The Absolutely First-Rate Refugee who was the Maker of the Modern Treasury.

Listener 17 May, 1997.

Keywords: Political Economy & History;

Henry Lang (1919-1997)

The refugees who fled the tyranny of Central Europe in the 1930s benefited New Zealand’s cultural, intellectual, and government life far in proportion to their small numbers. Examples range from architect Ernst Plishke to his stepson Heinrich Lang, who became Secretary of the Treasury, and contributed much else besides.

It must have been hard for the 19 year old, arriving in 1938 at this raw end of the world from comfortable cosmopolitan Vienna, overshadowed by the repression against Jews. If initially he was treated as an alien, New Zealand was for him a country of opportunity. He went part-time to university, served with the RNZAF, and in 1946 joined the Treasury’s elite Economic Stabilization Commission. The experience resulted in a profound commitment to the egalitarian New Zealand.

Although “Mr Lang” to Mr Muldoon, he was “Henry” to everyone else. While he was awarded an Order of New Zealand (our highest honour restricted to 25 living people), he never accepted a knighthood. “Sir Henry” was unthinkable.

By the early 1960s Henry was the enfant terrible, chief economist at the Treasury. He became Secretary in 1967, and resigned in 1977, years before he had to. There were many reasons, but undoubtedly one was his distaste for finance minister Muldoon, who perhaps reminded him of elements of the authoritarian style from which he had escaped.

To all he was a courteous European gentleman. His kindness was legendary. He retained his Austrian accent. It was once a sine qua non of being a Treasury official to be able to do a fair imitation of it, but always with affection. He had personally recruited them. But with a degree in philosophy as well as one in economics, he never confined recruitment to commerce students. When approached to join the Treasury one classics scholar demurred saying he was not an economist. Henry replied “but can you write?”

Yes, in the 1970s Treasury officials could write. It was a lively and exciting place which actively encouraged debate. It suited Henry’s temperament to have disputes between, say, keynesians and monetarists. He would insist they explore fundamentals, and compromise on a common sensible policy. Under him the Treasury attained the excellence which it prides itself on (although not always attaining). He described his best as “absolutely first rate”. That competence, plus the cabinet minute that all expenditure proposals require a Treasury paper, gave the Treasury its power. I once mentioned the myth that he and Muldoon had instituted the rule. Henry looked shocked, and explained it was before his time.

“More market”, the view that very often interventions were inefficient and ineffective, seems to have developed in the Treasury in the 1950s. Henry was a leading advocate of more market but he certainly was not an extreme commercialiser. After he retired he remained discreet, but there are enough hints that he had worries about some policy developments. How extensive they were we may never know, although at the very minimum he must have been concerned when narrow economic models replaced broad vision and the policy debate was limited to a single option. When I saw him to recall his memories of Bernard Ashwin, the Treasury Secretary who was his mentor, we would finish with a discussion on current policy issues. He could not bear not knowing all the significant arguments on an issue.

I suspect his years after retirement were lonely. Not that he lacked good friends, but his immense talents in policy development were under-utilised. Muldoon, of course, cut him off, but one of the earliest signals I got of the post-1984 policy upheaval, was an official telling me the new regime was keeping Henry out of economic policy, because his ideas were old fashioned. They came from the now abandoned corporatist tradition of the 1940s, where New Zealanders got together, consulted, and got a commonality of agreement.

Excluded from economic policy, Henry continued to work in the public interest in many areas, including the arts, about which he was passionate (as he was about skiing). He was a representative of the wider public on the Press Council, where he used his intelligence, common sense, experience, and sense of justice on our behalf, even though we did not know it. Yet his post-retirement potential was not fully utilized. Had those skills been applied to the 1991 health reforms, for instance, a lot of the stupidities would never have happened.

In the end Henry was, in my experience, a unique mix of insider and outsider. Being Secretary of the Treasury, together with his enormous network of friends made him insider par excellence. But the experience of a refugee plus a shrewdness of wit meant he accepted there were other points of view – a valid outside to the Wellington inside.

Of course Henry Lang was a New Zealander; a great New Zealander. But he was one distinctively from Central Europe. That we were able to use him so fruitfully, despite his minority background, was to our benefit, a benefit he was glad to give. But one cannot help regretting that in the later years we did not use him as fully as we might have.