Table of Contents
‘For God’s sake, don’t feel that [this] demands any answer. It is enough to have got it off my chest.’
Giblin, Brigden and Copland were not scholars immured in library stacks. Nor were they government officials, hidden in invisible annexes to the corridors of power. They were public figures. And they were never more public than in the 1930s, when they took to podium, platform and pen. They were the public intellectuals of the decade.
These public appearances were not a matter of striking an attitude, of being merely a lamenting chorus to the drama of the protagonists. They entered the amphitheatre to put to field a force that would win an important battle – the struggle between thought and prejudice. They believed, in the manner of the Enlightenment philosophe, that an important social dynamic lay in the conflict between a calm and supple reason on the one hand, and a hot and hard unreason on the other.
The urgency of this struggle had become more urgent with the advent of democracy, and the transfer of power from an educated elite to the uneducated mass. This transfer encouraged in late-Victorians doubts about the worth of democracy – doubts that both progressives (such as Giblin’s hero, George Bernard Shaw), and reactionaries shared alike. Giblin sometimes entertained a Shavian displeasure with democracy. What actual value Giblin placed on democracy – in the sense of majoritarianism – is unclear. But as the 1930s progressed, and as anti-democratic forces drew vigour from unreason, the causes of Democracy and Reason coalesced.
Giblin, Brigden and Copland were not entirely pessimistic about democracy successfully drawing on the rationality that anti-democratic forces despised. The three had some confidence in their capacity to soften ‘dense’ unreason of the public with their emollient wisdom. But diplomacy, tact, discretion would be at a premium. Polemic they completely avoided; the darts of Keynes’, The economic consequences of the peace, were very deliberately not imitated.[1]
They were assisted by the apparently easy access they had to newspapers and radio.[2] They were also assisted by the fact that their adversaries professed economic theories; the Douglasites and the Marxists, all considered themselves distinguished by their special economic insight. The simple dismissal of the economic criterion that was to confront a later generation of economists was not their difficulty.
At the same time their task was also made both harder and more necessary by circumstances. In Australia the teachings of political economy had never been received with a reverent hush. Political economy’s precepts on trade had long been violated by colonial tariffs, and Federation merely violated them in a larger context. For several years an appointment of the first professor of economics at Sydney University had been delayed on account of an apprehension that a free trader might be chosen. (One Chancellor of that University described his resistance to economics teaching as his regular ‘scotching the snake’ (Groenewegen and McFarlane 1990, p. 43)). At about the same time the appointment of a professor of economics at Melbourne was thwarted by the requirement that the appointee must be Australian. And Australia had until the inter-war period never raised a single ‘economist’ who had become a prestigious public figure. ‘Economists are heretics’, Brigden noted (Economic News 9 June 1932 p. 108). There were few resources deployed in the dissemination of ‘economic intelligence’. Textbooks with an Australian reference were non-existent. As Brigden wrote: ‘For the student of Economics in Australia there is, as yet, no satisfactory text book dealing with Australian conditions’ (Brigden 1922). And the financial press was undeveloped. The Australian Financial Review only came into being in 1951. Even the Statistical Bulletin of the Commonwealth Bank did not exist before 1937. It was partly in the light of this paucity that the Economic Record was originally conceived, not so much as an academic journal, but as a ‘record’ of otherwise deficient information.[3]
To this backdrop, the Great Depression arrived. In the view of the four, popular economic illusions exacerbated the Depression. The crux of the crisis did not lie in society’s economic machine: ‘Capitalism is ourselves’, said Brigden (1932a, p. 13). The economic machine was not broken, it had been halted. And it had been halted (to pursue the metaphor) by political obstacles laying in its path. ‘[The financial system] does not mix well with ‘politics’ – that is, politics which ignore economics, try to evade economics, and fail’ (1932a, p. 26). These ‘politics’ reduce to public opinion. This opinion, inevitably, became more obdurate in times of stress. And in addition to the older, local devotions (such as the ‘living wage’), there arrived in the 1930s new mystery religions (for example, Douglas Credit), and frenzies (for example, the notion of the Depression as a conspiracy).
These illusions, said Wilson in 1931, indicted Australia’s ‘education system’ for failing to acquaint her citizens with ‘the hard facts of our economic environment’. Consequently, Brigden believed ‘his principal duty to be the dissemination of elementary economic knowledge and principles to an Australian public in which, at that time, both labour and business opinion were indifferent or hostile’ (Wilson 1951).[4] In the same vein, Giblin believed the Depression to be a ‘great opportunity to bring home economic thought to the Australian people’ (Giblin 1947, p. 2).
This chapter, then, begins by telling of the homilies the four issued in the early 1930s to shepherd the flock away from cliffs towards which it was blindly cantering. The ‘texts’ of these sermons were, above all else, the system of award wages and the monetary system, and to a lesser extent, sugar and railways.
The chapter goes on to show that the secular homily was used not only for weaning the public off economic vice. Politics, censorship and art became matters of ‘open letters’, especially from Giblin.
But it tells more. For Giblin the ‘letter’ form was not a literary exercise. Giblin was an addicted, almost obsessive, letter-writer. It was his most preferred form of expression, for private relations as well as his public ones. The chapter closes with some of his personal correspondence. We move, therefore, from the glare of publicity to the recesses of privacy.
When Giblin was a young ‘socialist’, the pre-eminent literary success of socialist agitation consisted of a series of ‘letters’ by Robert Blatchford to one ‘John Smith of Oldham, a Hard-Headed Workman, Fond of Facts’. John Smith was also a Liberal voter, and these addresses were intended to explode the Manchester School in John’s eyes, and convert him to the socialist cause. First published in a newspaper in 1893, they were later collected in book form (Merrie England), priced at one penny, selling 850 000 copies by 1895, and ultimately two million, with translations in Dutch, German, Swedish, Italian, Danish, Hebrew, Norwegian, Spanish, and Welsh.
Giblin had used Baltchford’s letters to Smith for his discussion circle in pre-war Hobart. In the Great Depression Giblin decided to write his own addresses to ‘John Smith’, with the intention, it might be said with pardonable exaggeration, of restoring the Manchester School in the eyes of the ‘hard headed workmen’. Between 8 July 1930 and 18 July 1930, ten ‘Letters to John Smith’ appeared daily in the Melbourne Herald above Giblin’s signature. They were republished as a collection by the Herald with the sub-title: ‘telling in simple language the facts of the economic situation that has arisen in Australia, and showing how our problems can be solved’.[5]
Giblin’s fundamental purpose was to persuade his readers of the wisdom of wage rate reductions. The word ‘wages’ appears in eight of the ten titles. ‘The basis of wages’ (letter 1); ‘Wages can be too high’ (letter 3);‘Why wages must fall’ (letters 4 and 7); ‘More about profits and wages’ (letter 6); ‘How to get higher wages’ (letter 8); ‘Making terms about wages’ (letter 9); and the ‘Limit to wages’ (letter 10).[6]
Wage rates, says Giblin, are based on productivity. And the basis of profits? To explain profit, Giblin expounds the simple classical theory that interest and profit is the reward for abstinence.
Naturally we have to pay people to save – to refrain from spending – and we call the payments ‘interest’ … The rate of interest is fixed by the need we have for someone’s savings; it must be high enough to induce people to save enough to keep industry going. (Letter 5).
His explanation of wages and profits is the preface to his ultimate purpose of eliciting assent to wage cuts. But then suddenly he notes:
I have said, ‘Wages must fall’, and I have not given you any precise reason for the necessity.
This was correct. No reason had been given. But Giblin was cautious. He did not say: ‘I give you one’. Instead he backed away with:
… are we quite sure of the necessity? Everybody says it – but a considerable number of people always have said it, all through recorded history. Probably Adam in his later centuries was very apt to say of his descendants of the nth degree, ‘These boys eat too many figs, and they don’t work the way poor Abel used to. I shall have to cut down their rations’ … .(Giblin 1930d, p. 17).
Anything approaching a ‘precise reason’ for believing that unemployment would go down if wages went down is hard to find. Would not John have detected an evasion?
Would not John have felt that he was being patronised? Opinions on this last are various. (see J.M Garland in Copland 1960). An aspiration to ‘enlighten’ must assume some sort of position of superiority to those being ‘enlightened’. But it is fair to judge that Giblin’s assumed superiority lay in knowledge, not intelligence, rationality, or responsibility.
A similar diplomacy is found in Brigden’s complementary public lectures, Escape to prosperity, later published by Macmillan and sold at the ‘lowest possible price’. Brigden drew here on a radically new and apparently powerful way of communicating: the radio. The newly found and briefly lived predecessor of the ABC – the Australian Broadcasting Company – had already, by 1930, ‘considerably developed’ the radio talk. By 1929 there were 300 000 licensed listeners.[7]
But Brigden’s ‘strategy for escape’ included little economics. Brigden avoided it due to a concern not to lose his listeners. ‘I decline to say that Compulsory Arbitration should be abolished forthwith partly because I want this book to be read by people who are arguing about it’ (Brigden 1930a, p. 184). Instead he warns his listeners against the tendency of Australians to refer to, and depend upon, the state in economic matters; and then exhorts his countrymen to show in the economic emergency that hardy resourcefulness that was to be found in the ‘old pioneer spirit’ and ‘Mont St Quentin’. His exhortation is good-humoured, homely, and nudging. It is also frequently trite in sentiment and tired in phrasemaking: (‘It is time …’; ‘Let us …’). Escape to prosperity may have made passable listening, but it was a lost opportunity to convey some economic logic.[8]
It is not surprising that Brigden’s Escape was ignored, while Giblin’s letters – dense in simple economic principle – provoked John Curtin into writing his own ‘letters’ in reply. Curtin begins with a thoughtless conflation of the positions of Gibson and Giblin. ‘It is the policy of Sir Robert Gibson and of Professor Giblin that has to answer to the community; for it is their programme which has been, and is, in function’ (Westralian Worker 12 December 1930). He then turns upon Giblin’s thesis that it was the deterioration of the terms of trade which is responsible for Australia’s troubles. It is not relative prices, says Curtin, but a decline in all money prices that is the source of the difficulty. ‘It is not the relation of tea to flour … that has radically altered, but all of them to money that has given us world-wide depression … Why then does the Professor leave the money question sacrosanct?’ Curtin invokes Keynes as an ally, no doubt thinking of the recently published and much discussed Treatise on money.
Giblin drafted a reply. He addresses Curtin as ‘my friend’. He suggests that Curtin is mistaken in supposing a significant difference separated the two of them. He, like Curtin, favours going off gold. ‘[Curtin] would even make me responsible for the present economic structure of society and challenges me to defend it. I probably agree with Mr Curtin in most of the criticism he would make’.[9]
But Giblin defends his identification of the reduction in the terms of trade as the source of Australia’s ills. Flour may not have changed relative to tea. But tea made up little of Australia’s imports. The average prices of exports had fallen by 50 per cent, says Giblin, while the average price of imports by only six per cent: ‘much the greater part of our loss from exports is a real loss, which cannot be made up from monetary policy’. And Giblin contradicts Curtin’s notion that private interests are blocking a socially improving monetary policy. ‘I am not convinced that “private interests” have hitherto had very serious effects. The question of technical competence is more important’.
Giblin’s dismissal of the powerful vested interest seems a precondition of the usefulness of any attempt to shape public opinion. If ‘public opinion’ is just ‘public propaganda’ – just an attempt of the man in the street to blind others rather than see himself – any attempt to ‘enlighten’ opinion would seem totally misguided. As the three always had some confidence that they could enlighten, they must dispute the role of interest.[10] But could vested interests be so confidently dismissed?
Roland Wilson noted tartly in a column in the Statist (September 29 1932) that that the UAP Government had announced that pensions were to be cut from 17/5 to 15/-, while simultaneously confirming farmers were exempt from sales tax.[11] With relief he records: ‘the movement towards a reduction in costs has at last extended towards the sugar industry’. Sugar was the object lesson of vested interest, commented on by Giblin and Brigden as well as Wilson. For, at a time when Australia at large was in deep economic distress, the Queensland sugar industry was in a state of unnatural prosperity, on account of its protection from the Great Depression by subsidies from Australian consumers.
The preservation in the post-war period of abnormally high wartime sugar prices, by means of import prohibitions and bounties, had underpinned the 165 per cent increase in sugar production between 1921 and 1931. Although Australia was an importer before the 1920s, Queensland’s production had long outrun the capacity of the Australian market to absorb expensive Queensland sugar. The inevitable resort was to pay the foreigner to buy Australian sugar. In 1931 Brigden estimated that 49.8 per cent of all production would be exported. The very simplest calculation of the cost of the policy was £8.7m.[12] This compares with £600 000 of public funds spent on capital works in schools in 1930–31, and £150 000 of public funds spent on housing (Butlin 1985, pp. 34–5). £8.7m amounted to 1.5 per cent of GDP. It was equivalent to £1100 per farm (when average earnings in Australia came to £220 pounds per year).[13] It was Wilson’s belief that this hefty transfer from South to North was in considerable measure responsible for the unusually low rate of unemployment in Queensland compared with the rest of Australia (Wilson 1932).[14]
Brigden’s The story of sugar (1932b) seeks to reconcile Australian opinion to this expensive policy, and Queensland opinion to its mild reform. Yes, the Australian consumer pays Queensland producers a premium over the world price. Yet during the First World War a prohibition of the export of sugar to a sugar-starved world had kept Australian prices below international ones. ‘This is a fact that Southerners should remember – and Queenslanders forget’ (p. iii).
Brigden could certainly not go further – this was a publication of the Queensland Bureau of Economics and Statistics. It is surprising that he ventured as far as he did. Yet the fact remains he did not venture further. The fact remains that The story of sugar is an apology for the ‘virile industry in the North’. An industry that was not so virile, however, as to be unrequiring of the generous support of the effeminate South. Brigden closes by rebuking the ‘indignant’ propaganda’ (p. 9) of the South against the sugar subsidy. It was impossible for Brigden to join the South’s rebukes. But it was possible to avoid this slight of a well-founded resentment.
Railway economics (1931c) was another attempt by Brigden to gently persuade. It traces the roots of financial troubles of the Queensland railway system’s over-investment in track. ‘For its sparsely populated area Queensland is lavishly equipped with railways.’ But all this capital was not effectively exploited owing to regional squabbling. He traces the beginnings of wrangling over the railway system to the unification of the Southern Division of the railways (Brisbane to Charleville) with the Central Division (Rockhampton to Longreach). This enabled wool to be sent direct to Brisbane by rail, and so bypass Rockhampton. Consequently, penalties were imposed to stop wool using the railway route to Brisbane. But these penalties did not restore Rockhampton’s financial viability.
Brigden held hopes for Railway economics to obtain a wider interest. But, he says, it ‘did not contain any political sticks, and it fell flat’ (Economic News, 9 June 1932, p. 2).
One other attempt of Brigden at public persuasion is Credit (1932a), a tract designed to dispose of Douglas Credit theories. C. H. Douglas had gained considerable publicity on his tours in the 1930s, and Social Credit leagues, movements and associations proliferated in Australia prior to the formation of Social Credit Party. Moreover, it had proved popular with sympathisers of Georgists (more through psychological than logical considerations), and with many in the ALP. In Tasmania in May 1931, the Reverend George Carruthers, a penniless Anglican clergyman, won the sixth seat of Denison on the Social Credit platform, purportedly the first Social Credit MP anywhere. Social credit, it seemed, was on the march.
In Credit, Brigden launches his own rebuttal of social credit. He makes heavy work of the trivial fallacies of social credit (such as fixed costs affecting pricing in the short run), or its perplexing dicta (‘Money used several times in production must necessarily record a cost greater than itself’). Life is added by giving space to two Queensland Douglasites to reply to Brigden.[15] Brigden’s intention was much better secured by a public lecture Copland gave to the Commerce Students Society in August 1932, entitled Facts and fallacies of Douglas Credit with a note on Australian credit policy. Copland’s bony prose spears Douglas’ pretensions and evasions.