Arndt's Story: The Life of an Australian Economist (review)

Professor Heinz Wolfgang Arndt, who passed away on 6 May 2002, was a towering figure in the establishment of the Australian National University's (ANU's) study of Southeast Asian economies. He either directly supervised, or had substantial influence on, a large number of Southeast Asianist academic careers spawned at ANU. He established the Bulletin of Indonesian Economic Studies (BIES), which remains the standard journal in the field on the Indonesian economy. This book concludes that it was ANU's provision for student fieldwork in Indonesia (and other Asian countries) and BIES, under Arndt's leadership, that gave the institution an edge (p. 266). Arndt's contribution to understanding Indonesia's political economy is profound, and lives on with those whom he mentored. He also had some experience of the rest of Asia, including Afghanistan, Hong Kong, Japan, Malaysia, Nepal, Singapore, South Korea, Soviet Central Asia, the Philippines and also Papua New Guinea.

Arndt, described in this volume as a German by birth and an "Australian by choice" (p. xiii), went on a difficult journey before finding his place as one of Australia's leading scholars of Asian development. Arndt's Jewish background necessitated the family's flee from Nazi Germany. Arndt himself ended up in the United Kingdom and despite his anti-Nazi credentials he was interned in Canada during World War II. After the War he moved, first, to Sydney, and then ultimately to Canberra to what was to become ANU.

This coincided with an equally colourful intellectual journey. At Oxford University he was, in the words of this book, a "fellow-traveller" of the USSR (p. 21), although he was never a formal member of any communist party. Rejecting the "intellectual flabbiness" of political science and sociology (Arndt commented that "[t]hey seemed to be little more than journalism mixed with pedantry" —p. 43), he transitioned to development economics. His first major publication (with Chatham House), entitled The Economic Lessons of the Nineteen-Thirties, drew anti-free market lessons from the Great Depression (in contrast to the anti-government intervention lessons derived from the same experience by Hayek and others). By the time Arndt had moved to Australia in the late 1940s he had transitioned to Fabian Socialism (he once advocated the nationalization of Australian banks and attempted to influence Australian politics in the direction of economic planning) and later Keynesianism, and planted himself firmly with the left of the Australian Labour Party (ALP). His view of international relations had shifted to one of suspicion of both superpowers: "[my] own preference is for a critical attitude equally towards the USA and Russia" (p. 85). Years later Arndt would transition to free market economics and split with the ALP over its opposition to the Vietnam War. Arndt believed that the defence of South Vietnam was both a just cause and in the interests of the West.

What is not entirely clear from this volume is why and how all these ideological turning points occurred in Arndt's life. What the volume does tell us is that Arndt appeared to solidify his views against Marxism after reading Arthur Koestler's novel Darkness at Noon, and concluded that Marxism-Leninism was "destructive of all intellectual integrity" (p. 43). The volume also notes his trip to India in the 1950s, where he observed a debilitative central planning model that centred on import substitution and paid no regard to comparative advantage. According to the volume: "The hallmarks of Indian economic policy —direct controls, the lack of market incentives and extensive government intervention —were to become anathema to him" (p. 234). Arndt's philosophical transition also seemed to parallel Indonesia's own transition from government intervention (under Soekarno) to free market prescriptions (under Soeharto) —a point not lost on the authors of this book: "This philosophic shift coincided with the Suharto administration's gradual acceptance of comparable advice from American free marketeers" (p. 265).

Arndt (alongside others who were...