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THE INSTITUTE OF PUBLIC AFFAIRS JANUARY-MARCH. 1966289 FLINDERS LANE. MELBOURNE • 63 6558 Vol. 20— No. 1

The Menzies Era

THE decade and a half, 1950 to 1965, has become known,inevitably, as the Menzies Era. The nature of the designa-

tion is unique. No other period in Australian history has beennamed after an individual; we do not talk of the Chifley era,the Lyons era, the Hughes era, or even the Deakin era.Doubtless this is partly because Sir Robert Menzies is the onlyPrime Minister who occupied the throne of leadership fora period of sufficient length to be dignified by the term "era".(Like Bradman's records, it is almost inconceivable that the16-year period of Sir Robert's uninterrupted Prime Minister-ship will ever be surpassed.) But it is also because, over theentire period, Sir Robert exercised an unparalleled personaldominance in Cabinet, Parliament and in the country. He wasin the minds of Australians more than just a leader of singulartalents; he became a kind of national institution; it became in-creasingly difficult to envisage a Government without him asPrime Minister. Whether one liked or disliked him, agreed orfundamentally disagreed with him, the majority of Australiansfelt that nothing could go too seriously wrong while he re-mained at the helm. With others there was an element of risk;with him the risks were minimised; it was wise, therefore, toplay safe.

But, paradoxically, the Menzies Era was, above all, aperiod of movement, of vast and significant change in everyaspect of domestic affairs, in Australia's relationships with therest of the world, in national attitudes and national thought.Over 16 years of rapid, bewildering transition it was Sir

The Menzies Era (continued)

Robert's peculiar contribution to provide the country with asense of stability and a background of solid continuity. Inall this turmoil of change and movement and uncertainty,when today was different from yesterday, and tomorrowwould almost certainly be different from today, the great massof Australians were inwardly relieved to have as their leadera man who personified the solid virtues of stability and in-tegrity, who in himself provided such a stalwart link with thepast, who indeed served as a reassuring reminder that nomatter how rapid the transformations taking place, the goodthings belonging to earlier times would not be altogether over-laid.

Sixteen years is not a long time in the life-story of a nation,but into the Menzies Era were packed more significant changesthan in other times might have been expected in fifty or ahundred. In the last' days of 1949, when the Era was born, theAustralian economy had just about completed the long tran-sition back to a normal peace-time basis. The major structuraldislocations to the economy caused by six years of war hadnearly been ironed out; the period of post-war reconstructionwas virtually over. The substantial electoral success of the newLiberal Party meant, too, that the bitter battle between freeenterprise and socialism which had raged throughout the post-war years, and which had begun so unpromisingly for theformer, had ended in a victory for the free enterprise forces.But it was victory in a battle not a war. What it meant wasthat for the time being the people were impatient to be ridof the last remaining remnants of the war-time controls andwere prepared to give the free enterprise economy a chance toshow what it could do toward meeting the new demands andaspirations that had been born in the fires of World War II.These demands were for full employment, for steadily im-proving living standards, for more widely spread welfare andeducational opportunities, for renewed national developmentand utilisation of natural resources.

In all these respects, the Menzies Era was successful toan astonishing degree. At the beginning of the period probablyno one would have been sufficiently optimistic to think thatwe could prevent unemployment from rising above 3 per cent.It is easy to forget that in those days the goal of Full Employ-ment in a peace-time economy was no more than an ambitiousaspiration. The new economic theories and the new techniques

2

of economic management had still to be tested in practice;moreover, the ingenuity of the policymakers and managersthemselves in the manipulation of the new instruments ofeconomic control was unproven. The fact that we now takeFull Employment so much for granted that even the smallestdeviations from the Ideal give rise to angry protest is itself ameasure of the success achieved.

The rise in all-round living standards is just as notable.Who would have been so bold at the beginning of the Era(when there were 9 motor cars for every 100 Australians) topredict that within the short space of 16 years there would be25 cars for every 100 Australians? But this is merely symbolicof an amazing material advance on all fronts. In the MenziesEra Australia achieved the status of An Affluent Society, aphrase which a decade or so ago we associated with perhaps onlythe United States of America.

The achievements in the last 16 years in the fields ofpopulation expansion and national development have beenno less remarkable. Again the expectations of the most op-timistic have been far exceeded. Year after year the migrantshave flowed into Australia in impressive numbers and havebeen successfully absorbed in the expanding Australianeconomic complex. Massive immigration on a continuing,regular basis is now an integral part of Australian policies,something right at the core of Australia's national aspirationsand ambitions. It is not something to be indulged in onlywhen the economic signs and portents are propitious.

The Menzies Era has been, too, the era of the most spec-tacular and sustained economic expansion in Australian history.Production in all areas of the economy has grown almost un-believably. In the primary industries where, at the beginning ofthe period, output was widely supposed to be approaching theboundaries of maximum economic capacity, the expansionhas been no less spectacular than in manufacturing, wherealready-established industries have multiplied in size and wherenew industries, some of great dimensions, have emerged.Natural resources of almost inexhaustible extent, have beenuncovered — bauxite in the mid-1950's, iron ore in the early1960's, copper, natural gas, and many others. We are nowhoping, not entirely groundlessly, for the Great Oil Strike.

3

The Menzies Era (continued)

In the Menzies Era, Australia has become one of the greatsources in the world of mineral wealth. Sixteen years ago allthis was unknown. Moreover, there is little reason to think thatthe story is yet fully told. Looking at the long picture, therevolution in Australia's mineral prospects is perhaps themost portentous economic fact of the Menzies Era. It istypified by the removal of the traditional ban on the export ofiron ore — which, of course, has given a powerful incentiveto the rapid development of the ore fields. And there canbe little doubt that, in the 1970's, minerals will challenge thelong-standing pre-eminence of wool in the balance of pay-ments, and at long last it will no longer be true to say that"Australia rides on the sheep's back".

Among the great industrial nations of the world Australiamay still be "small potatoes", but today one would be hard putto find more than a remnant of the thought, which used to bequite general, that the proper course for this country was toconcentrate on its so-called natural role as a provider of foodand raw materials and to leave the more complex and sophis-ticated forms of production to others.

The rapid economic expansion, the growth of population,and the discovery of vast natural resources, have attracted in-vestment capital from abroad on an unprecedented scale. Thelarge and sustained annual inflow of overseas money was indeedone of the most characteristic and distinctive features of theMenzies Era. Without it, our economic growth would havelaboured along, under-nourished for lack of financial sus-tenance and of complex technical

'"know-how"- at the end

of the Era, Australia's economic stature would have been astunted, miserable thing compared with the robust, musculardimensions it has assumed.

On the other side, the Era was a period of rapid inflation inwhich the purchasing power of the £ was cut by half. This, ofcourse, could not be entirely laid at the door of the Com-monwealth Government. Abnormal export prices (at times)and the decisions of wage-fixing authorities played a part.And, in recent years, the Government could claim that aclose approach to price stability has been achieved.

One of the most striking features of the Era was theeducational "explosion" at the higher levels. The proportion of

4

young people in the 17-22 years age-bracket receiving auniversity or other tertiary education has about doubled overthe past 16 years. In the last 10, the numbers of universitystudents has sky-rocketed from 31,000 to 83,000. In 1950,a second university for a city such as Melbourne wouldhave been inconceivable; but by 1965 it is busy planning for athird. This great development in higher education was partlya mark of rapidly increasing affluence (indeed, it would nothave been possible without it). It was partly also a responseto the demands in industry and elsewhere for highly qualifiedmen and women. But more significant than this, it reflected agreat blossoming of intellectual curiosity and a passionate desirefor knowledge on the part of the young.

The contribution of the Menzies Government itself tothe great economic advance which marked the Era could bedebated endlessly. Some will argue that the Government hadlittle to do with it, that the "break-through" would have takenplace no matter what the political colour of the government.It may be claimed that it resulted from a combination of forceswhich had little or nothing to do with politics as such: a deep-seated, compulsive national urge to grow—the "double orquit" philosophy; advancing scientific knowledge and mana-gerial competence; new, sophisticated techniques of economiccontrol; and rich, new opportunities in the field of inter-national trade. There was also an unusually large element ofgood fortune; the Era was relatively drought-free and at timeswe were paid fantastic prices for major exports.

Nevertheless, in the matter of overseas capital at least,which was an indispensable ingredient of the whole process, theMenzies Governments could justifiably claim to have made aspecial contribution. There can be little doubt that the politicalstability provided by the long-continued dominance of agovernment favourable to free enterprise inspired a confidencein financial interests abroad which might otherwise have beenmissing. There was confidence, too, in the intregity and generalcompetence of the Administration and in the massive figureof its leader. Investors, at home as well as overseas, felt, withgood reason, that this was a Government that would steer clearor rash political or economic experiments, that, at the least, itwould take care not to "rock the boat".

5

The Menzies Era (continued)

Indeed, it was not until right at the end of the Era thatthe Government acted somewhat out of character by embark-ing on a major piece of experimental legislation in the shape ofthe Trade Practices Act, a venture which, whatever its pro-spective merits or defects, seems somehow peculiarly foreign tothe political temperament and disposition of Sir RobertMenzies himself.

In the Menzies Era, the traditional orientation of Aus-tralia's trade, dominated by the British nexus, was replacedby a new, more complicated pattern. At the beginning Britaintook 39 per cent of Australia's exports and provided 5 2 percent of its imports. At the end the proportions had fallen to20 per cent and 26 per cent respectively. As a market for ex-ports, Japan was almost outstripping Britain and the miracu-lously expanding Japanese economy, providing a rich outletfor Australian primary products and for its newly-foundmineral wealth, had become of prime significance to Aus-tralia's growth prospects. Moreover, (something inconceivableat the beginning of the Era) China had become the largestsingle outlet for Australian wheat. The United States, too,was beginning to loom very much larger in the total tradepicture.

All this was paralleled by an equally dramatic change inAustralia's external political alignments. Under the pressuresof the Indonesian confrontation and the ominously aggressiveattitudes of the Chinese giant, the Australian focus of interestshifted inevitably more and more to the South-East Asianarea. For the first time, Australia was to share a common landfrontier with a major Asian power — an historical fact,surely, of momentous importance. The Menzies Governmentwas quick to see the over-riding importance of Americanpolicies in this region to Australia. Hence the ANZUS Pact,which Sir Robert himself has claimed to be one of the mostsignificent achievements of his Administration, and the eageracquiescence in the establishment of the U.S. tracking stationat North West Cape. Moreover, whatever one might think ofthe rights and wrongs of the ,Vietnam War, the provision ofAustralian assistance — at least of token proportions — tothe American forces was an insurance premium which anyAustralian Government would probably have felt compelledto pay. For the stark fact is that the preservation of Australia's

6

independence in today's world can be guaranteed only by thecontinued friendship and protection of the United States.

During the Era there were signs of the disintegration ofthe British Commonwealth as a potent political force—signs ofwhich Sir Robert Menzies himself seems in very recent days tohave become increasingly aware. In the light of this, deeperstudents of international affairs may be disposed to criticise theMenzies Government for its apparent insensitivity to thechanging pattern of world power relationships. It might fairlybe said, for instance, that at the time of the British attempt tobecome part of the new, evolving European Community, theAustralian Government showed little understanding of theimport of this tremendous political concept.

The basic facts of the domestic political picture, too,have been transformed in the decade and a half of the Era, bythe inexorable march of events. At the beginning, traditionalsocialism, while suffering from the body-blow of the failureof the Chifley Government's attempt to nationalise the banks,was by no means a spent force. But the extraordinary economicgains of the Era have changed all that. An affluent people,expecting, and largely getting, additional increments of af-fluence year by year, can hardly be expected to give its supportto radical changes in economic organisation. Old-time socialism,at the moment, is a political doctrine without popular appealand very nearly without hope. It is not yet dead, but it couldbe revived to vigorous, meaningful life only by an economiccrisis of major proportions.

The Menzies Era is thus the era of the decline and prob-ably the disappearance of socialism in Australia, at least inits traditional guise, as a serious political force. How muchof this must be attributed to Sir Robert Menzies and thegovernments he has led, and how much, simply to the forwardleap of scientific and economic knowledge, is something forthis historian to decide.

While the Era was not marked in the main by significantlegislative change, it was distinguished by conscientious, skil-ful and honest administration. This would have to be concededeven by the political adversaries of the Government. Over 16years mistakes were to be expected — and some serious oneswere made — but, by and large, the all-round standards of

7

The Menzies Era (continued)

government and public administration were of a high order.There are those who will criticise the Government on thegrounds that little legislation of historic moment was placedon the Statute Book. But good solid, incorruptible administra-tion may contribute more to the advance of a nation thanlegislative achievement. It was not an era of reform, at leastin the traditional political sense of the word, but the adminis-trative proficiency of the Menzies Governments and theirsenior advisers commanded widespread confidence.

Finally, the Era has seen a surge of national pride andnational aspiration which has no parallel in Australian history,except perhaps at the beginning of the century when the Com-monwealth was born. We have emerged from adolescence intovigorous young adulthood, and are like the young man wholooks in the mirror frequently to admire his rapidly expandingphysique. As a nation we are becoming increasingly pleasedwith what we see. But what we are now is nothing to whatwe hope to become — a nation in size and economic powerand influence comparable with all but the super-powers.

Our national ambitions and pride may indeed be racingahead of our understanding of the world and its problems andour awareness of the inescapable responsibilities of maturenationhood. But nations, like individuals, must believe in them-selves if they are to do great things. In the Menzies Era, Aus-tralia began to entertain visions of a great destiny.

8

The Economy in 1966

-AN OVER-DOSE OF THE SUN

IN recent weeks, the concern felt in some business and economiccircles over the drift of the economy has intensified.

Toward the end of 1965, the severe drought in the westernparts of New South Wales and Queensland, the recession inthe two key industries of motor vehicles and housing, and thelarge deficits being incurred on current account in the externalbalance of payments, were combining to give rise to someuncertainty and caution.

1966, however, opened on a somewhat happier note. Goodrains had fallen in the drought-affected areas; the externalpayments' prospects were turning out much better than mostpeople had anticipated; even the Stock Exchanges exhibitedsome signs of life on the New Year resumption. The ReserveBank had also acted in December to stimulate activity in thehousing field by providing additional finance for home purchasethrough the Savings Banks.

But, in recent weeks, several factors have given rise torenewed apprehension. Among these have been the continuedslackness in consumer spending; reports from a number oflarge companies, including The Broken Hill Proprietary, ofdeclining business; and the failure of the drought-strickenareas to receive adequate follow-up rains. The Stock Exchangeafter its New Year flutter, has relapsed again into a conditionof listlessness.

Moreover, the subdued psychology in business and othercircles has been aggravated by a series of "scare" newspaperreports, based' on a wrong interpretation of current statisticson the state of the economy. The most glaring example of thisconcerned the quarterly National Income Estimates released by

9

The Economy in 1966 (continued)

the Commonwealth Statistician at the end of February. Thesewere interpreted to mean that there had been virtually no risein the real Gross National Product over a period of twelvemonths and that the expansion of the economy had slowed to acrawl. The effect of the drought on the figures of realGross National Product, because of the reduction of rural out-put, was largely overlooked. The truth was that the non-ruralsector of the economy had continued to grow at a rate some-where in the region of 4% a year, with civilian employmentin December, 1965, 31% above the level of a year previous.

While there are undoubtedly "soft spots" and areas ofdifficulty which need careful watching, the fact is that theeconomy is forging quietly and steadily ahead. The level ofemployment remains high and, in view of the December influxof school-leavers and the retrenchment of seasonal workersin Queensland, unemployment at about 1.4% is remarkablylow. Migrants continue to flood into the country and are beingsuccessfully absorbed into the work force. Despite the recessionin housing and motor vehicles, output in most sections is risingand the economy overall continues to expand, although at areduced rate. Great basic developments in mining and otherfields, involving investments running into hundreds of millionsof dollars, are proceeding apace.

The Australian economy is suffering, in the main, fromwhat might appropriately be described as an overdose of thesun, and as usual the physical discomforts are accompaniedby some depression of the spirits. But, basically, the patientis as robust as a young bull. Unfortunately the self-appointeddoctors are busy telling him that he is far sicker than hereally is, and that he is going to get much worse unless he isdosed with powerful drugs and stimulants. People sufferingfrom a mild ailment can think themselves into a state ofquite serious illness. And the greatest dangers to the economyat the moment are the perennial gloom-mongers, ever-readyto seize upon some apparently adverse movement in theeconomic indicators as portending major trouble ahead.

In much current discussion of the economy, there is oneimportant facet of the present situation which seems to beoverlooked. When the Commonwealth Budget was introducedin August last year, it was recognised that there would have

10

to be some shift in resources to meet the demands of the sharprise in expenditure on defence, and of accelerated nationaldevelopment and migration. The basic intention behind theBudget was to effect this re-deployment manoeuvre with theleast possible dislocation of the economy. The boom in privatefixed capital investment of a developmental kind and the sharpexpansion in Government spending, partly but by no meanswholly on account of defence, have had the effect of drawingresources away from the personal consumption field, which hasbeen feeling the pinch. Nevertheless, but for the unpredictableoccurrence of the drought, the re-deployment operation mighthave taken place with comparatively minor disturbance tothe economy.

While some sectors of the economy have flattened outmore than was anticipated a few months ago, the external bal-ance of-payments' position for the current year is turning outfar better than anybody expected. At the beginning of the year,many felt that the drain on the reserves during 1965/6 couldexceed the large deficit of $316 million in 1964/5 by a sub-stantial margin. A figure of $400 million at least was widelycanvassed.

Fortunately the balance of payments has been holdingup much better than many expected and the run-down of theoverseas reserves during 1965/6 is sure to be materially lessthan the original estimates. There are a number of contributingreasons. The drought has had a smaller impact on this year'sexport picture than was earlier believed likely. Accumulatedstocks have enabled us to maintain export sales of wheat,notwithstanding a 75% fall in the New South Wales crop.Wool prices have returned to the more encouraging levels ofa year ago, thus helping to counteract a 10-15 per cent lowerclip. With the resumption of production at Mt. Isa, and theexceptionally prosperous condition of the American economy,exports of base metals are buoyant; efforts to promote addi-tional exports of manufactures and miscellaneous goods arealso meeting with success. The Commonwealth Statistician'sindex of export prices is now at its highest level for 12 months.Moreover, imports, while high, look like being somewhat lowerthan anticipated and in total may be not much above lastyear's level.

II

The Economy in 1966 (continued)

In spite of a larger deficit on current account in theDecember quarter of 1965/6, overseas reserves rose by $18million compared with a fall of $26 million during the samequarter of the preceding year. This is attributable to a big risein the capital content of the balance of payments. Admittedlythe figure of - capital inflow covers a multitude of itemsand not only direct investment of new capital. Delays in payingfor imports, particularly major items of defence equipment,have helped maintain an abnormally high rate of capital inflowfor the half year; but this trend could be reversed when thebills have to be met. Nevertheless, huge investments in miningprojects and fabricating facilities, such as those in WesternAustralia and Queensland are blunting any effect the restraintsimposed in Britain and the United States might have had onoverseas investment. The statistical figure for capital inflowcould exceed the $468 million achieved in 1964/5 by at least$3 00 million.

The still healthy condition of the overseas reserves — $1307million in February — backed by expanded drawing rights withthe I.M.F. amounting to $560 million, means the economy isin a position to withstand a further large run-down inAustralia's currency holdings abroad.

The question in everyone's mind is whether the Govern-ment should act forthwith to stimulate demand in the recessedareas of the economy. There is a strong body of opinion inbusiness circles which feels, perhaps not without justification,that some stimulus to the economy, additional to that beingprovided by the Government in the housing and drought areas,is required. The Prime Minister's speech in the House ofRepresentatives of March 8 made it clear that the Governmentwould step in to act quickly if undoubted signs of a seriousdown-turn began to manifest themselves. This may not satisfythose convinced of the desirability of immediate action.

On the other hand, even the critics must concede that theGovernment is faced with a situation of extreme delicacy andcomplexity. It has to take into account a number of futurepossibilities in deciding whether or not the economy is inimmediate need of special measures to boost demand. It is

12

widely believed, for instance, that a rise in wages in the nextfew months could result from the hearing at present beforethe Arbitration Commission. If the Government were to give astrong stimulus to consumption in advance of the Commission'sdecision, the economy might be diverted towards inflationand in a direction opposed to the course set in the Budgetlast August.

There are also one or two underlying influences at work,which may lead to some revival of demand in the comingmonths. The long-continued slackness in consumer buyingcould of itself soon produce a reaction in this critical area ofthe economy, with consumers spending more freely to catchup on postponed purchases. It must be expected, too, that home-buying will continue to rise shortly as the additional moneychannelled into this field takes effect. These two factors couldlead to increased purchasing by manufacturers and distributorsfor stock purposes. Finally, there is always the hope andpossibility of good rains falling where they are most needed.This would undoubtedly give a powerful psychological boostto the economy as a whole.

Perhaps if activity in the key sector of housing could bemore rapidly increased, this might be all the medicine theeconomy needs at the moment.

It cannot be emphasised too strongly that all the uncertain-ties over present tendencies in the economy are taking placeagainst the background of developments that must rank asthe most momentous in Australian economic history. Theimmense significance for Australia's future of the iron oredevelopments in Western Australia and, to a less extent, thealuminium projects based upon the bauxite fields in Queens-land has not yet seeped into the Australian consciousness.Contracts involving thousands of millions of dollars of exportshave already transformed the balance-of-payments' prospect;and even this may be only the beginning. It is impossible to sayat the moment what the iron ore deposits in particular mayeventually mean for Australia's export income.

13

The Economy in 1966 (continued)

But even that is only part of the matter. Deposits of thisincredible extent and richness cannot fail to trigger off a massivetidal wave of development, which should carry us on to heightsthat no-one can at present foresee. For one thing, the scale ofthe search for additional riches, for instance for oil as well asmetals, is likely to be doubly, even trebly intensified. Overseasinterest in Australia, already considerable, is certain to be furtherincreased. As the new developments get well under way, theywill give rise to a whole host of related activities, the natureand extent of which at the moment can only be dimly perceived.Australians have not yet begun to appreciate the incrediblegood fortune which has befallen them as a result of theserecent discoveries which puke the continent among the greatestsources of mineral wealth in the world.

14

"Freedom or Free-for-all"

A MOST significant phenomenon ofthe post-war years is the numerous

private research organisations con-cerned with economic education and po-licy that have sprouted throughout thecountries of the Western World. Oneof the most interesting — and probablyone of the most successful—is the In-stitute of Economic Affairs in Britain.

The work of this body represents, ineffect, a protest against prevailing fashionsin economic thinking and governmentpolicies. For many years now — onemight say since World War II — theemphasis of modern economic thoughthas been on a larger and larger role forgovernment, whether in the every-daymanagement and control of the economyor the provision of ever-expanding wel-fare and social services, or — as mostnotably in France and Britain — at-tempted forward planning of the economyin pursuit of set targets and objectives. Bycontrast, the Institute of Economic Affairshas contended that the freely expressedpreferences of the consumer throughthe market provide, in general, the mostefficient basis for the allocation ofresources.

This is the fundamental premisewhich underlies and inspires the workof the I.E.A. If such a protest camefrom businessmen only, some might sus-pect it as being biased and even un-informed. But when it comes, as itdoes in the publications of the I.E.A.,from a wide range of economists andexperts of distinction, it cannot lightlybe brushed aside.

At the lowest assessment, the workof the Institute provides a needed cor-rective against the fashionable modesof thought, which if left unchecked,would be in grave danger of over-reach-ing themselves. At best, however,the endeavours of a body such as theInstitute could usher in a new approach,based upon a new way of thought, tothe major economic issues common toall the advanced democracies.

The I.E.A. has just published a newbook under the arresting title of "Free-dom or Free - for- All". The bookbrings together revised editions of fivepapers published separately in pamphletform two or three years ago as part of aseries which has now become widelyknown as the "Hobart Papers".

Reminiscent of the pamphleteering ofthe great economists of an earlier age, the"Hobart Papers" have become af e at u r e of contemporary economicsin Britain. The sceptical London "Eco-nomist" has complimented the Instituteof Economic Affairs on the contribu-tion it has made to economic think-ing. Recently "The Economist" prais-ed the Institute for having opened anumbrella of shelter for all economic dis-senters against "a particularly phoneycurrent panacea : Britain's chosen ver-sion of long-term planning".

The "Hobart Papers" are written bypeople specially chosen for their par-ticular knowledge of the subject con-cerned. The authors are expected to statewithout reservation the conclusions towhich their investigations lead. These

15

"Freedom or Free-for-all" (continued)

studies are then offered to the publicas responsible and important contri-butions to the continuing debate on econ-omic policy. There is, however, anobvious connecting link between thevarious studies. This derives from astrongly held belief, shared by most ofthe writers, in what might be called"the ultimate sovereignty of the con-sumer" as the primary basis for econ-omic policy.

The introduction to "Freedom or Free-for-All", written by the Director of theInstitute, Mr. Ralph Harris, is perhaps,the most interesting part of an interesting,important book. For in it, Mr. Harrisprovides us with a clear statement ofthe underlying philosophy and principleswhich have inspired the foundation ofthe I.E.A. and its subsequent work. Mr.Harris writes:

" . . . the loudest voices in journalismand broadcasting have appeared to bethose of fashionable exponents of asuccession of panaceas, on which forthe moment all seem agreed. Inrestrospect one may wonder thatanyone should have taken such adhoc prescriptions seriously, startingwith urgent pleas for more investment— at first simply undifferentiatedinvestment, to be followed only byslightly more specific calls for moreinvestment in science, then in educa-tion, then in business management,and latterly in automation, computersand new technologies."

Mr. Harris goes on:"In retrospect, this ad hoc approach

to serious problems may look simplyfrivolous, despite its plausible pres-entation as sophisticated thinking."Mr. Harris protests against the notion,

implicit in much economic thought today,that economic analysis can lead toobjectives and prescriptions for publicpolicy having the kind of inevitability

and authority attached to the physicalsciences. He would agree that there arefew, perhaps no solutions to economicproblems in the sense that one findsan answer to a problem in algebra orgeometry. "It is", he writes, "a pretencethat economists can offer advice on someaspect of public policy without incor-porating assumptions that rest on otherthan technical economic analysis." Mr.Harris contends that the theory of mar-kets, based upon the concept of consumersovereignty, provides the co re ofeconomics as a social science. Whenwe depart too far from that we enter aworld of value judgements derived fromthe preferences not of the great bodyof consumers (whom economic policyis concerned to serve) but from thesubjective preferences of politicians andbureaucrats.

"We have become accustomed",says Mr. Harris, "to talk about the`imperfections' of competitive markets. . . But there has been no comparableattention paid to the arbitrariness ofthe prices by which political prioritiesare established in response to suchirrelevant pressures as the personalitiesof rival ministers, administrative con-venience, t h e unequal power oforganised lobbies, or simply short-term electoral calculations. Who willassert that the outcome of such crude,capricious pressures must necessarilyprove superior to the dispersed pre-ferences of consumers who know whatthey want and increasingly have themoney to pay their way? If onerather than the other had to becharacterised as 'the law of the jungle'or 'a free-for-all', is it so clear thatconsumers in markets are less compe-tent and consistent in judging theirneeds than politicians or civil ser-vants in ministries? Can there be anydoubt that markets can be moresurely and more easily purged ofimperfections than the monolithic

16

governmental experiments which haveprovided so much evidence of ex-travagance and incompetence since1945?"

The first Paper in "Freedom orFree-for-All" concerns itself with anoutstanding example of this extrava-gance: the British National HealthService as a monopoly supplier ofvirtually free hospital and medicalservices. The author, Dr. Lees, isclaimed to be the first British economistto subject the Service to critical anddetailed examination. Dr. Lees deploresthe fact that although Britain had beenspending more than 4% of the nationalincome per annum on health servicesover the past 13 years, no attempt hadbeen made by any economist to dis-cover whether the nation's medical re-sources are being used to the bestadvantage. After exhaustive examina-tion of the facts, he comes to the conclu-sion that there has been great waste ofresources under the National HealthService which could have been largelyavoided had the free market been allowedto operate. He rejects any suggestionthat the National Health Service hasreduced administration costs, and quotesa study showing that as a proportion oftotal health costs, administration expendi-tures have risen from 4% before thewar to over 7% today.

Dr. Lees claims that the record onhospital building since 1 9 4 8 h a sbeen deplorable: capital expenditure inreal terms has been below the levelof the depressed 1930's. Regimenta-tion of the medical and dental profes-sion has created great professional dis-content, "perpetuated a shortage ofdentists and failed to anticipate oralleviate a shortage of doctors." (Ithas been established that betweet 1954and 1963 one out of every four graduatesof British medical schools emigratedabroad permanently.) With an insatiable

demand for drugs, provided virtuallyfree by the State, neither doctor norpatient has had any positive incentive toeconomise. Attempts to curb demandby imposing nominal charges on pre-scriptions have met with only limitedsuccess. (We seem to be having a simi-lar experience in Australia under thePharmaceutical Benefits Scheme wherecosts have snowballed in recent yearsfrom £13 million in 1955/6 to an es-timated £45 million in 1965/6).

Dr. Lees maintains that medical careis a personal consumption good, notmarkedly different from anything elsebought in the free market. He re-commends that apart from the dwindlingminority who cannot provide for them-selves, the Government should moveaway from taxation and free servicesto privately arranged insurance and freechoice of doctor. He believes it isessential to re-introduce the influenceof the market in determining the incomesof doctors and dentists.

"Despite the enormous expenditure ofmoney on national health", Dr. Leesconcludes, "the National Health Servicehas done no better than the diversemedical systems overseas i n raisinghealth standards." He asserts that thefundamental weaknesses of the NationalHealth Service i.e. the dominance ofpolitical decisions and the absence ofbuilt-in forces making for improvements,can only be overcome by resort to thefree market. However, Dr. Lees isreconciled to the fact that the NationalHealth Service can only be graduallysuperseded by the spontaneous growthof private institutions.

The second paper in "Freedom or Free-for-All", by J. E. Meade, the Professorof Political Economy at CambridgeUniversity, deals with Britain and theCommon Market.

In view of recent encouraging signsthat President de Gaulle may be relax-

17

"Freedom or Free-for-all" (continued)

ing his opposition to Britain's entry intothe Market, the publication of Pro-fessor Meade's paper comes at a partic-ularly opportune time. Professor Meade,while not an unreserved advocate ofBritish entry, would support Britain join-ing the European Economic Communityif it has real promise of becoming a"liberal, outward-looking institution".

The author holds the view that thepolitical issues are ultimately more im-portant than the economic.

"The Common Market could" hewrites, "become a liberal, outward-looking confederation of like-mindedcommunities, which exercised influence inbuilding a bridge between East and West,between developed and under-developedcountries, between socialism and freeenterprise and thus make a major con-tribution toward the building of the OneWorld which, in my view, with presenttechnological changes must necessarilybe our main political objective" — aconclusion which men of vision wouldsurely applaud.

The remaining papers in the bookdeal with industrial arbitration and themarket for labour; the economics of lib-rary services provided by public author-ities; and means of relieving ratepayersfrom some of the mounting costs of localgovernment. The interest of these essaysfor Australians lies mainly in the illus-tration they provide of the central theme

of the "Hobart Papers" — namely theavoidance of waste and extravagance inthe use of free services provided bypublic authorities, by making them moreresponsive to consumer preferences. Thisis to be done by imposing some chargeson those who use the services.

This would also have the advantage ofmaking the allocation of resources bypublic authorities more responsive toconsumer preferences and less dependenton more or less arbitrary decisions bygovernments.

The significance of this book stemsprimarily from its protest against thefashionable mode of economic thoughtwhich tends to accept higher and highertaxes and increasing government direc-tion of the economy as unavoidable. Afully employed society of growing per-sonal affluence should, on the face of it,have less rather than more need forgovernment-provided welfare services.

The time is coming when it may bedesirable to contemplate a much moreselective approach so that the servicesare reserved for those who really needthem. This will allow consumers to ex-ercise a greater say over the way inwhich economic resources are em-ployed rather than politicians or bureau-crats. The essence of a democratic econ-omic system lies in the concept ofconsumer sovereignty and we should neverforget it.

18

The Institute of Economic Affairs

The Institute of Economic Affairs wasformed in 1957 "to raise the standard ofeconomic discussion by spreading know-ledge of basic principles". It was estab-lished with the help of a generous grantfrom its founder, Mr. Antony Fisher, aBritish businessman who made a fortunein the mass poultry business. Its workhas since attracted support from around200 British companies. The Institute isguided by an Advisory Council, includ-ing some of the leading men in Britisheconomics: the Professors of Economicsat London, Manchester, York and Swan-sea Universities; George Schwartz, thewell-known writer of the "Sunday Times",Colin Clark and Graham Hutton.

The first "Hobart Paper", which inves-tigated re-sale price maintenance, was

written by Professor B. S. Yamey of theUniversity of London. Other titlesinclude: "Growthmanship" and "Tax-manship", by 'Colin Clark, a few yearsago the provocative Director of t h eBureau of Industry, Queensland, and nowDirector of the Agricultural EconomicResearch Institute at Oxford. Anotherprominent economist, Graham Hutton,contributed "All Capitalists Now". Pro-fessor F. W. Paish, regarded by some asthe top economist in Britain, wrote "APolicy for Incomes?", and the well-knownauthority on international economics,Gottfried Haberler, Professor of Inter-national Trade at Harvard University,wrote on "Money in the InternationalEconomy".

POSTSCRIPT

As a result of approaches by the In-stitute of Economic Affairs, the I.P.A.has agreed to enter into a close associa-tion with this body, and to act as its re-presentative in Australia. We expect thatmany benefits to both organisationsshould result from this link with a well-respected body in the United Kingdom.

The I.P.A. will promote the sale anddistribution of I.E.A. literature in Aus-tralia. We believe that these publicationswill be of special interest to businessmen,university lecturers and students, lib-raries, public servants and members ofParliament.

Copies of the book "Freedom or Free-for-All" (319 pages) are obtainablefrom the I.P.A. Price: $3.50.

19

Reflections on Life by

Leading Australians

THE Institute invited four prominent Australians to setdown some of the views and attitudes they have formed

toward the adventure of living as a result of their experienceand thought. All four men have achieved distinction andsuccess in the differing careers they have pursued.

Sir George Coles, Immediate Past President of the I.P.A.,is the founder of G. J. Coles and Company, an organizationof nearly 600 stores throughout Australia and one of thethree largest retail businesses in Australia. But he has had amultiplicity of interests and has taken a prominent part incharitable activities, hospital administration and variousbranches of public affairs.

Sir Albert Coates is a leading Melbourne surgeon and aPast President of the Victorian Branch of the British MedicalAssociation. Sir Albert was Senior Surgeon to the A.I.F. inMalaya in World War II and was captured by the Japanesein 1942. He won national renown for his remarkable and de-voted work for prisoners of war in Japanese prison camps. SirAlbert has held many prominent positions, including Lecturerin Anatomy at the University of Melbourne, Honorary-Surgeon of the Royal Melbourne Hospital and President of theMelbourne Rotary Club.

The Very Reverend Alan Watson has been Minister tothe Toorak Presbyterian Church since 1942, and was Moder-ator-General of the Presbyterian General Assembly of Aus-

20

tralia from 1959 to 1962. Earlier in life, he was a lecturer inPhilosophy at the University at Dunedin, New Zealand. Hissermons are renowned for their deep philosophical and in-tellectual content.

Professor Harry Messel, who was born in Canada, hasbeen Head of the School of Physics at the University ofSydney, since 1952. He is Director of the Nuclear ResearchFoundation within the University. He is regarded as one ofthe most brilliant and colourful figures in the Australianscientific world.

The articles which these gentlemen kindly agreed tocontribute to "Review" are in the nature of personal philo-sophies. Among other things, the authors have set down someof the values in life, and qualities in human character, whichthey esteem highly and which have guided them in their owncareers.

We believe their ideas will be of interest to all readersof "Review", and particularly to younger people. The thoughtsof men whose achievements merit the respect of their fellowsare always worth listening to, because of the lessons andguidance they afford.

21

Reflections on Life by Leading Australians (continued)

Sir George Coles

(As told to DAVID KEMP), SUPPOSE that by the time a man

I reaches the age of eighty years hisexperience of life should have taughthim a great deal. But I sometimeswonder whether the lessons you havelearned from your own experience willalso be true for others; however, I willtry to tell you the principles and ideasI have found of value to me and fromwhich I have drawn strength duringtimes of personal difficulty.

Perhaps I should make clear first ofall that my adult life has been almostentirely spent in the retailing trade.Several directorships, my work on theBoard of the Alfred Hospital, and in anumber of voluntary associations fill outmy business experience. Apart from that,my family has always been very import-ant to me, and unquestionably the lessonsmy parents taught me have had a lastingimpact on my life.

Above all else, I owe most to myparents for the grounding they gave mein Christian principles. They were notrigorous or puritanical in their religion,but they always stressed to their childrenthe importance of Christian morality,saw that we went to church and SundaySchool regularly, and kept us to a rigidstandard of right living. The present age

is more sceptical than the one in whichI grew up, and the broadmindedness ofmy parents towards other religions wasan important lesson. I recall that in thesmall country town where we lived therewas only a Presbyterian Church, thoughthe Coles were Church of England, andthere were occasionally moves amongthe members of the Church of Englandto build their own church. But myparents always believed that the Christ-ian community in the town was streng-thened by attending the one church, andby the two groups pooling, on occasions,their energies and resources. They didnot believe that the good Christian hadto be dogmatic in his observances pro-vided that he attempted to lead a con-siderate and worthwhile life. What theybelieved, as I do, was well expressed bya quotation from Aristotle I wrote downmany years ago: "The search for truthis in one way hard and in another wayeasy. For it is evident that no one canmaster it fully nor miss it wholly. Buteach adds a little to our knowledge ofnature and from all the facts assembledthere arises a certain grandeur."

I have always believed that Christianprinciples are as applicable and shouldbe applied, in business as much as inprivate life. Primarily this means simply

22

honesty and respect in one's dealingswith the public and with business asso-ciates. Business ethics have undoubtedlyimproved over the last sixty or seventyyears, and the whole community hasbenefited thereby. Fair dealing, fairprofits, and truthful advertising shouldbe the guiding principles for business inits relations with the public.

When a person speaks of businesssuccess he is often thinking of a mon-etary or financial success — and whatbusinessman does not set out to tradewithout hoping that his venture willplease the public and hence trade profit-ably? He would probably be a hypocrite,or at least a poor businessman, if hedid not admit this. But though successin one's occupation is very important,success in one's life as a whole dependsvery much on respect for other people.Love of money and love of power tothe exclusion of other things are certainlythe root of much of the world's troubles.In the particular job he is doing thebusinessman must be proud of the service'he is giving to the community. This meansthat he will come to have a certain pridein himself — that he is of value to thecommunity, and from this he can drawstrength and satisfaction.

Businessmen talk a lot about privateenterprise and individual initiative. Theytend to resent the State doing thingswhich they claim people can do equallywell for themselves. But the other sideof this is that the leaders of profitablebusinesses should take an interest in thesocial work of the city they live in, orin charity. Education especially offers anappropriate field for businessmen to actfor the benefit of all. If they refuse toact in this way they invite ever-increasinggovernment interference in private life.Moreover, I have, always believed thatindustry should, for the sake of thepeople who run it, as much as others,contribute to making life worthwhile.

An industrial system which is purelymaterialistic must ultimately degenerate.

I think, looking back, that books havealso had an influence on my life. It maypossibly surprise some of my closebusiness contemporaries that in my youthI read a good deal. At the age of twenty-three I had consumed almost all ofWalter Scott's novels, and the works ofDickens and Thackeray. Books onancient history have always interestedme, and in particular Gibbon's "Declineand Fall of the Roman Empire". Therewas also a book of English Essayistswhich one of my schoolmasters gave mewhich had essays by most of the greatEnglish writers—Addison, Locke, Baconand Ruskin among them. When I wasreading this book, it was a time ofdecision in my life, as I was just aboutto take over the small family store. Untilthen I had always worked with myfather, but now I was on my own andanxious to try. One of the essays in thebook caught my attention, a piece called"On Decision of Character" ("The De-cisive Character") by . John Foster(1770-1843). Though I suppose fewpeople have heard of him today, whathe wrote had a big impact on me.

One of the things which Fosterstressed was that it was most importantto be true to, and believe in, yourself,if you were ever to succeed in life—"A man's own conscientious approbationof his conduct must be of vast import-ance to his decision at the outset, andto his perservering constancy". Integrityof purpose is to me an essential elementof a successful life.

The other thing that Foster stressedwas the approach through reason to thesolution of the problems which confronta person. I remember he was supportedby John Locke (died 1704) who wrotethat "The faculty of reasoning seldom ornever deceives those who trust to it".

23

Reflections on Life by Leading Australians (continued)

Once a problem was encountered it hadto be followed through to a solution.Without such perseverance a personmight become lost in indecisiveness andhis capacity for achievement reduced.In business life a great many decisionshave to be made, some of which seemvery difficult when confronted for thefirst time. Indeed, the more one con-siders them, the more difficult they some-times appear to be. But in general asolution may be found by hard thought,and once found, the problem should bedisposed of. I think that this quality ofdecision is worth pursuing, and is oneof the most important requirements ofbusiness success.

In the long run, however, there isno substitute for love of your work.Whatever role you may choose for your-self in life, if you are not happy in it,it is satisfying neither to you nor tothose who work with you. Retailing hasalways been satisfying to me. I havealways looked on myself as a shopkeeper,

and to me it has been a most fascinatingbusiness. Over the years I have enjoyedwatching new trends, getting the newgoods, being able to compete. I thinkthat a purchaser in the retail businessshould get as much fascination out offinding new lines as, say, a collector ofantiques does. And with it goes the satis-faction of feeling that one is performinga public service.

Lastly, I should say how importantto me have been my activities in organi-zations outside the strictly business field,and in my family life. To watch myown family growing up and becomingestablished has given me a great dealof pleasure and satisfaction, while tomix with people on a broader level out-side business life has been a constantsource of interest. The businessman whorestricts himself to his work is likelyto become narrow. Someone once saidthat the greatest study of man is man,and that is a lesson that I hope I havetaken to heart.

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Sir Albert Coates

910 write an article for a journalI such as this, is not easy for a medicalman. Private affairs are more the con-cern of a doctor. Only those involvedin Public Health could be consideredcapable of contributing to a paper onPublic Affairs. Yet all of us are involvedin community affairs, whether in our roleas individual members of our trade orprofession, or as administrators of thenation's government. We live in a demo-cracy — we have a vote — we arepersonally responsible. We cannot passthe buck. Who am I to dictate to ordirect the lives of others? A word ofintroduction.

My grandparents were free settlers inthis country. By the time I was bornin 1895, the two widowed grandmothershad a task before them that faced manyof our pioneers. A strong body inheritedand developed by mother's excellentpreparation of natural foods (no pro-cessing in those days) enabled ourfamily of seven to reach adult life andfulfill their functions as Australians.Home life and Christian teaching influ-enced us in the same way as otherfamilies of the period.

Possibly, a sense of mission combinedwith personal ambition were the main-

springs at the start of my professionalcareer. Some adversity and the needto struggle only added spice to thesense of adventure. The latter, togetherwith an element of patriotism (an almostforgotten word) probably were the mo-tives for joining the A.I.F. in 1914.Nor was the interruption of professionalstudy regretted. What wonderful men Imet! I saw humble men rise to heightsof nobility in personal valour, indomit-able courage, unselfish devotion. Thememory of those youthful comrades—many of whom died in battle—has beena precious possession. To have countedthem as my friends has sustained mein many a time of tribulation. The asso-ciations in 1914-1918 enhanced mypride of my British stock. The Queen,the Flag and the Church had a validsignificance in the first years of theTwentieth Century. They still do. I'mold fashioned I suppose.

My medical studies, which began in1919 (and which I hope will continuefor another decade) have taught methat pride of racial origin needed to bemodified. Many different peoples settledin England — some from the North,East and even the Mediterranean littoral.Black hair, swarthy skin is to be foundamong our kinsmen today, and in one

25

Reflections on Life by Leading Australians (continued)

family, the contrast with the fair hairand blue eyes is noted. The millionsof ancestors who have endowed by in-heritance each of us with our physicaland mental characteristics, are often for-gotten. A sobering thought is to work outthe number of our grandparents—greatgreat etc., back to William the Con-queror. Is it any wonder that a "Sport"occurs now and then. A great artist, amusical genies, a profound thinker, agifted scientist appears in the most un-expected stratum of society. MotherNature mixes the genes. Thank God manis not yet able to penetrate this Holyterritory. The human biological factoryis sacrosanct up to date. Recent dis-coveries and their applications as des-tructive agents by men may alter thesituation soon. Sober thoughts—sombrespeculations—worthy of reflection by thethinkers of the rising generation.

The talent for quiet meditation, theformulation of thoughts and the abilityto express them in the only way thatour fellows understand, i.e. language,is as necessary as ever today. Thecourage to state our conclusions — nomatter how unpopular—is of supremeimportance if our democratic way oflife is to persist. Our English languageis spoken by our American cousins andby millions who are not English. Indeedit is the lingua franca of a multitude ofpeoples. The British legacy in languageand forms of government in civilizedinstitutions—roads, hospitals, educationfacilities—should not be forgotten by usnor by the emerging nations who havebeen the beneficiaries. Other greatpeoples have their language, literatureand customs. The more one travels andmeets other nationals, the more respectone has for the human family in general.There is no "master" race. Personalcontact with other peoples breaks downinsular hostility. Hence the value oftravelling fellowships, established by

Rotary International and the ChurchillFoundation, Overseas Service Bureau andsuchlike worthy bodies.

The ability to see things through andto persist to the end, is probably oneof the most important attributes ofgreat people I have met. Many who havebeen endowed with fewer talents, yethaving that dogged persistence, haveattained success—whereas the gifted butirresolute have been disappointing. Aus-tralians in the past were men who couldadventure. Their forefathers of 150 yearsago certainly took a chance. It is to behoped that no softening process will setin. There is ample scope for adventurein all fields in this country. The smugassertion that the rolling stone gathers nomoss should not be taken too literally.Sedate suburbia with its arm-chair com-ments has its rights, deserves respect,but that is all.

To wonder at the marvels of natureseems to me to be akin to worship.The contemplation of the constellationsin the heavens, did much to comfort andconsole many of us in the Japaneseprison camps. The study of livingcreatures (e.g. my dog) the birth of ahuman baby, the healing of a woundare a perpetual source of amazement.Those who retain this child-like attributeremain young in spirit.

A basic element in civilized societyis loyalty—first to one's family, friends,community and nation. Difficulties arisewhen there is a clash at internationallevel on ideological, trade, territorial,religious or other grounds. The man whois loyal to his country is more likelyto be a safe advocate in the internationalsphere. The history of the nations isnot synonymous with the fusing or inter-mingling of the races. This may bebiologically desirable or not—but weface realities when we recognize that,while all men are physically the same

26

inside, their traditions, religions, culturesand ways of thinking are widely different.We have a common humanity — butfortunately an infinite variety. Perhapsthe Australian continent—geographicallya southern appendage of Asia but witha European (mainly British) culture upto now—may become an experimentalarea for the integration of different races.My generation was brought up with theidea that neighbours could be friendlythough they lived in separate houses.Maybe the day of privacy, whether ofthe individual, the family, the nationsand the races, is passing. However thatmay be, there is no cause for pessimism.Homo Sapiens has struggled upward fora long time. There never was an erasuch as the present, when there appearsto be as much goodwill among men.This tender plant needs cultivating atevery level. If one were to live anotherseventy years, one would continue tohave Faith in the ultimate triumph of alofty human race. Hope for steady im-

provement in the relations of thepeoples, and trust that there will bea wider diffusion of Charity among themen and women of this planet.

However, sudden changes are not therule in Nature. We, who lived throughthe era of disarmament, conferences andpeace treaties—between the great wars—have no illusions about man's corporateconscience. It is very elastic. We havewitnessed Hitler and Stalin rise and re-ward our trust with perfidy. We haveseen the horrors of the wars and num-bered our friends among the victims.It is unwise to constantly meditate onthese matters. History is not bunk, butthe record of man's upward strugglepunctuated by acts of barbarism—recently on a mass scale.

We Australians would be wise in thecoming days, to cling to our traditionalbrothers in arms, and clasp firmly thehands of great allies who helped us inthe past.

' 27

Reflections on Life by Leading Australians (continued)

The Very Reverend Alan C. Watson

LIKE everyone else I was born into a home where parents based theirlives on certain assumptions. In my caseit was a Christian home, and the assump-tions grew out of the practice of myparents' faith. It was for this reason thatI grew up in a happy and relaxed family,and took it for granted that life is good,that work is important and should bedone with all my might, and that there isa purpose in life beyond anything I couldever hope to understand.

In a sense the rest of my life has beena testing of these and related assump-tions. They are no longer receivedassumptions, but personal convictions.The testing has taken place within theconditions and limitations of my workand manner of life, first as a universitystudent, then as a teacher of philosophy,and finally as a minister in three differentparishes, in the country, in a city, andnow in a suburb. This has been combinedwith other duties required of me as aChurch's representative on many civicand church councils. All of which hasbeen interesting and stimulating andsometimes exciting.

I could write of five or six of myassumption-convictions, but since this isa single article I will concentrate on oneof them only, the one which has grownin importance for me as life has gone

on; the assumption, now become an actof faith, that there is no lost good. WhenI was a student at the end of the firstWorld war I spent many hours in eagerand vigorous debate with other studentsabout this fundamental matter. Nowadaysit is still discussed, and as vigorously,by students and writers; it is now calledthe search for meaning.

There is obviously so much that islost. Nature's evolutionary process istraced and described in part by the com-bined studies of the natural scientists.They make it clear that Nature is waste-ful and prodigal; she tries one path, thenabandons it; throws up one species andallows it to disappear. And then thereare her convulsions, like earthquakes,_which so impressed my youthful mindin my New Zealand youth. Yet this isNature's way, and we have to put upwith it.

It is when we examine human naturethat we are really puzzled. Man is thelord of creation, the thinking animal. Yethis progress is so uneven. He has thepower of reason, he comes of age intel-lectually, but remains emotionally im-mature. He is still subject to the brutaland final stupidity of war. It requiresa special kind of optimism to affirmthat good things and good people are notdestroyed forever.

28

But none of us can ever "see" thewhole of reality; all we can ever hopeto do is to see one part of it. Our inter-pretation of what we see is largely deter-mined by our own personal experience.In my thinking I suppose I am still apessimist, but I have come more andmore to believe that no good thing is everlost, and particularly that no honest workwell done is lost. I do the work of apastor, now often described as coun-selling. It requires both study and ex-perience. The two are inter-dependent.Many times, for instance, I have spentlong hours in reading which has nospecial point or significance, and thenalmost at once I meet a man who seemsto illustrate what I have been readingabout. The study illuminates the ex-perience, although it is not directlyrelated to it. So time and again I havefound that because of study, the problemwhich last year would have been insolubleis today capable of solution. For thisreason I have come to believe in thevalue of indirect preparation.

What I have so learned I have alsoobserved in the lives of my friends. Someof the most successful of them are doingjobs for which they were not directlytrained. One of them, a graduate inmedicine, is a vice-chancellor of a greatuniversity; another a student of thehumanities, is now a political leader;another, an engineer, is an administratorin a vast international enterprise.

When Sir Winston Churchill becamePrime Minister in 1940 he faced themost testing moment of his life—and hewas not a young man. Afterwards hesaid of this time: "I felt as if I waswalking with destiny and that all my pastlife had been a preparation for this hourand for this trial." That exactly expressesthe meaning of my phrase—the value ofindirect preparation.

It is important to glimpse the truthof this when we are young. Young peopleoften talk over their future with me.Strangely, it is the young men, not the

young women, who are often undecidedand apprehensive. When one of themsays, "I don't know what I want to be",one can only talk out of one's own ex-perience. Commonly my advice runs likethis—get on with your work of prepara-tion, stretch your mind, exercise yourabilities to their limit. If you do that,the moment of illumination will come;the door will open; the way forward willbe clear.

Of course we must be prepared tosuffer setbacks. We set our hearts onachieving a goal, of holding an office, ofwinning a place; but we don't succeed.What then? This, at least, can be saidwith confidence—many of the most satis-fying successes are those which comenot after our striving to achieve them,but when we are trying to achieve some-thing else. It has taken me a long timeto believe that. But this I can say, whenwe do believe it, the tension goes, andwe know something of the joy of living.

And now that I am growing old, Iam coming to understand that what Ihave been writing about is as importantfor age as for youth. The sensible thingto do is to accept the limitations of age,and above all not_ to become sorry forourselves. It is possible to make someof our best contributions to the life andhappiness of other people in this periodof our life. But it takes courage—or touse another name for the same thing,faith.

There are two kinds of courage—thecourage of youth and the courage of age.In youth we should launch into the un-known without too many questions andtoo much fuss. In age we should acceptthe things that cannot be changed. Whenwe are young we should not accept thingsas they are; we should work for newand better things. But when we are oldwe should have the humility and courageto accept things as they are. There issomething wrong with a young fellowwho is not a rebel, and there is somethingwrong with an older man who is.

29

Reflections on Life by Leading Australians (continued)

Professor Harry Messel

MY principal thoughts on my philo-sophy of life are deceptively simple.

This does not mean that there is adefinite number of them, nor that I amable to "give all the answers". I don'teven know all the questions!

I shall therefore set down here butone or two of the principal thoughts Ihave about human behaviour and con-duct. I shall not—because I cannot atthis stage in a short article—deal atlength with the most basic of all ques-tions: Why are we here? What is thepurpose of life — human life in par-ticular?

Let me just say that I believe thatthere is or should be a purpose. I believethere is—or should be—a reason for"going". I believe each human beingshould have his "sailing orders". Manshould have and must have a mission.

I, myself, have always felt a drive togo on; a drive to make a contribution,as significant as I can. I have alwaysthought that it is my mission in life todo as much as I can to make this worlda better place to live in than what it waswhen I entered it.

And on this road I think that intellec-tual honesty is one of the principal items

in one's marching equipment. Thus, letme talk about honesty and its most vitalcompanion—courage.

I think a man should be honest—notonly honest in the conventional sense ofthe word, but honest with himself. Ibelieve that if we try hard enough wecan succeed to a great measure in seeingourselves as we really are. This, of course,requires an almost brutal frankness withoneself. Only if one admits to oneselfone's innermost thoughts, desires and am-bitions and urges, can one make pro-gress on the road to recognising oneself.

I, myself, have tried to practice thisbold self-recognition and self-appraisalall my thinking life. Frank, basic think-ing and the resultant self-recognitionhave, I hope, helped me in my attemptsto be fair both to myself and to others.Equally well, I have always also triedto muster the courage to express myconvictions in words and action.

I have for long found it strange thatin our modern times—contrary to theever more realistic expression in our artand culture—most people tend to foolthemselves into a make-believe world andtry to deceive themselves and others.

I cannot understand how this widetrend to see and interpret things differ-

30

ently from what they really are, has madesuch inroads.

It is amazing to observe how manypeople try to escape honest self-appraisalof their thoughts and actions by eitherpretending that certain thoughts are notin their minds, or by conjuring up artifi-cial justifications for certain actions.

We all know of the many individualswho are given to talk much about happi-ness in the home, for instance, and thentake advantage of every opportunity toabsent themselves from their own homesand families.

Similarly, we know of the millions ofwhom their daily work is merely a neces-sary evil, an unwelcome means of ob-taining a weekly pay envelope—peoplewho honestly could not care less aboutthe quality of their effort, the purposeof their labours, or the consequent well-being and prosperity or otherwise of theirfellow-men, including their employers.

Twentieth-century man seems to goabout with a perpetual chip on hisshoulder — a chip of deep resentmentagainst the fact that he has to do some-thing about his own survival, and thatof his family and that of his nation.

As a consequence of this we havecome to recognise as a fact that fewpeople like to have any real interest intheir employers.

We have come to accept that almostno-one today "applies" for or "requests"an increase in salary or better workingconditions. All we know of today arewage "claims", and the outcome of suchclaims is often judged not on the per-formance and merit of the claimant, buton the ability of his employer to pay.

One can carry such false values adabsurdum and come to a situation wherea wealthy individual or firm is ordered

by a tribunal to pay more for work thana not so wealthy individual or firm.

Personally, I cannot see how a dis-honest mental approach by our societyto many realities can continue withouteventually bringing harm to society. Inthe same manner I believe that noindividual member of the community cancontinue to fool himself and his sur-roundings without coming to harm.

In some societies already there aremanifestations of such harm actuallytaking effect. The increasing number ofpeople in need of mental treatment today,and the increasing number of psychia-trists' couches, are to me a sorry proofof my contention.

I think if more people would honestlyand realistically look at and into them-selves, and frankly take stock of theirown thoughts, abilities and ambitions,there would be less falseness, pretenceand deceit. The word "pseudo" couldbe more and more eliminated, and to-gether with it the need for ever morepsychiatric treatment.

To be "well-adjusted" is not a termthat has sprung from the imagination ofmodem psychiatrists. It is a term coinedby a new science which has far greatermeaning, I feel, than that accorded toit by most people today. It is in factthe psychiatrist's term for the desirable,normal mental state of a human being.And it is in my opinion quite impossiblefor anyone to be well adjusted withouthaving practised some frank self-assess-ment and being able to face the factsat least within one's self.

It is clear to honest thinkers that themore honest they are with themselves,the more humble—and, at the sametime, courageous—will they be; and itis interesting to note that some of thegreatest men of our century have alsobeen some of the bravest and humblest.I think here not only of great scientists

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Reflections on Life by Leading Australians (continued)

such as Einstein, or great medical mdnsuch as Florey, Salk and Schweitzer, butof great men in all spheres of life like,Gandhi, Pope John, Trygve Lie, FolkeBernadotte and numerous others.

As a scientist, of course, my mind istrained to weigh up things and valuesscientifically, but I think I have suc-ceeded in applying a similarly realisticyard-stick to human considerations oflife.

This has given me an opportunity ofassessing as best I can my upper limita-tions beyond which I know I could neverrise, but also the lower limits belowwhich I know I could never consciouslyfall.

It is only natural that I should there-fore esteem people who practice honestself-appraisal and consequent courageoussincerity of effort on their part. To theinitiated such characteristics in others arequite obvious and, as far as I am con-cerned, they command my respect beyondall other considerations.

I admire a man who has honestlyassessed himself and his ability, his am-bitions and his yearnings, and has hon-estly worked hard and courageously toachieve top-grade within his own limita-tions. I have great respect for the end-product, be he a scientist, a butcher, a

clerk or a train driver. I have equalregard for him as I have for the industrialtycoon, the musician (irrespective of thelength of hair) and the artisan, the writer. . . in short, for people in all walks oflife.

I think that all individuals within theirlimits—a matter of genes, of brain-power, a matter of body and mind—canbe valuable human beings and valuableto society.

If they are the people they can be,they all will have one thing in common,they will be humble, happy and in posses-sion of a large measure of peace of mind.They will never be complacent, and willalways strive to better themselves, theirsurroundings and the world around them.

All they will be and do will be inthe realisation of their own greatnessand smallness all at once, and in therealisation that they cannot do betterthan give their best.

No man can ever be blamed for any-thing by society, or for that matter byhis God, if he acts in what to himappears an honest and courageousmanner, and what to him is the best ofhis ability.

No one acting thus can ever be trulysaid to have failed.

Contributed articles by noted authorities in Australia and

overseas dealing with matters of public interest are published

from time to time in the I.P.A. Review. This Institute is not

necessarily in full agreement with the views expressed in

these articles. They are published in order to stimulate free

discussion and inquiry.

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