodstuffs in exchange for manufactures as long as they had the necessary technical ability, a large population and a good transport network. Delving back into the realm of conjecture, Clark pondered the ‘What if’ question. Had the authorities listened to Malthus and his theoretical ‘Laws of Population’, Britain would have restricted her population growth and remained a small, insulated, agrarian-based economy. There would have been no industrial revolution since the economics of large-scale industry demanded a large market and a viable transportation network; these improvements came only with a large and growing population. Such bulges in population growth, he argued, triggered profound economic change. In his address at the 1949 UNSCCUR Clark boldly proclaimed that the Earth could cope with a rising population if there was a sharp and sustained rise in the price of farm products relative to manufactures; it would come with a commensurate rise in the status of agriculture. His projections were dependent on several conditions, the most important of which was that the rural labour force did not markedly decline. But here was a blind spot in Clark’s analysis; he could not see, as aforementioned, the massive increase in agricultural productivity that would soon unfold with labour-saving mechanisation and better knowledge. Other evidence was given at the UNSCCUR about advances in scientific agriculture that meant increased yields but only if the land was cultivable. For the

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moment, Clark (1950b, 34) blamed the looming world food shortfall on labour shortages rather than diminishing returns or scarcity of cultivable land. He was concerned that the drift of workers to the big cities, aided and abetted by better transport and communication links, would denude the farm sector of labour. Ill-advised industrialisation policies in developing countries and in food-exporting countries was making the global food shortage more serious. The 1952 Paley Report, commissioned by President Truman to examine the likelihood of any shortage of raw materials affecting America and the rest of the world, concluded that most resources were in adequate supply at existing prices. Clark (1954a) took heart from the optimistic tone of the report, especially that, given the ingenuity of engineers and chemists, substitution possibilities would be forthcoming. He argued, though, that the projected decline of the United States rural work force meant increasing imports of farm products. This could be averted only by raising food prices and encouraging new migrants to settle in rural areas. In contrast with conventional economic opinion, Clark (1954a, 272) argued that it was the decline in the rural labour force that determined the rate of mechanisation of agriculture, not vice versa. In other words, he still saw farm production as still quite labour-intensive. Rising incomes meant an increase in demand for food but he initially over-estimated the strength of that demand. The only recourse, then, was higher prices for agricultural produce, which would give those working on the land a stronger incentive to stay. It also meant that food-exporting countries would gain from a favourable term of trade. Besides the sparsely settled lands of Australia, New Zealand and North America Clark foresaw plenty of cultivable land in Africa and Latin America but that this would need huge amounts of capital, spent on roads and transport links, to end isolation and bring these lands into production. The problem here was that, following the end of the Second World War, international capital available to develop such acreage was relatively scarce. Clark wanted the West to supply that capital and, moreover, to open their domestic markets to agricultural exports from poorer countries. He concluded that, for those developing countries output would keep pace with population though he contemplated that the elasticity of supply would, in the short run, be limited. However, as food prices rose and the drift of people to the big cities slowed, there would be a stronger supply response.

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From the 1950s Clark took the line, following Kuznets, that developing countries with the fastest growth in population and labour force had, on average, the highest rate of production per head; the very opposite of what Malthusian theory predicted (Clark 1953). He later qualified this by saying that agricultural production per head was far greater in developed countries, such as Canada and the United States, than in developing countries. However, these figures applied before new strains of high-yielding rice and wheat had been introduced. In any case, Clark observed that instances of rapid population growth were quite rare in history and areas of excessive population density rare; the more usual pattern was one of stationary or modest growth. In other words, mankind’s capacity to bear children had not changed over the ages, it was just that the mortality rate had been far higher in the past. Only now, in the post-war period, had the world entered a period of rapid population growth induced by a huge fall in the death rate. And, to repeat, instances of rapid population growth acted as a stimulus, not only for economic growth, but for overall cultural improvement as well. Moreover, the more industrialised a country became, the greater the economic benefit which it would derive from population growth. A free market economy was unlikely to exist in a sparsely populated country (Clark 1967, 274). Clark did admit that, in special circumstances, population growth was less important for certain developed economies. For example, Switzerland or Sweden, despite small populations, secured the advantages of large-scale production by producing specialised goods for export to global markets. In short, Clark believed that the physical and technical potential of world agricultural systems, following the adoption of more appropriate policy and techniques, would provide a good diet for present and future populations. Clark (1953) discussed the power of increasing returns in a paper in the International Labour Review, which showed how the principle of diminishing marginal returns was much misunderstood in economics discourse: ‘It certainly does not mean that the returns from agriculture, or any other economic activity, diminish from year to year’. The law of diminishing marginal returns was not a universally applicable law of nature, he argued; it only applied if two further conditions were fulfilled. First, where the inhabitants of a densely populated area do not use different farming methods from those of less densely settled areas and, second, that they do not employ any more capital per head. These two conditions, he argued,

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meant that the law of diminishing marginal returns would have only limited application because progressive societies would use more efficient methods and more capital when confronted by population increasing relative to a fixed supply of agricultural land. Clark (1953) then went on to show empirically the density of settlement and average product per head for 26 countries. He found that the densities of settlement in Denmark and Soviet Russia were identical but that the product per worker in Denmark was five times greater than of its Russian counterpart. Comparing India and Italy, both of which had 30 persons engaged in agriculture per square kilometre of cultivable land, Clark (1953) found that the Italian cultivator produced twice as much as his Indian counterpart. If the Indian cultivator could ideally copy the ‘simple’ techniques of the Italian farmer he would, within a few years, be twice as well off. In short, where cultivable land was available, immense improvements in agricultural productivity were possible as long as there was dissemination of education, fertilisers, technical knowledge and capital equipment. Some would say that Clark was overlooking how difficult it would be for developing countries to have the means to assemble inputs like machinery, fertiliser, transport and technical knowledge (Bhattacharya 1971). In the third edition of Conditions , Clark (1957, 324) argued that it was the moral duty of rich countries to expedite this process through capital transfers. If they refused to help the poor countries with fertiliser, transport and the like the world would soon see diminishing returns return in dramatic fashion. Clark marvelled at the productive potential of fertilisers and how, for example, these allowed Dutch farmers to become the most productive in the world; he even flippantly insisted that fertilisers could work adequately without much water (Dhawan 1968). Fertiliser was, as J.K. Galbraith memorably described it, ‘a land substitute’, yet Clark was often perplexed at how reluctant Indian farmers, for example, were to use it. He had told agronomists that the application of nitrogen to lower nutrient Indian soils represented the best investment in the world. Another way of looking at it was that the price of one ton of fertiliser was only two-thirds the price of one ton of grain. When an alleged world-wide shortage of fertilisers in 1974 proved to be pure fiction, it dawned on Clark that powerful Indian farming interests were concerned that more abundant application of fertiliser would induce a fall in grain prices (Higgins 1989, 306).

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Citing Danish data, Clark (1953) showed that ten men working per square kilometre could feed 200 people. If there were no net import or export of farm products, Clark estimated that Denmark still had to keep around 12% of its labour force in agriculture. If all of Europe was as closely settled as Denmark, 700 million people could obtain all their food supplies from that one source. The catch was that poorer countries would require transport, communications and fertiliser supplied or paid for by the West; otherwise diminishing returns would set in. The 1953 paper was also notable for Clark’s criticisms of neoMalthusians as propagandists. He noted that those who argued on a purely scientific basis had no knowledge about population and those who did understand demography ‘seem to be almost universally uninformed about economics’ (Clark 1953, 100). The neo-Malthusian view that children should be borne only if they were economically sustainable took away the right of adults to bear children. Bringing up children was relatively inexpensive if housing and food were adequate by local standards, so children represented no great cost and became economic assets at harvest time. Another strong incentive for having children was the absence of a social welfare net, with children caring for parents in old age. It was only when children’s economic and social advancement depended on education and inheritance that the desire for family limitation first appears. In short, Clark argued people would limit the size of their families when they had a clear motive to do so. In March 1954 Clark was invited back to the Royal Statistical Society to present a lecture about world food supply, future production potential and the quest to measure output adequately. In a technical, terse paper full of facts and figures, Clark looked at the likely real output and consumption of farm products in per capita terms for advanced and middling income countries. As in the first edition of Conditions he found enormous differences in agricultural productivity whether measured by per man or per hectare (Clark 1954b, 292). When asked by Arthur Lewis and others about what to do when all the cultivable land was in use, Clark replied that this depended on the productivity of the land and how much was needed to support one person. He cited the example of the Netherlands where one acre, or 0.4 of a hectare, could support one person because that country’s high rate of fertiliser use made the soil highly productive. The point was simple: if other countries could imitate efficient Dutch farming methods on the world’s available land, this would provide an abundant,

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varied diet for the world’s population many times over. Citing the productivity of Japanese rice farmers using fertiliser and higher-yielding strains of rice, Clark (1954b) noted that if her farmers could copy their efforts, India, too, could feed its people.

Food Wars: Taking on the FAO Lord Boyd Orr’s claim that rising population was placing pressure on the world’s ability to feed its people stole the public imagination as much as the hysteria over the march of communism. Colin Clark called it ‘the most incorrect statement of human history’, misinformation spread by farm lobbyists, scientists and theologians alike.3 Boyd Orr’s statement hinted at the need for some sinister form of population control; something that Clark (1970b, 1973) abhorred given his innate belief that population growth was a spur to economic growth. Clark’s optimism about the balance between world population and the world’s resources was vindicated in 1954 when it was revealed that Boyd Orr had misread FAO data, on average calorie requirements per head for all nations, by confusing maximums and minimums of calories. The error was revealed by M.K. Bennett (1954, 189), Director of the Food Research Institute at Stanford University. Knowing Boyd Orr to be casual about statistical accuracy, Clark recalled correcting some of his work for the Ministry of Agriculture in the 1930 s showing that 10% of the British population was seriously malnourished and another 50% deficient in calcium. It was the first time a scientific effort had been made to define a nutritionally-adequate diet and drew attention to the connection between economics and health.4 Despite doubts about the veracity of Boyd Orr’s predictions, the FAO continued to trade upon them. Clark made merry with a line from The Economist that sardonically described the FAO as a ‘permanent institution devoted to proving that there is not enough food in the world’.5 Over a 20-year period, he doggedly criticised the FAO’s estimates of food requirements per head and the extent of world hunger which, he

3 B. Johns, ‘How Australia Can Aid World’s Hungry’, Sydney Morning Herald, 16 September 1967. 4 R. Crow, ‘Hunger and Colin Clark’, Tribune (Sydney), 15 July 1970. 5 The Economist, 23 August 1952.

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argued, had been prepared to suit their own purposes (Clark 1970a, 30). He was further astounded to hear FAO officials say that they sometimes made statements about the extent of world hunger first and then gathered evidence to support it. He first confronted FAO officials about their claim, in their 1952 World Food Survey, that half of the world’s population was ‘malnourished’, a finding based on applying the dietary standards of French and British citizens who derived at least one-third of their calorie intake from animal products, vegetables, fruit, fats and oils. Clark insisted that this was irrational since these calorie standards indicated over-nutrition. Indeed, it was later found by physiologists that diets, rich in animal fats, caused early deaths. Addressing the thirtieth British Liberal Summer School in 1956, Clark repudiated the prophets of doom who, he said, showed a complete lack of awareness of ‘the simplest facts of geography and agriculture’ and of ‘the extraordinary rapidity’ with which scarce materials and fibres could be replaced by substitutes.6 By 1957 the FAO had changed its tune, now claiming that half of the population in the developing world (as distinct from the entire world) was malnourished. When the FAO persisted with bleak statistics it was exposed to further ridicule by the Australian anthropologist, Margaret McArthur (1964) who showed that, if its world standard of 2,300 calories per day was correct, then 20% of the Japanese population was starving and the Chinese population utterly famished. It was only then that the FAO revised its statistics, admitting that only about 10–15% of the world’s population was hungry. However, when the figures included those they considered malnourished, the final statistic was a figure of between one-third to one-half of the world’s population (Sukhatme 1961). Despite Clark’s objections, the FAO’s claims about malnutrition and hunger made for a great public relations success and took in many leading political figures. Clark argued the organisation spread this misinformation about widespread malnutrition to give support to Western farmers who wanted higher support prices to produce large, uneconomical surpluses of grains all in the name of preventing world hunger.

6 ‘Enough Food to Go Round’, The Manchester Guardian, 4 August 1956.

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If one took into account that the income elasticity of demand for food was low in developed economies and tended to be overstated for poorer countries, the world average income elasticity demand for food was lower than previously thought. It meant that once developing countries got their agricultural systems working commercially with more farm product being marketed they were likely to face low international prices.7 In its publications, the FAO described malnutrition as denoting an inadequacy of certain essential nutrients without actually stating what they were. Using his scientific background, Clark familiarised himself with the medical literature about physiology and nutritional requirements. He discovered that physiology was an even more inexact science than economics; earlier estimates of world hunger had been premised on physiological doctrines about vitamins and mineral malnutrition which later needed to be revised. For instance, in the 1960s Clark wrote that a large amount of fat in the average diet from dairy foods, once highly prized, was now deemed to be harmful and that the amount of animal protein was less than optimal. He questioned the belief that there was a supposed shortage of calcium in British diets; a belief that had resulted in the subsidisation of milk for British schoolchildren.8 While Asian and African diets were once mostly based on cereals, Clark argued that it was wrong to conclude that they were inadequate for good health. Diets which were protein-deficient could be easily remedied by enriched diets provided by staple foods and dried milk (Clark and Haswell 1964, 7). In other cases, he observed diets that were not protein-deficient but lacked sufficient calories and carbohydrates to assimilate that protein in their diets. Simply put, the standards for nutrition had changed since 1930s and 1940s. The FAO later moved to concede that no standard calorie requirement for full nutrition was reliable given advances in physiological science. Calories provided the energy for bodily activity while protein was needed to perform vital maintenance work on the human body. A sustainable diet also depended on climate, average body weight, the number of children within a population, the exertion of work and differing calorie requirements; calorie requirements for an Asian population were 25% lower than they were for Europeans. Some economists,

7 ‘Poor Nations Getting Poorer’, The Courier Mail (Brisbane), 10 September 1970. 8 ‘Wild Claims on Diet’, The Courier Mail (Brisbane), 29 April 1978.

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such as Peter McCawley of the ANU, were incensed that Clark was arguing that smaller-framed Asians could survive on smaller ration of calories each day; scientific evidence would later be mounted that people living in hotter climates need more food to perform manual work (Bhattacharya 1971). Critics pointed out that Clark had committed just as many statistical misrepresentations about the dietary needs required for human activity as had the FAO. It must be understood that Clark never claimed the world was free from malnutrition; indeed, people living dependent on root crops were likely to suffer from protein deficiency. He believed that the bulk of that malnutrition was in China, where figures were suppressed, while in India, malnutrition, even in the 1970s, could be as high as 25%, especially among children. In either case, the problem was caused by political and distribution hurdles, not resource constraints. Clark considered that communism and collectivisation were largely to blame for the hunger and malnutrition in China; in India he felt that the caste system was to blame. To deal with the Indian emergency, Clark (1972b) proposed lifting the minimum wage and adopting a cheap food policy thereby resisting support prices for local farmers.9 He also identified poor distribution and governance as the cause of malnutrition in Pakistan and Indonesia. In 1971, W.H. Pawley, Head of the Policy Committee of the FAO, tried to put an end to the disagreement about potential food supplies, nutrition and the true extent of world hunger. In an address to Scandinavian economists, he stated that it was time to end the argument that the world’s inability to provide cereals as justification for limiting population growth. Previous attempts to make any estimate were ‘dangerous’ because they provide ‘a satisfying diversion to those like Colin Clarke (sic) who for theological reasons wish to deny the whole problem and have no trouble proving it is difficult to place limits on capacity to produce food’ (Pawley 1971, 15). Clark was fond of repeating this quote though always omitting the phrase ‘for theological reasons.’ This backhanded compliment about his work came after he had pestered the new FAO Director-General, Dr Boerma, to substantiate his 1969 statement that about ‘half of the inhabitants of developing countries were still malnourished’.10

9 ‘Extent of Hunger in India’, Economic and Political Weekly, 7(40) September 1972,

30. 10 Clark to Boerma, 10 March 1969, Clark Papers, UQ.

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In his 1971 conference paper, Pawley admitted that, in the following 100 years, world food production could easily be increased to 50 times its present level even with existing technology (Clark 1972a, 35). This startling admission did not take into account further advances in agricultural science and technology. Pawley’s comment was consistent with a report on possible cultivable land prepared by geographers and agricultural scientists for the US President’s Scientific Advisory Committee in 1967. This found that, taking both soil and climate into account, the world’s potential farmland, with multiple cropping, was over nine billion hectares. Clark calculated that this could feed 36 billion people with a quarter of a hectare of agricultural land per person; one agricultural worker could feed 30 people (Clark 1970a).

The Crusade Against Neo-Malthusianism In his onslaught against neo-Malthusianism, Clark drew strength from attending the first UN World Population Conference, held in Rome in 1954. Some 400 scientists, theologians, statisticians, and population experts gathered to discuss issues such as population planning. Clark noted that it was only the American and British delegates who were advocating contraception as a solution to high birth rates in the poorer countries, much to the amusement of delegates from developing countries.11 He mused that those holding the neo-Malthusian view were likely to advocate protectionism and isolationism. Another comic twist was the godless communists from the Soviet Union shared opposition to artificial contraception along with the Catholic Church. One interesting line of thought came from Sir Dudley Stamp, professor of geography at the University of London, who pointed out that the world was only using one-third of its arable land and that most of this was being used inefficiently.12 While Gunnar Myrdal was the centre of attention at the conference it was the French delegation and their leader, Alfred Sauvy that intrigued Clark. Sauvy headed the French Institute for Demographic Studies in Paris and was acknowledged as a leader in demography.13 He and his

11 ‘Malthusians in Retreat’, The Advocate (Melbourne), 14 October 1954. 12 ‘Families and Famine’, The Sunday Times, 6 March 1955. 13 ‘Malthusians in Retreat’, The Tablet, 25 September 1954.

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countrymen had long regretted that France had followed Malthus by practising a policy of family limitation since the early nineteenth century that had sapped the country’s vigour. French philosophers called this ‘le malthusianisme économique’ to explain her flagging economic fortunes (Clark 1960a). Clark drew attention to the fact that France had hardly become wealthy from doing so. Put simply, if population limitation was the key to economic progress then France should have become the wealthiest country on Earth. Indeed, the agricultural improvement and subsequent industrialisation of her near neighbours, Holland, Germany and Britain, were provoked by population pressures while France lagged behind because her peasants had no incentive to improve farming methods or seek industrial employment. In his work Richesse et Population? (1943), which was published during the period of the Vichy regime, Sauvy developed a sociological argument that would explain the post-war inflation; it delighted Clark because it also underpinned his argument about there being an economic limit to taxation especially when set against a stationary population. Sauvy argued that every country built up ‘overheads’ which do not vary proportionately with current output; with a stationary population these charges rise relative to the size of output.14 Once taxation rose beyond 25% of net national income (or 23% of Gross National Product) inflation ensues. According to Sauvy, this was because it set off a sociological reaction or ‘the revolt of the young’. When the rate of population growth slowed, it meant there was a larger proportion of older people to provide for; the young would shake off the claims imposed upon them through inflation and devaluation.15 Clark adopted this view right up to his last paper, arguing that it was one of the underlying reasons for inflation. Sauvy dismissed arguments against population pressure saying that ‘all forecasts about the economic effects of population increase have been falsified by events’ (cited in Tabah 1991, 354). By 1960, Clark declared that advocates of population limitation could no longer base their argument on a present or prospective shortage of food.16 While economists such as Albert Hirschman, Milton Friedman, Roy Harrod, Arthur Lewis,

14 Clark to Harrod, 11 April 1947, RES, LSE. 15 Colin Clark, ‘Do Population and Freedom Grow Together?’, Fortune, December

1960. 16 ‘Population and Food’, The Tablet (London), 1960.

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Paul Streeten, Peter Bauer, Basil Yamey and Simon Kuznets all supported a positive causal relationship between population growth and economic development, Clark’s advocacy had been the most strident. Moreover, he and Marjorie had made a personal investment in this belief, with a large family of their own. He brazenly told Friedman that ‘those who bring up large families should be excused most or all taxation. They have made their contribution to the State already … It is clear from historical evidence that the greatest occasions of both the economic and cultural advancement of mankind have been in times of rapidly increasing population. In times of stationary population, opportunities shrink, competition tends to shrink in all spheres, and society to stagnate’.17 Conversely, he argued that those parents who limited the size of their families were weakening their country’s political and economic future. Pointing to the decline in the American birth rate in the 1960s, Clark believed that, to have influence and power, countries needed to have a large and growing population (Clark 1969). Clark drew support for this view by marshalling arguments and theorems from other scholars. The first of these was the work of Everett Hagen of the Massachusetts Institute of Technology. Before a conference in 1953 hosted by the International Association for Research in Wealth and Income, Hagen argued that every country had to make big public investments in infrastructure and that population growth ‘absolves a country from its economic errors’, especially in capital investment. He meant that the misplaced investment could be quickly utilised elsewhere in the form of ‘indivisibilities’, especially transport infrastructure, but only if a country had a rising population. Put simply, population growth, ceteris paribus, requires less social capital per unit of production than in countries with static populations. Hagen’s paper which was published much later, suggested that the net stock of capital did not have to increase in the same proportion as population as previously thought (Hagen 1959). Another argument in favour of population growth was that a rising proportion of working men and women would mobilise a greater pool of savings. Clark cited the case of India where saving had risen from 5% of net national income in the early 1950s to 9%. This lent proof to the Modigliani-Brumberg theory that a growing population increases the rate of saving. Conversely, a country which reduced its population growth

17 Clark to Friedman, 9 April 1954, Clark Papers, UQ.

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rate would soon have an increased ratio of elderly to young people, with the average pensioner consuming proportionately more than the average child. Further support for the rejection of Malthusianism would come from the Danish economist Ester Boserup (1965), who showed how traditional agricultural systems change when a growing population interacts with agricultural methods and property relationships; farmers improved their production techniques by intensification, that is, by multi-cropping, and using more labour and ingenuity to increase production. Interestingly. Clark and a colleague from the Institute, Margaret Haswell, had touched upon this same population-push theory of innovation the year before to which we now turn.

The Economics of Subsistence Agriculture (1964) Over Easter 1964, a group of distinguished British economists gathered at Manchester University to discuss the state of knowledge in the teaching of economic development. The conference had been sparked by a controversial paper the year before by Dudley Seers in which he doubted whether Western economics had much to offer in eliminating Third World poverty. Clark certainly agreed, stressing that his research with Margaret Haswell which was just about to be published had uncovered ‘some reasonably stable and concrete relationships existed in subsistence economics’ (cited in Martin and Knapp 1967, 176). Clark had lamented how political leaders in developing countries neglected agriculture in their drive towards industrialisation; the incomes of farmers were reduced by export taxes and price controls designed to keep the price of food low in the cities. Clark told the delegates that his work on subsistence agriculture had rediscovered the work of the Dutch economist E. de Vries; his fieldwork in Indonesia had revealed that, in subsistence agricultural societies, production and population tended to grow proportionately. Clark told the gathering that his own findings in the economics of subsistence agriculture had now made him an ‘absolute and dogmatic physiocrat’ in that the agricultural sector had an important role to play in economic development (Martin and Knapp 1967, 177). Much of the world’s population, he argued, was engaged in subsistence or shifting agriculture devoted to producing just enough food for their families. The trigger for a switch to a more commercial agriculture, including newer productive techniques, was population pressure.

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The rate at which workers left the agricultural sector could be reduced to a logarithmic function of agricultural productivity, the exception being countries with mineral and forest resources that could be exported. Only rising agricultural productivity would allow countries to earn the foreign exchange needed for economic development and to feed an urban workforce. Apart from improving the productivity of the land it was high transportation costs, rather than lack of land, education or fertilisers which locked the world’s isolated regions into subsistence agriculture. Better transport, as simple as a road, would make marginal returns to agricultural investment more remunerative. It was ‘the first duty of economists’, Clark declared, to advise developing countries about the importance of good transport, markets and remunerative prices (cited in Martin and Knapp 1967, 178). Clark also told the Manchester gathering that when Asian farmers received more income, they did not follow the traditional pattern of an improved diet, which was the case in Europe during the nineteenth century, but spent it on consumer goods and education for their children thus denying the thought that they were malnourished. The Economics of Subsistence Agriculture looked at how the bulk of the world’s population living within traditional agricultural settings lacked basic amenities such as clothing, housing, medicine, education and transport. The latter was identified as the overriding factor holding back agricultural productivity and perpetuating poverty. Co-written with Margaret Haswell, the book considered how a subsistence cultivator at village level divided his time between production and leisure, his land requirements, exchange and consumption preferences. Haswell had been working for some time on the problems of primitive agriculturists and the transformation from subsistence to cash cultivation and how this impacted upon the rest of the economy. In primitive societies, population growth was very slow with land to spare; some people could make do with a subsistence type of cultivation, working only a few hours every week and using a huge amount of land at their disposal. Importantly, there was no pressure to change their ways of cultivation (Clark 1962). The authors observed the evolution of agriculture, from preagricultural man who required almost 90 square kilometres to obtain his food, to the hand-cultivator and, finally, to the settled cultivator who required just 1 to 5 square kilometres per person. Besides examining how traditional communities engaged in subsistence and self-sufficiency to solve their basic economic problems, Clark and Haswell detailed how a

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spurt in population forced communities to abandon their hunter-gatherer mode of existence in favour of a primitive form of agriculture. This transition made possible an increased population but one below the level that a settled agricultural system could yield. Clark and Haswell (1964, 178– 199) argued that much of the African continent engaged in this form of shifting agriculture as a matter of choice and that this was surprisingly efficient in that crop production kept in line with population. The underlying premise in all this analysis was a shortage of land was not a serious problem in most developing countries. The opening chapter of the book recycled Clark’s vendetta against the FAO about the true extent of world hunger, arguing that only a small minority of the world’s population, around 10%, was ‘really’ hungry. Another 30 to 40% of subsistence farmers subsisted on a diet that while ‘monotonous, distasteful, and often insecure’ was not ‘inadequate physiologically’ (Clark and Haswell 1964, 172). However, the book’s findings made little impact upon public understanding about global food supplies. It left the two authors to suggest something sinister: ‘Social psychologists may take the almost universal circulation of a statement demonstrably false as yet another example of the unbalanced state of mind of a generation prone to fiction and extremism’ (Clark and Haswell 1964, xx). The alternate view, posited by Peter Drake, was that the authors by ‘being so anxious to explode’ Boyd Orr’s claim were in danger of a certain complacency in discussing present levels of nourishment in poor countries. Was it the case, too, perhaps, that a better diet might engender more productivity? (Drake 1965, 375). It was on the role of the agricultural sector during industrialisation that Clark and Haswell made a contribution to development economics. Until then, it was held that the agricultural sector mattered little for economic growth. It was argued that economic growth was synonymous with industrialisation and that resources could be transferred to urbanbased manufacturing with little adverse effect upon local agricultural production. That is, the agricultural sector was a reservoir, riddled with disguised unemployment with the marginal product of labour presumed to be zero. It was also argued that primary producers did not respond to economic incentives, with production decisions guided by tradition and custom. Clark had long resisted these views; no less an economics teacher than Gandhi had told him of the demoralising effect low prices had upon local farmers.

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While he had no general theory of economic development, Clark had stressed in Conditions that economic progress involved the transfer of labour from low productivity sectors to higher productivity ones. While structural change was seen as the key to development, the critical question was how rapidly could non-agricultural employment increase? A rising proportion of the labour force engaged in non-farm production could only occur if agricultural productivity rose, and at an increasing pace. In turn, this increased productivity would generate sufficient real purchasing power for the agricultural population to buy the products from urbanbased manufacturing. The only exceptions to this dynamic was where a developing country had what Clark called ‘food substitutes’, such as minerals or other resources, earning foreign exchange to enable more food imports (Clark 1984, 77). From this Clark and Haswell (1964) developed their ‘neo-Ricardian principle’, positing that the proportion of the labour force able to be employed in non-agricultural activity was governed by the productivity of the agricultural sector. That is, the proportion of the labour force transferring to non-agricultural employment was a consequence, not a cause, of the increase in agricultural productivity. Success was not guaranteed. For some developing countries the historic role the rural sector played could be checked if rural population grew faster than agricultural productivity. In this case the ability to feed an urban population would be inadequate (Clark 1970a, b, c). Moreover, if societies tried to industrialise before agricultural production had increased it would backfire. Clark (1962) cited the botched attempt at transformation in China where Mao Tse-tung’s Great Leap Forward (1958–1962) resulted in famine due to a shortage of rural workers during the crucial periods of planting and harvesting. Mao had wrongly believed that onethird of China’s agricultural labour force was redundant and could be redeployed elsewhere. This reflected one of Clark’s earlier views about the wrong-headed idea of the existence of idle labour within the agricultural sector. By the same token, the economic effects of population change could be adverse in agricultural societies that were resistant to changes in technology and land tenure. While Clark was ahead of Theodore Schultz in seeing the importance of agriculture in transforming the economy, he did not attempt to construct an adequate theoretical basis for the transition nor advance much policy advice about how an agricultural society would transform itself into a more developed one. It was Schultz (1964), therefore, who

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trumped Clark and claimed the credit for showing how a poor but efficient agricultural system could become modern by the response of farmers to economic incentives using the power of human and material investment. The Economics of Subsistence Agriculture, which ran to four editions during the 1960 s, saw the authors bemoan the lack of sustained growth in developing countries. To redress this, they suggested altering the pattern of international trade. They argued that food aid from developed countries should cease as it never reached the most destitute because of poor transport and because it demoralised local farmers by lowering the price of grain. Western countries could better assist by ceasing subsidisation of their own farmers. Another way to transform subsistence agriculture to a commercial basis, they argued, was to place heavy land taxes based on the productive capacity of the land rather than on the actual harvest, thereby allowing better performing farmers to keep some of the harvest for himself. Better roads and a good primary education were also important factors.18 While a mammoth work, covering 57 countries and listing 200 field surveys, the book was difficult to digest and the earlier editions lacked a preface and introduction as to the book’s purpose (Walker 1966, 402). Chapters ended abruptly with no conclusion. Nor were its findings particularly striking (Drake 1965, 378). There was also poor presentation, with much of the text based upon historical studies, field surveys and cases, together with a bewildering amount of statistical material (Thorner 1966). Drake (1965, 378) felt that this latter aspect was likely to be dangerous in the hands of the uninitiated who should ‘be warned of the inadequate nature of much of the source material’. Drake (1965, 378) was critical of how ‘wide generalisations’ were made from scattered fragments of material which would have horrified the original collector of the statistics. That aside, Walker (1966, 401) still hailed the book as an ‘outstandingly original contribution’ in being the first study of the economic characteristics, structures and dynamics of subsistence agriculture or, put plainly, an insight into how nearly half of the world’s population actually made a living. While Clark and Haswell had been at the forefront of scholars in suggesting that population pressure could lead to the intensification of

18 ‘The Role of Agriculture in Economic Growth’, 1968, Clark Papers, UQ.

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agriculture, their work was to be overshadowed by Esther Boserup in The Conditions of Agricultural Growth (1965). Her research showed how population pressure led to changes in land use, agricultural technology and land tenure (Grigg 1979, 65). While Clark and Haswell had anticipated the germ of her thesis, Boserup’s analysis of agricultural change was more theoretically formal, testable and clearer in conveying conclusions.

Population Growth and Land Use (1967a) If The Economics of Subsistence Agriculture (1964) had been something of a disappointment in terms of readability, penetration and its haphazard presentation of data (Schapper 1965), the same could not be said of Clark’s next work, Population Growth and Land Use. It was a treatise on population growth, emphasising that this was the locomotive for technological innovation and land use. It was, despite its faults and idiosyncrasies, described as ‘a tour de force’ (Kirk 1968) ‘a source of pleasure, information and challenge’ (Spengler 1968, 228) and its impact marked something of ‘an Indian summer’ for the author (Hall 1967). The book showed off Clark’s talents, not just as a statistician but also as an economist, historian and urban designer. It was always going to be a controversial book, given Clark’s well-known stance on birth control and connections with the Vatican (see next chapter). A compendious, synthesised work, drawing upon a wealth of sources, it encapsulated views on fecundity, fertility and mortality, nutritional requirements, the sociology underpinning reproduction and the economic consequences of population in terms of density and prosperity. Adopting a long-run view, it considered the effects of population growth on food production, land use, urbanisation and economic development. In its deliberations it drew upon biology, medicine, mathematics, archaeology, history, nutrition, agriculture, geography, sociology, politics, economics, urban planning and even traffic engineering. Stylistically, Population Growth and Land Use was an oddly bifurcated book with the opening chapters on the history of population patterns, the determinants of fertility and fecundity while the last two chapters focused upon the economics of industrial location, transportation and how distribution of population fell within urban areas. Dedicated to Alfred Sauvy, the book included 300 tables, maps and charts from a bewildering range of sources. It struck reviewers as reminiscent of Conditions with its polymathic approach, cryptic style

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and ecumenical dispensation of material and statistics. Twenty years in the making, it was a ‘personal statement’ conveying Clark’s earnestly held views about population, the use of the world’s resources, urban development and economic growth. He qualified it as only a ‘preliminary attempt’ at the interrelationship between population growth and economic growth (Morgan 1968, 277). On this, Clark obliged with a string of subsequent publications which did not have the pedigree of this volume, nor added much new material. A second edition, released in 1977, included a new chapter confirmed the striking decline in fertility in many Western countries and the socialist republics of Eastern Europe. This decline was attributed to deep-seated sociological reasons, including the rise of the nuclear family, contraception, compulsory education and the prohibition of child labour. As the title denotes, the book focused on patterns of human reproductive capacity amongst nations and societies, population capacity, food supplies and urban densities. Given the temper of the times and continuing concern about population growth outrunning food supplies, there was a contrarian twist in the preface where Clark suggested that the ‘principal problems created by population growth are not those of poverty but of exceptionally rapid increases in wealth, in certain favoured regions of growing population, their attraction of further population by migration and the unmanageable spread of the cities’ (Clark 1967, xi). The real problem facing humanity was, then, not resources or food, but finding space for housing and economic activity in a bid to avoid unseemly urbanisation. Developing a line of argument he had nurtured since the 1950s, Clark (1960b) feared that motor cars reduced the compactness of cities and encouraged linear development with commuting over long distances. He feared that these linear cities would tend to be on the coastline, citing Santa Barbara in California and the region from Boston, Massachusetts to Newport, Virginia on the east coast of the United States. This, he argued, would deprive people of any notion of civic sense. Improvements in rail, and especially road transport, set both the manufacturer and trader free from the close confines of industrial cities. This meant a tendency for such areas to go on ‘sprawling’ into the countryside at a faster rate. That is, the economic dependence of outlying regions upon the city centre was diminishing. Innovations in transport had now made it both ‘the maker and breaker of cities’ (Clark 1958). He feared that transport had become so efficient that in England a conurbation of built-up areas would spread

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from Dover to Liverpool (Clark 1958, 250). This economic tendency needed to be checked, he argued, because of its anti-social effects. Clark (1960b) felt that the lure of having a house in spacious surrounds with room to garage a car would, along with employment and shopping centres, move out to the suburbs. This would force inner-city land values to fall and lead to ‘the complete disintegration of the city’. This would be replaced by ‘an ugly and plan-less dispersal of population spreading almost uniformly over a whole industrial zone’ (Clark 1960b, 415). To avoid this, Clark wanted people to dwell in compact communities, with minimal commuting time and access to green areas, with a desired population of 150,000 that would yield a full range of administrative and economic services. The concentric rings of von Thünen’s rural land use model were reconfigured since innovations in transport, such as refrigeration, allowed for geographical specialisation in different types of agricultural produce including milk, fruit, vegetables, livestock and meat; moreover, uneconomic lands were now brought into cultivation (Clark 1958, 246). Specialists, such as urban planners and traffic engineers, had failed to appreciate how modern transportation spelled revolutionary changes in urban development. Greater dispersion was further encouraged by high costs of land in the city centres together with congestion costs which encouraged industry to provide workplaces 15 miles from the centre. This meant more sprawl and the spread of industry to rural areas. There would be a flight of population from the city to the suburbs together with the creation of shopping centres, recreational and educational facilities. Clark (1960b) feared that this ‘sprawl’ would lead to the ‘metropolitanisation’ of extensive parts of the countryside while other regions would become denuded of resources, including people. The ultimate check on urbanisation was the acute problem of land use. Here was something that was fixed in supply while the demand for it was high. Inspired by the work of German economist August Losch, the founding father of regional science, Clark showed that industry and people were attracted to regions already densely populated and growing because of external economies associated with urban agglomeration. Industrial employment grew strongest in areas proximate to markets or to areas of strong economic activity. Clark noted how that these areas of economic strength suffered from external diseconomies such as traffic congestion while other parts of the country were denuded of industry. In other words, the individual choice of a manufacturer to base himself in an

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industrialised area conflicted with balanced development. Clark (1965a) was prepared to use taxes and subsidies to change the siting of industry and housing, because as he told a gathering of town planners, the location economist had a time-frame of a century in which to weigh things up. He gave the same paper at a Delos Symposium in 1964 organised by the enigmatic Greek architect Constantine Doxiadis. Following the work of his doctoral student Max Neutze on the economics of location, Clark (1965b, 57) recommended decentralisation, not in the form of satellite towns but as new, economically self-sustaining towns 100 miles from existing centres and surrounded by zones of recreational and open green spaces. For an industrial town, a population of at least 250,000 was required to exploit agglomeration economies; country towns of 50,000 were inadequate as locations of either manufacturing or services. This distance would discourage any commuter traffic flowing between them. If they were pitched closer to big cities, this would merely encourage encroachment and the creation of commuter or satellite towns. In turn, this would aggravate problems of traffic, water, sewerage and access to recreational land. It would also raise the price of land in all suburban areas with access to the new towns. The only means of keeping the price of land from rising was a genuine policy of decentralisation. Such a policy would probably mean lower land prices in established cities and, therefore, be resisted by vested interests, not least homeowners. Clark (1972c, 176) held that rising residential land prices in large cities were a social injustice perpetrated by the middle-aged at the expense of the young. His ideal of new decentralised cities would require minimum populations of 250,000 and possibly 500,000 if they were to become viable centres of manufacturing. One way of creating such cities, mooted by Neutze, was to invite industrialists to participate in a Dutch auction where they could tender for the employment they could offer and the subsidy they would require from government. All this might be possible but, Davis (1968, 138) pondered, how was one to disperse the established populations in already built-up metropolises? On food supplies and population Clark (1967, 124) said that ‘by now surely no one still believed’ in the claims of mass hunger. Many economists agreed that larger populations were economically beneficial but only Clark believed that the scale economies that came with a bigger population were powerful enough to outweigh the capital dilution effect. And he sought to go one better. On the key dynamic between global population growth and food supplies, Clark (1967, 147) now came to the

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rather startling conclusion that with 7.7 billion hectares of arable land, including the forests of Amazonia, Borneo and Central Africa to draw upon, the planet could, in extremis, support 47 billion people at American nutrition standards, a population some 14 times greater than the then world population of 3.2 billion. If people were fed on the Japanese diet, it was suggested that the Earth could feed three times as many, that is, 157 billion. A later estimate, using more conservative figuring for the productive capacity of the tropics, put the possible population at 35.1 billion but with no provision for further advances in agricultural production or any extension of irrigation (Clark 1967). As Lord Ritchie Calder (1968) noted, the ‘quality of life’ would hardly be good in such circumstances, with unedifying diets, a strain on the ecological system and barely enough room to move. This argument was echoed by many critics. Clark (1967) had made the case however that it was hypothetically possible for the planet to feed such gargantuan numbers. Put another way, using resources rationally, the minimum space necessary to feed a person was half an acre of average temperate zone land. If mankind was to acquire more methods of improving the rate of photosynthesis more could be fed. In the future it would be possible to feed a person using just 27 square metres of continuous, fertilised cultivation. It must be understood that Clark was not advocating unlimited population growth; indeed, he warned of the adverse environmental consequences of population growth (Peters 2001, 10). While, at the time, these figures by Clark were considered to be fantastic, technological innovations in food production over the past 50 years have vindicated him. However, he did admit that for the years 1967–1969 and 1952–1956, most of the increase in global food production had been achieved by the developed nations whilst production in developing countries had advanced just a fraction more than population growth.19 What held production in check and kept farmers producing just for subsistence were factors such as inefficient land taxes, price regulation, inadequate transport and improper attempts at early industrialisation. Surveying population growth through the ages, Clark focusing upon the interrelationship between population growth and economic development; he concluded that a flourishing economic culture was one associated with healthy population growth. Conversely, a static population 19 C. Clark, ‘World Population and Food’, Atlantic Education Trust 1971, Clark Papers,

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would be likely to lead to economic and technical stagnation. A country experiencing a rising population, he emphasised, was not an unqualified blessing; it meant a political challenge to the existing world order and it was this aspect that was far more important than the environmental or economic aspect (Clark 1970c, 132–133).

Reaction There was no shortage of critics of Clark’s new book. Among the most prominent and vitriolic was the sociologist Kingsley Davis (1968), who, writing in an issue of Scientific American, delivered one of the most sustained dissections of Clark’s work on population growth and economic progress. His opening salvo was that Clark’s ‘old tricks’ were on display: ‘the old interest in long run trends, the old flair for empirical data and skill in their analysis, the dazzling breadth of knowledge, the critical sharpness, the subtle defence of an unspoken religious ideology’. However, Davis (1968, 133) warned that ‘Clark’s reputation and his skill with words and numbers give his argument a halo of credibility that may mislead the unpractised eye.’ Besides the book lacking ‘an overall integration’, Davis (1968, 133) pointed out the sloppiness of approach; ‘The tools of scholarship are causally handled with frequent omission of authors, dates or titles, occasional misspellings, ambiguous labelling of charts and tables, use of derived figures and unexplained inconsistencies’. These faults, argued Davis, and, more importantly Clark’s apparent ‘disregard of contrary arguments and evidence’, eroded trust in his work. It was compounded by the author’s reluctance to construct the semblance of a theoretical model and his fuzziness in nominating an independent variable. Mere correlation, Davis (1968, 133) reminded the reader, only went so far and, in any case, the causations may run the other way, in this case, from economic improvement to population growth. This chicken-before-the-egg aspect was also pointed out by Etienne Van de Walle (1968, 545). After some empirical testing of his own, Davis suggested that Clark had massaged his data to fit his thesis and sometimes to disguise the fact that developing countries with fast growing populations were falling behind in the economic race. Davis (1968, 133) also contested Clark’s view that the elderly were a drag upon an economy; rather, it was having and maintaining too many children that was the real burden. Davis said that Clark’s criticism of big cities as a source of

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negative externalities, such as traffic congestion and other quality of life aspects, was somewhat contradictory since urbanisation usually proceeded in tandem with economic development. And, if urban expansion did have damaging externalities, could not the same be said about population expansion including those who choose to have large families? This was perhaps a direct reference to Clark himself. Other reviewers of the book noted how the coverage of the literature was ‘spotty, the choice of evidence arbitrary’ and the text marred by ‘irritating inaccuracies’, ‘defects’ and ‘lack of guidance’ (Hall 1967). Many complained about lack of chapter summaries or a final chapter that drew all the threads together. There was a tendency to let the facts speak for themselves (Firn 1968, 220). These were familiar charges against Clark’s work. Some reviewers grew tired of Clark’s insistence that family limitation did not square with economic progress and countered with contemporary concerns about the disconcertingly rapid population growth occurring in poorer countries (Morgan 1968). Morgan suggested that Clark’s largely unsupported optimism about food and population did not address the influence of institutions. Both Morgan (1968, 277) and Lord Richie Calder (1968) did not doubt the planet’s ability to feed its people but argued that the main issue now was the lack of opportunities facing much of the world’s population. Another reviewer felt there should be more discussion on those developing countries enduring very high rates of population growth (Dennier 1968).

The Economics of Irrigation (1967b) Produced in the same year as Population Growth and Land Use, this book dealt with one of Clark’s favourite subjects of water management and the obsession politicians, engineers and farmers had for building dams and irrigation projects. Formal and cryptic, the book was squarely addressed squarely to those charged with spending money on irrigation. Clark found support for his views on impecunious irrigation in the work of the Australian agricultural economist, Bruce Davidson. An appreciation of the water requirements for plants and the resources available allowed him to make five basic points (Prest 1968). First, Clark argued that ‘secondary economic benefits’ should be excluded from assessing returns from irrigation projects, since to include them would overlook the opportunity costs of labour. Second, he posited that marginal returns to irrigation would be highest for high-value crops such as fruit and vegetables. Third, in terms

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of cost, he argued that irrigation was subject to diminishing returns but marginal costs would be lowest if the water came from rivers or bores. Fourth, if river flow was to be maintained by dams, increasingly high costs would be incurred. Finally, in assessing irrigation projects in the face of limits to available supplies and rising costs, Clark proposed a system of water charges in the interests of promoting efficiency rather than equity. One reviewer (Thornton 1968, 123–124) felt the book did not achieve what it had set out to do. It was not comprehensive since some aspects of irrigation were not covered and yet the book was lumbered with an arid writing style, a surfeit of material, case studies and quotations, and a lack of guidance for the general reader. Readers were over-burdened with facts in comparative tables that sometimes ran to ten pages in length. Despite this, a new edition came out shortly thereafter with most of the criticism unmet; nor did Clark address how recent advances in agronomy, including the ‘Green Revolution’ and engineering improvements, would rewire the economic benefits of irrigation. A few years later, Ian Carruthers, an expert in irrigation, assisted Clark in updating and extending his work and making it a more polished, readable guide to the subject (Carruthers and Clark 1981).

Starvation or Plenty? (1970d) This shorter book, written in a more popular vein, was pitched at the intelligent layperson, though the content all derived from his two works, particularly Population Growth and Land Use. Once again, Clark displayed his scientific training in looking at human nutrition, physiology and agricultural techniques. However, he let his imagination run wild and spoke unwisely of how, in the future, the colonisation of the planets and the Moon as well as cultivation under ‘science fiction conditions’ meant that a man’s minimum requirements for food and fibre could be obtained from just 27 square metres. The idea that mankind could escape earthly bounds and live in outer space struck Crawford (1975, 4) as risible. Other scientists, too, said that Clark’s ‘demographic euphoria’, especially the notion that the planet could feed between ten to forty times of the then population, was wayward (O’Connor 1970). One reviewer pointed out how India had narrowly escaped famine in 1965 and 1966 thanks only to

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American food aid.20 Another critic pointed out that the gap between population growth and its beneficial effects on production might be long, noting that it takes a long time to educate and disseminate new techniques and innovations (Bhattacharya 1971). Nor would developing countries have the capital resources of New Zealand or the Netherlands to produce phenomenal amounts of agricultural output using only a fraction of the labour force. A central weakness of the book was that Clark turned a blind eye to the relative costs of innovations, such as land reclamation or irrigation schemes, as against achieving a similar increase in living standards by simply exercising birth control; farmers also had to contend with a shortage of funds, of acreage and the risk of bankruptcy. Debesh Bhattacharya (1971) raised the issue of distribution in terms of whether the population would be able to purchase the greater volume of grains available.

References Arndt, H.W. 2000b, ‘Colin Clark as a Development Economist’, History of Economics Review, Supplement: 6–14. Bennett, M.K. 1954, The World’s Food. New York: Harper and Brothers. Bhattacharya, D. 1971, ‘Review of Starvation or Plenty? by C. Clark’, Economic Review, 15. Boserup, E. 1965, The Conditions of Agricultural Growth. London: Allen and Unwin. Boyd Orr, J. 1950, ‘The Food Problem’, Scientific American, 183: 11–15. Carruthers, I, and C. Clark, 1981, The Economics of Irrigation. Liverpool: Liverpool University Press. Clark, C. 1950a, ‘Economic Life in the Twentieth Century’, Measure, 1(4): 329– 341. Clark, C. 1950b, ‘World Resources and World Population’, in Proceedings of the United Nations Scientific Conference on the Utilisation of Natural Resources (UNSCCUR). Lake Success. New York: 15–28. Clark, C. 1953, ‘Population Growth and Living Standards’, International Labour Review, 99: 99–117. Clark, C. 1954a, ‘Afterthoughts on Paley’, Review of Economics and Statistics, 46(3): 267–273.

20 ‘Balancing People Against Food’, Times Literary Supplement, 5 March 1970, Clark Papers, UQ.

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Clark, C. 1954b, ‘World Supply and Requirements of Farm Production’, Journal of the Royal Statistical Society, 117(3): 263–291. Clark, C. 1957, The Conditions of Economic Progress. London: Macmillan. Clark, C. 1958, ‘Transport—Maker and Breaker of Cities’, Town Planning Review, 28(4): 237–250. Clark, C. 1960a, ‘Do Population and Freedom Go Together?’ Fortune, December 136–139. Clark, C, 1960b, ‘The Effect of Industrial Development in Rural Areas’, Chartered Surveyor, February–March. Clark, C. 1962, ‘Future Sources of Food Supply: Economic Problems’, Journal of the Royal Statistical Society, 125(3): 418–448. Clark, C. 1965a, ‘The Location of Industries and Population’, The Town Planning Review, 35(3): 195–218. Clark, C. 1965b, ‘Land Taxation: Lessons from International Experience’, in Peter Hall (ed.) Land Values. London: Sweet and Maxwell. Clark, C. 1967, Population Growth and Land Use. London: Macmillan. Clark, C. 1969, ‘World Power and Population’ National Review, May 20, 481– 484. Clark, C. 1970a, ‘Too Much Food?’, Lloyds Bank Review, 95: January, 19–35. Clark. C. 1970b, ‘The Economic and Social Implications of Population Control’, in A. Allison (ed.) Population Control. London: Penguin: 222–237. Clark, C. 1970c, ‘Health, Population and Agriculture’, in A.H. Bunting (ed.) Change in Agriculture. New York: Praeger. Clark, C. 1972a, Population Growth: The Advantages. Santa Ana: R. L. Sassone. Clark, C. 1972b, ‘Extent of Hunger in India’, Economic and Political Weekly, 7(40). Clark, C. 1972c, ‘New Cities for Australia’, Social Survey, July: 172–176. Clark, C. 1973, The Myth of Over-Population. Melbourne: Advocate Press. Clark, C. 1984, ‘Development Economics: The Early Years’, in G.M. Meier and D. Seers (Eds.) Pioneers in Development. Oxford: Oxford University Press: 59–77. Clark, C. and M. Haswell, 1964, The Economics of Subsistence Agriculture. London: Macmillan. Crawford, J.G. 1975, ‘The Malthusian Spectre Today’, Economic Papers, 49: 1–16. Davis, K. 1968, ‘Colin Clark and the Benefits of an Increase in Population’, Scientific American, 218(4): 133–138. Dennier, D.A. 1968, ‘Review of Population Growth and Land Use by C. Clark’, The Town Planning Review, 39(1): 79–80. Dhawan, B.D. 1968, ‘Criss Cross on Irrigation’, Economic and Political Weekly, 3:6: 291–292.

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Drake, P.J. 1965, ‘Review of the Economics of Subsistence Agriculture by C. Clark and M. Haswell’, Twentieth Century, 19: 374–378. Firn, J.R. 1968, ‘Review of Population Growth and Land Use by C. Clark’, Urban Studies, 5(2): 219–220. Grigg, D. 1979, ‘Ester Boserup’s Theory of Agrarian Change’ Progress in Human Geography, 3(1): 64–84. Hagen, E.E. 1959, ‘Population and Economic Growth’, American Economic Review, 49(3): 310–327. Hall, P. 1967, ‘Review of Population Growth and Land Use by C. Clark’ New Society, July. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Kirk, D. 1968, ‘Review of Population Growth and Land Use by C. Clark’, American Sociological Review, 33(6): 1011–1012. Lodewijks, J. 2007, ‘A Conversation with Helen Hughes’, Journal of the Asia Pacific Economy, 12(4): 429–451. Martin, K. and J. Knapp (eds.) 1967, The Teaching of Development Economics; Its Position in the Present State of Knowledge. Chicago: Aldine Publishing. McArthur, M. 1964, ‘Some Factors Involved in Estimating Calorie Requirements with Special Reference to Persons Engaged in Agriculture in Asian Countries’, Journal of the Royal Statistical Society, Series A, 127: 392–408. Morgan, M. A. 1968, ‘Review of Population Growth and Land Use by C. Clark’, The Geographical Journal, 134(2): 276–277. O’Connor, B. 1970, ‘Clark on Starvation’, Venture, Fabian Society. Pawley, W.H. 1971, ‘In the Year 2070’, Ceres, 4(4): 22–27. Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist’, Working Paper No. 69, Queen Elizabeth House, University of Oxford. Prest, W. 1968, ‘Review of The Economics of Irrigation by C. Clark’, Economic Record, 44(105): 122–125. Ritchie-Calder, P. 1968, ‘Review of Population Growth and Land Use by C. Clark’, Ceres, March–April. Rostow, W.W. 1990, Theorists of Economic Growth from David Hume to the Present. New York: Oxford University Press. Sauvy, A. 1943, Richesse et Population? Paris: Presses Universitaires de France. Schapper, H.P. 1965, ‘Review of The Economics of Subsistence Agriculture by C. Clark and M. Haswell’, Australian Quarterly, 37(3): 113–115. Schultz, T. 1964, Transforming Traditional Agriculture. New Haven: Yale University Press. Spengler, J.J. 1968, ‘Review of Population Growth and Land Use by C. Clark’, The Annals of the American Academy of Political and Social Science, 380: 228.

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Sukhatme, P.V. 1961, ‘The World’s Hunger and Future Needs in Food Supply’, Journal of the Royal Statistical Society, 124(4): 463–525. Tabah, L. 1991, ‘Alfred Sauvy: Statistician, Economist, Demographer and Iconoclast (1898–1990)’, Population Studies, 45: 353–357. Thorner, D. 1966. ‘Review of The Economics of Subsistence Agriculture by C Clark and M. Haswell’, American Economics Review 56(1): 282–284. Thornton, D. 1968, ‘Review of the Economics of Irrigation by C. Clark’, Journal of Agricultural Economics, 19(1). Van de Walle, E. 1968, ‘Review of Population Growth and Land Use by C. Clark’, American Economic Review, 58(3): 645–647. Walker, D. 1966, ‘Review of The Economics of Subsistence Agriculture by C. Clark and M. Haswell’, Economic Journal, 76(302): 400–402.

CHAPTER 16

Slaying the Doomsayers

While Clark might have felt by the late 1960s he had the Malthusians beaten on empirical grounds, the issue of food supplies and population never really went away. It was soon reignited by the American biochemist Paul Ehrlich in his book The Population Bomb (1968). Ehrlich spoke of the need for Zero Population Control (ZPG). Besides contesting many of the bold claims in that book, Clark was critical of The Club of Rome and its first report, The Limits to Growth (1972), which not only recycled the gloomy view of food production falling behind population growth but rekindled fears that the world was running out of resources. The Limits to Growth coincided with the UN Conference on the Human Environment held in Stockholm in June 1972 and proved to be an instant best-seller with its prophecy that the world economic system was doomed. It left Clark perplexed how it and other gloomy ‘end of the world’ scenarios had captured the public imagination. He attributed the ‘potent’ appeal of mass environmentalism to some form of collective psychological disorder, a hysteria among the intelligentsia (Higgins 1989). When Clark (1977, 5) warned a gathering of social scientists that ‘If we are entering this period of population decline, our Western civilisation will come to an end’ he was taken aback by the audience responding with cheers and clapping.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_16

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His friend, Malcolm Muggeridge suggested that there seemed to be a collective psychological death-wish among Western intelligentsia. It was strange, Muggeridge continued, that the demand for population control came a time when the possibilities for food production were becoming limitless (Clark 1970, 171). Clark pointed out that arguments for a stationary population and the cessation of economic growth meant increased rigidity of social divisions and little hope of relieving poverty. Clark believed that widespread disillusion about the Earth’s future, coupled with a low level of scientific education, spread anxiety about the future and lay behind the faltering birth-rate in the West. He had experienced a similar mood of despondency during the 1930s when economists would not believe his data, which showed an increase in labour productivity, fearing that they would never get back to the golden age of 1914. Over his life Clark had seen several prophets of doom come and go invariably telling people that the world was running out of food and resources. He sought to overturn this prevailing mood of negativity by the only means open to him, empirical data and scientific persuasion.

The Economics of 1968 It was not, then, the rosy optimism of The Economics of 1960 that resonated with the intellectual community of the 1960s but rather widespread anxiety about the future of mankind. Of course, the predictions of The Economics of 1960 had been long discarded by the time that decade arrived. The student demonstrations in Paris in May 1968, primarily over the American involvement in the Vietnam War, set off a worldwide reaction against the traditional values of the establishment. Even with patience of a saint, Clark must have felt exasperated that his research on global food supply and the potential of agricultural productivity were entirely put aside by a new wave of doom-laden prophecies that took hold at that time. In the 1970s the suspension of both population growth and economic growth as policy goals was mooted. For instance, the American representative on the UN Population Commission, General Draper, advocated ZPG not only for the United States but also for developing countries by the end of the century. Both the Rockefeller and Ford Foundations invested money in funding the American anti-population movement. Clark was aghast, too, that school students were being indoctrinated not to have too many children because of environmental concerns. He would

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express irritation against such figures as Ehrlich and the British political economist Barbara Ward (Turner 1974, 97). Ehrlich echoed the FAO in his claims about the extent of world hunger but without empirical evidence and dismissed as fantasy the idea that India would be able to feed itself (Clark 1973, 48–49). Ehrlich seemed unaware of the extent of the increase in world food production, especially in developing countries.1 When he was made aware of this, he changed tack by then claiming that diets in developing countries were deficient in high class protein and minerals.2 Despite Clark amply showing that many of Ehrlich’s claims were false, Ehrlich remained an effective proponent of ZPG. The concept was also discussed in the 1972 Rockefeller Commission Report on Population Growth and the American Future; this had been initiated by President Nixon after concerns were raised about the viability of the American population growth rate (Hoff 2010). Clark was invited to give evidence before the Commission in June 1970. In keeping up with the mood of the times, the final report concluded that it found no convincing economic argument for continued population growth and recommended slowing it to improve the quality of life. Nixon moved quickly to disown the report because of the Christian churches’ opposition to family planning measures, including abortion (Hoff 2010).

Vatican Economist Ironically, Ehrlich’s book was published in the same year that the Papal Encyclical on birth control and population, Humanae Vitae (Of Human Life), was released by Pope Paul VI. That Encyclical banned Catholics from practising artificial forms of contraception. Since 1964 Clark had been involved in the early stages of discussions that would culminate in that Encyclical, having been a member of the Commission for the Study on Problems of Population, Family and Birth.3 Earlier, when working with the FAO in Rome, Clark had discussed the political appeal of

1 ‘Population Bomb Prophet Criticised’, The Courier Mail (Brisbane), 5 August 1971. 2 ‘Who Says We’ll Starve’, Sydney Morning Herald, 29 September 1971. 3 Cardinal Ciognani (Secretary of State for his Holiness) to Clark, 20 November 1964, Clark Papers, UQ.

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Marxism with the future pontiff then known as Cardinal Montini and serving within the Secretariat of State, Holy See.4 The Commission had been established by Pope John XXIII to advise him upon how to deal with new forms of artificial contraception like the Pill. Pope Paul VI then vastly expanded the committee to 72 members including theologians, physicians, clerics, sociologists, psychologists and economists. The commission was given one task, albeit a diabolical one, to determine how the church could consider changing its position on birth control yet without undermining Papal Authority. The commission was divided into two committees. The first was a committee of 65 lay persons (Kaiser 1987); the second consisted of 15 clerics, including the future Pope John Paul II, then Cardinal Karol Wojtyla. Finding that birth control was not intrinsically evil, the commission recommended that the Church rescind its ban on artificial contraception. The lay committee voted 60 to 5 in favour of this while the clerics voting 9 to 6 in favour. Given his extremely conservative views Clark was one of the five dissidents; he provided the economic rationale for taking a hard line against birth control (Arndt 1979, 123). Unhappy with the resolutions of the majority report, Pope Paul VI then secretly commissioned a minority report which was to help write an encyclical to ‘settle the matter’, that is, to reassert the traditional view and reject the idea of birth control. Most commentators would later agree that the encyclical did not stop Catholics using birth control and that, overall, it led to some weakening of papal authority. An editorial in The Economist lamented: ‘This encyclical is not the fruit of papal infallibility but of papal isolation’ (cited in Kaiser 1987, 245). Despite it being a time of growing social permissiveness, Clark was not one for changing his moral compass. In the Catholic newspapers he suggested that oral contraceptives were not reliable and that the reappearance of venereal disease increasingly resistant to antibiotics would, he hoped, lead to moral restraint. Besides stridently upholding the principle of papal infallibility, Clark upheld Catholic Social Teaching that Divine Providence had created the Earth for mankind and commanded man to increase and multiply for some important and eternal purpose (Yuengert 2014). Put another way, population was God’s way of bringing about change. Clark saw birth control as the worship of humanity replacing the worship of God and

4 Interview with Barbara Blackman, 1986.

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equated it with marital breakdown and a decline in family life. He had earlier told an assembly of Scottish clergymen that divorce was ‘a terrible insult to God’.5 While he spoke little about the Commission Clark did later criticise it for being ‘clumsily organised’ in the sense that a panel of 65 lay persons was too large. He told an American religious newspaper that the economists on the committee saw no substance to the threat of overpopulation and that it was ‘the Catholic theologians’, many of them ‘third-raters’ who had voted in favour of birth control.6 This was an interesting admission since a listing of the lay members on the Commission showed that Clark was one of the only two recognisable economists on the panel (Kaiser 1987, 297–300); the other was Audrey Donnithorne (2019). A few years later when asked to explain his Catholic faith, Clark said he believed ‘in the same God I have always believed in, God as the Catholic Church understands’. He then added that there was an alarming lot of ‘doctrinal irregularity… coming from the bishops and theologians.’7 Upon reflection, Clark’s appointment to the Pontifical Commission was costly to his academic reputation. Critics drew an easy association between his views on population and his allegiance to the Catholic Church. Julian Simon, who worked in the same fields as Clark, suggested that Clark had not been considered for the Nobel Prize because of his Catholicism and outspoken views on population.8 Simon (1993, 145) also recalled that it was a ‘misfortune for the sake of knowledge’ that Clark’s ‘painstaking and meticulous’ work on population was dismissed on the grounds that he was ‘just’ a Catholic. Clark was adamant that his views on the economic consequences of population growth were based on economic reasoning, not religious belief. Nor was he ever actually advocating unlimited population growth (Peters 2001, 10). Following in Clark’s footsteps, Simon (1981) argued that the Malthusian doctrine

5 ‘Nation Which Permits Divorce Terrible Insult to God’, Scottish Catholic Herald, 11 May 1956, Clark Papers, UQ. 6 ‘Denies Idea That the World Is Over-Populated’, The Wanderer, 17 June 1971, Clark Papers, UQ. 7 P. Manning ‘What Do Catholics Believe?’, The Bulletin (Sydney), 14 March 1970, p. 40. 8 J. Simon to J. Brown, 25 September 1985, Clark Papers, UQ.

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was wrong though he did feel that a slower growth in population was preferable to a high rate. While Clark’s views on the evils of birth control might have been considered outlandish in the 1960s, by the early 1970s his views had begun to attract support from the political conservatives who encompassed libertarian and new classical economic thinking (Hoff 2010, 36). Moreover, they mobilised the same arguments that Clark had been proselytising since the 1940s. The libertarians now saw population growth as a source of good since it unleashed the power of human creativity; Clark shared some of the limelight with strange intellectual bedfellows who otherwise regarded his Catholic morality with repugnance (Simon 1977). Many Catholics, however, still found his views on birth control to be extreme. In one ecumenical conference on World Development, held at the University of Sydney in February 1970, Clark was asked by organisers not to speak on the matter.9 But Clark could also draw on the support from the developing countries. At the 1974 UN Conference on World Population in Bucharest, the developed countries again put the case for population control. They were rebuffed by the developing countries, with the leader of the Indian delegation Karan Singh (1988, 301) calling economic development ‘the best contraceptive’.

Refuting the Club of Rome 1968 was also the year that the Club of Rome was formed by a group of European businessmen concerned about the deterioration of the environment. Described as an ‘invisible college’ of scientists, engineers, economists and analysts, it commissioned a team of Massachusetts Institute of Technology scientists, led by Dennis Meadows and Jay Forrester, to carry out interdisciplinary research work and to examine trends and interactions of a number of variables that would shape the future The subsequent report, entitled The Limits of Growth, was based upon the findings from a computer-generated model which produced results that argued for the cessation of economic growth. It was predicated on the idea that growth caused pollution and irreparable environmental damage and that it would use up the remaining stock of non-renewable 9 ‘Action for World Development—Reflection on a Conference’, in Priest Forum Australia 1970 2(5): 8–13.

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resources. The Limits to Growth concluded with a bleak, dystopian picture of the future: If the present growth trends in world population, industrialisation, pollution, food production and resource depletion continue unchanged, the limits to growth on the planet will be reached sometime within the next hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial output. (Meadows et al. 1972, 23)

For Clark, this was the return of the hoary old chestnut about the world ‘running out of resources’ (Clark 1973, 28; 1977). His chemistry background would prove useful in refuting the claims contained in the First (1972) and Second (1974) Reports of the Club of Rome. He was quick to point out that many resources were actually indestructible, providing huge potential for recycling. He was adamant that pollution was not directly related to population growth and was conquerable, though most societies were reluctant to take on the vested interests opposing it and the 1 to 2% of GDP needed to abate it. It irritated him that many of the Club of Rome’s arguments about population growth, land acreage and the bountifulness of resources had all been rebutted in the past. Take, for instance, the Club of Rome’s claim that the world would need 4,000 square metres of land per person to produce a subsistence diet. Mystified about where these figures had come from, Clark (1973, 29) had already identified that 2,300 metres would suffice to provide a person with an American-style diet. Another line of attack was against the computer-based modelling of system dynamics which underpinned the Club of Rome’s report; Clark used the computer operator’s proverb of GIGO (Garbage-in, Garbage-out), later cleverly amended by Herman Kahn to ‘Garbage in, Gospel out’ in the sense that people wanted to believe its findings. Following scathing criticism from authoritative sources, such as The Economist, the First Report of the Club of Rome was dumped, to be replaced by a Second Report which focused on the other bane of a worried humanity, namely the exhaustion of non-renewable resources and the ecological damage caused by rampant population growth (Clark 1973, 27–28; 1977). The founder and President of the Club of Rome, Aurelio Peccei, an Italian industrialist and economist actually spoke at Monash University in November 1973, disavowing the First Report and announcing

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a new direction, world politics. The Second Report, by Mesarovic and Pestel, was entitled Mankind at the Turning Point (1974). It abandoned previous dire forecasts about the exhaustion of resources and the uncontrollable increase in pollution but still mooted shortages of mineral and energy resources over the following 20 years. Having seen all this before, Clark dismissed its validity. He spoke of energy substitutes such as solar power and silicon batteries. He reminded readers that pollution could be easily dealt with by technology and that the main hurdle was political, namely whether society would dedicate that 1.5% of GDP to deal with it. He pointed to the River Thames and the Ruhr Valley as examples of successful action to clean up the environment. Clark next turned to the issue of potential world food production and saw no reason to amend his earlier critique of the Club’s estimate of the world potential agricultural land. In this Second Report, the Club of Rome maintained that the world supply of agricultural land was 2.4 billion hectares rather than the 9.2 billion hectares equivalent which the US President’s Science Advisory Committee had estimated by expressing all lands in terms of their capacity to produce cereals. Clark (1973, 39) argued that, on conservative estimates, 9 billion equivalent hectares of standard agricultural land could make full provision for 36 billion people with 4.4 tons per hectare achieved on very productive European farms. All this was predicated on there being no further improvement in agricultural technology and on the assumption that the world would want to eat an American-style diet. In short, the world’s capacity to produce food was vastly in excess of any expected increase in world population. In concluding his review, Clark reminded doomsayers of Sir William Crookes, President of the British Academy, who had predicted a global famine by the 1930s, based on projections of population increase and food production. Unfortunately, Crookes had failed to foresee how innovations such as synthetic fertilisers as well as the discovery of huge deposits of nitrates and the development of high-yielding, drought-resistant strains of wheat, not only opened up swathes of land for cultivation but also the prospect of increasing yields. In considering the exponential use of resources, Clark wistfully recalled how, when taking his chemistry degree, he had been told that the world would run out of oil by 1940. He recalled, too, how when he had attended the 1949 UNSCCUR and, using the estimates of mineral resources then extant ascertained the usage rate of various non-renewable resources by 1972. He came to the conclusion that the world should

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have exhausted its supplies of zinc, lead and copper with aluminium and tin supplies running low. This was assuredly not the case. The Second Report had made the error of accepting mining companies’ estimates of reserves rather than geologists’ surveys of known reserves. Clark (1973, 19) pointed out that the exploration policy of mining companies would not allow discovered reserves to run too far ahead of demand, otherwise prices would slip. The optimal extraction policy for most minerals was to arrange a ten to thirty-year supply. Moreover, the report did not take into account how mining companies, at the cutting edge of technology, were likely to have more efficient ways of extracting resources. Also, the metal component in finished manufactured goods was likely to decrease rather than increase with substitutes and recycling possible, especially if metal prices were increasing. Indeed, Clark (1973) generally felt that metals were too cheap, so that hard waste, such as old cars, was being dumped and disfiguring the landscape. He advocated that taxes be placed on materials such as glass and wood pulp to encourage recycling. Clark asserted that the earth’s crust contained sufficient metals to last for thousands of years. Rising fuel prices would encourage economies by both consumers and industries and also induce greater recycling. In the third edition of Conditions , Clark (1957, 488–489) had foreseen how solar power could be used since mankind could not keep loading carbon dioxide into the atmosphere by burning coal and oil especially if was exceeding the rate of photosynthesis. With pollution, Clark, like many other economists, was content to use the market mechanism to deal with the externality. Indeed, the mitigation of pollution was one of the clearest cases of a public good, something the private market would not supply. Clark proved to be a nascent environmentalist, saying that pollution and other ills had not been dealt with adequately because of the power of vested interests. Frugal in his personal life, Clark loathed waste and considered mankind far too wasteful. He loved nature and felt humans abused it at their peril. He took the interesting line that pollution was not caused by excessive population growth per se but rather by the excessive concentration of population into a few limited areas. To that end, he spoke yet again of a rightly distributed population, of dispersing into a number of moderatelysized cities (Clark 1973).10 The real shortage humanity faced was not

10 ‘World Population and Food’, p. 20, Clark Papers, UQ.

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food therefore but ‘breathing space’, that is open space for privacy and recreation, together with the conservation of wild-life and natural habitat. He was therefore delighted to observe growing community support for conservation.11 He argued that consumers should pay more for water to encourage recycling. On carbon emissions he was on less solid ground, arguing that two-thirds of carbon dioxide in the atmosphere dissolved in the ocean and that it would be many centuries before the use of carbonbased fuels would have to cease.

A Parallel Life A related and contemporaneous work in that genre of environmental doom was the book Only One Earth (1972), by Barbara Ward and René Dubos. It was the outcome of discussions among over 150 experts who gathered at the first UN Conference on the Human Environment, in Stockholm in 1972. Like the Club of Rome it, too, concluded that the Earth was a vulnerable life support system that could easily tip into disequilibrium because of global warming, overpopulation and the destruction of non-renewable resources. Despite a harrowing narrative, Ward and Dubos placed their faith in science and knowledge to mitigate these environmental dangers. To achieve this, they argued, people would have to forsake their loyalty to the ‘idols of the market and the idols of the tribe’ (Ward and Dubos 1972). Two years before the best-selling Only One Earth was published, Barbara Ward released The Angry Seventies , a by-product of the Pontifical Commission for Justice and Peace on which she was a founding member. The commission, established by Pope Paul VI, aimed to provide guidance on how the Catholic Church should respond to the challenge of development. Clark and Ward shared remarkably similar lives that beg comparison. Both were Oxford-educated and attracted to Distributivism, equity and a concern for the natural environment. Both served on Pontifical Commissions. Both abhorred the excessive degree of urbanisation prevalent in those economies. Both, too, had an Australian connection; Ward had married an Australian. Both advocated assistance for poorer countries and the need to alert the public to problems of economic development

11 ‘Problem Will Be Areas for Play’, The Courier Mail (Brisbane), 14 January 1970.

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and the inevitable rise of big cities. Both spoke out against communism. On development Clark preferred trade access through the granting of preferences whereas Ward wanted rich nations to give more aid through international agencies. This aid was seen by Clark as more to the agencies’ benefit than that of the poor, though he made an exception in the case of the World Bank which used its own auditors. Long before Peter Bauer’s caustic critique of Western foreign aid, Clark was well aware of how such aid was usually a self-enriching process for politicians in recipient countries. There were other remarkable parallels. When Ward stayed in Australia for just over a year in the early 1950s, she told Australians that the production of food was their future and that Queensland had ‘limitless possibilities and was the real state of the future’.12 Like Clark, she held the view that Australia had neglected her food production to pursue industrialisation.13 The two had met in Brisbane despite Clark’s estrangement from the Labour movement. However, they did not seem to correspond thereafter. As a proponent of sustainable development, Ward was far more successful in securing recognition and occupying positions of influence and consequence than Clark. Later she was the Schweitzer Professor of International Economic Development at Columbia University and knew both Presidents Kennedy and Johnson. When she retired, she was made a life peer by the Wilson Labour Government. Upon her death in 1981, Pope John Paul II sent a cardinal to represent himself at Ward’s requiem service. In reviewing Ward’s book, The Angry Seventies , Clark said that developing countries’ agricultural production per head in 1968–1970 was on average 5% higher than what it had been in 1956–1958. It would have been even higher if some developing countries had turned away from experimenting with collectivised agriculture. He reminded Ward, that instead of facing famine, the developing economies were actually facing an adverse term-of-trade because developed countries such as the United States and Canada offloaded their subsidised surpluses on to global markets. Clark dismissed Ward’s recourse to product price stabilisation schemes because these involved cutting back production. Such

12 ‘Food Our Future—Barbara Ward’, Sunday Mail (Brisbane), 4 November 1951. 13 ‘Food Production Is Our First Priority’, Sydney Morning Herald, 11 January 1952.

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schemes were anathema to Clark and confirmed his view that Ward ‘did not understand economics’.14 The invective could be part explained by Ward’s ‘obsession with population’ and her bluntness in once telling Marjorie Clark how wrong it was of her to have had nine children.15 By the 1970s Clark, aware of protectionism by the developed countries and the near cessation of population growth in those countries, encouraged developing countries to switch into the export of simple manufactures such as textiles. More fundamentally, Clark dismissed Ward’s bold opening claim in her book The Angry Seventies ‘that not one of the beneficent selfreinforcing processes of the nineteenth century is at work’ in modern-day capitalism.16 Nor did he approve of her advocacy of a big role for the public sector, commanding 30 to 40% of GDP. Most importantly, Clark abhorred Ward’s call for some form of birth control, which she advocated in the mid-1970s on the basis of the alleged paucity of agricultural resources. Her alarming claim, too, in the 1970s that there would be a shortage of oxygen in the future because of carbon pollution, deforestation and chemical residues in the biosphere, was ridiculed. However, two areas of common ground on which both agreed were the need to retain open space for recreation, conservation of wildlife and natural beauty and to the need to reject high rise urban living. While Ward was correct to stress the primacy of the agricultural sector and to highlight the problem of inadequate farm production, she did not perceive that this inadequacy was due to inappropriate economic policies, including collectivised agriculture. One way to increase agricultural production, Clark argued, was to put a tax on the potential of agricultural land, not on what it actually produced. Clark felt this mechanism was better than Ward’s idea of putting a tax on the most successful agricultural producers. Clark refuted the claim that industrialisation required a high degree of capital per worker and upheld the model of industrialisation set by Japan. Her industrialisation had been underpinned by food production increasing faster than its population since the 1890s. Ward conceded that a large population was beneficial but only if it occurred after breakthroughs in mechanisation and technology, which acted as a spur to further growth.

14 C. Clark, ‘Miss Ward’s Angry Seventies’, Nation Review (Sydney), 1972. 15 ‘Review of “Only One Earth”’, mimeo, Clark Papers, UQ. 16 Clark ‘Review of the Angry Seventies by B. Ward’, The Tablet 1970.

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So, once there was a greater supply potential, the increase in demand from a larger population acted as a further stimulus (Ward 1966, 26). However, the Malthusian check still existed, she argued, if population growth expanded ahead of any such leap in agricultural productivity. As late as 1981, Clark denied that human activity had any appreciable effect on the climate change though he did admit that there were limits to burning fossil fuels. He believed that the science was not established on climate change and rejected Ehrlich’s claim that it was caused by ‘industrial dust’ (Clark 1973, 76–77). He interpreted this new environmental movement as another form of neo-Malthusianism (Arndt 2000). However, he agreed with Ehrlich that farmers could use too much nitrate fertiliser, leading to run-off to the sea and felt that farmer education would be a good response. Clark’s admission of the negative side-effects of fertilisers showed that he was no dogmatist. He had long conceded that excessive population growth put strains on the environment and living space.

References Arndt, H.W. 1979, ‘Colin Clark’, in David L. Sills (ed.) International Encyclopaedia of the Social Sciences, Biographical Supplement, Vol. 18. New York: The Free Press: 121–124. Arndt, H.W. 2000, ‘Colin Clark as a Development Economist’, History of Economics Review, Supplement: 6–14. Clark, C. 1957, The Conditions of Economic Progress. London: Macmillan. Clark, C. 1970, Starvation or Plenty? New York: Secker and Warburg. Clark, C. 1973, The Myth of Over-Population. Melbourne: Advocate Press. Clark. C. 1977, ‘Population and Depopulation’, The Eleventh Monash Economics Lecture, mimeo. Donnithorne, A. 2019, China in Life’s Foreground. Melbourne: Australian Scholarly Press. Ehrlich. P. R. 1968, The Population Bomb. New York: Ballantine Books. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record. 65(3): 296– 310. Hoff, D. 2010, “‘Kick That Population Commission in the Ass!”: The Nixon Administration, the Commission on Population Growth and the American Future and the Defusing of the Population Bomb’, Journal of Policy History, 22(1): 23–63. Kaiser, R.K. 1987, The Encyclical That Never Was. London: Sheed and Ward.

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Karan Singh, 1988, ‘Development Is the Best Contraceptive’, Interdisciplinary Science Reviews, 13(4): 301–302. Meadows, D.H., D.L. Meadows, J. Randers, and W.W. Behrens, 1972, The Limits to Growth: A Report for the Club of Rome Project on the Predicament of Mankind. New York: Universe Books. Mesarovic, M.D. and E. Pestel, 1974, Mankind at the Turning Point. New York: E.P. Dutton. Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist ’ Working Paper No. 69, Queen Elizabeth House, University of Oxford. Simon, J. 1977, The Economics of Population Control. Princeton, NJ: Princeton University Press. Simon, J. 1981, The Ultimate Resource. Princeton, NJ: Princeton University Press. Simon, J. 1993, ‘Economic Thought About Population Consequences: Some Reflections’, Journal of Population Economics, 16(2): 137–152. Turner, A. 1974, Zero Population Growth: Colin Clark Versus Derek Llewellyn Jones. Melbourne: Heinemann Educational. Ward, B. 1966, Spaceship Earth. New York: Columbia University Press. Ward, B. 1970, The Angry Seventies: The Second Development Decade. Rome: Pontifical Commission Justice and Peace. Ward, B. and R. Dubos. 1972, Only One Earth: The Care and Maintenance of a Small Planet. London: Penguin Books. Yuengert, A.M. 2014, ‘Roman Catholic Economics’, in P. Oslington (ed.) Oxford Handbook of Christianity and Economics. Oxford: Oxford University Press: 153–176.

CHAPTER 17

Angling for Australia

During the late 1950s Clark had, as we have seen, applied unsuccessfully for four high level posts at Australian universities. He took this philosophically, telling Santamaria that while he still longed ‘to join the fight with him’, Australian universities do not ‘want my type of economist. So, I think I might stay here while I still have education to pay for … But we look forward to getting back to Australia eventually - we still own our house in Queensland.’1 In a forthright interview in 1962, he told Alan Trengove, an Australian correspondent based in London, that ‘You cannot say that I am living in England by choice’ adding that he felt he had ‘been expelled from Australia’ by a number of interest groups including unionists, brewers, manufacturers and academics.2 Clark refused to answer when Trengove asked whether he and Marjorie were unhappier than when they were in Queensland. The job search for an Australian post continued well into the 1960s. For instance, when Santamaria heard that another new university (La Trobe) was soon to open in Melbourne he sounded it out with Clark ‘to see if there could be a suitable appointment to which you could be

1 Clark to Santamaria 2 February 1961, Santamaria Papers, SLV. 2 The Courier Mail (Brisbane), 2 January 1962.

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invited’.3 Clark responded that ‘You have my consent to say anything you wish about my case - but handle it prudently’.4 He reminded Santamaria that he had already suffered four rejections from Australian universities and then, pointedly, listed his qualifications: MA Oxford (science), MA Cambridge (economics), Hon. D. Sc.(Milan), Hon. D. Econ (Tilburg) University, Lecturer in Statistics, Cambridge, 1931-37, Visiting Professor (and offered permanent professorship) Chicago 1952: since 1953, Director, Agricultural Economics Research Institute, Oxford Professorial Fellow of Brasenose College Oxford: Fellow and formerly Council member, Econometric Society: Member of French Academy of Agriculture: Member of International Statistical Institute (limited membership obtained only by election).

By this stage Clark had probably given up on finding work in Australia. One must ask why Clark could not secure an academic appointment there. Apart from identifying himself with Santamaria’s Movement, he had been closely involved in the idea of establishing a new Catholicbased political party that became known as the Democratic Labor Party (Truman 1960). As a conservative, Catholic-based political party its sole purpose was to recruit disaffected Labour supporters fearful that the Labor Party was falling under communist influence (Allan 2015, 5). Moreover, Santamaria’s influence and Catholic social thought in general had so alienated intellectual circles within Australia that, to quote one neutral but unnamed observer, it was now ‘practically impossible for a Catholic to get a post on an Economics faculty in Australia’ (cited in Duncan 2001, 360). Moreover, Clark’s markedly libertarian views about the Australian economy, particularly on protectionism, federalism and welfare reform, were not helpful. With some self-deprecation, he suggested that ‘to make confirmed enemies of nearly all the universities throughout Australia at this juncture is a real stroke of misplaced genius.’5 Self-mockery aside, he was not prepared to compromise his views but rather to advance them whatever the forum. One such example was a rather ill-tempered book that caught the eye of many reviewers. 3 Santamaria to Clark, 17 February 1965, Santamaria Papers, SLV. 4 Clark to Santamaria, 30 April 1965, Santamaria Papers, SLV. 5 Clark to Santamaria, 19 September 1957, Santamaria Papers, SLV.

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Australian Hopes and Fears (1958) Much to the discomfort of the Australian economics profession, Colin Clark had been criticising Australian economic policy since the late 1940s. He raised the tempo in a spate of publications in the early 1960s. One of his more systematic critiques of Australian economic policy was the book which Walter Crocker had urged him to write. This opinionated history of Australian society, as well as its physical geography, population, history, politics and economy, was given broad coverage in the British and Australian media. The net effect, however, was to damage Clark’s credibility and standing with its intended audience (Duncan 2001, 360). This was not just because he perceived that communist influence was ‘very strong’ in Australian labour politics and even within academe but because his radical economic vision for that country alienated many (Clark 1958, 297). The book also contained some gratuitous, ill-informed commentary on Australian society and politics, in particular, that the Labor Party leaders condoned communism. It was much better on subjects Clark knew better such as Australia’s agriculture sector, climate and geography. As a handbook and source of information, the book was marred by many factual errors. One Australian historian joked that Clark, famous for his reluctance to accept the views of his predecessors, now extended this ‘to the field of facts’ (Inglis 1958, 24). His old friend, Hartley Grattan also uncovered historical errors in the book noted that Clark sometimes gave the impression that he was the ‘only’ intellectual in Australia who truly understood her economic problems (Grattan 1958, 619); in reality there were many economists and analysts who well understood the problems of the Australian economy. Even The Economist found the book a ‘distorted’ and ‘unreliable’ guide to twentieth century Australia, noting that Clark was reluctant to say sensible things about Australia and did not do justice to that country’s hopes and fears.6 Another reviewer, the political scientist Hugo Wolfsohn (1959), was scathing, finding it ‘a very disappointing book … hastily and negligently written apparently from personal recollections and experiences … badly planned, and chapter headings often belie their contents’. Wolfsohn was not the only critic to bemoan the lack of documentation.

6 ‘Australian Prejudices’, The Economist, 19 July 1958.

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Most reviewers agreed that Clark was on more defensible ground with his critique of Australian economic policy. Broadly, the leitmotif of the book was his well-known position on free trade and argument for the massive expansion of agricultural and pastoral output directed at the huge markets of Asia. Adopting his physiocratic vision for Australia, Clark deplored the assistance accorded to manufacturing which drew labour away from agriculture and penalised that sector with high costs. This also left the manufacturing sector with oligopolistic tendencies that perpetuated high, uncompetitive wages. One argument in his favour was that, despite an array of protectionist measures, Australia still suffered from a perennial trade deficit. Only increased production and export of products such as cereals, animal fodder, meat, dairy products, eggs and fruit would free Australia from this bind. There was plenty of cultivable land available and productivity per worker in the agricultural sector was the second highest in the world.7 Reviewers focused on three blind spots in Clark’s analysis. First, many countries protected their domestic agricultural markets, making it difficult for agricultural exporting countries. Grattan (1958) wondered whether exporting more agricultural products would be enough to pay for Australia’s soaring import bill. Second, besides a brief mention about coal exports, Clark barely alluded to Australia’s mineral wealth, then admittedly mostly unexploited. Indeed, as late as 1970, he disparaged the idea of Australia becoming a leading mineral exporting country.8 Third, despite its inefficiency, the secondary sector had still allowed Australia to absorb millions of migrants since the war; moreover, it was quite difficult for a migrant to get a job on the land.9 Capturing the mood of many, John Douglas Pringle noted that Clark had the reputation of ‘being brilliant, original, provocative, eccentric – and, sometimes, just plain wrong’.10 A solitary voice in support of Clark’s pastoral idyll for Australia came from Enoch Powell (1958), the British Conservative MP who readily agreed that their manufacturing sector was hogtied by structural inefficiencies, high transport costs and a fragmented

7 ‘Colin Clark Surveys Australia’, The Christchurch Press, 9 August 1958. 8 ‘Australia Dependent on Primary industry’, The Courier Mail (Brisbane), 19 March

1970 9 J.D. Pringle ‘Land of Hope’, The Observer (London), 1 June 1958. 10 Ibid.

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market. Powell had taught Greek at the University of Sydney in the 1930s and been inquisitive about Australia before returning to Britain in 1939. In another place Clark (1962b) reminded Australians of the marked lack of competition within industry; when one local businessman said he was standing up for ‘free enterprise’ it transpired that he meant the right to restrict enterprise! There was a serious lack of interest at the thinking level in the ‘efficiency of resource allocation in the Australian economy’ (Clark 1962a, 86); academic economists were little concerned about overcentralisation and the widespread aversion to competition. In 1962 he was given another opportunity, this time in person, to impress upon his Australian hosts what was wrong with their economic policy. The Australian Institute of Political Science in Canberra invited him to speak on the theme of problems of growth in the Australian economy. Among the participants were Crawford, Donald Cochrane and Clark’s troublesome student at Oxford, Bob Hawke. The latter, now a leading official within the Australian trade union movement, was one of the discussants of Clark’s paper along with Crawford. Sparks were sure to fly. Clark’s presentation was basically a refrain of what he had been saying for the past two decades. He bemoaned that it took ‘Australia a long time to learn’. While he did not think that industrial development was wrong, he regretted the fact that Australia had literally ‘set out to manufacture everything’ (Clark 1962a, 18). Australia’s mediocre growth performance was attributed to protection, a low level of expenditure on education and low rates of labour force growth. Clark rounded on Australia’s ‘great trouble’, the balance of payments; he was emphatic that building up industry at the expense of agriculture led to chronic trade deficits and kept down the general level of productivity. Redirecting labour back to agricultural pursuits would raise Australia’s average productivity. The main problem affecting agricultural development was the Australian tradition of wage fixation which allowed unduly high awards to be handed down, made permissible by an economy kept in a state of excessive demand and shielded from imports. On agricultural exports, Clark argued that wool faced an adverse future and that a more lucrative market would be meat. He took a pot-shot at those who felt that Australia would have to invest in huge irrigation projects if she was to become a big agricultural exporting country. On trade, Clark (Clark et al. 1962, 15) urged Australians to accept the inevitability that Britain would join the EEC; with this would come the

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termination of imperial trade preferences. Australia should turn her trade orientation towards Southeast Asia, he said, suggesting the creation of a putative Western Pacific Economic Union. Clark concluded his presentation by, again, lamenting how Australian business culture had an aversion towards competition and was too dependent upon government to put things right (Clark 1962a, 26). Perhaps a little prematurely, he warned that the world was moving against protectionism and turning inexorably to free trade. This meant that Australian economists had ‘floated happily with the current popular protectionist sentiment and have avoided the unpleasant task of having to educate public opinion out of its prejudices’ (Clark 1962a, 28). While his address was politely listened to, its radical content was too much for the audience. ‘We have been given a typical Colin Clark production’ mooted Crawford (1962, 30), ‘bristling with comment calculated to irritate, very revealing of his own prejudices on many subjects, it is nevertheless full of shrewd insights and worthwhile provocations’. In his discussion on Clark’s paper, Crawford agreed that with him that the Australian growth rate was mediocre but did not agree in attributing it to deficient levels of education. He agreed with Clark that there needed to be more competition introduced into the Australian economy by limiting restrictive trade practices. However, Crawford’s main concern was whether Clark’s emphasis on a more market-based economic policy and allowing comparative advantage to determine Australia’s exports would be enough to guarantee full employment. In addition, Crawford (1962, 33) pointedly asked what good was comparative advantage if ‘markets are artificially closed’ against Australia. Still seething with resentment, Hawke (1962, 160) described Clark’s advocacy of a rural utopia as ‘a perverted programme for Australia’ and his scheme of dispersing migrants into rural areas as ‘the economy of peasant plots. This is profoundly absurd and dangerous’. His critique was, however, outdated and mischievous, since Clark had left behind his advocacy of placing European migrants in rural districts, having seen the impracticality of it.

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A Farewell to Oxford Despite still having five years to run on his contract as Director of AERI, Clark suggested to Vice-Chancellor Kenneth Turpin, in December 1968, that it might be desirable if he stood down earlier.11 He told Turpin that Monash University had offered him an honorary research position within the Faculty of Economics and Politics but failed to also disclose that the Roman Catholic Archdiocese of Melbourne had already made him an offer to head up an Institute. Along with others, Turpin might have been mystified why Clark would want to leave Oxford, with all its trappings, to settle again in the academic backwater of Australia. He was still a significant figure in world economics; there were, though, some compelling reasons for his move. One was that Clark probably felt he had, so to speak, ploughed enough in the field of British agricultural economics and that it was time for a change. Another was that the normal retirement age at Oxford was 67 in 1973 so his decision to return to Australia a little earlier, at 63, had to do with the time limit necessary to maintain his Australian tax domicile (Higgins 1989). If he had stayed any longer in Oxford, he would have faced a monstrous tax bill from the Australian authorities. There was another reason why Clark wanted to leave Oxford. As he later told his son David, Clark found his colleagues within the economics department ‘intellectually stultifying’.12 Most of them were left-wing and found his empirical approach to economics unappealing.13 Regarding his new position awaiting him in Melbourne Clark felt he had still something to offer; others might have felt he was past his peak. The most alluring prospect was that he would have at last his own research institute, courtesy of the Catholic Church. Santamaria had convinced Archbishop James Knox of Melbourne to set up a research institute with Clark at its head. Santamaria had explained to Clark that he was ‘most anxious … that you should be in Australia and at the same time be in a position to help the general fight’. The ‘general fight’ was a reference not just to vigilance against communist influence but to fortifying Catholic thought and giving it a greater place in Australian society. Archbishop Knox supported the venture. He was an Australian-born former Vatican 11 Clark to Turpin 20 December 1968, AERI, Oxford University Archives. 12 Communication with the author, September 2019. 13 A comment made by Sir David Hendry to David Clark.

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diplomat who had been appointed as the Archbishop of Melbourne in 1967. A strong supporter of Humanae Vitae, Knox told Santamaria he was ‘extremely keen’ to have Clark in Melbourne and in ‘a full-time capacity’.14 Knox knew of Clark’s participation with the Pontifical Commission that led to the making of Humanae Vitae. Clark had visited Australia in September 1968 to discuss the proposed Institute with Archbishop Knox and the resources needed to make it functional. Remuneration was necessary since Clark still had two children at school and his consultancy work had dried up. As one of the founder-member of the IEA, Clark knew all about the power of think tanks and their influence on public policy. Underlying all these machinations was the additional factor that Clark wanted to play out his remaining years in Australia.15 When he landed back in Australia in October 1969, he found it, however, a vastly different country from the one he had grudgingly left a generation before. The nation was no longer as Anglocentric or insulated a society as it was in 1952. One thing that had not changed was that economic news dominated the front page of the nation’s newspapers. A few journalists noted his return.16 Clark would have been bemused to hear that, just after he started at Monash in 1969, Bob Hawke had just become the President of the Australian Council of Trade Unions, representing some one and a half million workers. That appointment was welcomed by left-wingers since Hawke believed it was high time that unionists obtained, by militant action, a fairer share of the wealth they were producing.

References Allan, L. 2015, ‘Colin Clark and the Movement’, Recorder, No. 283, 5–6. Clark, C. 1958, Australian Hopes and Fears. London: Hollis and Carter. Clark, C. 1962a, ‘Economic Growth’, in J. Wilkes (ed.) Economic Growth in Australia. Sydney: Angus and Robertson: 1–29. Clark, C. 1962b, ‘Review of the Structure of the Australian Economy by M. Brunt and P. Karmel’, Australian Journal of Agricultural and Resource Economics, 6(2): 86–87.

14 Santamaria to Clark, 19 June 1968, Santamaria Papers, SLV. 15 ‘Top Economist Comes Home’, The Australian, 1 November 1969. 16 ‘Colin Clark Coming Home-with His Views Intact’, The Australian Financial

Review, 15 July 1969.

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Clark, C., H. Frankel and L. Moore, 1962, British Trade in the Common Market. London: Stevens and Sons. Crawford, J.G. 1962, ‘Discussion’, in J. Wilkes (ed.) Economic Growth in Australia. Sydney: Angus and Robertson: 30–33. Duncan, B. 2001, Crusade or Conspiracy. Sydney: UNSW Press. Grattan, H. 1958, ‘Colin Clark on Australia’, The Review of Politics, 20(4): 615– 622. Hawke, R.J. 1962, ‘Discussion’, in J. Wilkes (ed.) Economic Growth in Australia. Sydney: Angus and Robertson: 160–165. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Inglis, K. 1958, ‘Clerical Errors’, Australian Quarterly, 26: 23–24. Powell, E. 1958, ‘Development Down Under’, National and English Review, August, 67–70. Truman, T. 1960, Catholic Action and Politics. Melbourne: Georgian House. Wolfsohn, H. 1959, ‘Australian Hopes and Fears’, Quadrant, 3(1): 101–103.

PART IV

1969–1989 Australia Resumed

CHAPTER 18

The Monash Years

By officially accepting an invitation to become an honorary research Fellow with the Faculty of Economics and Politics at Monash University, Once again, Clark became a British capital export to Australia.1 It was a five-year appointment. Monash had built up a respectable, pluralist economics department under the leadership of Donald Cochrane. Made aware that Clark was coming back to Australia, Cochrane had jumped at the chance to recruit him; he was offered an honorary research fellowship with some ‘privileges.’ These ‘privileges’ were small beer: membership of the faculty, library borrowing rights and the use of a title. Another figure instrumental in Clark’s appointment to Monash was Sir Michael Chamberlin, who was the Deputy-Chancellor at the University. An associate of Santamaria’s, Chamberlin had founded the Knights of the Southern Cross as a counter to freemasonry in Australian workplaces. Compared to Oxford, the new campus at Monash University while pleasant, was set in the drab surrounds of Clayton, a semi-industrial suburb, some 20 kilometres from the city centre. Clark must have smiled at the irony of it all, working amidst an urban sprawl in Australia’s second largest city. He arrived at Monash in October 1969; Marjorie, a little 1 Clark to Monash Registrar, 31 October 1969, Clark staff file, Monash University Archives.

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reluctant to leave England, came afterwards with Cecily who had been attending Wycombe Abbey School. This was not the first time Clark had sought employment at Monash. When he started there, he would have recalled that, eight years earlier, when the university was first established, he had applied for the position of Foundation Dean of the Faculty of Economics and Politics. He was shortlisted for the leadership position along with Cochrane. Clark’s application for the post and how it was received gives a useful insight to how his Australian contemporaries regarded him and how, by damning him with faint praise, blew away any chance of his appointment. Despite his brilliance, the issue of Clark’s Catholicism and how it may affect his research agenda kept cropping up; his reputation among economists was diminished by his propensity, when discussing the case for population growth, to use inadequate data without much statistical refinement along with his relish for drawing unfashionable conclusions about public policy. In his 1961 application Clark called upon two leading political scientists, Sir Herbert Butterfield, vice-chancellor of Cambridge University and Bertrand de Jouvenel, to speak on his behalf. Butterfield told the Monash authorities that Clark was ‘more than just an economist’ with a lively interest in public affairs. Regarding Clark’s conversion, Butterfield suggested it ‘stimulated his interest in things humanistic, though it may have given him a certain “slant” in various fields’. Butterfield volunteered that Clark was right in leaving his position in Oxford, ‘which is not quite suited to his temperament’, that ‘he needs something wider than economics now’ and that the Monash position would suit him.2 In hindsight, it seems that Clark’s choice of referees was unwise since the selection committee, which included Douglas Copland and Richard Downing, decided that the appointee must be an economist, given the demands of the new faculty. In private correspondence with Downing, Copland said he had ‘reservations’ about either candidate before adding, with telling affect, that ‘I thought Clark would not settle down to building and administering a new department as would perhaps a younger man with more capacity for administration and cooperation with others.’3 2 Butterfield to Monash Registrar, 19 August 1960, Butterfield Papers, Cambridge University. I am indebted to my colleague Benedict Davies of the Economic Society of Australia for retrieving this correspondence. 3 D. Copland to R.I. Downing, 8 September 1960, Copland Papers, NLA.

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Wilfred Prest at the University of Melbourne was asked by the Monash vice-chancellor, Louis Matheson, to rate the two contenders. In a fairminded assessment, he considered Clark: a world figure, a prodigal writer and a brilliant and stimulating talker, in public as well as private. Nevertheless, as a foundation professor, I think he would have serious drawbacks. He has had very little teaching experience, and his administrative experience has been largely confined to research organisations. His economic views are often wrong-headed and he is so heavily committed to a particular sectarian and political point of view that he might well prove a real embarrassment to the University.4

Richard Downing was also asked to offer advice on the two applicants, but not to rate them. He considered Clark: a brilliant and dazzling statistician and an outstanding stimulating economist and colleague generally. He is an electric charge. There are few minds as lively and provocative as his. He is an innovator, building much from little in an intellectual field. If I say I am not so sure of his ability to innovate a potentially large and important school of economics, it is only because I know nothing of his qualities in this respect.

Downing could not resist, however, referring to Clark’s religious faith: ‘It seems also necessary to say that, personally, I feel he has, in later years, taken a political and spiritual position which has led him to interest himself on special economic problems and solutions of policies’.5 This was a reference to Clark’s output while at Oxford which, as mentioned, encompassed a broad canvas sometimes unrelated to the Institute’s agenda. After discussing the attributes of Clark, Downing concluded that Cochrane was probably ‘the safe bet’. He later told Prest that, with respect to Clark’s application, ‘I demurred on spiritual and on political grounds’.6 Overall the decision reflected that, in those days, the administrative ability and leadership skills of a head of a department were valued more than research eminence.

4 W. Prest to J.A.L. Matheson, 20 September 1960, Copland Papers, NLA. 5 Downing to J.A.L. Matheson, 14 September 1960, Copland Papers, NLA. 6 Downing to W. Prest, 29 September 1961, Downing Papers, UMA.

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The Institute for Economic Progress When Clark arrived back in Australia his paymaster was not, therefore, Monash University but the Catholic Church. The idea of an Institute had all been Santamaria’s and was considered ‘the only practical way’ to get Clark back to Australia.7 So it proved. The Institute, initially called Populorum Progressio (the development of the peoples), after Pope Paul’s VI 1967 encyclical, was later changed to the more secular-sounding Institute for Economic Progress. Another reason for the name change was that this particular encyclical had been criticised for its attack upon free trade and liberal capitalism. The described the encyclical as ‘souped-up Marxism’ while Time said parts of it ‘had the strident tone of an early twentieth century Marxist polemic’.8 If Clark was embarrassed that his book The Conditions of Economic Progress had been cited in the encyclical, he did not express it. It was the first time a papal encyclical had quoted a source outside church doctrine. For the Institute there was sufficient funding for six and a half years with an annual salary for Clark of $12,000, and a travel stipend of $1,000 per annum, together with secretarial assistance and a small library. The prosaic task of the Institute was to forecast the future requirements for Catholic schools within the Roman Catholic Archdiocese of Melbourne, with Clark given licence to pursue his research interests in education and population and the economic prospects for Southeast Asia.9 Clark would also have time to conduct research in a field called ‘religious sociology’, looking at how the processes of urbanisation and decentralisation affected the Church. He would also investigate how Australia could fulfil its responsibilities to the poorer countries of Asia by imparting social justice in her economic relationships. A considerable part of Clark’s research and commentary, while at the Institute, would appear in a local journal called Social Survey; this had a focus on socio-political trends and contemporary developments from the viewpoint of the Catholic Church. It was not, therefore, an academic journal but one published by the Institute of Social Order run by the Jesuits and affiliated with Santamaria’s movement.

7 Santamaria to Clark, 19 June 1968, Santamaria Papers, SLV. 8 Wall Street Journal, 30 March 1967 and Time, 7 April 1967. 9 ‘Top Economist Comes Home’, The Australian, 1 November 1969.

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Raising Dust It did not take long for Clark to immerse himself into the sea of Australian opinion. Trading on his international profile, he quickly secured a weekly column with the Fairfax press which had leading quality broadsheets in both Melbourne and Sydney; these columns were syndicated elsewhere, including Brisbane. In his two-year stint as a weekly columnist with Fairfax, Clark provoked controversy in writing about economic and political issues including inflation, environmentalism, town planning, decentralisation, population and world hunger. What was remarkable about this blaze of opinionated commentary was just how little Clark had changed his ‘somewhat anachronistic’ views (Fitzgerald et al. 2003, 264). One of his first columns reminded Australians that the world was actually well-fed. Food was no longer the key requirement in the developing world; rather what was important was clothing, education, housing and health.10 The corollary of this was to debunk fears of world hunger.11 He told a journalist that Australia’s most urgent need was the decentralisation of both industry and government, and greater specialisation of primary exports.12 Another provocative piece in April 1970 enraged female readers when Clark suggested that men be given preference over women in allocating scholarships to attend university, especially for expensive and more technical courses, because men were more likely to put their training to longer use.13 It was surely his father talking when he suggested that most women enter university to meet young men who will earn more money than those they would otherwise meet. In the same article he said that the Australian Labor Party had, by advocating free tertiary education, lost its bearings because such a scheme transferred resources from the working classes to the well-off. Indeed, he was always keen to inform unionists that most Labour governments were usually ‘a big fraud’ and that ‘most… government spending represented a net burden on the manual worker’.14

10 ‘World Well Fed Says Economist’, The Age (Melbourne), 3 November 1969. 11 ‘The Myth of World Hunger’, The Courier Mail (Brisbane), 13 February 1970. 12 ‘Top Economist Comes Home’, The Australian, 1 November 1969. 13 ‘Make Them Pay’, Sydney Morning Herald, 16 April 1970. 14 Clark to Santamaria, 6 August 1974. Santamaria Papers, SLV.

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In a related argument, his view on the decision in 1969 by the Commonwealth Conciliation and Arbitration Commission to introduce equal pay for equal work was that it would encourage women to have fewer children; it would also penalise women with young children at home who were dependent upon their husbands’ wages. The other net loser would be Australia, which would suffer a fall in the birth-rate because women would be reluctant to leave their employment to raise children.15 Clark wrote opinion pieces for Fairfax until January 1972 when the publisher did not renew the association. The Brisbane daily morning newspaper, The Courier Mail continued to publish articles from him until 1978.16 When Clark arrived back in Australia, the senior ranks of the local economics profession made some amends for its earlier treatment by securing him Fellowship of the Academy of the Social Sciences. Even this gesture was marred by some controversy. Trevor Swan, the foundation professor of economics at the ANU and a former economic adviser in the Department of Post-War Reconstruction, resigned from the Academy in protest at Clark’s selection because of the latter’s view on a range of subjects. Visiting Brisbane for the first time in several years, Clark volunteered that the real future problem would be finding enough space for recreation for the world’s growing population. It was good, he said, to see ‘public sympathy for conservation’. He also forecast that the world was heading for a global food surplus since food production was increasing faster than population.17 In a speech to the Monash Graduates Association, Clark argued that it was ‘plutolatry’ that caused pollution and the destruction of the environment in Australia.18 This came after the Victorian State Government had proposed an industrial development in what was once a wilderness area.19 Another outburst came when he told a meeting of the Democratic Labor Party that university students should pay their own tuition fees through a loans scheme; at the time most university students had the fees paid for 15 ‘Who Foots the Bill’, The Catholic Weekly, 4 January 1973. 16 Editor of The Courier Mail to Clark, 20 January 1972. 17 ‘Problems Will Be Areas for Play’, The Courier Mail (Brisbane), 14 January 1970. 18 ‘Money, God in Politics’, The Courier Mail (Brisbane), 1 July 1970. 19 ‘Money Worship in the States’, The Canberra Times, 1 July 1970.

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by the award of Commonwealth scholarships. Once again, he argued that public assistance was not going to the people who really needed it.20 It appeared as if Clark had a penchant for targeting the university sector as one most likely to receive unwarranted assistance. He spoke out against tenure for Australian academics on the basis that it bred indolence. A month later, he lamented the failure of the welfare state to help the needy and mooted the idea of a reverse or negative income tax which would render assistance to low-income families. He noted how the poorest felt the incidence of indirect taxation more than others and said it was no good telling them to go without alcohol and tobacco.21 On display was his sympathy for the powerless (Peters 2001, 12). In March 1972 Clark participated in a debate on abortion law reform, with leading feminist Germaine Greer, at the Sydney Town Hall in front an overflow audience of 2,000 people. The debate was billed as one on ‘Women’s rights, abortion, free contraception and birth control’. It did not start well with the exchange: Colin Clark: ‘I don’t know what to call you: Miss Greer or Mrs.?’ Germaine Greer: ‘Call me Doctor’. (cited in Wyndham 2012, 359)

In upholding the Catholic Church’s views on birth control and opposing the sexual permissiveness of the 1960s Clark might have sounded like an Old Testament prophet. It got worse when Clark innocently recalled his father’s old Edwardian witticism ‘Most advocates of women’s rights are men’s lefts’. The audience shuddered but Greer refused to take the bait. Around the same time Clark engaged in a televised debate with the famed biochemist, Paul Ehrlich. Clark was already furious that Ehrlich had earlier described him as ‘a veteran Catholic economist’ and an ‘idiot’ for claiming the Earth could support 157 billion people (ABC 1974, 34). Using the latest data from the FAO World Food Survey, Clark had Ehrlich concede that he was quite wrong in claiming in The Population Bomb). that, in developing countries, ‘food production every year falls behind burgeoning population growth’. Ehrlich amended this fact in his

20 ‘Students Need to Pay Their Own Fees’, The Canberra Times, 22 August 1970. 21 ‘Tax Changes Suggested’, The Canberra Times, 18 May 1970.

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more academic work, but the mistruth continued to circulate in his more popular work The Population Bomb. In the debate, Ehrlich challenged Clark’s reference to the Netherlands as the template of high yields per square kilometre in order to demonstrate that the Earth could easily feed 28 billion people. He pointed out that the Netherlands achieved these yields only because it could import fertiliser as well as high quality protein (ABC 1974, 37). Clark bristled when Ehrlich quoted a progressive theologian that the Pope ‘and a few elderly Catholic economists’ had made a terrible blunder by opposing birth control (ABC 1974, 31).

The Political Economy of a Christian Society In one of his most overlooked essays written while at Monash, Clark (1974c) provided the most comprehensive and systematic guide to how ecclesiastical thought and the two papal encyclicals, Rerum Novarum (1891 and Quadragesima Anno (1931, underpinned his economic philosophy. Channelling American economist Allyn Young, he reminded readers that there was no such thing as a value-free economics, since economic analysis always involved moral considerations and that the discipline could not be divorced from its principal object, the material welfare of mankind (Yuengert 2014). ‘There would never be’, he insisted ‘a perfect economic or political system’; but if properly applied, economics could ‘mitigate some of the worse effects of human sinfulness’ (Clark 1974c, 53). He next turned his attention to some of the seven deadly sins and how they were at play in everyday business life. Pride, he said, was evident in the corporate world when ambitious company directors chose not to distribute profits but retained earnings so as to acquire other businesses. To curb such behaviour merely required a change in corporate law to encourage companies to distribute their profits to the shareholders to whom they rightly belong (Clark 1974c, 54). Clark felt it important that the capital market functioned efficiently and that directors were reminded of their roles as the trustees, not proprietors, of their shareholders’ money. But it was avarice and lust that Clark identified as the most likely business transgressions because such sins were almost limitless in economic behaviour. These two sins, if untrammelled, impeded the rational solution of the economic problem. Envy, expressed through the resentment of other people’s wealth and fanned by expedient politicians, drove much of taxation policy. Clark felt the state should not attempt to equalise incomes

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but that it should check contrasting extremes of wealth and also restrict shows of opulence. When it came to man’s rights, Clark invoked Rerum Novarum as the best case for protection of a living wage, including conventional necessities but also for the affirmation of man’s natural right to own property, including the means of production. It also enshrined the right to form unions and cast doubt on the popular belief that unions were to blame for inflation. Clark (1974c, 57) welcomed unadulterated competition in the market. Competition, he countenanced, would tend to neutralise avarice, envy, gluttony and sloth which were endemic in human nature. He warned that, under a ‘regulated economy’, these sins would be allowed greater ambit in business life, though he made an exception for public utilities which he argued should remain state-owned. A few years later, Clark (1978b, 5) suggested that upholding free competition was a practical matter which would be abandoned if it was not working efficiently. On advertising by modern corporations, Clark (1974c, 61), following the 1931 encyclical, was against ‘mood’ forms of persuasion and anything that created a desire with the object of making a profit from satisfying it. Overall, he felt that critics, such as Galbraith and Balogh, overrated the power of advertising to sway consumer choice. 22 The role of the state, he said, was plainly to serve the family, not vice versa. Its specific role was to act as a nightwatchman; apart from helping decentralisation, anything beyond that such as providing comprehensive welfare to all was to be shunned. Clark (1978b) insisted that the state was responsible for the welfare of its citizens but this did not mean welfare for those capable of providing for themselves. The current welfare state was ‘morally invalid’, he argued, since it involved a flagrant misappropriation of funds especially to those who could more than adequately help themselves. Only ‘naïve souls’ lacking a knowledge of bureaucracy believed that the state could provide education, health and other welfare services better than private providers (Clark 1974c, 59). If the state was involved in funding education, the best way to arrange it was by vouchers exchangeable at private schools. He upheld Friedman’s idea of a negative income tax which would give people the responsibility of apportioning money to meet their various needs more carefully and efficiently than

22 ‘Lord Balogh Lunges Out—But with What Effect?’, News Weekly (Melbourne), 16 June 1982.

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any government department could manage. The only catch with negative taxation was ascertaining the level of income to be disbursed without impairing the incentive to earn. This view of welfare was compatible with fulfilling the 1931 encyclical, namely, that of achieving decentralisation, both politically and economically. In terms of fiscal governance, it meant that every level of government had to find its own funding via taxation; in a federal system, grants to lower level of government did untold harm by promoting irresponsibility and extravagance. Decentralisation of political power would introduce an element of competition into government.

The Return of Mr. 25 Per cent The 1970s were marked by rising inflation due mainly to increasing wage costs and higher commodity prices. Clark publicly engaged in the debate on how to battle the recurrence of persistent inflation, which in Australia and elsewhere had reached frightening proportions. But quelling inflation was not as easy as in past decades because of labour militancy and the complacency of management. The collapse of the Bretton Woods system of monetary management in 1971 and a local share-market boom had not helped matters in Australia. Clark saw it as an opportune time to reinstate his argument linking inflation with high-taxing, high-spending governments. As Hotson (1979, 381) noted, Clark’s argument had no effect on the development of macroeconomic policy in the 1950s and 1960s; the theory of tax-push led inflation had to be re-discovered. Clark (1976c) identified over-taxation as the bedrock factor in causing persistent inflation. As with many of his constructs and theorems, he had never forsaken it; in 1963, for instance, he suggested that countries with high rates of tax proportionate to GDP tended to have higher rates of inflation. Few Australian economists gave credence to that proposition. In a little-known pamphlet Why Prices Rise (1971), he blamed inflation on the increasing abundance of capital relative to labour. Inflation was aided by the anti-competitive and insulated nature of Australian business that, he argued, preserved high profits and, in turn, high wages. The pamphlet rejected the idea that inflation was caused by wage-push factors, instead taking a Hicksian approach which focused upon the ease by which labour could be replaced by machines and vice versa. Clark had reviewed Hicks’s Theory of Wages (1932), noting how it showed that rising wages had led to the shift away from labour-intensive processes and products.

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Now it was Hicks with a twist. Wages, Clark argued, are the consequence of profits, not vice versa. Wages follow profits upwards because the nature of production has become more capital-intensive meaning the possibilities of substituting capital for labour were limited. Both profits and wages were not exogenous, he argued, but rather the consequence of current and past levels of aggregate demand. Recalling his early days of research in the 1930s Clark returned to the study of the long-term distribution of national product between labour and capital and how it was dictated by factor substitution. He used the elasticity of labour-capital substitution as an explanation for rising wages and falling profits, linking it to the pressure of aggregate demand upon capital and the estimated replacement cost of new capital machines. In the short run, gross profit was directly proportional to the pressure of demand upon productive capacity. The price of capital goods was crucial in the process since a rise in the price of machinery forced businessmen to charge higher prices for their output in order to earn the gross margin on expensive new equipment (Clark 1977b). Wages were rising, Clark argued, because the elasticity of capitallabour substitution was falling, meaning that labour, with its increased bargaining power, was winning an increasing share of national income. It was a natural development for the share of profits in national product to decrease (Clark 1979, 6). He shared his findings with Bob Solow, who responded positively that Clark ‘might be on to something’.23 Put simply, a rising capital intensity of production, led to a ‘blackmail’ theory of wages whereby labour had industrial power to extract higher remuneration (Clark 1974b, 1). He duly provided his empirical proofs and theoretic reasoning determining the relative incomes of labour and capital (Clark 1978a). Unlike his Australian colleagues therefore, Clark was not in favour of reducing real wages to restore the share of profits in national income. In putting forth this view, Clark was, like Milton Friedman, absolving trade unions of any blame for causing inflation; that responsibility ultimately lay with big-spending, big taxing governments. Friedman was amused to hear laudatory references to him by Australian trade unionists about the true source of inflation (Clark 1981, 228). Clark was among the few

23 R. Solow to Clark, 8 January 1974, Clark Papers, UQ.

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Australian economists not to blame unions for wage inflation. His interpretation of inflation, which he had fathomed since 1970, was certainly more nuanced than just blaming rising money wages. The slowdown in growth in Australia and throughout the world was linked, in Clark’s view, to a long cycle of investment spending being stuck in a satiation phase. His solution for inflation was to suppress the level of demand, in particular the level of public expenditure, followed by a reduction in taxation to restore private demand. It would take a year before this would show an effect upon prices. Labour’s share of national income would not shrink much as it always did relatively well in years of near recession. While Clark’s thesis about inflation and the unfamiliar role wages played in the process impressed Solow, it did not sway his Monash colleagues nor indeed one of Clark’s former Cambridge colleagues, Joan Robinson. She was spending a term at Monash in 1975 and was amazed to run into Clark. After being entertained by the Clarks at their home, Robinson told Richard Kahn that Clark was ‘some kind of grand supernumerary professor … He has an elegant villa overlooking the sea and lives on excellent food and drink but still as dotty as ever’.24 Her fears were confirmed when she later attended one of his seminars at Monash: We had a seminar from Colin Clark on wages yesterday. Some interesting figures and a totally dotty explanation. The ‘rise in the price of capital good’ causes substitution of labour for machines and so raises money wages. He was quite good natured under attack. There is something rather sweet about him after all and as a personality he is much better value than anyone else here.25

Joan Robinson and Clark had, over the years, shared an infrequent correspondence; on one occasion in 1964, Robinson had taken umbrage at Clark’s review of her book Economic Philosophy (1962), in particular the claim that she had ‘crossed the Rubicon’ and became a Marxist.26 On matters like population she saw ‘no point in arguing with him’.27 The dinner party conversation at Clark’s home might have also broached the subject of import controls which had recently been canvassed by 24 Robinson to Richard Kahn, 7 March 1975, Kahn Papers, King’s College, Cambridge. 25 Robinson to Kahn 13 March 1975, Kahn Papers, King’s College, Cambridge. 26 ‘Review of Economic Philosophy by Joan Robinson’, The Tablet, 11 April 1964. 27 Robinson to Clark, 9 June 1964, Clark Papers, UQ.

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the Cambridge Economics Policy Group. Since Robinson was soon to depart Australia for China the dinner party conversation might have also revolved around their diametrically different views about Mao Tse-Tung’s economic stewardship. At the time Clark (1976d) was putting the final touches to a damning economic assessment of China’s economic progress since the Cultural Revolution which would appear in a forthcoming issue of the Journal of Political Economy. As for Clark’s ‘dottiness’ with his theorising, Robinson was correct in a way. While Clark (1976a, d) presented his model to Monash and other Australian economists, most were not interested in his thesis and focused on real wage-push or that real wages had grown faster than productivity as the more likely cause behind Australia’s stagflation. In contrast, the post-Keynesians visualised inflation as part of the relative class struggle between labour and capital. Clark’s (1975a) view was, like Friedman, that wage demands by trade unions were the consequence, not the cause of inflation. Working from his own macro-econometric model of Australia, Clark (1974a) showed that the only cure for inflation was, as mentioned, a drastic reduction in government expenditure and, in turn, a lower rate of taxation. He continued this line in 1979 in a paper entitled ‘The Persistence of Stagflation’, given at the 8th Australian Conference of Economists at Latrobe University (Clark 1979). He argued that only a moderate but sustained downward pressure on demand would break the spiral of price and wage expectations.28 Many Keynesians would have parted company with him over this, just as mainstream economists were bemused at his arguments opposing cutting real wages to restore profitability. He drew strength from the fact that he was probably the only economist pushing this line and reminded critics that when economists were unanimous on something, they were likely to be wrong. Querying why demand restraint was barely discussed, Clark suggested to Alan Walters at the LSE that he had ‘unhappily’ come to the conclusion that far too many ‘economists were ‘place-seekers’, hoping for consultancies with government departments and organisations under government control or influence and did not wish to appear hostile to the policies which were being upheld by all political parties.29 A more sober, less emotive

28 ‘Pull Back Demand-Economist’, The Age (Melbourne), 29 August 1979. 29 Clark to A.A. Walters, 4 July 1974, Clark Papers, UQ.

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outlook was that both sides of politics agreed that the very long time lags governing responses to policy changes made policy action to control inflation terribly difficult. At Monash, Clark, alarmed at the rapid increase in government spending, feared that Australia was heading for a rate of inflation of 40%. He had, of course, been saying this since he had written Why Prices Rise (1971). The only way to cut the cycle, as he told Arthur Seldon, was to wind back taxation and, in turn, government expenditure, adding though ‘I can see myself receiving little support for these proposals’.30 The revelation that, without the indexation of tax scales, the state took more of the average salary gave his argument added force. He told Milton Friedman that Australia needed a ‘drastic cut-back in government spending’ and invoked his 1945 article correlating a positive relationship between taxation and inflation.31 Simply put, higher taxes predicated on higher government spending would reduce saving and incentives, and in turn, productivity and were thus inflationary. Clark’s willingness to recycle his 25% limit of Net National Product belied claims by Perkins and Powell (1990, 332) that his faith was wavering on that empirical finding.32 When Milton Friedman, the high priest of monetarism, visited Melbourne in 1975, he appeared on the ABC television program Monday Conference.33 Many economists, including Clark, were in the audience. On this nationally-aired program Clark, prefaced a question by repeating his claim that inflation in Australia could skyrocket to 40 per cent unless the government cut expenditure; he suggested to Friedman that ‘the first area’ of excessive government expenditure that could be curbed was higher education. At the time, the Whitlam Labor Government had recently introduced free tertiary education for all local matriculating students; there had been a boost in university salaries, departments, positions and students. In response, Friedman readily agreed that spending on university education be wound back and that middle-class graduates could

30 Clark to Seldon, 20 October 1975, Clark Papers, UQ. 31 Clark to Friedman, 26 November 1974, Friedman Papers, Hoover Institution

Archives. 32 In 1992 Perkins (1977b, 1) recorded that Clark in personal communication still adhered to the relationship, arguing that, though weak, it was nonetheless a clear one. 33 Transcript of telecast of Monday Conference with Milton Friedman 14 April 1975, Australian Broadcasting Commission.

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well afford to pay their own tuition fees.34 That interjection revealed that Clark shared Friedman’s vision of a minimalist state rather than any abiding interest in monetarism, which he felt was a ‘fixation’ (cited in Higgins 1989, 309). Clark (1975a) did agree though that one reason why the money supply rose was because governments were spending more. While they did not agree in theory, the two men did agree in practice. Put simply, Clark (1975b, 41) saw the opportunity of conquering inflation as the means to implement his ambition of dismantling the welfare state. After the television broadcast, the Friedmans were, like Joan Robinson the month before, entertained by the Clarks at their house overlooking Port Philip Bay. Two years later, in January 1977, at an IEA forum in London on the theme ‘The State of Taxation’, Clark gave his last public rendition of his cherished 1945 paper. On this occasion he produced his prized letter from Keynes saying how he was strongly ‘disposed to agree (that) 25 per cent taxation is about the limit of what is easily borne’.35 He had already reproduced it in a 1976 article in the Australian literary journal Quadrant (Clark 1976c). The discussants for Clark’s paper were the Conservative MP Nigel Lawson and Professor T. W. Hutchison of the University of Birmingham. Interestingly, Clark (1977b, 22) made a few new qualifications to his analysis. He first reminded his audience that the ratio was not the work of distilled theoretical modelling but strictly an empirical finding. On the evidence, no other country had gone beyond this limit without some inflation. He also acknowledged that excessive taxation was not the sole cause of inflation and that the rate of inflation was not proportional to the rate of taxation; it all depended on what forms the taxation took. Lawson (1977, 30) suggested that this later admission weakened the significance of the 25% criterion. Nonetheless, Clark still subscribed to the general rule but chose to see the culprit more as the growth in government spending rising faster than GDP rather than the taxation needed to finance it. As a last comment, Lawson (1977, 31–32) remained unconvinced that Clark had identified the tangency point where taxation stopped serving as an inducement to produce and became a disincentive. Hutchison (1977, 32)

34 ‘Inflation Could Be 40 pc in Australia’, The Canberra Times, 16 April 1975. 35 Keynes to Clark 9 March 1945, RES, LSE.

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suggested that the 25% criterion had been breached before 1945 and cast doubt on whether it was possible to roll back government spending to meet that criterion. Clark felt that two areas where the state could restrain expenditure were on higher education and welfare spending. His very last publication (Clark 1987) was on welfare reform. Noting how health, education and pensions were ate up tax revenue, Clark now proposed the introduction of two classes of taxpayer. One class would pay taxation and receive the full array of social services while the other class would pay no income tax but would have to make provision for their own welfare needs. The latter would predominantly be new entrants to the labour force as well as immigrants. To ensure the system worked the young would have to undertake some form of compulsory savings or financial investment.

A Thatcherite Vignette Towards the end of 1975 Clark received overtures from the leading British Conservative politician Sir Keith Joseph, about the possibility of spending a year in England with the Centre for Policy Studies (CPS). The Centre was a think-tank, which Joseph had set up in London in 1974 with journalist Alfred Sherman, to begin the long march in support of liberal market ideas. Joseph was close to the newly-elected leader of the Conservative Party Margaret Thatcher and was a trail-blazer for free market liberalism. Joseph had come to know of Clark’s work because he had received the manuscript of an essay on welfare reform and negative income tax that had been forwarded by David Clark, then an economist in the City. Having read through the essay twice, Joseph was interested in Clark’s proposals. He warned that he did not think the Conservative Party ‘had the courage to go along the road he indicates’, but welcomed ‘the boldness’ of Clark’s analysis.36 Joseph had just given a lecture entitled ‘Monetarism is not enough’, elements of which accorded with Clark’s political philosophy, not least, in criticising the post-Keynesians clustered around Cambridge. Two years earlier, in 1974, Joseph had given an oration entitled ‘Inflation is caused by Government’, which signalled his rejection of incomes polices and keen embrace of monetarism. He had cited Clark’s work on how inflation and rising costs were squeezing corporate profits (Clark 1974b). 36 Keith Joseph to David Clark, 18 June 1975. I am indebted to David Clark for having shown me a copy of this letter.

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Joseph also knew about Clark’s work through his links with the IEA. He was an admirer of Clark’s pamphlet The Political Economy of a Christian Society (1974) and would later, as Secretary of State for Industry in the Thatcher Government, make it required reading for all civil servants in his department (Halcrow 1989, 136). Back in Melbourne, Clark now 70, agonised over Joseph’s offer. While the Institute for Economic Progress had ended, he was quite content at Monash and felt that the job would better suit a younger man. He imagined the position would be about preparing advice on economic issues that arose from parliamentary debate, preparing press statements and public speeches. He envisaged the material would cover trade, the balance of payments as well as monetary policy. Clark suggested a civil service salary just below that of a head of a department as appropriate remuneration. He poignantly closed his letter of reply, saying that, as he relaxed and looked over a sunlit sea from his home, ‘you will understand it is only the sense of urgency of things which makes me willing to discuss moving’.37 He told Joseph he would be visiting Brasenose College in early 1976 where they might discuss the matter further. By ‘sense of urgency’, was a reference to the dire state Britain was in the mid-1970s, beset by stagflation, divided by industrial relations problems and sagging productivity, an underlying weakness in the balance of payments and an unstable pound. Moreover, there was frequent media reference made to Clark’s dictum about what happens when the state attempts to extract too high a level of tax from people’s incomes. Privately, Clark might have shared some doubts about his suitor. Apart from being a politician and ideologue, Joseph had dabbled in eugenics, when he spoke about the cycle of deprivation among the under-privileged and concluded that too many poor in Britain were having children. He had also tended to regard Britain’s service sector as wealth-consuming, not wealth-producing. On the positive side of the ledger, Joseph had undergone some quasi-religious conversion to full blown economic liberalism and had even contemplated an embryonic negative income tax in 1974 (Seldon 1977, 5). After that initiative, the idea had lain dormant and Clark would have felt excited that it could be reintroduced under a future Thatcher government. This

37 Cited by David Clark in his memoir of his father, Brasenose Colloquium, 2005.

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explains why Clark, accompanied by Marjorie, took a year’s leave from Monash in June 1976 to take up the London engagement. Although they were comfortably housed in a flat in Mayfair, things did not go to plan. One intimation of this occurred when CPS co-founder Alfred Sherman wrote a brief to Joseph about ‘Restructuring the Centre’ and seemed confused about what Clark’s role was and where he fitted.38 It was all a little unclear as to what Joseph really had in mind for Clark. Alan Prest, by now an economist at the LSE and an expert on negative taxation, was ‘astonished’ to hear about Clark working for the CPS and told his brother, Wilfred, how Clark had come along to ‘to pick my brains’ on the subject. He went on: ‘I wonder if they have the slightest conception of what they are letting themselves in for. A perfect example for remaining in opposition in perpetuity I should have thought, much as I respect his brightness’.39 Things got no better when, a few months later, Clark gave a seminar on public finance at the LSE which Prest chaired: ‘He really is totally incorrigible and the same old mixture of sharp insights together with an unbelievably slapdash approach in what he doesn’t know much about’.40 Undaunted, Clark continued to polish his work on welfare reform and mooted the introduction of negative taxation. Having raged about the problem of centralisation and excess welfare since the 1950s, Clark would crystallise his thoughts in the paper Poverty before Politics published by the IEA in May 1977. In this paper he set out the mechanics of how the scheme would work. The existing welfare state, he asserted, was incurring rising costs, transferring large sums of public money to those who did not really need it and provided employment to a small army of bureaucrats (Clark 1977c, 23). Another blight of the current arrangements was the belief, strongly held by Clark, that much of the unemployment was voluntary. Under the new arrangements, the working class would rediscover how to handle money so as to provide for their own education, health and pension entitlements. Essentially, the poor would have their income topped up and leave the provision of these services to the market. Clark insisted that the poor knew their needs better than meddling civil servants. A negative

38 A. Sherman to K Joseph, 10 January 1977, Sherman MS, Royal Holloway Library. 39 A. Prest to W. Prest, 24 July 1976, Prest Papers, UMA. 40 A. Prest to W. Prest, 24 March 1977, Prest Papers, UMA.

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income tax which would be phased in would supplant all welfare payments and national insurance contributions. Income supplements would be paid to those on low family incomes and in need, and those who claimed the concession would need to show proof of their disability or inability to work. The scheme would dispense with the problem of poverty traps and remove the blight which welfare had on those who received it. The scheme also allowed for personal income tax cuts with a maximum marginal rate of tax at 50%. Under the scheme, working women with children would have an incentive to stay home with their children (Clark 1977c, 45). Overall, the cost of this scheme was about one-third of the current system. Despite her fiscal toughness, Margaret Thatcher steered clear of any such radical reforms to welfare, including rejecting the idea of education vouchers. Clark returned to Monash in August 1977 disheartened, having found the CPS venture a waste of time; he told Bill Stent, an economist at La Trobe University, that Thatcher was ‘hopeless’.41 To his sons, he bemoaned that ‘Thatcher had ruined my reputation’.42 Gregory Clark sympathised with his father, telling him ‘like yourself I too am concerned at the menace of government spending and the inability of even conservative parties to oppose the trend in that direction’.43 However, when Clark returned to Australia, he publicly welcomed the Fraser Government’s austerity program to defeat inflation, commenting that he did not think unemployment would rise markedly.44 Apart from cuts to higher education expenditure, Clark (1976c) recommended that public expenditure on housing cease altogether because the beneficiaries of it were not the poorest people in need of help. There was an interesting sequel to the Keith Joseph episode. On 10th March 1981 Clark, writing to Friedman and commenting on Thatcher’s unpopularity in the polls, told him how he had met her in 1976 and told her that she ‘would not get things going unless people paid for their own health and education’. Thatcher agreed but suggested that welfare reform was for ‘the election after next’.45 This was read as a fudge. Thatcher later 41 ‘Distinguished Economist and Eccentric’, The Age (Melbourne), 6 September 1989. 42 Cited from David Clark’s memoir of his father. Brasenose Colloquium, 2005. 43 G. Clark to Clark 1978, Clark family letters. 44 ‘Government on Right Tack Against Inflation’, The Canberra Times, 8 August 1977. 45 Clark to Friedman 10 March 1981, Clark Papers, UQ.

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made another blunder by abolishing local rates, thereby leaving municipal government reliant upon central government grants. On that same day in 1981 that Clark wrote to Friedman, the Chancellor of the Exchequer, Sir Geoffrey Howe, brought down a contractionary budget, which included a 4 billion pounds increase in taxation designed to restore Britain’s fiscal balance. The most controversial aspect of the budget was its timing, amid the depths of a recession. It famously prompted a public letter of protest and condemnation by 364 British economists, including many luminaries who objected to the economic framework behind the budget (Wood 2006). Margaret Thatcher had trouble naming just three economists who supported her economic strategy. Had Clark been in Britain, he would presumably have strongly opposed the budget simply because the tax increases would adversely impair the supply side of the economy. It is bemusing to think what Thatcher actually made of Clark; he was, unlike Alan Walters, Friedrich von Hayek, Patrick Minford and John Vaizey, not one of her favourites, yet he was probably the first economist to articulate and model her views. Clark subsequently said very little about how Thatcherism became a shorthand for the emergence of a brash new individualism within English society.46

Monash: Autumn Years With still some fight in him, Clark returned to Monash he was delighted to hear that the university had extended his Fellowship for another three years. Given staffing difficulties, Monash offered him a part-time senior lectureship for the first half of 1978.47 This time Monash paid Clark a salary of $11,600 for his teaching duties contrary to his earlier stated belief of never wanting the government as his ultimate paymaster. There was no doubt that Clark was a treasured member of the economics department there. What he had been saying for years about the self-imposed constraints and cosseted nature of the 46 For her own part, Thatcher would have her revenge on economists. With the help of her press secretary Bernard Ingham, she devised a short sketch based on the BBC television comedy program Yes, Minister. Together with actors Paul Eddington and Nigel Hawthorne, she performed this sketch at the National Viewers and Listeners Award presentation in 1984. Her latest brainwave was, as set out in the sketch, to abolish economists! Yes Minister was one of Clark’s favourite television programs. 47 J.D. Butchart (Registrar) to Clark, 27 January 1978, Clark personnel file, Monash University.

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Australian economy struck a chord with younger members of staff. They favoured a more outward-looking Australia, free from the incubus of tariff protection and regulation. When asked to justify why Clark should be reappointed, the Chairman of the Economics Department, Ross Parish, wrote: He continues to enliven our staff room conversations with his knowledge and wit; that he participates in staff lectures; that he continues to give public lectures … and that the Department of Economics earlier this year resolved unanimously to recommend that his honorary appointment as Fellow of the Faculty be renewed.48

The reference to Clark’s tea-room interaction with others would have been valuable, given his colourful life and his ability to recall events and luminaries from the worlds of politics and economics. Some younger research students were impressed by Clark casually recalling discussions ‘with Keynes on the steps of the (British) Treasury’ (Banks 2008, 1). The name-dropping was excusable, given Clark’s vintage, experience and network of associates. Many members of the Monash staff, including graduate students, encountered him in the departmental tea-room. With no time for small talk, Clark initially appeared gruff and uninterested until a subject sparked his attention. Today this aspect of university life is all but lost, but in Clark’s time the Monash staff room and (later at the University of Queensland) were lively forums for exchange of ideas (Wright and Ville 2018). Clark proved equally good value in seminars. One Monash econometrician, Alan Powell, recalled how Clark came to nearly every post-lunch time seminar at the department. He would sit at the end of a long boardroom table directly facing the speaker. The great economist, however, as Powell tells it, usually seemed to ‘be afflicted with post-prandial stupor, appearing to sleep through most of the talk’ (Perkins and Powell 1990, 333). As soon as the chairperson called for questions, Clark would sit bolt upright and quiz the startled speaker. Peters (1990, 130) suggests it was all an act; ‘a feigned sleep followed by devastating interjections’ but occasions, nonetheless, to be treasured.

48 Ross Parish referee’s report to Butchart, 21 December 1977, Clark personnel file, Monash University Archives.

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The most technical work he wrote while at Monash was The Value of Agricultural Land (Clark 1973). A technically dry work, it was designed for a specialist audience. Besides summarising von Thünen’s theory of the ‘isolated state’, it was a survey of studies that had derived agricultural land values from production function analysis and the net return from land. The book was basically an exposition of the Ricardian principle that rent, and the price of land depended on the net return from farming. Put another way, the price of land is mainly a ‘rent’, the value of which depends upon the value of the output from the land. In conclusion, land prices and rents reflected the net profit of farming. Therefore, any form of farm support immediately would become crystallised in the price of the land. Clark was intrigued that Australia had adopted land taxation whereas Britain had not. Clark (1965) later articulated his plans for a national land tax for developed countries. In 1974 Clark made a final visit to his beloved India. Invited by the Indian Chamber of Commerce, he spoke on ‘Fiscal policy as an aid to growth’. The title was something of a misnomer as Clark regaled the audience with all his familiar nostrums and advice regarding an ideal taxation system, the primacy of agriculture, the need for better roads, the virtues of decentralisation and minimising bureaucracy. The year before, on another private trip, he had spoken at the Forum of Free Enterprise in Bombay, giving public lectures and presentations on development, population and ecological issues. In October 1977 Clark was given the honour of presenting the Eleventh Monash Economics lecture where he spoke on ‘Population and Depopulation’. It was apt since, forty years earlier, in the same city, he had first presented evidence showing that, following Keynes’s lead, a growing population was the sign of a prosperous economy. He warned that on current population projections Australians would be living in an increasingly ‘geriatric society’ as the ranks of the elderly ballooned.49 While the public lecture did not strike any new ground, Clark cogently traversed the territory of his research career. Having fought many battles against fashionable economics and conventional opinion, Clark, like the celebrated Roman general Cincinnatus, felt it was time to return to his farm. He left Monash in June 1978. He and Marjorie had been away from their property at Sunset 49 F. Cranston, ‘An Aging Population in a World of Changing Power Balances’, The Canberra Times, 8 October 1977.

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Road, Kenmore, for over 25 years. The property was now surrounded by some of Brisbane’s most fashionable houses and its value had skyrocketed. Clark would have been amused at this since he knew that a genuine policy of decentralisation meant a fall in urban property values. In coming back to bustling Brisbane, it was obvious that Clark’s attempt at getting Queensland to adopt decentralisation had not succeeded. He was horrified later to learn that the Queensland Government had compromised other state governments’ attempts at decentralisation by enticing interstate companies to come to Brisbane. There was another attraction in coming back to Sunset Road; Clark had been invited to take up an honorary research position within the Department of Economics at the University of Queensland. Ideally, the campus was just downriver from his residence.

References Australian Broadcasting Commission (ABC), 1974, Saving our Small World: Monday Conference on Population, Ecology and Resources. Adelaide: Griffin Press. Banks, G. 2008, ‘Industry Policy for a Productive Australia’, Economic Analysis and Policy, 38(2): 1–19. Clark, C. 1965, ‘Land Taxation: Lessons from International Experience’, in Peter Hall (ed.) Land Values. London: Sweet and Maxwell. Clark, C. 1971, Why Prices Rise. Melbourne: Hawthorn Press. Clark, C. 1973, The Value of Agricultural Land. Oxford: Pergamon Press. Clark, C. 1974a, ‘The Only Cure for Inflation’, The Bulletin, September 14, 76–77. Clark, C. 1974b, ‘Inflation and Declining Profits’, Lloyd Bank Review, 114. Clark, C. 1974c, ‘The Political Economy of a Christian Society’, Social Survey, 53–63. Clark, C. 1975a, ‘The State of Economics’, Quadrant, 19(8): 73–76. Clark, C. 1975b, ‘Inflation; The Cure’, Quadrant, 19(3): 15–21. Clark, C. 1976a, ‘Wages, Profits and the Substitution Function’, Economic Papers, 52: 16–30. Clark, C. 1976b, ‘Keynes on Taxation’, Quadrant, 20(6): 15–17. Clark, C. 1976c, ‘Paying for Inflation’, Quadrant, 20(2): 31–32. Clark, C. 1976d, ‘Economic Development in Communist China’, Journal of Political Economy, 84(2): 239–264. Clark. C. 1977a, ‘Population and Depopulation’, The Eleventh Monash Economics Lecture, mimeo.

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Clark, C. 1977b, ‘The Scope for, and Limits of, Taxation’, in A.R. Prest (ed.) The State of Taxation. IEA Readings, No. 16, London: IEA. Clark, C. 1977c, Poverty Before Politics: A Proposal for the Reverse Income Tax. London: Institute of Economic Affairs. Clark, C. 1978a, ‘Wages and Profits’, Oxford Economic Papers, 30(3): 388–408. Clark, C. 1978b, ‘Australia’s Wrong Turnings’, Quadrant, 12(12): 5–10. Clark, C. 1979, ‘The Persistence of Stagflation’ Paper give at the 8th Conference of Economists, La Trobe University, Melbourne. Clark, C. 1981, ‘Do Trade Unions Raise Wages?’, Economic Affairs, 1(4): 228– 229. Clark, C. 1987, ‘Welfare Taxation: Opting Out to Shrink the State’, Economic Affairs, 7(3): 38–39. Fitzgerald, R., A.J. Carr and W.I. Dealy, 2003, The Pope’s Battalions: Santamaria, Catholicism and the Labour Split. St Lucia: University of Queensland Press. Halcrow, M. 1989, Keith Joseph: A Single Mind. London: Macmillan. Hicks. J. 1932, The Theory of Wages. London: Macmillan. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Hotson, J. 1979, ‘Inflation and the Rise of the Government Sector: An Analytical Survey’, Eastern Economics Journal, 5(3): 379–401. Hutchison, T.W. 1977, ‘Comment on Clark’s Paper’, in A.R. Prest (ed.) The Level of Taxation. London: IEA: 32–34. Lawson, N. 1977, ‘Comment on Clark’s Paper’, in A.R. Prest (ed.) op. cit. 29–32. Perkins, J.O.N. and A. A. Powell, 1990, ‘Colin Clark, 1905–1989: An Affectionate Memoir’, Economic Record, 66(4): 329–341. Peters, G. 1990, ‘In Memoriam: Colin Clark’, Journal of Agricultural Economics, 41(1): 129–131. Perkins, J.O.N. 1992, ‘Public Finance and Macroeconomic Policy’, Economic Analysis and Policy, 22(1): 1–19. Peters, G. 2001, ‘Colin Clark (1905-1989): Economist and Agricultural Economist ’ Working Paper No. 69, Queen Elizabeth House, University of Oxford. Seldon, A. 1977, ‘Introduction’ to Poverty Before Politics, 3–6. Wood, G. 2006, ‘364 Economists on Economic Policy’, Econ Journal Watch, 3(1): 137–147. Wright, C. and S. Ville, 2018, ‘The University Tea-Room: Informal Public Places as Ideas Incubators’, History Australia, 15(2): 236–254. Wyndham, D. 2012, Norman Haire and the Study of Sex. Sydney: Sydney University Press. Yuengert, A.M. 2014, ‘Roman Catholic Economics’, in P. Oslington (ed.) Oxford Handbook of Christianity and Economics. Oxford: Oxford University Press: 153–176.

CHAPTER 19

At Heaven’s Gate

The last decade of Clark’s life was to prove a mostly contented one. It was marked by public recognition of his achievements as an eminent applied economist but set against a major illness and the decrepitude of old age. He would, though, have been mostly content as both he and Marjorie would sit in the evening on the veranda of their house, overlooking the Brisbane River, listening to the song of kookaburras. He had at last, ‘settled down’ in his favourite place, and Queensland would, in turn, bless him with honours. On his ‘farm’ he spoke of growing vegetables; the animals had long gone. He spoke, too, of slowing down but his relentless mind would still yield two more books; one of them a primary school textbook, co-authored with Mike Ferguson (1984), on understanding weather. The other, a more serious endeavour, was a collection of his thought and fieldwork on urban and regional economics. It reflected what he had written in 1976 about the most likely problem to confront mankind in the future; ‘The principal social and economic problems of mankind in the coming generation are not going to be population growth, exhaustion of mineral resources, or food shortages’. The great, ‘still unresolved’, he argued, was how to make cities tolerable places in which to live. Another issue that continued to intrigue Clark (1985b) was the prevalence of long economic cycles.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7_19

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Colin and Marjorie Clark, Brisbane 1980s Many of Clark’s major prophecies about global economics had borne fruit and, equally, many of the dire projections of the Club of Rome and the likes of Paul Ehrlich and Barbara Ward had not materialised. In his last article on this area Clark (1985a, 124) described the 1984 World Bank’s World Development Report as Malthusianism ‘in retreat’ because the Bank now ceded that ‘moderate’ population growth was, overall, a net benefit; of course, the Bank still held that slowing population growth was better because it augmented capital per worker thereby raising productivity and per capita income. Clark was vindicated in that few spoke seriously anymore about half of the Third World facing malnutrition or claimed that the world’s supply of oxygen would run out. The developing countries with high rates of population growth generally enjoyed a good rate of growth in real incomes per head. The dreary talk, too, of the world running out of precious resources was now seen as infantile. This would have pleased Clark who throughout his life had maintained an optimistic frame of mind on human ingenuity and economic progress. While decentralisation had failed to prevent the development of swollen and congested cities, Clark sought refuge in ‘the theological virtue of hope’; to use Chesterton’s phrase, ‘You must hope, when the

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situation appears hopeless, otherwise hope is not virtue at all’.1 Clark attributed the optimism that had marked his life to this precept. It was one reason why he refused to be despondent about the ‘collapse’ in the fertility rate in western countries; in the United States, for instance, the fertility rate had halved from 3.60 in 1960 to 1.83 in 1977 (Tabah and Clark 1982, 39). He did warn, however, that Western societies had to be less materialistic and individualistic and have more children instead. Clark began to waver a little in his dogmatism, saying that the papal encyclicals were not always correct and that he did not believe the Catholic Church could give all the answers to social and economic questions. There was room for divergence as long as people remained generally obedient on doctrinal matters.2 However, Clark still associated with Santamaria and his movement, now known as the National Civic Council. That association, however, did not prevent Clark from participating in, and, indeed, chairing a rather bizarre conference hosted by the Queensland branch of the Economic Society on ‘The Economic Basis of Colonel Gaddafi’s ‘Third Universal Theory’’. The conference was backed by money from the Libyan government (Perkins and Powell 1990). Intent upon an interview with Clark, the journalist Geoffrey Barker, from The Age newspaper, located him in his small, austere university office surrounded by books on population statistics. Barker found that age had not mellowed him. Clark was still: the rogue oracle of Australian economics, a weary Cassandra whose judgements on the times seem doomed to be unheeded … he is fortified by a combination of religious faith, personal optimism, scientific curiosity and social commitment. Colin Clark is God’s economist, prophetic, sometimes sad, sometimes angry, but ultimately tolerant about human frailty.3

Barker had earlier interviewed Bill Stent who told him that Clark ‘had roguish views which turn out to be right 25 years later’.4 Certainly Clark did not grow despondent as the winter of his life closed in, however, he would have objected to Barker’s portrayal of him as ‘God’s economist’. 1 ‘ZPG Will Bring Economic Catastrophe’, News Weekly (Melbourne), 11 January 1984. 2 G. Barker, ‘God’s Economist’, The Age (Melbourne), 20 July 1983. 3 Geoffrey Barker ‘God’s Economist’, The Age (Melbourne), 20 July 1983. 4 Personal Communication with Bill Stent, July 2019.

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Regional and Urban Location (1982) In 1982 Clark published his fifteenth book which dealt with issues such as location and related themes of transport costs, the spatial distribution of industry, urban-regional migration, population density, land use and value. The book’s orientation was empirical with Clark eschewing theory on regional and urban location for an assembly of facts. Clark (1982) noted that the tendency for population density to decline from a central point now, in fact, tended to uniformity. The result, he noted, was the mindless sprawl of cities such as Los Angeles and Melbourne. What was needed was the creation of dispersed smaller cities consisting of low-density urban areas linked by modern transportation links. On metropolitan transport links Clark made explicit how it benefitted inner city elites while those in the less well-served suburbs had to commute using cars. One of the few reviews of this book from Clark’s former student, Max Neutze (1983, 195), suggested the overall presentation and scope of the book was ragged and unhelpful especially for the novice facing a collection of facts loosely related to each other. The lack of a conceptual framework nor a conclusion did not help matters. Clark made too many pronouncements on policy without reference to supporting data. Another, rather pointed, criticism of the book was that most of the data underpinning the book was old. This meant that Clark did not address a major challenge to some of his earlier findings, in particular the fact that some areas, once of economic concentration and power, had slipped into economic decline. This was contrary to Clark’s emphasis on economic potential. He could offer no explanation (Neutze 1983, 195). A more sympathetic review came from John Niedercorn (1984) who said readers would be dazzled by Clark’s ability to weave a great mass of quantitative information on all aspects of urban and regional location and spatial interaction.

Reconciling Keynes and Friedman In his interview with Treasury official Chris Higgins (1989, 309) Clark said that he no longer understood much of contemporary economics; it had become ‘excessively mathematical with few useful conclusions being drawn’ (Clark 1985c, 54). Praising the scientific approach of the ANU economist Heinz Arndt, he urged researchers to scrutinize data closely, ‘even to prepare simple scatter diagrams to learn which relationships were

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worth following up’ rather than flinging data into the computer hoping that it would do the analysis for them (Clark 1985c, 54). Clark continued his research interests in urban and regional economics and economic change over the long term. He also continued to dabble with his econometric model of the Australian economy which he had first developed while at Monash. It operated on markedly different principles and parameters from comparable macroeconomic models used by the Reserve Bank of Australia (RBA) and the Federal Treasury. Clark told Austin Holmes, a leading RBA economist, that his model showed that cutting real wages was neither necessary nor possible and that, with substantial structural unemployment, expansionist policies were likely to encounter shortages of skilled labour.5 He criticised the Federal Treasury, too, for its obsession with cutting real wages. The Clark model, with its ‘modified Keynesianism’ orientation, was put into the public domain in 1985 in an obscure organ and later issued as a University of Queensland economics department working paper (Clark et al. 1989). The model was overlaid with four forms of capital investment, each having its own cycle, making it a rather complex creature. His model, one recalls, eschewed both the Phillips curve analysis and also the notion that the wage-profit share of national income had to be realigned towards capital (Clark et al. 1989, 2). Instead, the model contended that, as aggregate demand rose and fell, gross operating surplus fluctuated much more violently than wages. Therefore, in times of economic contraction gross operating surplus fell relative to wages and its share of national income shrunk. When Australia found itself in recession in 1982–1983, Clark revealed himself to be a Keynesian, with a libertarian twist. He wanted the federal government to undertake a large but temporary increase in public borrowing to fund cuts in both direct and indirect taxation. This was predicated on his old belief that public spending programs took too long to be effective and, in any case, the tax burden, already onerous had to be lightened. In advancing this policy, Clark dismissed claims that it would be inflationary, or that it would lead to higher interest rates or have an adverse impact upon the trade account. It was ‘ominous’, he noted, that, on the centenary of Keynes’s birth, his doctrines had been neglected; when it came to public policy it seemed ‘as if Keynes might never

5 Clark to Austin Holmes, 20 June 1979, Clark Papers, UQ.

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have lived’ (Clark 1983, 33). In his model, Clark continued to suggest a theoretical compromise between Keynes and Friedman, believing in short-term Keynesianism but that, in the long-run, Friedman was right and that the size of the public sector had to be wound back. As a consequence, he was ‘disliked by both sides.6 No doubt both camps would have felt Clark was naïve. In 1980 Clark paid one of his last visits to Brasenose. At Oxford he also met the economists Richard Bacon and Walter Eltis (1976) whose work arguing that a large public sector was eroding Britain’s ability to produce would have been music to his ears. In that same year he journeyed to South America to give lectures on the Billings Method of birth control and then to North America to give graduation addresses at several liberal arts colleges. One graduation address, given at St Thomas Aquinas College, New York State, was entitled ‘Faith and Population in a Declining Civilisation’ and channelled Toynbee’s call for spiritual renewal as the means to combat moral decay. However, his days of being a peripatetic economist were coming to an end. Invited to Germany in 1982 to give the prestigious Leonard K. Elmhirst Lecture on aspects of agricultural economic development, Clark declined on the grounds of age and health.7

Long-Term Economic Change One of Clark’s last published works was a return to the study of longrun economic change with his 1942 theory of alternating periods of capital hunger and capital satiation. This allowed him to frame the period between 1950 and 1973 as one of economic boom, propelled by trade and investment flows and not the application of Keynesian economics. The two principal driving variables in his schema were the demand for capital investment and demand for trade. He figured that the cycle, after starting in 1945, had reached a turning point in 1973. The buoyancy was prolonged a little by the dislocation caused by the World War Two. Now, the global economy was facing depressed trade, low growth rate and an adverse term of trade for primary products (Clark 1985b). Inflation would remain because it was a political problem compounded by a falling birth

6 Geoffrey Barker, ‘God’s Economist’, The Age (Melbourne), 20 July 1983. 7 Clark to Theodor Dams, 18 March 1982, Clark Papers, UQ.

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rate, which did not help matters by increasing the dependency ratio. The slowing in population growth also meant lower investment requirements. In one of his last public engagements in 1986 Clark told a journalist that there was not much Australia could do but ‘ride the wave’ of international commodity prices. His forecasts seemed to be uncannily right for, in that year, Australia faced a terms-of-trade crisis when prices for her commodity exports plunged.

Affirmation In his final years, Clark’s contributions were recognised by Australian economists. In August 1978 he was invited to give the Timothy Coghlan address at the Seventh Conference of Australian Economists at Macquarie University. This was a fitting acknowledgement since Coghlan (1855– 1926) had been one of Australia’s pioneering economic statisticians including making a rudimentary attempt at measuring national product (Haig 2006). It marked 40 years since Clark had given his first public lecture to Australian economists. Now, in his address, entitled ‘Australian economic development policy: the wrong turning’, Clark regaled the audience about Australia’s wrong choices in its post-war economic settings. At the time of his address the stagflation-ridden Australian economy was marked by high degrees of protection and wage regulation. Clark (1978, 7) sheeted the blame for this aversion to competitive markets to Alfred Deakin, one of Australia’s first Prime Ministers. Monash University acknowledged Clark with an honorary doctorate in economics in 1983 . The Dean of the Faculty of Economics and Politics, W.A. Sinclair, praised him as an Australian economist whose influence on economics was recognised internationally. Sinclair noted that Clark’s attention was always on large social issues and that his name was synonymous with issues such as economic development, population growth and food supply, macroeconomic forecasting and policy, the limits of taxation and the optimal size of cities. He noted that Clark’s career bore testimony to his fight against the then ‘tendencies to divorce economics from human concerns and that his choice of research had never been inhibited by narrow considerations of modern economics. Wherever his social conscience and penetrating intellect have led him he has followed.’ Sinclair closed his address by saying that Clark ‘never

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accepted the conventional wisdom uncritically or refrained from exposing its inadequacies’.8 In his address to the graduates, entitled ‘The State of the Dismal Science’, Clark explained that this infamous term was never more appropriate than then with mass unemployment, recession and persistent inflation.9 He wove into his speech thoughts about a lifetime’s work on long-term business cycles, the centralisation of political authority and the need for lower taxation.10 With the Australian economy mired in recession, Clark called for the newly-elected Hawke Labor Government to undertake cuts in taxation. He spoke, too, of how, superimposed on the current business cycle, was a long cycle, governed by movements in the levels of investment and population. The net effect of the long cycle was to make depression deeper and recoveries weaker. Inflation was perceived as an intergenerational struggle with the young likely to vote for inflationary policies as an indirect way of shaking off the claims of the old. Later that year, Clark returned to his old stamping ground at Monash, to give the Newman address on ‘The Approach of Depopulation’. It was a recondite summary of all his arguments against environmental catastrophe and fears of overpopulation. He made the simple point that fertility had declined with economic progress and that the ensuing lower birth rates posed a strategic and political challenge for developed countries such as the United States. Those who reassured themselves that this was not a problem, as long as the birth rate exceeded the number of deaths, overlooked the fact that deaths then occurring represented the passing of a generation where the population stock had been smaller. So, he argued, if current births do no more than replace that generation, a country will inevitably end up with a smaller population. The University of Queensland also recognised Clark’s contributions to economics by awarding him Doctor of Economics honoris causa. The fact that no British university had earlier seen fit to award Clark with similar accolades prompted Arthur Seldon (1977, 5) to observe that ‘he can be said to have done Britain more honour than she did him’. In that same year, the Queensland Branch of the Economic Society held a

8 ‘Economist Honoured’, Monash Reporter, April 1983. 9 ‘The State of the Dismal Science’, Weekly Times (Melbourne), 23 March 1983. 10 Ibid.

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special dinner to honour Clark on his eightieth birthday. Appropriately the idea of undertaking a Festschrift was launched to highlight Clark’s contributions to economics; the volume was completed just a year before his death. Meanwhile, the Australian economics profession made one last act of contrition for its neglect of Clark by electing to make him one of their first Distinguished Fellows of the Economic Society of Australia. Ross Garnaut had proposed that Clark be honoured. Poetically, it was Clark’s last public appearance before the local economics profession. The announcement was made at the formal dinner of the Sixteenth Australian Conference of Economists by the guest of honour, Australian Prime Minister Bob Hawke. It was to be a joint award; Clark would be honoured alongside Trevor Swan. The occasion made, then, for some awkwardness, given Clark’s poor relations with both Swan and Hawke though only economists of a certain vintage would know of it. At an earlier Conference of Economists in 1979, Swan and Clark had engaging in a shouting match over trade and protection which astounded onlookers.11 Hawke had long left behind the bitterness of having Clark as his supervisor at Oxford. He told the hushed gathering that Clark had ‘attained eminence in both academe and policymaking. It is no secret that he and I had some fairly profound differences, dating back to days at Oxford. However, I unhesitatingly pay him tribute as one whose work first elucidated many profound questions about the Australian economy’ (Hawke 1987, 100). A nonchalant Clark told a newspaper that Hawke ‘may have improved (since the fifties). Judging by what I see, to some extent he probably has’.12 This was a reference to Hawke’s role in helping to create the Accord which put a lid on the growth of real wages and stagflation, but also his government’s commitment to a fiscal trilogy whereby it promised budget restraint pledging that federal government revenue, expenditure and the budget deficit would not increase as a percentage of GDP. Hawke’s economic advisor, Ross Garnaut (2013, 31) recalls that when Hawke met US President Reagan, the President recalled that he reminded how ‘someone said that an economy gets into trouble if taxation rises above 25 per cent’. Garnaut whispered to Hawke that Reagan was channelling, wittingly or otherwise, Colin Clark. At that time, it was

11 As told by Geoff Harcourt to the author. 12 ‘Dr Clark, 80, Is Ready with Opinions’, Courier Mail (Brisbane) 7 November 1985.

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increasingly fashionable for governments around the world to accept Clark’s proposition of a budget constraint and holding down the ratio of taxes to GDP (Perkins 1992, 2). American supply-side economists were busy incorporating Clark’s 25% fiscal limit into their proposals for economic management. Equally, President Reagan used Clark’s criterion to frame his own tax plans (Haney-Powell 1983, 4–6).

Death Colin Clark died on 4 September 1989 after spending a week at Wesley Private Hospital, in the Brisbane suburb of Auchenflower. A relatively simple medical operation had gone wrong and complications set in leading to heart failure. Nonetheless he had easily exceeded the life expectancy of a Briton born in 1905. All of his children—Gregory 53, Nicholas 52, Christopher 50, Antony 48, Bernard 47, Maurice 46, Oliver 42, David 37, and Cecily 35—most of whom were present around the bedside, mourned his passing. Marjorie was grief-stricken. His death shocked the economics department at the University of Queensland where he still attended one or two days a week. There were obituaries in leading Australian newspapers, as well as in The Times, The Daily Telegraph and The Guardian in Britain. The headings of these obituaries, some of them unsigned, indicated his status: ‘Wayward genius of the dismal science’; ‘Truth was his yardstick’; ‘Man of faith and numbers’; ‘A man ahead of his time’; and ‘Passing of a great economist’. One of the more concise appraisals came from Mark Blaug in The Guardian: ‘Those that knew him personally will remember a charm and sweetness of character that contrasted with his laborious statistical studies and his provocative writings on matters of economic policy’ (cited in Peters 2001, 15). A funeral mass with choir was held at Our Lady of the Rosary Catholic Church, Kenmore, on 7 September. The eulogy was given by Ted Kolsen, the Head of the Department of Economics at the University of Queensland. As the coffin was conveyed from the church, ‘The Skye Boat Song’ was played by a piper. Clark was interred at Mt. Gravatt cemetery with the headstone engraved with the inscription ‘Example is better than precept’. It was a fitting epitaph for an economist obsessed with empirical realism rather than theory. Appropriately, there was a memorial for Clark at Mannix College, near Monash University where his think-tank had its office; Duncan Ironmonger gave the address. In London, Lord (Ralph) Harris of High

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Cross delivered a memorial address for Clark at St Etheldreda’s Catholic Church, Holborn, on 2 November 1989. There were obituaries of Clark by his old friend, Bill Herbert (1991), Peters (1990), Kolson (1990), and Gavin McCrone (1989) of Brasenose. It was poignant that Clark had died just two months before the Berlin Wall fell and the first meeting of the Asia Pacific Economic Cooperation (APEC) launched by Australian Prime Minister Hawke. He would have smiled at both developments.

Epilogue When asked by Chris Higgins (1989, 309) whether there had been research disappointments in his career Clark mused that ‘the nature of research’ led to many false trials; he was ‘surprised’, though, about how many results he did get. There had been no ‘lemons’. Nor, it seemed, were there any unfinished papers on Clark’s desk when he died. Thirty years after his death, Colin Clark has been proved more right than wrong in his grand prophecies. Fifty years on from the debate on global population, he has proven his detractors wrong. As he forecast in 1967 in a newspaper article, overeating is now a bigger cause of death than malnutrition. Once one of the world’s poorest countries, Bangladesh, for which Clark was apprehensive when he undertook a report there in the 1950s, can now feed its people. India, too, is prospering from its neo-liberal reforms—a development that would have delighted Clark and perhaps Gandhi, though both men would have had reservations about its economic activity becoming too focused within the big cities. This does not mean that malnutrition has been conquered; many people in the developing countries still suffer from severe protein deficiency. This has, however, more to do with the methods of food distribution than the production of it. Since the 1950s Colin Clark was the one voice who dared expose the falsehoods over fears of overpopulation and dwindling resources. While he implicitly admitted that excessive population growth meant more environmental pollution and put a strain on both space and resources, the impetus of more people was, overall, a good thing for economy and society. Some of Clark’s other predispositions went unheeded. His obsession with decentralisation and the creation of viable country towns in the hinterland to avoid the swarm of big cities proved, in fact, to be a

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‘lemon’. In 1972 Clark predicted that big cities would become basically uninhabitable in 30 years due to congestion, pollution, strains on urban infrastructure and, not least, crime. In 1986 he told Barbara Blackman that the big cities were losing people; the UN now predicts that more than 68% of the world’s population will live in urban areas by 2050, with 43 megacities of more than 10 million people. Moreover, these big cities serve as economic dynamos of the knowledge economy. For instance, Australia’s two largest cities Sydney and Melbourne, are responsible for generating nearly half that nation’s output with most of that services-based activity occurring within the central business district. Urban regeneration means that the density of the inner cities was rising refuting Clark’s original findings. In the 1980s he readily conceded this trend but remained unrepentant, complaining that his beloved Queensland had become ‘so unbalanced’.13 Globalisation, a process that Clark would have approved of, became a phenomenon born more of the metropolis than the countryside. Clark’s work on likely trends in fertility has been more telling. In many affluent western countries, it was now accepted that the increasing cost of child-care and education, plus the income earning opportunities of both couples meant that couples focused more on quality than the quantity of children. Relatedly, Clark’s puckish views about the empowerment of women, such as restricting their access to higher education and participation in the labour market, melted away as he mellowed. He ensured that his daughter Cecily went to university. Regarding Australia’s economic development, Clark often suggested that his adopted nation had taken too many wrong turns in its past. In this he was proven correct. Could not the same, though, be said about his own career, that he, too, had taken too many wrong turns? His decision to stay in Queensland and forgo Cambridge was one such instance. He twice rejected entreaties from Keynes to return to England. It meant that Clark surrendered his place in the development of national income accounting and the intellectualising company of Keynes or indeed the comradeship of Dalton, Parker, Durbin and Attlee. The same might be said, too, of his reluctance to take up a professorship at the University of Chicago where his contrarian views against both welfare and a big public sector would have found a more congenial audience.

13 ‘Queensland Is So Unbalanced’, The Courier Mail (Brisbane), 13 November 1978.

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Another major turning point in Clark’s life was to adopt Catholicism; many have suggested that this event subsequently shaped and coloured his economics but not his findings. One could say that settling in the cosseted society of Brisbane in the 1930s triggered this development. While his Catholicism provided ‘a better blueprint’ for the good life than other religions it spelt a big turn in Clark’s political and economic outlook (Kolsen 1991, 65). Fabian socialism and grandiose schemes of redistribution were abandoned for a new creed of radical conservatism; a switch which ended his association with old allies and friends. He embarked upon a new direction combining distributivism and decentralisation. He deplored statism, the encroachment of the welfare state and the army of clerks needed to operate it. Equally, he fought against Keynesianism and became an early advocate for supply-side economics. These dispositions meant Clark withdrew from his Australian colleagues whom he had lavishly praised shortly before; a breach mended only in the last years of his life. While Clark’s name has largely disappeared from many branches of economic literature, the University of Queensland sought to perpetuate his memory by naming the building which houses the economic and commerce departments after him. In a quirky sense, Clark’s visage with animpish grin was apparently used for one of the stone gargoyles adorning the Forgan Smith Building on the university campus. Another honour by the University came when the economics department began to host an annual Colin Clark Memorial Lecture from 1990 onward. It has been given by distinguished economists drawn from far and wide and has included Australia’s high-level economic officials such as the Secretary of the Federal Treasury, the Governor of the Reserve Bank of Australia and the Australian Statistician. Some of the earlier lecturers, such as Heinz Arndt, James Perkins, Angus Maddison and Peter Groenewegen, who all knew Clark as a contemporary, shed light on his personality and purposes. Arndt (1992) spoke of Clark’s espousal of free trade and accurate depiction of the political economy of protection, Perkins (1992) re-examined the limits of taxation while Maddison (2004) explored how Clark’s works on national income and wealth followed in the tradition of Petty and Gregory King. Groenewegen (1994) described how Clark did his economics and the ethics that underpinned his work. A lecture given by J. Stanley Metcalfe (2006) examined whether Clark’s The Conditions of Economic Progress (1940) reveals any insights about innovation in modern capitalism and, in doing so, why Clark’s renown had waned in recent times. Metcalfe reminded his audience

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that, in terms of economic evolution, the services sector was just as capable of innovation as manufacturing and that this was the key to economic progress. However, what Metcalfe said about Clark’s place in the pantheon of economics knowledge was even more interesting. He asked why Clark’s insights on the nature of modern capitalism, and the role which innovation played in transforming it, had been mostly underappreciated by the economics profession. Metcalfe gave three reasons. First, was the familiar charge that Clark’s ‘impatience’ with theory, and his views about the imbalance between theory and economic reality, meant that he was not ‘a builder or user of connecting principles’ that would help amplify the significance of his empirical findings. Metcalfe (2006, 2) reminded us that ‘facts do not speak for themselves’ and the framework in Conditions was too subtle. A second reason for the relative neglect of Clark’s work was that he was writing on classical issues such as the long-run development of an economy when economists’ attention had switched to short-period concerns following the Great Depression. The third reason, somewhat related to the above, was that Clark had the ‘misfortune’ to be working on the relationship between economic structure and growth that ‘did not fit’ with a profession preoccupied by the Keynesian Revolution (Metcalfe 2006, 2). In a recent reappraisal of ‘Conditions’, the historian Daniel Speich (2011, 24) praised Clark’s work not just providing ample evidence that the bulk of the world’s population suffered from poor living conditions but also how he had framed his research mission, namely, the where and how of economic progress, to have universal applicability. Ross Garnaut (2013) gave his Colin Clark lecture on climate change and praised him for visualising new forms of energy such as solar power and fuel cells as far back as 1940. While he disputed climate change, Clark had always maintained that mankind could not continue to burn fossil fuels without endangering the environment.14 This begs the question of how the science-trained Clark would have responded to the global challenge of anthropogenic climate change. Given his relentless empiricism, and indeed interest in Australian weather patterns, would he have remained a climate change sceptic? The betting is that he would have changed his mind but would have cheerfully refrained from doomsday scenarios. He had, of course, seen such gloomy sentiments expressed

14 ‘Is Our Weather Changing?’, The Courier Mail (Brisbane), 12 June 1978.

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before, and, more to the point, beaten them off. Clark would hold out hope that mankind, sufficiently energised and united to deal with the task, would find solutions to mitigate the threat of climate change. As he had frequently told his children, if people wanted a cleaner environment then they would have to pay for it; equally, if people wanted space for recreation and appreciating nature, they would have to make allowance for it. The fact that Clark chose to spend the last quarter of his life in Australia, rather than Oxford, meant that when the glittering prizes were being given out, he was literally out of sight and out of mind. And here there was one glaring, rather astounding omission. The Australian economist, Peter Dixon recounts that Assar Lindbeck, who chaired the Royal Swedish Academy of Sciences Committee for the Nobel Memorial Prize in Economic Sciences, was unaware that Clark was Stone’s principal mentor in the research and, ‘in a frank and unguarded manner, said that the Committee should have given the prize to Clark and Stone jointly’.15 Moreover, Clark would, unlike other honours offered to him. Have gratefully accepted the award. The fact was, though, that Colin Clark was not really interested in accolades, just that he be listened to. The conceit of this book is that it will do justice to Clark’s legacy to economic science.

References Arndt, H.W. 1992, ‘Stubbornly Defending the Free Trade Position’, Economic Analysis and Policy, 22(2): 117–126. Bacon, R. and W. Eltis, 1976, Britain’s Economic Problem: Too Few Producers. London: Macmillan. Clark, C. 1978b, ‘Australia’s Wrong Turnings’, Quadrant, 12(12): 5–10. Clark, C. 1982, Regional and Urban Location. St. Lucia: University of Queensland Press. Clark, C. 1983, ‘Recollections of Keynes’, Economic Papers, 2(3): 33–41. Clark, C. 1985a, ‘Review of World Bank Development Report 1984’, Population and Development Review, 11(1): 120–126. Clark, C. 1985b, ‘Is There a Long Cycle?’, Banca Nationale de Lavoro, 38: 307–320.

15 Communication with the author.

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Clark, C. 1985c, ‘Review of A Course Through Life by H. Arndt’, Quadrant, 53–54. Clark, C., B. D. Holland and N.K.C. Fletcher, 1989, ‘Australian Business Fluctuations’, Discussion Paper in Economics, Department of Economics, University of Queensland. Ferguson, M. and C. Clark, 1984, Understanding Weather and Climate. London: Macmillan. Garnaut, R. 2013, ‘Removing Climate Change as a Barrier to Economic Progress’, Economic Analysis and Policy, 43(1): 31–47. Groenewegen, P. D. 1994, ‘The Making of Good Economists; Reviewing Some Consequences of Colin Clark’s Life and Practice’, Australian Quarterly, 66(1): 7–24. Haig, B. 2006, ‘Sir Timothy Coghlan and the Development of the National Accounts’, History of Political Economy, 38(2): 339–375. Haney-Powell, B.A. 1983, ‘Inflation and Taxable Capacity: Some Recent Evidence’, MA thesis, Eastern Illinois University. Hawke, R. J. 1987, ‘Issues of Economic Management’, Economic Papers, 6(2): 100–106. Herbert, W. 1991, ‘Vale Colin Clark’, World Review 30(3): 60–63. Higgins, C. 1989, ‘Colin Clark: An Interview’, Economic Record, 65(3): 296– 310. Kolsen, H.M. 1990, ‘Colin Clark: A Personal Tribute’, Economic Analysis and Policy, 20(1): 2–3. Kolsen, H.M. 1991, ‘Vale Colin Clark’, World Review 30(3): 63–67. Maddison, A. 2004, ‘Quantifying and Interpreting World Development: Macromeasurement Before and After Colin Clark’, Australian Economic History Review, 44(1): 1–34. McCrone, G. 1989, ‘Obituary of Colin Clark’, The Brazen Nose, A College Magazine, 24: 69–70. Metcalfe, J.S. 2006, ‘Innovation and the Conditions for Economic Progress’, Economic Analysis and Policy, 36(1): 1–12. Neutze, M. 1983, ‘Review of Regional and Urban Location by C. Clark’, Economic Record, 59 (165): 194–195. Niedercorn, J. 1984, ‘Review of Urban and Regional Location by C. Clark’, Journal of Regional Science, 24(2): 306. Perkins, J.O.N. 1992, ‘Public Finance and Macroeconomic Policy’, Economic Analysis and Policy, 22(1): 1–19. Perkins, J.O.N. and A. A. Powell, 1990, ‘Colin Clark, 1905–1989: An Affectionate Memoir’, Economic Record, 66(4): 329–341. Peters, G. 1990, ‘In memoriam: Colin Clark’, Journal of Agricultural Economics, 41(1): 129–131.

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Peters, G. 2001, ‘Colin Clark (1905–1989): Economist and Agricultural Economist ’ Working Paper No. 69, Queen Elizabeth House, University of Oxford. Seldon, A. 1977, ‘Introduction’ to C. Clark. Poverty Before Politics: A Proposal for the Reverse Income Tax. London: Institute of Economic Affairs: 3–6. Speich, D. 2011, ‘The Use of Global Abstractions: National Income Accounting in the Period of Imperial Decline’, Journal of Global History, 6(1): 7–28. Tabah, L. and C. Clark, 1982, ‘The Decline of World Fertility’, Quadrant, 26(6): 39–43.

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Index

A agricultural economics, 213, 218 agriculture, 301 subsistence agriculture, 221, 261, 275, 278 Alexander, Stanley W., 238 Allen, G.R., 218 Allen, Sir Roy George Douglas, 121 Antill, A.G., 218 Archer, Jeffrey Howard, 252 Arndt, Heinz, 4, 8, 9, 118, 159, 160, 196, 197, 200, 216, 344, 353 Arnold, Matthew, 11, 252 ‘The Scholar Gipsy’ (1853), 252 Ashby, Arthur Wilfred, 213, 219 Attlee, Clement Richard, 28, 45, 50, 188–190 Aukrust, Odd, 245 Australia, 1, 11, 21, 24, 74, 92, 345 Academy of the Social Sciences, 322 Australian Loan Council, 79, 102 Basic Wage, 91, 181 Basic Wage Enquiry, 1959, 227

Commonwealth Bank of Australia, 77, 80 Commonwealth Conciliation and Arbitration Commission (1956–73), 227, 322 Commonwealth Court of Conciliation and Arbitration (1904–56), 169, 179–181 Commonwealth Department of Information, 136 Commonwealth Grants Commission, 143, 201 Curtin Government (1941–45), 132 Department of Post-War Reconstruction, 145, 172 Department of War Organisation of Industry, 130, 137, 146 depression of 1890s, 17 Federal Treasury, 345 Finance and Employment Committee, 130 fiscal federalism, 201 Fraser Government (1975–83), 335

© The Editor(s) (if applicable) and The Author(s) 2021 A. Millmow, The Gypsy Economist, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-981-33-6946-7

381

382

INDEX

Hawke Government (1983–91), 348 fiscal trilogy, 349 Korean War economic boom, 1950s, 177 National Wage Case, 1953, 227 Perth, 78 Prices and Incomes Accord, 349 Rural Reconstruction Commission (1943–46), 146, 174 threat of Japanese invasion 1942, 130–131 wage arbitration system, 76 Western Australia State Court of Arbitration, 91 White Australia policy, 141 White Paper on ‘Full Employment in Australia (1945)’, 131, 142 Whitlam Government (1972–75) (Australia), 330 Australian Democratic Union (ADU), 195 Australian Institute of Political Science, 309 Australian National University, 216 Austrian School of economic thought, 58 B Bacon, Richard, 346 Balogh, Tamás, 246, 249 Bangladesh, 260, 351 Barker, Geoffrey, 9, 343 Bauer, Peter Thomas, 258, 273, 301 Beatles, The, 252 Bellerby, John Rotheford, 218 Belloc, Joseph Hilaire Pierre René, 97, 142 ‘The Servile State’ (1912), 98 Beloff, Max, 253 Belshaw, Horace, 122 Belz, Maurice Henry, 216

Benham, Frederic Charles Courtenay, 99, 103, 170 Bennett, M.K., 267 Betjeman, John, 23 Beveridge, William Henry, 28, 33, 141, 166, 229, 232 ‘Full Employment in a Free Society’ (1944), 166 Bevin, Ernest, 31, 33, 36, 46, 108 Bhattacharya, Debesh, 287 Birch, Evelyn Nigel Chetwode, 235 birth control, 302 birth rates, 348 Blackman, Barbara, 9, 352 Blaug, Mark, 350 Boerma, A.H., 270 Boer War (1899–1902), 20 Bogdanor, Vernon, 8, 252 Booth, Charles, 29, 30 Boserup, Ester, 274 Bowen, Ian, 250 Bowley, Arthur Lyon, 55, 59, 60, 63 Boyd Orr, John, 2, 257, 267, 276 Bradfield, John Job Crew, 199 Bradfield Scheme, 199 Brigden, James Bristock, 79, 80, 95 Britain 1935 general election, 50, 51 Attlee Government (1945–51), 188 British Commonwealth Relations Conference, 1938, 108 Butskellism, 234 Economic Advisory Council (EAC), 32, 33, 36, 37 economy in 1970s, 333–336 General Strike of 1926, 27 imperial preference scheme, 176 National Economic Development Council (NEDC), 249 National Government (1931–1940), 51

INDEX

Population Investigation Committee, 94 Report of the Committee on Higher Education (Robbins Report) (1963), 253 sluggish post-war economic growth, 253–254 Transport and General Workers Union, 31 Wilson Government (1964–70), 249–251 British Embassy, Washington, 252 Brown, Arthur Joseph, 121 Brown, Horace Plessay (Horrie), 227 Buckley, William Frank Jr., 236 budget deficit, 349 Bulbeck, Chilla, 9, 101 Burton, Herbert (Joe), 44, 66 Butler, Richard Austen (‘Rab’), 222, 234 Butlin, Sydney James Christopher Lyon, 93 Butterfield, Sir Herbert, 318 C Cairncross, Sir Alec, 9, 10, 43, 50 Calder, Peter Ritchie, 283 Campion Society, 138 capital capital hunger, 124 capitalism, 5, 212 Carr-Saunders, Alexander, 30, 32, 230 Castles, Ian, 9 Centre for Policy Studies (Britain), 332–336 Chamberlain, Neville, 76 Chamberlin, Sir Michael, 317 Champernowne, David, 23, 91 Chesterton, Gilbert Keith, 97, 342 China ‘Great Leap Forward’ (1958–62), 2, 277

383

cities, 149, 173, 274, 282, 341, 342, 351 optimal size of, 147, 149–153, 347 Clark, Antony (son), 100, 350 Clark, Bernard (son), 100, 106, 350 Clark, Christopher (son), 100, 350 Clark, Claire, x Clark, Colin, vii, viii academic career applies unsuccessfully for highlevel posts at Australian universities, 216–217, 305, 318, 319 Colin Clark Memorial Lecture inaugurated, 353 curriculum vitae, 10 honorary doctorates, 10, 347, 348 qualifications, 306 dearth of ‘glittering prizes’, 7–8, 11, 355 Director of Agricultural Economics Research Institute (AERI), 215, 259, 311 Distinguished Fellow of Economic Society of Australia, 349 effect of Catholicism on Clark’s academic appointments, 203, 295, 306, 318, 319 estrangement from Australian economics profession, 6, 108, 130, 133, 138, 161, 172, 193, 197, 204, 305 Fellowship of the Academy of Social Sciences, 322 ‘Festschrift’, 9, 349 honorary research fellow, Monash University, vii, 317

384

INDEX

lecturer in economic statistics, University of Cambridge, 39–45 qualities as a teacher, 43–45 range of academic interests, 41–42 working habits, 64–65 analysis of British economy in 1930s, 34–36, 46, 74, 76, 77, 163 analysis of post-war Australian economy, 194–199, 307–309, 309–310 analysis of post-war British economy, 221–222, 236, 238–239 analysis of post-war US economy, 223–225 and B.A. Santamaria, 137–139, 311–312 and Bob Hawke, 225–227, 310, 349 and climate change, 303, 354 and development economics, 2 summary of Clark’s contribution, 258 and economic performance of Soviet Union, 109, 113–115, 174, 237–238 approach to economics, 41–43, 76, 117, 139 argues economic shift from manufacturing to agriculture and services, 3, 101, 169–173, 196, 309 becomes international consulting economist, 187, 222–225 career achievements - overview, 351–355 continuing tension between scientific integrity and faith, 138, 172–173

criticisms of Australian breweries and heavy drinking, 105 of Australian wage rigidity, 179–181, 309, 347 of big government in post-war Australia, 177–179, 327 of economic policies of Harold Wilson, 248–251 of FAO on malnutrition, 267–271, 276 of irrigation schemes, 195, 198–199, 215, 285, 287, 309 of lack of scientific approach by English academic economists, 116 of mediocrity of Australian universities, 104 of New Zealand farmers, 88 of size and influence of bureaucracy, 131, 133, 143, 161, 165, 178 of subsidised tertiary education, 5, 253, 321, 323, 332 of the welfare state, 5, 141, 162, 172, 179, 196, 200, 229, 230, 232, 323, 325, 331, 332, 334, 353 criticisms of presentation in Clark’s published work, 125, 156, 278, 284, 307, 334, 344 Distributivism, 1, 4, 110, 239 economic liberalism, ix, 1 environmentalism, 5 Fabian socialism, 4, 45, 133–134 ‘gypsy economist’, 11 ideological odyssey, 1, 4, 133–146, 353 in Australia 1937–52 arrival and early months in Australia, 1937, 73–82

INDEX

entranced by Australia, 78, 90, 99 New Zealand secondment, 1938, 87–90 observations about Queensland, 79, 95–97, 100, 104 Queensland Deputy Director for Commonwealth Department of War Organisation of Industry (WOI), 130, 137, 146 Queensland Government appointments, 94 Director of Bureau of Industry, 91, 101–105, 113 enjoyment at being part of Queensland oligarchy, 103 Financial Advisor to Queensland Treasury, 92 Queensland State Statistician, 91, 183 rapport with William Forgan Smith, 92–94 relationship with Vince Gair, 183 resigns from Queensland Government positions, 193–196 resignation speech, Dalby, 1952, 194–195 revisits Britain, 1947, 188–190 in Australia 1969–89 analysis of Australian economy, 321–323, 326–331, 346, 347 and Margaret Thatcher, 335–336

385

awarded honorary Doctor of Economics, University of Queensland, 348 honorary doctorate, Monash University, 1983, 347 honorary research fellow, Monash University, 317 Institute for Economic Progress, 311–312, 320 secondment to Centre for Policy Studies (London), 332–336 suggests compromise between Keynes and Friedman, 345 in England 1905–37 accepts university positions in Australia, 1937, 66–68 assists British Labour Party in 1930s, 45–47 attempts at winning seat in British Parliament, 30, 46, 50–51 birth, 17 early interest in economics, 25–26, 29 early life, 20–22 friendship with Keynes, 39, 58, 68, 163–165 lack of recognition at Cambridge, 85, 87, 93, 94 lecturer in economic statistics, University of Cambridge, 39–45 private secretary to Clement Attlee, 45 schooling at Winchester, 22–24 serves as secretary to British cabinet committee, 1930, 34 sits in on meetings of Committee of Economists, 1930, 35–37

386

INDEX

student at Oxford, 6, 10, 24–28 work at London School of Economics, 28–30 work with Economic Advisory Council (EAC), 1930, 32–37 in England 1952–69 and Institute of Economic Affairs (IEA), 238–240, 243 as ‘Vatican economist’, 293–296 Director of Agricultural Economics Research Institute (AERI), 215, 259, 311 member of Pontifical Commission for the Study on Problems of Population, Family and Birth, 293, 296 interest in alleviating poverty, 28, 149 media attention, 67, 73, 101, 135–136, 195, 203, 223, 307 national income accounting, 1, 2, 6, 7, 33, 44, 45, 55–57, 59–61, 63, 67, 81, 82, 85, 87, 88, 94, 101, 102, 105, 113–115, 115–123, 123–126, 187, 345, 352 econometric model of Australian economy, 345 on climate change, 303, 355 on family allowances, 78 on feminism, 5, 8, 133, 321, 322, 352 on foreign aid, 5 on free trade, 233–234

on population growth, 8, 74, 75, 78, 146, 198, 264, 274, 279, 284, 296 population growth as a spur to economic growth, 260–267 on population growth, 135–136 parallels with Barbara Ward, 300–303 personal appearance, vii, 24, 28, 44, 86, 95, 104, 131, 188 character, 4–5, 45, 79, 190, 200, 203, 204, 253 concern for domestic financial security, 8, 24, 101, 204, 225, 311, 312 conversion to Roman Catholicism, ix, 134–137, 353 death and interment, 350–351 devotion to Catholic doctrine, 5, 135, 137, 146, 233, 312, 324–326, 343 entrepreneurial flair, 24, 212 frugality, 299 ‘God’s economist’, 343 guiding influences, 1 love of nature and countryside, 11, 45, 99 pride in Scottish heritage, 18 ‘The Skye Boat Song’ played at funeral, 350 riverfront property in Brisbane, 205, 339 published works ‘A Critique of Russian Statistics’ (1939), 113–115, 174 ‘Australia Hopes and Fears’ (1958), 10, 307–309

INDEX

‘Economics of Subsistence Agriculture’ (1964), 274–279 ‘Free Trade - an Immediate Remedy for Britain’s Economy’ (1954), 233 ‘Growthmanship—A Study in the Mythology of Investment’ (1961), 244 ‘National Income and Outlay’ (1937), 61–64, 55, 66, 85, 245 ‘Population Growth and Land Use’ (1967), 221, 279–285, 285 ‘Poverty Before Politics’ (1977), 334 ‘Property and Economic Progress’ (1945), 142–144 ‘Regional and Urban Location’ (1982), 344 ‘Starvation or Plenty?’ (1970), 286–287 ‘The Conditions of Economic Progress’, 44, 50, 64, 92, 105–107, 113, 187, 219, 220, 260, 261, 265, 277, 279, 299, 320, 353 ‘The Cost of Living’ (1957), 234–236 ‘The Economics of 1960’ (1942), 123–126, 129, 141, 145, 146, 172, 181, 182, 292 ‘The Economics of Irrigation’ (1967)”, 285–286 ‘The Economics of Subsistence Agriculture’ (1964), 221 ‘The National Income 1924– 31’ (1932), 42, 56, 57–61

387

‘The National Income of Australia’ (1938), 80–82 ‘The Political Economy of a Christian Society’ (1974), 333 ‘The Value of Agricultural Land’ (1973), 338 ‘Welfare and Taxation’, 232 ‘Why Prices Rise’ (1971), 326–328, 330 Taxmanship - principles and proposals for the reform of taxation (1964), 247 range of intellectual interests, 4, 6, 10 reflections on Australia’s economic future, 78, 106–108, 141–142 refutes neo-Malthusian prophecies, vii, 2, 5, 8, 106, 222, 260, 266 refutes Club of Rome predictions, 296–300 refutes neo-Malthusian prophecies, 65–66, 221, 271–274, 291–292, 342, 351 role in development of multiplier, 36 rural utopian vision for post-war Australia, 141–142, 169–177, 180, 195, 200, 201–202 taxation and ‘25 per cent’ hypothesis, 2, 154–161, 247, 272, 326–332 urbanisation, and effects of, 5, 30 use of slide-rule, 4, 24, 102 views on post-war reconstruction, 131 writing for the press, 8, 77, 195, 196, 213, 321, 322 Clark, David (son), x, 7, 11, 24, 45, 100, 236, 332, 350 Clark, Gregory (son), 9, 52, 134, 226, 335, 350

388

INDEX

Clark, Kenneth (art historian), 23 Clark, Kenneth (brother), 20 Clark, Malcolm (brother), 21, 22, 24 Clark, Margaret (sister), 21, 24 Clark, Marion Nelly, née Jolly (mother), 20 Clark, Marjorie (wife), 48, 50, 52, 334, 341, 350 Clark, Mary Ryllis, x Clark, Maurice (son), 100, 350 Clark, Nicholas Forgan (son), x, 100, 350 Clark, Oliver (son), 100, 350 Clay, Henry, 25 climate change, 354 Club of Rome, 291, 296–298 ‘Limits to Growth’ (1972), 291, 297 ‘Mankind at the Turning Point’ (1974), 298 Cochrane, Donald, 309, 317, 319 Coghlan, Sir Timothy Augustine, 347 Cohen, Ruth Louisa, 217 Cold War, 237, 243 Cole, George Douglas Howard, 26–28, 33, 36, 39, 117, 129 Cole group, 27 Condliffe, John Bell, 193 Conservative Party (Britain), 332 consumption, 98 contraception, 135, 323 Billings Method of birth control, 346 Coombs, Herbert Cole ‘Nugget’, 82, 131, 170, 171, 183 Cooper, Frank Arthur, 102 Copland, Douglas, 44, 66, 67, 75, 76, 108, 117, 198, 200, 203, 318 Cornish, Selwyn, ix Coyle, Diana, 56 Crawford, Sir John Grenfell, 80, 135, 197, 309, 310

Cripps, Sir Richard Stafford, 189 Crocker, Walter, 27, 204, 215, 217, 307 Crookes, Sir William, 65, 298 Crosland, Charles Anthony Raven, 246 Crossman, Peter, 9 Crossman, Richard, 23 D D’Alpuget, Blanche, 226 Dalton, Hugh, 25, 26, 30, 46, 51, 75, 85, 93, 155, 188, 214 suggests reasons for Clark accepting Queensland posts, 1937, 86–87 Dalton, Ruth, 50, 189 Davenport, Nicholas, 37 Davidson, Bruce Robinson, 285 Davis, Kingsley, 260, 284 Deakin, Alfred, 347 Deane, Phyllis Mary, 115 decentralisation, 98, 107, 109, 132, 140, 143, 144, 151, 174, 176, 193, 201, 213, 282, 320, 321, 325, 326, 338, 339, 342, 351, 353 Dedman, John Johnstone, 146 de Jouvenel, Bertrand, 243, 318 Democratic Labor Party (DLP) (Australia), 306 developing countries, 285 development economics, 6, 116, 220 de Vries, E., 274 Distributivism, 1, 4, 5, 138, 141, 180, 239, 353 Dixey, Roger, 218 Donnithorne, Audrey, 216, 295 Douglas, Paul, 7, 78, 117, 158, 159 Cobb-Douglas production function, 78 Downing, Richard Ivan (Dick), 161, 198, 203, 204, 318, 319

INDEX

Doxiadis, Constantine, 282 Dragon School, Oxford, 22 Drake, Peter, 276 Draper, William Henry Jr., 292 Dubos, René Jules ‘Only One Earth - The Care and Maintenance of a Small Planet’ (1972), vii, 300 Durbin, Evan, 27, 47, 117, 188 Dwyer, Sir Walter, 91

E Econometric Society, 7 economic development, 212, 221, 274, 347 economic growth, 2, 124, 236, 243, 245, 246 Harrod-Domar growth model, 245 economic growth, 244–247 Economic Journal, 66 economic liberalism, 222, 238, 240, 333 Economic Society of Australia, 6 economies of scale, 29 Ehrlich, Paul, viii, 8, 291, 293, 323, 342 ‘The Population Bomb’ (1968), vii, 291, 323 Elmhirst, Leonard K., 346 Eltis, Walter, 346 employment, 73, 196 Encounter, 236 Endean, William, 89 Endres, Tony, 9 Ensley, Grover W., 158, 224 eugenics, 333 European Economic Community (EEC), 250 Common Agricultural Policy, 250 externalities, 236

389

F Fabian socialism, 45 New Fabian Research Bureau (NFRB), 39, 45, 46, 134 Fadden, Sir Arthur William, 102 Fairfax press (Australia), 321 Fay, Charles Ryle, 99 Ferguson, Mike, 341 fertilisers, 260, 265 Fifth Congress for Cultural Freedom, Milan, 1955, 237 financial collapse of 1907, 17 Firth, Gerald Gill, 203 Fisher, Allan George Barnard, 73, 78 ‘The Clash and Stability of Progress’ (1935), 73 Fisher, Sir Antony George Anson, 239 Flux, Sir Alfred William, 28, 36, 59 Food and Agriculture Organisation (FAO), 193, 194, 212, 257, 267–271, 268 food production, 213 food supplies, 65, 212, 218, 219, 257, 266, 270 Forgan Smith, William, 79, 96, 102, 110, 132 Forrester, Jay Wright, 296 free market liberalism, 332 Friedman, Milton, viii, 5, 211, 232, 272, 273, 325, 327, 329–331, 335, 336

G Gaddafi, Muammar, 343 Gair, Vincent Clair, 183, 193, 194, 196, 215 Gaitskell, Hugh, 23, 26, 47, 51, 214, 234, 237, 248 Galbraith, John Kenneth, 5, 102, 164, 193, 236, 250, 265 ‘The Affluent Society’ (1958), 250

390

INDEX

Gandhi, (Mahatma) Mohandas Karamchand, 190–191, 351 Garnaut, Ross Gregory, 349, 354 George, Henry, 97 Germany, 346 Gibbon, Edward, 41 Giblin, Lyndhurst Falkiner, 67, 75, 130 Gifford, John Liddle King, 104, 146, 200 Gilbert and Sullivan, ‘The Mikado’, 92 Gold Standard, 35 government expenditure, 330, 349 Grattan, Clinton Hartley, 9, 145, 307 Greer, Germaine, 323 Groenewegen, Peter, 9, 353 Grossman, Gregory, 237 growthmanship, 243, 244, 248 Guillebaud, Claude William, 233

’The Road to Serfdom’ (1944), 119 Healey, Derek, 9, 218 Heller, Walter Wolfgang, 158, 159 Henderson, Sir Hubert Douglas, 34, 35 Hendry, Sir David Forbes, 64 Herbert, William, 9, 178, 201, 351 Hicks, Sir John Richard, 117, 121, 213 ‘Theory of Wages’ (1932), 326 Higgins, Christopher Ian, 9, 351 Higgins, Henry Bournes Higgins, 171 Hirschman, Albert Otto, 258, 272 Hoa, Tran Van, 9 Holmes, Austin, 345 Howe, Sir Richard Edward Geoffrey, 336 Hughes, Helen Dolly, 258 Hutchison, Terence Wilmot, 43, 331 Hytten, Torleiv, 44

H Haavelmo, Trygve, 7 Hagen, Everett Einar, 273 Haire, Dr. Norman Haire, 136 Hall, Noel, 252 Hall, Robert, 190 Hamilton, Adam, 88, 89 Hanlon, Edward Michael (Ned), 154 Hannan, Edward, 216 Hansen, Alvin Harvey, 163 Hardie, Keir, 92 Harris, Lord (Ralph) of High Cross, 240, 350 Harris, Seymour Edwin, 158 Harrod, Roy, 47, 62–64, 125, 157, 160, 180, 214, 272 Haswell, Margaret, 218, 274, 275 Hawke, Robert James Lee, 225–227, 309, 310, 312, 349 Hayek, Friedrich August von, 58, 119, 230, 237, 239, 336

I Ibn Khaldoun, 3 immigration, 139, 141, 173, 175, 181 imports, 198 import controls, 248 increasing returns, 65, 119, 122, 211 India, 43 inflation, viii, 154, 180, 326–330 Institute for Economic Progress (Australia), viii, 311, 320, 333 Institute of Economic Affairs (IEA) (Britain), 222, 230, 236, 238–240, 243, 331 investment, 2, 244–246 Ironmonger, Duncan, 9, 55, 65, 350 J James Robert Knox, Archbishop, 311 Jay, Douglas, 27, 47, 51 Jevons, William Stanley, 6, 25

INDEX

Johnsonian Club, Brisbane, 103 Jones, George, 29 ‘Increasing Returns’ (1933), 29 Jones, G.T., 119 Joseph, Sir Keith Sinjohn, 332, 333, 335 Secretary of State for Industry (1979–81), 333

K Kahn, Herman, 297 Kahn, Richard, 36, 328 Kaldor, Nicholas, 30, 166, 249 Kalecki, Michal, 7 Kelly, Sir William Raymond, 180 Kennan, George Frost, 237 Kennedy, John Fitzgerald, 243 Kenwood, Albert George, 9, 10 Keynes, John Maynard, viii, 6, 28, 30, 32–36, 39, 41, 47, 52, 74, 75, 80, 125, 154, 156, 180, 202, 331, 345 ‘A Treatise on Money’ (1930), 41, 165 ‘How to Pay for the War’ (1940), 63, 81, 96 Keynesian economics, 200, 235 Keynesianism, 5, 162, 163, 222, 246, 329, 346 ‘The Economic Consequences of the Peace’ (1919), 75 ‘The General Theory of Employment, Interest and Money’ (1936), 6, 41, 180 King, Gregory, 3, 353 Klein, Lawrence, 1, 9 Kolson, H.M. (Ted), 9, 350, 351 Kondratieff’s cycle, 124 Kuznets, Simon, 1, 5, 7, 42, 44, 56, 60, 245, 273

391

L labour, 31, 352 Labour Party (Britain), 26, 28, 30 XYZ Club, 46, 51 land settlement, 107, 139, 173, 175, 176, 195 Laski, Harold, 26 La Trobe University, Melbourne, 305, 335 Lawson, Nigel, 331 Lepenies, Philipp, 7, 56 Lerner, Abraham ‘Abba’ Ptachya, 164 Lewis, Arthur, 7, 116, 182, 237, 245, 258, 266, 272 Lindbeck, Assar, 355 Little, Ian Malcolm David, 248 London, 17 London School of Economics (LSE), 25, 28, 29 Lopokova, Lydia, 49 Lösch, August, 281 Love, John Stuart, 98 Lydall, Harold, 216 Lynam, A.E. ‘Hum’, 22 Lyons, Dame Enid Muriel, 135

M Macarthur, General Douglas, 130 MacDonald, Ramsay, 28, 31–33, 37, 45, 51 Macgregor, David Hutchison, 25 Macintyre, Stuart Forbes, ix, 130 Macmillan, Daniel, 57 Macmillan, Harold, 85, 235 macroeconomic policy, 326 Macrosty, Henry William, 63 Maddison, Angus, 9, 57, 353 Mahalanobis, Prasanta Chandra, 190 malnutrition, 268–270, 351 Malthus, Thomas Robert, 3, 65, 75 ‘Malthusian devil’, 106, 115, 260

392

INDEX

Malthusianism, 89, 115, 264 Mannix, Archbishop Daniel Patrick, 137, 138 Mannix College, Melbourne, 350 manufacturing, 78, 200 Mao Tse-tung, 2, 329 Marshall, Alfred, 25, 50, 59, 82 Marshall, Mary, 49 Matheson, Sir James Adam Louis, 319 Mauldon, Frank Richard Edward, 82 Mayer, Thomas, 158 Mazenod College, Melbourne, vii McArthur, Annie Margaret, 268 McCawley, Peter, 270 McCrone, Gavin, 252, 351 McFarlane, Bruce, 9 McKell, Sir William John, 139 Meade, James, 27, 47, 188 Meadows, Dennis Lynn, 296 Melbourne, vii Melville, Sir Leslie Galfreid, 77, 80, 216 mercantilism, 89 Meston, Lord, 22, 24 Metcalfe, J. Stanley, 353 Millmow, Alexander John, 9 Minford, Anthony Patrick Leslie, 336 Modigliani-Brumberg theory, 273 Monash University, 311, 317, 328, 350 Monday Conference (ABC TV program), 330 monetarism., 332. See also neo-liberalism Mont Pelerin Society, 5, 236 Moran, Patrick Alfred Pierce, 216 Mosley, Oswald, 37 Muggeridge, Thomas Malcolm, 292 multiplier, 36, 47, 81 Murdoch, Sir Keith Arthur, 76 Myrdal, Karl Gunnar, 258

N Nall-Cain, Ronald, 31 Nash, Sir Walter, 87–90 national income accounting, 81, 113–115, 115–123, 123–126, 347 Gross Domestic Product (GDP), 2, 8, 10, 55, 56, 349, 350 Gross National Product (GNP), 2, 55, 58 Oriental Unit, 123 use of International Unit of measure, 118, 123 nationalisation, 51, 142 Nehru, Jawaharlal, 191 neo-liberalism, 230, 351 Neutze, Max, 225, 282, 344 New Zealand, 82, 87 Nicholas, Barry, 252 Niedercorn, John, 344 Nixon, Richard Milhous, 243 Nobel Memorial Prize in Economic Sciences, 7 O Oakeshott, Sir Walter Fraser, 213 Orwin, Charles Stewart, 213, 219 Our Lady of the Rosary Catholic Church, Kenmore, Brisbane, 350 P Parish, Ross, 337 Parker, John, 26, 27, 48, 51, 99, 103, 214 Parkinson, Cyril Northcote, 161 Patinkin, Don, 56, 164 Patrick Alfred Pierce Moran, 216 Pawley, Walter H., 270 Peccei, Aurelio, 297 Pechman, Joseph Aaron, 158, 160 Perkins, James, 9, 353

INDEX

Peters, George, 9, 351 Petty, Sir William, 2, 3, 73, 119, 353 Phelps Brown, Sir Ernest Henry, 58, 63 Philby, Kim, 134 Pigou, Arthur Cecil, 5, 35, 36, 50, 61 Platnauer, Maurice, 252 Polanyi, Michael, 67, 114 Polglaze, Jean, 44, 64 pollution, 351 population, 265–287, 295, 348 population control, 192, 221, 296 population density, 151, 261, 344 population growth, 3, 66, 106, 163, 258, 284, 297, 303, 347 population growth as a spur to economic growth, 260–267 poverty, 335 Powell, Alan, 9, 337 Powell, John Enoch, 235, 308 Prest, Alan Richmond, 64, 190, 334 Prest, Wilfred, 190, 203, 319 price controls, 179 Prince, William Norman Wood, 212 principle of diminishing returns, 100, 106 Pringle, John Martin Douglas, 103, 308 productivity, 212 property, 338 universal distribution of, 141 protection, 36 protectionism, 35 public works, 35, 46 Pyatt, Graham, 9

Q Quadrant , 236 Queensland Brisbane Kenmore, 153

393

Burdekin River Burdekin Dam, 199, 215 Bureau of Economics and Statistics, 80 Bureau of Industry, 95, 101–105, 109 Department of Labour and Industry, 183 Queensland Meat Export Company, 20 Queensland Royal Commission on Pastoral Lands Settlement, 1950, 144, 175 Townsville, 19

R Radice, Edward Albert, 47 Ramsey, Frank, 23 Rao, V.K.R.V., 43 Reagan, Ronald Wilson, 349 Reddaway, William Brian, 75 Ritchie, Alan, 117 RMS Strathnaver, 73 Robbins, Lionel, 5, 25, 26, 35, 36, 39, 43, 117, 214, 253 Robertson, Dennis, 5, 35, 93, 154, 165, 203 Robinson, Joan Violet, 47, 81, 190, 328 ‘Economic Philosophy’ (1962), 328 Robinson, Sir Edward Austin Gossage, 47, 50, 64, 66, 81, 222 Rockefeller Foundation, New York, 61, 96, 104 Roman Catholicism, 1, 18 Australian National Secretariat of Catholic Action (ANSCA), 137 Catholic Social Justice ‘Food or Famine’ (1952), 173 Catholic Social Teaching, 230, 236, 294

394

INDEX

Catholic Social Thought, 142, 306, 311 Principle of Subsidiarity, 143, 250 Roman Catholic Archdiocese of Melbourne, viii, 311, 320 Society of Jesus (Jesuits), 320 Institute of Social Order, 320 Roos, Charles Frederick, 225 Rosenstein-Rodan, Paul Narcyz, 116, 182 Rostow, Walt, 3, 9, 245, 247, 258 Rothbard, Murray Newton, 246 Rothbarth, Erwin, 81, 96 Rowe, A.P., 217 Rowse, Alfred Leslie, 253 Royal Statistical Society, 28 Rueff, Jacques, 36 Russell, Bertrand, 26 Russell, Charles Wilfred, 195 Russell, Eric Alfred, 227

S Salter, Wilfred Edward Graham, 227 Samuelson, Paul A., 7, 257 Santamaria, Bartholomew Augustine, 137–139, 144, 172–174, 176, 180, 183, 216, 226, 240, 305, 306, 311, 312, 317, 320, 343 National Catholic Rural Movement (NCRM), 139, 144, 172–174, 198, 226 National Civic Council, 343 Saunders, Christopher, 27 Sauvy, Alfred, 257, 271 Savage, Michael Joseph, 89 savings, 47, 332 Schultz, Theodore, 7, 211, 277 ‘Transforming Traditional Agriculture’ (1964), 211 Schumpeter, Joseph, 1

secondary industries. See manufacturing Seers, Dudley, 274 Seldon, Arthur, 230, 240, 330, 348 services sector, 59, 73, 78, 248, 249 Shannon, Ian, 225 Shaw, George Bernard, 113 Sherman, Sir Alfred, 332, 334 Shonfield, Sir Andrew Akiba, 234 Shove, Gerald Frank, 47 Simon, Julian, 295 Sinclair, William Angus, 347 Singer, Sir Hans, 43 Singh, Karan, 296 Skidelsky, Robert, 2 Smedley, William Oliver, 238, 239 Smith, Adam, 3, 25, 27 Snow, Charles Ernest, 59–60, 63, 125 Snowden, Philip, 31, 34 Solow, Robert Merton, 5, 244, 327 Souter, Ralph, 88 Soviet Union, 2, 244 Speich, Daniel, 354 Spengler, Oswald, 41 Stamp, Josiah, 33, 35, 55, 60, 271 Stent, William R., 335, 343 Stephens, F.B., 87 Stewart, Michael, 27, 33, 188 Stone, Sir Richard, 7, 9, 43–45, 125, 188, 190, 249, 250, 355 stop-go economic policies, 234 Strachey, Evelyn John St Loe, 190 Streeten, Paul Patrick, 273 Stretton, Hugh, 152 supply-side economics. See neo-liberalism Swan, Trevor Winchester, 154, 198, 201, 322, 349 Sydney, 217 Sydney Harbour Bridge, 199 Syme, Sir Ronald, 252

INDEX

T Tawney, Richard Henry, 26, 34 taxation, 3, 88, 202, 231, 246, 247, 251, 323, 325, 326, 328, 332–335, 338, 345, 349, 350 natural limits of, 154–161 Taylor, Griffith, 98 tertiary industries. See services sector Thatcher, Margaret, 332, 335, 336 The Courier Mail , 322 The Econometric Institute, New York, 225 The Economist , 62 Third World, 257 Thorneycroft, George Edward Peter, 235, 236 Tinbergen, Jan, 125, 258 Tocker, Albert, 88 Toynbee, Arnold Joseph, 41, 261 trade, 34 trade unions Australian Council of Trade Unions (ACTU), 227, 312 Trengove, Alan, 305 Truman, Harry S., 191 Turpin, Kenneth, 311 U unemployment, 334 unemployment insurance, 51, 74 United Nations United Nations Educational, Scientific and Cultural Organisation (UNESCO), 193 United Nations Scientific Conference on the Conservation and Utilisation of Resources, Lake Success, New York (UNSCCUR), 1949, 191–193, 262, 298 World Population Conference, Rome, 1954, 271

395

United States of America Central Intelligence Agency (CIA), 236 Congressional Joint Economic Committee, 158 Congress of Cultural Freedom, 236 University of Buckingham, 253 University of Cambridge, viii, 23 Economics Policy Group, 329 University of Chicago, 211 University of Liverpool, 30 University of Melbourne, 216 University of Oxford, 23 Adam Smith Society, 25, 27 Agricultural Economics Research Institute, 213–214, 217–222 All Souls College, 253 Brasenose College, 4, 9, 24, 252 Oxford Union, 27 University Labor Club, 25–28 University of Queensland, viii University of Western Australia, 78, 93 urban and regional economics, 341 urbanisation, 5, 152, 280, 281, 320 use of International Unit of measure, 123

V Vaizey, John Ernest, 336 Vatican (Holy See), Rome, 294 Papal Encyclical ‘Humanae Vitae’ (1968), 293, 312 Papal Encyclical ‘Populorum Progressio’ (1967), 320 Papal Encyclical ‘Quadragesima Anno’ (1931), 137, 143, 324 Papal Encyclical ‘Rerum Novarum’ (1891), 143, 324, 325 Pontifical Commission for Justice and Peace, 300

396

INDEX

Pontifical Commission for the Study on Problems of Population, Family and Birth (1964–66), 293, 312 Pope John Paul II (formerly Cardinal Karol Wojtyla), 294 Pope John XXIII, 294 Pope Leo XIII, 98, 143 Pope Paul VI (formerly Cardinal Montini), 293, 294, 300 Pope Pius XI, 98, 143 Verdoorn, Petrus Johannes, 248 Vogt, William, 192 ‘Road to Survival’ (1948), 192 von Thünen, Johann Heinrich, 338 rural land use model, 281 W Wadham, Samuel Macmahon, 138, 173, 196 wages, 227, 250, 325, 327, 349 Walker, Sir Edward Ronald, 170 Walters, Sir Alan Arthur, 329, 336 Ward, Artemis (aka Browne, Charles Farrar), 258 Ward, Barbara Mary, 293, 300, 342 and parallels with Colin Clark, 300–303 ‘Only One Earth–The Care and Maintenance of a Small Planet’ (1972), vii, 300

‘The Angry Seventies’ (1970), 300, 301 Webb, Beatrice, 113 Webb, Sidney, 113 welfare state, 229, 231, 232, 234 Wentworth, William Charles, 5, 151 Whitfield, Hubert Edwin, 78, 93 Wiles, Peter John de la Fosse, 237 Williams, John Henry, 163 Wilson, James Harold, 248–251 Winchester College, England, 23, 24 Wolfsohn, Hugo Adolf, 307 Woodberry, Cecily, née Clark (daughter), x, 100, 350, 352 Wood, Edward Frederick Lindley (Lord Halifax), 109, 252 World Bank, 258 world hunger, 267–270, 293, 321 World War Two, 129–130 Woytinsky, Wladimir S., 224, 237

Y Yamey, Basil S., 273 Young, Allyn, 3, 29, 30, 119, 261, 324

Z Zero Population Growth (ZPG), viii, 291–293