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Arndt's Story

Arndt's Story: The life of an Australian economist OPEN ACCESS

Peter Coleman
Selwyn Cornish
Peter Drake
Copyright Date: 2007
Published by: ANU Press
Stable URL: http://www.jstor.org/stable/j.ctt24h3vr
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  • Book Info
    Arndt's Story
    Book Description:

    'H.W. Arndt has been Australia's leading scholar of Asian economic development for over thirty years' - Former World Bank President James D Wolfensohn. The year of Heinz Wolfgang Arndt's birth, 1915, was not a good time for a German boy to be born. His country was soon to be defeated in a great war, his school years were shadowed by the rise of Hitler. Yet when Heinz's long-buried Jewish background led his academic father to lose his chair in chemistry and flee to Oxford, Heinz followed. As Heinz put it, the calamity of Hitler's rise to power led him to 'the incredible good fortune of an Oxford education and a life spent in England and Australia.' This was a man of inexhaustible energy and optimism, who returned from months behind barbed wire interned in Canada to write a historical classic—The Economic Lessons of the Nineteen-Thirties. He seized the opportunity of an unexpected job offer to set off with his young family for Sydney where he quickly established himself as a leading authority on the Australian banking system, embarked on his fifty year career as a gifted university teacher and enjoyed the first of many vigorous forays as a public intellectual. But it was at ANU that Heinz took the bold step which led him to become the Grand Old Man of Asian Economics. In 1966, just after the Sukarno coup and the year of living dangerously, he determined the time had come to study the Indonesian economy. It took all his charm, persistence and formidable intellect to persuade the Indonesians to open their doors to him. The result was a world-leading centre of Indonesian economics which greatly contributed to the development of modern Indonesia.

    eISBN: 978-1-921313-17-2
    Subjects: History
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Table of Contents

Export Selected Citations
  1. PREFACE (pp. xiii-xiii)
    Peter Coleman, Selwyn Cornish and Peter Drake
  2. Why doesn’t Heinz have a gong? The question had come up many times. It did seem odd that my father hadn’t received an honour at any time in his distinguished career. So about 2001, a group of people decided to put his name up. Eminent people lined up to be referees. Former heads of Foreign Affairs, government ministers and prominent academics—the list was impressive.

    Nothing happened. Finally, Heinz confessed to me that he had had an offer but had turned it down. What’s more, he mentioned that he had had an even more salubrious gong proposed by the Fraser...

  3. Part 1 Peter Coleman
    • The year of Heinz Wolfgang Arndt’s birth, 1915, was not a good year for a German boy to be born in. Such a boy would soon know that his country had been defeated in a great war, that the Emperor had abdicated and a republic had been proclaimed amid putsches, revolutions, assassinations, unemployment and malnutrition. By the time Arndt was seven, Germany would endure hyperinflation. When he was 10, the first volume of Hitler’s Mein Kampf would be published.

      In the 1920s there would be an economic recovery and the explosion of a dazzling ‘Weimar’ culture, which seemed to make...

    • Heinz’s arrival in England in October 1933 had elements of farce. Eager to practise his English, he struck up a conversation on the cross-channel ferry with an affable Englishman who turned out to be a homosexual attracted to the good-looking if confused young German. At Oxford, he disconcerted the Lincoln College porter by addressing him as ‘sir’. On his first morning, he attended the matriculation ceremony in the Divinity School, but was unable to understand a word of the Vice-Chancellor’s address, which was, as it happened, delivered in the Latin spoken by English dons. To show how cooperative he could...

    • ‘Please attend Hampstead Police Station on 3rd October 1939 at noon, and bring with you all papers regarding your nationality and those connected with your profession or business’.

      So began Heinz Wolfgang Arndt’s ordeal as an enemy alien. The Chamberlain government had not intended it to be an ordeal. Determined to avoid the undiscriminating mistreatment of aliens that had occurred during World War I, it established 120 tribunals throughout Britain whose mandate was to assess the loyalty of some 73,500 foreigners. It was to classify them in three categories: A (dangerous; to be interned); B (of uncertain loyalty; to be...

    • 4 CHATHAM HOUSE (pp. 42-55)

      Heinz left the internment camp a changed man. He had endured the humiliation of unjust arrest and deportation as an enemy alien. He had been toughened as one of the leaders of the internees in constant, often bitter, unreasonable and sometimes merely tactical disputes with the camp authorities. He had run the camp ‘university’. He had been stigmatised as a communist troublemaker. The eight months behind barbed wire had not destroyed his pro-British idealism, but they had indubitably tempered it. On his return to England, he was no longer the uncertain scholar. He was his own man. He was 25....

  4. Part 2 Selwyn Cornish
    • Heinz’s appointment as assistant lecturer at Manchester was for three years, beginning on 29 September 1943. The custom, in those days, was that when an assistant lecturer had not obtained a lectureship by the end of his or her appointment, he or she should seek employment elsewhere. With the return to the university of a number of economists—John Jewkes and Eli Devons among them—who had spent the war in government service, Heinz thought that his chances of promotion would be limited. This was not only because the number of positions in economics was small. Heinz also believed that...

    • The University of Sydney, Australia’s first university, was founded in 1851. When Heinz started teaching there, its students were overwhelmingly undergraduates. Some were taking master’s degrees, but most Australians studying for doctorates were enrolled at either British or American universities. In 1946, student numbers were swollen by ex-servicemen, who were encouraged to enter universities on generous scholarships as part of the Commonwealth government’s program of postwar reconstruction.

      Between 400 and 500 first-year students were enrolled in courses offered by the Economics Department. Of those, about one-third were studying full-time and two-thirds were part-time students, who attended classes in the evening...

    • Heinz was determined, almost from the moment he stepped foot on Australian soil, to avoid being the typical academic economist who confined himself to teaching undergraduates and conducted esoteric research that lacked practical application. Rather, he expressly intended to become a public intellectual, using the media and speaking engagements to raise issues of social importance. Soon after he arrived in Sydney, he wrote to a friend in England

      In the few months since my arrival in Australia I have been impressed by the apparent lack of interest in, and ignorance about, public affairs in general and international affairs in particular...

    • In 1948, after two years in Australia, Ruth decided that she wanted to visit her parents in Germany and take the children with her. Heinz’s university commitments made it impossible for him to accompany her. Though three years had passed since the end of the war in Europe, it was still difficult for foreign civilians to travel to Germany. Private citizens generally were not permitted to visit the country, so it was uncertain whether Ruth would be allowed to do so. The annual quota of visitors was usually filled by businessmen, and even then, there was a sizeable waiting list....

    • 9 NEW HORIZONS (pp. 96-103)

      While Ruth was in Europe, Heinz considered his career and where it might take him. In particular, he wondered whether he should remain in Sydney, seek positions at other Australian universities or return to England. Even before Ruth had left for Europe, he had written to Tom Wilson, who, after graduating from Queen’s University, Belfast, had become a Fellow of University College, Oxford. He asked Wilson whether he should apply for one of the vacant positions at Belfast, where the Australian Keith Isles was head of the economics department. Wilson replied that he appreciated Heinz’s ‘difficulties in Australia—the more...

    • Canberra University College (CUC) was established in 1929 and took its first students in 1930. This was not an auspicious time to establish a public institution of higher learning in Australia, especially in the new national capital. Cost cutting by governments, including the Commonwealth, was the order of the day. In fact, expenditure on and in Canberra came to a sudden halt with the onset of the depression. Originally a college of the University of Melbourne, CUC had been promoted by a group of senior Commonwealth public servants, led by Sir Robert Garran, the Solicitor-General, who was chairman of the...

    • 11 CANBERRA (pp. 119-129)

      Heinz was 35 years old when he took up his appointment at Canberra University College on 1 January 1951, the fiftieth anniversary of Australian Federation. In the national capital, it was a day of special significance and celebration. Canberra then had a population approaching 20,000. The war had initiated a new spurt of growth, after the stagnation experienced during the depression years. As Australia’s political nerve centre during the conflict, Canberra had become the true capital of the nation. After the war, with a Prime Minister (Chifley) and Cabinet dedicated to centralisation, Canberra’s expansion was expected to continue rapidly. Anxiety...

    • 12 SOUTH CAROLINA (pp. 130-145)

      By 1954 Heinz had spent more than seven years teaching at Australian universities and was eligible for what was then known as sabbatical leave. He decided to take six months’ leave, the bulk of it to be spent in the United States. For this, he would need external funding to meet travel and living expenses.

      He began applying for grants as early as 1952, when he wrote to the British Dominions and Colonies Fund of the Carnegie Corporation in New York asking for a study and travel grant to the United Kingdom and the United States. While waiting for the...

    • 13 POLITICS (pp. 146-170)

      Heinz’s career as a public intellectual, which had begun in Sydney on his arrival in Australia, continued when he moved to Canberra. There he joined the ALP, after meeting the requirements for Australian citizenship. Though he was to resign from the ALP in 1972—over its policies on the Vietnam War and, more immediately, its decision to recognise Communist China—his association with the party was always controversial. Declining affiliation with either the party’s Left or Right, he preferred to be regarded as a moderate or non-aligned member. He opposed the powerful communist involvement in the trade unions; he also...

    • At Canberra University College, Heinz continued to teach macroeconomics. At first, he took responsibility for the Economics B course, which covered in the first term the theory of income determination and trade-cycle theory. The second term included money and banking, while the third term included international trade and international finance (some lectures on economic development were added later). But as the college gained greater autonomy from Melbourne for the courses it taught, Economics B became Economics 111; by this time, Heinz was also giving lectures in Economics 1 (the first-year economics course). He lectured as well on public finance, took...

    • 15 GENEVA (pp. 195-205)

      In 1959, Heinz began to make arrangements for his next sabbatical leave. He wrote in June to Bob Ratchford at the Commonwealth Studies Centre at Duke University to ask whether there might be any possibilities there for him to teach and engage in research during the northern academic year of 1960–61. As he told Ratchford, he had recently embarked on an examination of the financing of public expenditure in Australia and would be interested to pursue the project further during his leave. Ratchford had recently been in Australia, to collect material for a project on Australian government expenditure, and...

    • After his year away, Heinz found it difficult to settle back in Canberra. Part of the problem was the excitement he had experienced in Geneva. The city itself was inspiring, an international centre at the heart of a great continent. That was one thing. More important, perhaps, was the excitement associated with the work at the ECE, especially the project he had been asked to lead on the identification of the sources of economic growth in Europe. In contrast, Australian issues now seemed to him to be insignificant and decidedly dull. Just before he left Geneva, he wrote to Dick...

  5. Part 3 Peter Drake
    • Heinz’s practical introduction to the developing world came about in India, where, from December 1958 to February 1959, he was a Visiting Professor at the Indian Statistical Institute (ISI), first in Calcutta and then in New Delhi. The appointment had been proposed by Gunnar Myrdal, whom Heinz had first met in 1953 when, in Jakarta, Myrdal boarded the plane in which Heinz was flying to Beirut (en route to Istanbul and eventually to South Carolina, as recounted in Chapter 12). This first acquaintance, and protracted conversations, with Myrdal was not only the start of a long and lively friendship, it...

    • A Department of Economics had long been planned for the Research School of Pacific Studies (RSPS). The department became a reality in 1962, after the ANU’s successful enticement of Sir John Crawford from the public service (where he was head of the Department of Trade) to be the first director of RSPS and, with the standing of professor, head of the new Department of Economics. Crawford went about his new responsibilities ‘with vigour, indeed one might say in the grand manner’, as Heinz later wrote.

      Crawford, however, was so busy being director of the school and fiscal adviser to the...

    • Heinz made his reconnaissance of Indonesia in October–November 1964. The lengthy diary that he kept and later published (in edited forms) shows how eager and delighted an academic visitor he was. It reveals idealism, optimism and great enthusiasm, but not zealotry or gullibility. His eyes were fresh, he went without preconceptions, and he travelled without hindrance.

      On what in those days was a rather long flight from Sydney to Jakarta, Heinz spent much time trying to learn the Indonesian language. He had begun this task in Canberra, with the help of conversation classes and Yale language tapes. During his...

    • Indonesia suffered bloody political upheaval during 1965 and 1966. Sukarno’s presidency appeared, at first, to have survived a 1965 coup attempt, which led to the deaths of at least 100,000 people within weeks; but power gradually slid away from him. By late 1966, General Suharto had installed a military regime, which he headed himself. The new regime promptly made two remarkable policy decisions: economic development must have priority over all else, and civilian experts (rather than the military) would be put in charge of this goal. Indonesian academic economists thus attained great influence with, and indeed within, the Suharto government....

    • Despite Heinz’s passion for Indonesia, it would be wrong to categorise him as merely an ‘Indonesianist’. His early Asian engagements, as we have seen, were in Malaya, Singapore and India. For the rest of his life, he retained strong academic connections and friendships in many parts of Asia. (He never went to China or to Africa; and he visited Latin America only fleetingly.)

      Bangkok especially interested him, largely because of his membership of the Governing Council of the UN Asian Institute for Economic Development and Planning (ADI for short). This institute was financed by contributions from the member countries of...

    • 22 RETIREMENT (pp. 293-311)

      As was usual in Australia in 1980, Heinz’s job at the ANU was subject to mandatory retirement at the age of 65. Most reluctantly, Heinz accepted this rule and retired in the formal sense on 31 December 1980 (the last day of the year in which his sixty-fifth birthday occurred). For him, retirement could never mean idleness. He had to have something worthwhile to do and he needed to find it outside the structure of formal, continuing employment.

      The answer—which he perhaps had a hand in preparing—came in the form of the Joint Research Project on ASEAN–Australia...

  6. In July 1970, a young Indonesian scholar arrived at a freezing Canberra airport with his wife and baby daughter. Heinz Arndt was there to greet him. The family was driven to the Arndt home and fed a hot breakfast before being taken by Heinz to their university flat. There Heinz lit a fire, left and then returned with a bag of groceries Ruth had organised for the family. ‘He did all this when he was a famous professor and I a lowly research assistant,’ wrote Boediono, who went on to become the Indonesian Minister of Finance, and afterwards attained the...