Dr Sutch: (1907-) 1951-1975

Chapter 10 of The Nationbuilders
The earlier part of his life.

Keywords: History of Ideas, Methodology & Philosophy; Political Economy & History;

Sutch must have returned to New Zealand in 1951 with renewed self-confidence. His overseas sojourn had proved he was world class, while he had successfully published two books in the previous decade, and had a record as a valued adviser to the New Zealand government. There were also high expectations of him from others. Just before he went overseas Rex Fairburn had written of the then 37 year old, in a series to promote the reputation of a group of New Zealanders, ‘I think it is safe to say that very few, if any New Zealanders, have a more distinguished record, in such a wide range of activities.’[1]

Yet he returned to a much less favourable climate within the Wellington Establishment, with a new National government in power, and growing doubts among some key public servants. For instance Alister McIntosh, permanent secretary to the Prime Minister’s Department, and the recipient of dedication of a book by Sutch in 1936,[2] had shifted from an admiring ‘one of the ablest chaps I know’ in 1944, to growing reservations by 1948.[3] The problems were partly administrative arising from the structure of the New York office, which were identified before Sutch took the position and thus cannot entirely be his fault. But there were allegations of fraternisation with the Russians (more likely Central Europeans) together with that willfulness – doing what he thought was right, rather than what he was told.

It is likely that Sutch also returned with economic forebodings. He had been through the Great Depression, and his subsequent writings suggest he never ruled out another one. Like many of the nationbuilders of his generation, much of his policy was directed to protecting New Zealand from the damage which another world depression would generate – insulating the economy by increasing self sufficiency.

He became Department of Industries and Commerce economist, and rejoined the Wellington cultural and intellectual community, including chairing the Wellington Architectural Centre. A magnetic public lecturer, Sutch contributed actively to adult education via such groups as the WEA and broadcasting. As late as 1960 he was involved in organizing the Wellington Festival of Arts. His modernist house, high on Brooklyn Hill not far from where he had grown up, was designed by Ernst Plishke. (While the house is called ‘the Sutch House’, he would have acknowledged his wife’s financial and design contribution: modernist Bill did not want a fireplace, traditionalist Shirley insisted on one. Today it is a feature of the house’s main living room.) He again took up writing on contemporary issues, including book reviewing and art criticism, in the N.Z. Listener, and Here and Now (under the pseudonym of `William McChesney Martin’ which, with his deadpan humour, he explained was not the Federal Reserve chairman of the day).

In 1957, Assistant Secretary Sutch presented a paper The Next Two Decades of Manufacturing in New Zealand. It is based on statistical projections by a departmental officer (and Central European refugee), Hans Lachman, and was discussed with Jack Baker, who was to become the Government Statistician. While Sutch did not do the sophisticated (for their time) projections, he grasped their significance. The agriculture and service sectors would not grow sufficiently to maintain full employment. To maintain full employment, the manufacturing sector would have to absorb over one in three of the new workers over the next 20 years. While working through the implications of this growth, which implied considerable manufacturing investment (and protection) to promote the new businesses, he noted that Jack White, a respected agricultural economist, thought that farm production could grow only 2 percent p.a.. Sutch concluded that there may be insufficient foreign exchange to increase standards of living (even with the import substitution which came for manufacturing) ‘unless New Zealand’s export income rises more rapidly.’[4]

With hindsight, the conclusion is a weak one, but Sutch was feeling his way. His term as Secretary commenced with a (brief) downturn in export prices in 1958. The Department of Industries and Commerce, charged with administering the supply-side of the economy, applied import and price controls, and promoted industrialization and diversification. To boost export income, and consistent with the logic of his earlier paper Sutch extended the strategy from import substitution to ‘manufacturing in depth’, in which New Zealand manufacturing would aim to add value to raw materials. (An important component of which was the further processing of agricultural exports to a more advanced state.) By 1962 he was actively talking of exports other than those based upon the pastoral industries, and by 1963 he had strengthened the case for the agricultural sector being unable to provide sufficient foreign exchange, by suggesting there would be a tendency for pastoral export prices to fall relative to the cost of imports (that is, the terms of trade would decline overtime).[5]

The commodity terms of trade (the price of pastoral exports relative to import prices) play a crucial role in the development of a small open multisectoral economy such as New Zealand, because they determine the imports that can be purchased for each unit of exports.[6] Their pattern can be split into the long term, or ‘secular’, and the short term or ‘cyclical’.

There is a view there is a declining long term trend. This is partly based on an interpretation of the nineteenth century statistics, and partly a account of the relationship between the manufacture supplying first world (the ‘core’ or ‘imperium’) and the commodity and the commodity supplying third (the ‘periphery’ or ‘colonies’). Sutch was aware of the arguments but in public tended to stress the first world protection of farmers and the threat of substitutes (synthetic fibres for wool, white meats for red meat, margarine for butter). The general proposition is still disputed, but the Sutch was proved absolutely right about the particularities of pastoral products, whose prices have shown a secular decline through most of the post-war era.[7] He certainly would not be surprised today that the pastoral terms of trade are about where they were in the 1930s (and could argue that the economy is not as seriously affected because of some of his policies were pursued).

The conventional wisdom – the Planning Council for example – has been much more optimistic about the terms of trade than was the actual outturn, although it may not want to be reminded of this today. To admit the failure makes Sutch’s policy prescriptions more relevant, rational, and farsighted. For if the terms of trade are going to fall for any export, the policy logic is to diversify from it, generating new exports and import substitutes. And it is prudent to prepare for that contingency before the fall. That is exactly what Sutch advocated.

Thus while Sutch’s administration promoted protection via import controls, and created some new domestically oriented firms of which the Marsden Point oil refinery and the Glenbrook Steel Mill were among the largest it also laid down the foundation for the major export diversification which occurred in the 1970s.[8] And by talking about the possibility he gave New Zealanders the confidence that non-pastoral exporting could succeed. Sutch can be thought of as the grandfather of that diversification.

It is not just fishing which is now an important part of exporting. Today there are also energy and mineral products, forest products, general manufacturing, horticulture, tourist services, plus a host of smaller activities to numerous to list. It is sometimes claimed that farming still produces 55 percent of exports (albeit that proportion is well down on the 90 percent plus when Sutch took over the Secretaryship). But to get the figure above 50 percent, forest products have to be included, and the service sector (including tourism which is the largest exporter) forgotten. In any case farm product exporting has a considerable manufacturing component, a consequence of the manufacturing in depth that Sutch promoted.

Would the industrialisation would have happened anyway? Throughout New Zealand’s history, economic development took place because nationbuilders seized opportunities. Sometimes they took the wrong ones, but more often they chose well. Without Sutch the economy would have moved in roughly the direction it did, but later and with greater pain.

Cyclical changes in the terms of trade cause volatility to the export revenue, and hence to the economy as a whole. Diversification to exports which are less volatile (or cycle differently) reduces that impact. It is also possible, to some extent, to insulate the economy frm these temporary occurrences. As an economic adviser in the 1930s and 1940s, Sutch had been concerned with the establishment of the Reserve Bank, the arrangements for dairy farmers, and economic stabilisation, as well as import controls. These are all measures which could be used to insulate the economy to some degree from variations in the external environment.(Another mechanism is the government borrows overseas to cover any temporary deficit in overseas export revenue.)

A major policy difficulty is that practically it is difficult to separate out the beginning of a new secular trend from a cycle. The Second Labour Government and Sutch seem to have thought the cyclical downswing of 1957 was the begining of a long run decline in the pastoral terms of trade. It proved to be temporary. The conventional wisdom treated the sharp fall in the pastoral terms of trade which occurred in late 1966 as temporary where it is much more the beginning of the long term decline in relative export prices which dominated subsequent economic behaviour.

Looking at Sutch’s writings one is struck by how while Secretary of Industries and Commerce he was thinking through the issues that were confronting the New Zealand industry. His were practical responses to practical issues, developed with his colleagues, and using the most recent data. He supported what today would be called an ‘East Asian’ model of development, which has a highly protected domestic market which is the base for aggressive exporting of increasingly skilled and technological manufactures. That may no longer be an option, because of world trading arrangements (every country cannot be protectionist at home and expect easy entry elsewhere for their exports), but many East Asian economies succeeded with that strategy in the latter part of the twentieth century. The parallel is not exact, since Sutch had major non-Asian concerns in social welfare and insulation from the terms of trade shocks, while the Asian’s inefficient agricultural sector gave a source of new workers unavailable to New Zealand. (Sutch was keen on immigration.) Nevertheless he neither favoured the purely protected, almost autarchic, regime some attribute to him, nor the export oriented industry with unprotected home base that many of his critics seem to favour (and is a reasonable description of the pastoral industries).

In 1963, Sutch described his vision for New Zealand’s economic structure in Towards Economic Maturity, which has to be seen in the context of the economic debate of the time. Contemporaneously with widespread decolonisation, there was the view that the imperial powers had distorted the development of their colonies for their own interests, by confining them to being international providers of raw materials, and preventing manufacturing in depth and import substituting. This resulted in an imbalanced economic structure. From today’s perspective the New Zealand economy of half a century ago, with its emphasis on exporting processed grass to Britain, certainly looks imbalanced.

Sutch quoted Walt Rostow’s then fashionable theory of ‘the stages of economic growth’ as to what is meant by a mature economy:
Formally, we can define maturity as the stage in which an economy demonstrates the capacity to move beyond the original industries which powered its take-off and to absorb and to apply efficiently over a very wide range of its resources – if not the whole range – the most advanced fruits of (then) modern technology. This is a stage in which an economy demonstrates that it has technological and entrepreneurial skills to produce not every thing but anything it chooses to produce. It may lack (like Sweden or Switzerland for example) the raw materials or other supply conditions required to produce a given type of output economically, but its dependence is a matter of economic choice or political priority rather than a technological or institutional necessity.[9]
(Characteristically, Sutch extends the notion of the ‘mature economy’ to the ‘mature society’ mentioning education, the arts, industrial design, housing and town planning and infrastructure.)

Now it is not a great step from Rostow’s argument to conclude that a mature economy will have an economic structure as much like that of other ‘mature economies’ as is practical. (So the argument does not extend to New Zealand making its own jet planes.) This apparently flies in the face of ‘comparative advantage’, which argues that an economy should specialise. But that analysis ignores externalities between production processes and industries which are important, if not central, to Rostow’s thesis.[10] (While the notion of ‘intra-industry trade’ – that is two countries trading the same products rather than inter-industry trade where they specialise and exchange different products – became prominent only subsequently, that it is practically important provides some empirical credibility to the balanced economic structure policy.[11])

Thus Sutch saw the need to reduce the over-specialised structure of the New Zealand economy as a part of a growth strategy as well as a means of reducing the vulnerability of the economy to fluctuations and downturns in the world economy. However, it does not insulate the economy from a major world economic and financial downturn. Nor does increasing autarchy do that, as long as key products (such as oil and tourist services) have to be imported.

We shall see a decade later Henry Lang arguing for more specialist economy than he thought Sutch supported. Even so, Sutch was right to draw attention to the extreme specialisation, and to look for a more diversified export and domestic structure. Moreover the economic assumptions – of interdependencies between production processes in different firms – which underpin the analysis should not be neglected. Sutch’s emphasis on education and training, on industrial design, on technology and research, and on infrastructure are no less relevant today.

But insulationism need not be isolationism. It is clear that Sutch wanted to engage with the world. Under him the Department deliberately allocated import licences for more carpet making machinery than the domestic market could sustain, on the basis that New Zealand should be exporting woolen carpets from the overcapacity.
Sutch’s promotion of industrialisation, with an explicit argument that New Zealand was too dependent upon pastoral products, was an anathema to much of the farm community, while some in the business community did not trust him. At the time there was a three way inter-sectoral fight for political dominance. Sutch was a major spokesperson for manufacturing. The farm sector, which had been happy to use the state when they had political dominance (as in the 1920s), was now increasingly moving towards less state involvement in industry (although even in the 1990s they were not unknown to make special cases for farmers – as in the case of disaster relief and rural mail deliveries. Farmers were probably right in judging that as their political power diminished, the government interventions would less frequently favour them. So the farm sector increasingly aligned itself with the financial sector, which also – as was illustrated in the Coates and Fletcher chapters – have long advocated minimal government involvement when it was in their interests. Sutch saw them as committed to the colonial economic structure dependent on a few imperial countries. Similarly the financial sector was dependent upon a few capital exporters. The result was Sutch became offside with both groups.

So he was involuntarily retired in March 1965, after 40 years of public service employment. At 57 he began a new career as a consultant while he taught, lectured, reviewed and wrote. (His festschrift includes a bibliography of over 800 odd items covering an extraordinary range of areas and ideas.) His writings are in general not analytically detailed. Instructively, in an early 1960s clash, discussed in greater detail in the Philpott chapter, Sutch talked about ‘manufacturing in New Zealand’, but Philpott only of ‘agriculture in the New Zealand economy’.[12] A consequence is that Philpott’s argument is economically tighter, because Sutch used the space to cover much wider issues such as education, design and research.

He worked across an even more comprehensive canvas in his post-Secretaryship days, revising his two earlier widely read books, to became much fuller economic and social histories of New Zealand, [13] and adding numerous other major publications, including four books. Three are discussed below, and there was also Women with a Cause (describing women’s struggle for equality, and finishing with his submissions to the Committee on Equal Pay). In 1973, he became chair of the Queen Elizabeth II Arts Council. At the end he was working on a biography of his hero, Gordon Coates. [14] It is doubtful he would think that subsequent biographers have captured the man, or recognised all his nationbuilding achievements.

Sutch’s thinking was not without its paradoxes. He promoted the wine industry, but was teetotal; he supported the car industry but did not drive; he encouraged the tobacco industry but did not smoke. To the end Sutch was a royalist he especially admired Princess Anne. To the dismay of his republican followers, he sought a knighthood from the Kirk government. (Hardly anybody complained when that other great nationalist historian, Keith Sinclair accepted a knighthood in 1985, although he was almost a generation younger.) As later as 1944 he wrote of himself as an ‘Englishman’, although the subsequent experience at the UN may have led to a greater awareness of the distinction of being a New Zealander. Sutch reflects the ambiguities of attitude other mid-century nationbuilders had towards Britain.

The greatest paradox is that in September 1974 the ‘most loyal New Zealander’ was charged with an offence of obtaining information that would be helpful to an enemy, following some outdoor meetings with a Russian diplomat, cum KGB agent.[15]

There has been much speculation as to what occurred at these meetings, and indeed on Sutch’s security record over the preceding four decades. ‘Speculation’ is the operative word, for the hard facts are few. We have a reasonable idea of what was on his security file, which all public servants had. The memoirs of John Marshall, who as Sutch’s minister would have had access to it, records
A security check not long before his retirement in 1964 did reveal visits to the home of a member of the Communist Party, but no more than that. Some people, from time to time, alleged that Sutch was a communist, but there was no positive proof to support the charge. [16]
Significantly, the trial provided no further evidence (other than the events of 1974), and so broadly confirms this assessment. (It would be very difficult to live in New Zealand and never visit a home of the member of a Communist Party or one of its successors.)

The spy story is not particularly related to the main themes of the book, and it would be fallacy ad hominem to argue that were Sutch a spy, his theories were fundamentally flawed (although, sadly, recourse to the fallacy is stock in trade of much New Zealand debate). Reviewing the available material, my conclusion is that there is no evidence that Sutch was a spy, although he shared freely information in the public domain.[17] The events of 1973 were that it was a bungled intelligence operation by a KGB agent, in which Sutch acted unwisely but not dishonourably, and that the NZSIS bungled too.

For the record, a jury of twelve ordinary New Zealanders acquitted Sutch of the charge of treason in February 1975, despite the legislation (since repealed) being so general that almost any communication with a foreigner was covered by it. Extraordinarily, he was not demoralised by the events, and bore himself afterwards with considerable dignity. Yet the arrest and trial seems likely to have hastened his death at 68, a year later.

The trouble with this spy industry stuff, is that it deflects attention from Sutch’s ideas. For his writings provide one of the most comprehensive accounts of, and visions for, New Zealand. The title essay in Colony or Nation illustrates the difficulty to coming to terms with Sutch.. He identifies the problems of the economic structure in the mid-1960s, by twelve propositions, set out in italics below, each followed by an assessment from the perspective of 35 years later.[18]

1. New Zealand is just as exposed to a world depression as in the past. This remains true although there has yet been no world depression, and New Zealand has been a beneficiary from world prosperity.

2. There has been no change in the price characteristics of New Zealand’s exports. The terms of trade fluctuate less following the diversification of the export sector. That is what Sutch advocated and facilitated.

3. New Zealand’s vulnerability to changes in the terms of trade have not changed. Insofar as the terms of trade fluctuate less (see proposition 2) the statement is no longer strictly true. But New Zealand still remains very vulnerable to fluctuations in the world economy (see proposition 1).

4. New Zealand still has to rely on one main market, the United Kingdom, for the major part of its exports. New Zealand is no longer dependent upon the British market, and now has a pattern of foreign markets characteristic of a ‘mature’ economy. Sutch had a hand in that diversification.

5. New Zealand’s prospects in international trading have not been improved by the General Agreement on Tariff and Trade to which New Zealand is a party. Sutch is observing that GATT barely addressed agricultural protectionism. However the WTO regime includes its regulation.

6. New Zealand has, in fact, to face not less but more intensified agricultural protectionism in the industrial countries of the temperate zone. His prediction of increased protection (and the dumping of surpluses into third markets) proved correct. Even under the WTO regime, there has not been a lot of progress in reducing protection the agricultural products most relevant to New Zealand.

7. No serious attack has been made yet on the need to diversify land use. That happened during the post-1966 diversification, but the pastoral sector still produces about half of gross farm output.

8. In general, New Zealand’s pattern of (and attitudes towards) international trade still savour very much of colonial attachments. Sutch was concerned about New Zealand’s rejection of bilateralism in trading relationships, and its emphasis on multilateralism. In fact the world has become more multilateral, while today New Zealand has bilateral deals with Australia, most Pacific Island States, Chile and Singapore, and is exploring others.

9. Many economic institutions are still characterised by lack of diversity and flexibility. It is unclear what Sutch meant. It might be argued that Sutch was right, but the institutional issue has since been largely addressed. However Sutch seems to have had in mind the need for more public institutions.

10. In industrial development the continuing shortage of foreign exchange has brought a minimum of expansion of manufacturing: but no guiding lines have been laid down about the direction and extent of the various industrial sectors. Much of the essay is concerned about the failure to expand manufacturing fast enough. (For Sutch that meant active interventions.) In fact the post-1966 diversification expanded the composition and scale of manufacturing. However it has suffered an enormous setback since the mid-1980s.

11. Far too much development in manufactures has been because of investment and activity in foreign countries. This discussion is detailed his later book Takeover New Zealand. Sutch most certainly would see greater foreign penetration today.

12. New Zealand’s unique contribution to human welfare is being threatened at an accelerating rate. This might have seemed excessively alarmist in the 1970s, although the threat was always there. The changes to the welfare state in the late 1980s and 1990s justified the alarm.

The essay is all the more prescient because it was written in September 1965, before the collapse in the terms of trade at the end of 1966. Sutch’s strategy of export diversification was the economy’s response, part driven by market opportunities, part by the measures which Sutch’s administration had put in place, and part by the confidence he had given New Zealanders by talking about it. The conventional wisdom is reluctant to acknowledge his contribution to the shift to export oriented industrialisation. Failure is an orphan, while success has many parents. Sometimes an identifiable grandparent is overlooked.

With the benefit of hindsight, one might score half the propositions (1,6,10,11,12, possibly 5) as still broadly true today, and the remainder (probably excluding 9) less true because of Sutch’s contribution. This is an impressive record, but this response misses much of the point. The book concludes
The crisis for New Zealand in the mid-1960s is not that the basis of our wealth has suddenly gone. It has not gone and the trends which have produced the crisis are not sudden. The crisis consists in this: the time in which we can take remedial action is getting shorter and shorter; and the longer we delay these measures , the more the crisis deepens. Rapid and radical action is needed to readjust our economic structure and institutions to meet our new development needs: the building of industry to supply raw materials, components, and capital goods, and the basing of our society on a broad range of skills. In all too many respects we have been outpaced by a large part of the developed world and we may, for all we know, be in the process of being outstripped by many developing countries. These latter at least recognised their problem – the need to develop rapidly – and they the will to try to solve it.
The crisis is one of time and of attitude. It lies in a failure to understand fully the fact and nature of a crisis that has already arrived; and a failure to meet it quickly enough. It is also a crisis of dependence – a ‘decisive moment for our future – colony, or nation?[19]

Stripping away the rhetoric of ‘crisis’ (much used in New Zealand and elsewhere), Sutch is arguing that too many New Zealanders still had colonial attitudes, and that compromised the viability of the nation. This may have seemed less so fifteen years after the book, but the post-1984 regime as illustrated how subservient to international fashion and lacking in self-confidence so many influential New Zealander were.

Takeover New Zealand took up the theme of foreign control and greater self sufficiency. Unfortunately the book exhibits some of the weaknesses of today’s antagonists to foreign investment. It begins with a short (and not uninteresting if one is unfamiliar with the period) economic policy history from 1920 to 1950) and then has six chapters which describe the extent to which New Zealand resources, businesses and finances are owned or controlled by foreigners. (The extent would be even greater today.) So far so good. But it provides very little account of why this has happened, other than specific instances of takeovers or investments, alerting readers but not providing much analysis. The fundamental reason is that New Zealanders do not save enough, so the economy has to borrow from overseas to provide itself with the capital investment it needs. If the savings deficit is great, then much of that overseas supply will have to be terms of equity investment. And so the New Zealand economy is steadily taken over by foreigners. Unless the savings deficit is addressed, any undesirable foreign penetration cannot be either.

Indeed, harking back to John Ballance’s vision of ‘self-reliance’, probably the best single insulation New Zealand can do from the vicissitudes of the world economy would be more self-sufficient in capital. Even so if there is a major world contraction, New Zealand exporters must suffer, as must those who supply the exporters, and thence the economy as a whole. There is no way a small economy dependent upon overseas resources can avoid all the costs of an international downturn. But it can insulate itself to some degree.

The Responsible Society, Sutch’s evidence to the 1972 Royal Commission on Social Security, was described by its chairman, Thaddeus McCarthy, as ‘your plan here not as one standing by itself but as a part of what might also resemble a minor social revolution which you desire to see happening in the country in ways of our social living, our social approaches, which may be highly desirable.’[20] Again it contains a short history, but its main concerns were to protect and extend the social welfare system of social security (including a particularly powerful chapter on ‘Our Children, Our Future’), and health. His vision was underpinned by human capital theory, which was becoming popular. Indeed when he introduced it to the 1960 Commission on Education the approach was so new in the former case, that the Commissioners consulted another economist to test it.[21] His vision may be summarised by the motif on the dedication page of Poverty and Progress, although it is became banal after prime minister David Lange began chanting it in the mid 1980s while his government pursued exactly the opposite course.
Ki mai ki au, he aha te mea nui o te au?
Makue ki atu, he tangata, he tangata!
(Tell me, what is the most important thing in the world?
Well, I’ll tell you: It’s people. It’s people!)

Thus Sutch has a unique place in New Zealand’s history, and its history of ideas. For while from one perspective he is but one of many prominent nationbuilders of his times, his compass was wider than most, and because of his writing, and the values he expressed, which impacted on subsequent generations – as Bruce Jesson reports in the Envoy. Some of his theories – especially the political economic framework of New Zealand – are now a part of the conventional wisdom, likely to be taught, debated, and elaborated for some time to come, while policies he first advocated are now accepted as integral to New Zealand’s development.

He argued New Zealand had been a dependent colony, a monoculture which grew and processed grass mainly sold to Britain as wool, meat, and dairy products. Sutch saw the need to foster industry and employment within New Zealand, and to earn foreign exchange by exporting a diversity of goods and services to many countries, as well as conserving foreign exchange through import substitution. Production had to be of high quality, well designed, and make full use of human resources. Thus he was a tireless advocate a polemicist for the development of a national culture. People were at the core of his development vision: children were a key to the future, and women were entitled to equality both as a right and because they contributed to the broad social and economic development. Full employment, education and the welfare state promoted human resources.

He saw a key role for the state, but it was a Fabian one, for he advocated decentralisation and was concerned with human rights. It certainly was an interventionist state by the standards of the 1990s, promoting economic activity, and providing protection and support via public education, health and welfare services. But his support was no different in this respect from that of most of his contemporaries. He was just more prominent publicly arguing the case, and perhaps more farseeing. If his views were often original and independent of the times, many are now accepted as part of the main stream of New Zealand discourse. Sutch has attained the status of Keynes’ defunct economist, whose thinking practical men rely upon without realizing it.

Were he alive today, Sutch would be delighted with the external diversification, but appalled by the lack of industrial assistance since 1984, and the neglect of the productive sector in favour of the financial one, with the resulting reduction in the import substituting sector and a poorly performing export sector. He would be distraught by the degree of foreign ownership of New Zealand industry, and unbelieving at the extent of the dismantling of the welfare state. Yet Sutch would be delighted at the social progress of women and many ethnic minorities, and amused that the human capital approach he initially almost alone advocated in the early 1960s, is now accepted by even the most practical of politicians.

From one perspective Sutch was a man of his times. His economics reflect the paradigm of his day and it does not always make sense to judge him according to later developments in economic theory or the new circumstances which he helped to create – or at least no more harshly than today’s commentators expect to be judged in the future. Even so, he gets misrepresented, by both left and right, who focus on his 1957 vision of import controls as the central issue for industrial policy, and do not allow that his approach pragmatically developed thereafter. If he were alive today, he would develop his ideas further, absorbing new theories and new circumstances. We misrepresent his intentions if we focus on his specific policies which were of their times, to the detriment of his principles which remain relevant into the future..

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Biographical Sources
See bibliographical sources of Chapter 7.

1. A.R.D. Fairburn (1945) ‘W.B. Sutch’, Action – The Thinker’s Digest, February 1945, p.32-34.
2. Sutch (1936)
3. McIntosh to Berendensen in I. McGibbon (1993) p. 68, 158.
4. Sutch (1957) p.20.
5. Sutch (1962); Sutch (1963)
6. B.H. Easton (1997) In Stormy Seas, Dunedin,
7. Easton (1997) p.75-81.
8. R. Cullen & P. Wooding (1981) ‘Export Incentives in New Zealand: 1962-1978,’ NZEP, 15, p.144-162; P. Wooding (1987) ‘Liberalising the International Trade Regime’, in A. Bollard & B. Buckle (ed) Economic Liberalisation in New Zealand, Wellington, p. 86-101.
9. W. Rostow (1960) The Stages of Economic Growth, London, p.10, quoted in Sutch (1963) p.14.
10. For more on the protection debate see Easton (1997) Ch.11.
11. See Easton (1997) Ch.9, on the intra industry trade evidence for New Zealand and the implication that New Zealand is not a ‘mature’ economy.
12. Compare Sutch (1964) with B.P. Philpott (1964) ‘The Future of Agriculture in the New Zealand Economy’, in M. Lloyd-Pritchard (ed) (1964), p.24-43.
13. Sutch (1966b, 1969).
14. Sutch (1973a).
15. N. Hilliard (1975) ‘Thinkers of Evil and the Most Loyal New Zealander’, New Zealand Monthly Review, March 1975, p.1-4.
16. J. Marshall (1989) Memoirs, Auckland, Vol II, p.145-146.
17. I prepared an appendix for this purpose. It has not been published, because it distracts from the central themes of the book.
18. Sutch (1966a) p. 163-172.
19. Sutch (1966a) p.183.
20. Reported on the back cover of Sutch (1971).
21. Told to me by a member of the secretariate of the Commission.

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