Listener 29 January 1994.

Keywords: Growth & Innovation; History of Ideas, Methodology & Philosophy;

Economics is a profession where 40-year-olds usually give up serious research,proclaiming platitudes instead. But Bryan Philpott is still an active researcher, six years after retirement, His greatest love, which goes back to the 1950s when he worked for the Meat and Wool Economic Service, is the determinants of economic growth. The farm accounts series from the 1920s, which he and associates derived in the 1920s, which he and associates derived in the 1960s, is still definitive. Even more valuable is the economy-wide comprehensive database from the 1950s, filling in gaps in the official series. More recently, students under Philpott’s supervision have been extending his unique capital series back to the last century.

In the 1960s, when he was the first professor of agricultural economics at Lincoln College, he began modelling the New Zealand economy, From modelling farm economic behaviour, the work evolved into his Research Project of Economic Policy (RPEP), with its suite of economy-wide models, The first, Victoria, was named after the university, and he subsequently kept to women’s names: Joanna, Julianne, Emily, Joani. Philpott treats them like daughters. When I once suggested that Victoria was obsolete, he fiercely defended her relevance, No chiId of his could be superfluous.
These economic models are computer-based characterisations of the economy, inwhich economic behaviour issummarised in mathematical equations. Different assumplions for the equations give different models. The RPEP suite is mainly concerned with medium-termbehaviour and growth of theeconomy.

It takes energy to develop, maintain, and extend a model. New Zealand economics is littered with half-baked attempts to start up economic models. But Philpott keeps on keeping on. Unfortunately, he has not been in a country committed to publishing in academic journals, so a lot of his results have not been readily accessible. Yet early in the 1980s he had an international reputation as an innovator. Once, following a rather poor presentation at an overseas seminar, I explained the parallel work at the RPEP, to be told by Philpott’s equivalent there that it was a new and interesting approach and that he greatly admired the RPEP, which was more poorly funded than his unit.

Yet, in the mid-1980s, Treasury cut its funding to the RPEP, severely limiting its subsequent development, In most democratic nations, a profession would react to such cuts by finding alternative sources of funding for a valued research project (and worker). New Zealanders are more cautious.

Why economic research is feared in New Zealand can be illustrated by an earlier incident in Philpott’s life. Farmers used to tell me he had betrayed them when, in 1970, he moved from his professorship at Lincoln to Wellington, especially when he came out supporting protection. In fact, his modelling in the late 1960s suggested there would be a growing gap between the labour force and the numbers the economy employed. Protection of industries that absorbed labour and conserved foreign exchange proved to be an effective means of dealing with unemployment, Was Philpott to adopt the conventional wisdom or was he to remain loyal to his research? For a researcher it is no contest. To reject research because you disagree with its conclusions is to abandon it altogether. Yet ours is a culture that prizes political correctness before research quality, We want our prejudices confinned, not challenged.

Research is driven by curiosity: belief that there are patterns but that they have to be found; astonishment at finding unexpected new patterns; delight at overturning conventional wisdom with a more common-sense account of the world, Such research is not welcomed by those who think they already know the truth, They are like the drunk who uses a lamppost for support, rather than to shed light.

An illustration of this is a Business Roundtable report quoting some RPEP research that said unskilled wages needed to be cut by 30 percent to eliminate unemployment. (You work out why the BRT supported huge wage cuts.) In its anxiety to use the conclusion, the BRT neglected to understand what the research was saying, The model runs were based on unskilled unemployment of around 25,000. At the time of the BRT report, the level was well over 100,000, A moment’s thought would have suggested that the wage cuts would have had to far exceed the percent the BRT enthusiastically quoted, Nor did the BRT mention related RPEP research that suggested alternative policies.

The vicious attack on economic research in the mid-1980s terrified many economists, who decided not to state publicly their private misgivings over economic policy. It also inhibited good research and the development of good policy. For instance, RPEP models do not have an explicit fiscal sector linking the government policy stance with the overall economic configuration. There is an implicit sector in the model that Philpott can talk about fluently: he knows what needs to be done, but does not have the resources to do it. The government won’t fund the work, for, while it would improve our understanding of the contribution of fiscal policy to economic growth, if is likely to tell us the government’s policy settings are wrong, Economic management has suffered from an ideologically correct fiscal stance that has damaged the economic growth performance,

Philpott has struggled on despite the resource limitations, Retirement from teaching has simply meant more time for research. If you walk along the lonely corridor to his office you may hear a happy humming sound emanating from his room. It means that the data he is working on is coming together; the problem is beginning to make sense. But what, the researcher is wondering, will be the new discovery?