Henry Lang: 1919-1997

Chapter 14 of The Nationbuilders

Keywords: Political Economy & History;

The day I finished the first draft of this chapter I walked past the Henry Lang Memorial sculpture, in a small park nestled between various government buildings, where once had been Broadcasting House, an architectural gem in its own right, and an important centre of the nation’s culture in general, and drama and music in particular. In the Great Hall of Parliament House, magnificently restored by the Warren & Mahoney partnership, Helen Clark, the Prime Minister announce a major funding and structural package, ‘Building Cultural Heritage’, for her adjunct portfolio, Arts, Culture and Heritage. Did I hear Peter Fraser and Norman Kirk chuckle? Henry Lang would have said, ‘absolutely first rate.’

The refugees who fled the tyranny of Central Europe in the 1930s benefited New Zealand’s cultural, intellectual, and government life far out of proportion to their small numbers. Perhaps the jewel in this studded crown was Heinrich Lang, who became Secretary of the Treasury the greatest successor to Bernard Ashwin and contributed much else besides to the New Zealand which was evolving in the second half of the twentieth century. But the Central Europeans are also an example of a wider phenomenon. While for much of the century New Zealand pretended to be wholly Anglo-Celtic, with a bare acknowledgement of the Maori presence hidden in the backblocks, there has always been a non-British immigrant presence in New Zealand. Once they looked, New Zealanders found themselves a much greater cultural polyglot than the conventional wisdom allowed.

Like most, but not all, Central Europeans refugees, Lang had Jewish ancestors. His grandparents were practising Jews, but his Viennese parents were not. Even so, they were persecuted after the Nazis took over Austria and his father, a successful industrialist, was detained for a time in a camp. By the time they fled, his father and mother, Anna, were divorced, and she had remarried a promising young architect, Ernst Plishke, so it was with his stepfather and mother that he arrived in New Zealand in 1939 at the age of 20.

Plishke was a gentile, but following the Anschluss his career opportunities had been limited by the marriage to Anna. They came to New Zealand because another Central European found him a job in the government architectural service which was under pressure given housing needs at the time. He did not have a happy time here. In part his formal Viennese background meant he did not fit in his stepson recalls he found the New Zealand visiting habit of dropping in disconcerting. He required New Zealand workmen to operate at much tighter tolerances than they were use to.

But neither did New Zealand quite know what to do with him. He was one of the first modernists architects to work in New Zealand, but his oeuvre is limited to little more than 40 houses (the best known is the Sutch House in Wellington), some churches, and Massey House, an eight-story office building with a glass curtain wall on Wellington’s Lambton Quay, the city’s first modern high-rise – since modified. (Parsons Bookshop, established in 1947 by Roy Parson an English migrant dedicated to promoting quality books, remains located in it to this day. It also contains a well-known coffee shop, established before café life was normal.)

Lang tells of Plishke going to some New Zealand furniture-makers, and offering to design them modern furniture. (Plishke had worked in the family joinery business.) They explained they had no need, showing him pictures in an European magazine from which they got their ideas. They were Plishke’s design. Later, he was turned down for the chair of design at the School of Architecture at Auckland University College, ‘seemingly because he was too modern in his approach and represented a European rather than English tradition of architecture.’[1] (The students protested vigorously.) In 1963 he returned to Vienna to a chair in architecture.

His major influence was on subsequent generations of architects, partly transmitted through the Architectural Centre, together with the nostalgia of an ‘if only.’ As Lang said ‘[h]e did a lot of houses and things, but there were few people a narrow sophisticated group, you know, the Bill Sutchs of this world who were interested. …artistically things were pretty backward here ’[2] (Sutch chaired the Centre for four years.) To put it bluntly, Plishke came to a bit of a cultural desert.

So did Lang, but he was a generation younger, had already spent time in England, and was fluent in English in a way his elders were not. Lang described Vienna as ‘a highly sophisticated, fairly formal sort of society. And much more structured in class terms than it was here.’ In his new home there was a ‘lack of class distinction which was obvious, and a lack of poverty which was agreeable. I always hated living in a city like Vienna where there were well off and there were beggars all over the place and people did not have enough to eat.’ Throughout his life Lang was to combine the gentlemanly courtesy of Central Europe and its commitment to cultural and intellectual excellence together with some fundamental New Zealand attitudes and values such as egalitarianism. Although ‘Mr Lang’ to Mr Muldoon, he was ‘Henry’ to everyone else. While he was a member of the Order of New Zealand (the highest honour, restricted to 25 living people), he was never a knight. ‘Sir Henry’ was unthinkable.

Lang’s first job was ‘factory labourer in a fruit packing outfit [in Petone] and I learned a hell of a lot.’ Including how to get on with New Zealanders. Within two years he became a foreman. Then went into a number of commercial jobs, followed by war service as a mechanic in the RNZAF. At the same time he was attending Victoria University College part-time. He says his time at Vienna’s elite Akademisches Gymnasium made the New Zealand degrees in commerce and philosophy relatively easy. He was a keen tramper and skier. And in a tumultuous first decade for the newly arrived, he married Tup (Octavia) from a Hawkes Bay farming family in 1942.

In 1983 Henry reflected on this period very positively, although it is difficult to believe that there were not times of uncertainty. ‘I was thinking of going into business, but I’m totally inept for that sort of thing I am not a business type you know.’ The story is told in the context of his rarely being discriminated against because of his Central European origins the buying of the barrels for the sauerkraut he was considering manufacturing being one of the few instances. (Later in the interview he mentions that some Hawkes Bay in-laws never really accepted him until he became Secretary of the Treasury after 25 years of marriage.)

He joined the Economic Stabilization Commission as an investigating officer in 1945, when Ashwin was still involved. Lang greatly admired Ashwin who was a mentor and model. In 1949 and 1950 Lang went full time to university, on a Public Service Commission grant. The Diploma of Public Administration did not make onerous demands, so he did many other things, read many other books. He said they were ‘the best years of my life’. By now the Stabilization Commission had been closed, so he went to Treasury in his early thirties, with a rich variety of experiences behind him.

Lang said ‘I am not an economist although I taught it [at Victoria University of Wellington after 1978] but I never really learned it.’ There is both a truth and a modesty in this judgement. The economics Lang would have done at Victoria University College would have been institutionalist, and he probably had little knowledge of the details of the theory developed from the 1950s. But he was intellectually sharp, and able to grasp the nub of issues. He would never be only an economist. He never confined recruitment to commerce students.

“It is obvious that all this work can be done effectively only if we can recruit and retain highly professional staff. The days are long gone when all that was needed were some accountants and a few economists. We now have a wide range of graduates, one third of whom have what are called ‘non-relevant degrees such as languages, geography, history or political science. I have always believed that in policy-making there is no such thing as a non-relevant degree and the main requirement is a first-class mind.”[3]

When approached to join the Treasury, one political science graduate demurred, saying he was not an economist. Henry replied ‘but can you write?’ When he ran Treasury, the Treasury officials could write. It was a lively and exciting place which actively encouraged debate. It suited Lang’s temperament and style of management to have disputes between, say, Keynesians and monetarists. He would insist they explore fundamentals, and agree on a common policy. If they could not, he would decide.

Lang’s kindness was legendary, and he could behave with principle. When Sutch was prosecuted in 1974, his daughter, Helen, wanted to return from London where she was working as an economic adviser in the UK Govt Economic Service. After interviewing her, Lang offered her a job, and then defied instructions from the State Services Commission that she was not to be employed. He also sent out a circular to his staff warning that he would not tolerate victimization. He had seen this sort of thing in Austria, and he was not having it in his New Zealand.

Lang joined Treasury when it was undergoing a development in economic analysis. Keynesianism was developing as a systematic framework. ‘More market’, the view that very often interventions were inefficient and ineffective, seems to have developed in the Treasury in the 1950s. (There is little evidence in the Ashwin-signed papers of such judgements, except in monetary policy. But they always show fiscal caution.) Lang was not necessarily the leading innovator. The most important theoretical contribution of the period may have been the balance of payments constrained model of the New Zealand economy written up by Geoff Schmitt (who is a valued source on Ashwin’s later Treasury years, leaving Treasury shortly after to work for the Tasman Pulp and Paper Company).[4] Lang would have provided a commentary on the paper.

Returning from being an economic counsellor in the London High Commission in 1955 to 1958 it was he and Tup’s OE together he became chief research officer at the Treasury, in effect principle adviser on economic policy, for the secretaries immediately after Ashwin were not economists. Lang rose quickly through the ranks to become Secretary of the Treasury, at the age of 49 in 1968, a position he would hold till 1977.

There was a struggle from the late 1950s between Treasury and the Department of Industries and Commerce over the direction of economic policy, with Lang the champion for the former (and Sutch the latter, notionally after he was sacked in 1965). Nominally it was an argument about protection. There may have been an element of temperament in Lang’s position. He was irritated by the insularity of many protectionists (although Sutch demonstrates some were not). His was a cosmopolitan world in which nations succeeded by engagement, rather than avoidance, so he objected to ‘Fortress New Zealand’.

The protection debate is the proxy for a wider one of how government could be effective in promoting economic performance. Treasury were (and are) sceptical about the efficacy of the government being able to over-ride the market. (Between the mid-1980s and the mid-1990s, it became almost total disbelief.) I&C (as it was known) believed that intervention could enhance the growth performance of the economy. (I&C’s successor, the Department of Trade and Industry, did not abandon a belief in its ability to intervene effectively until about 1980, partly arising from an increasing distrust of politicians in general and Rob Muldoon in particular, to make good judgements.)

The debate has occurred in other countries and at other times, often signalled at the political level by the establishment of a planning or economic development ministry to offset the power of the Treasury. Almost always the keepers of the public purse have won, partly because fiscal discipline cannot be avoided in the long run. They would add that they had the better arguments, and also that opportunistic politicians cannot be trusted to intervene solely to enhance the economy.

Lang took over the Secretaryship, shortly after Muldoon took the financial portfolio, following the 1966 collapse in the wool price, and all the complications that followed including the 1967 devaluation. (A similar situation occurred in the early 1930s which brought Ashwin to the fore.) Shortly after the Court of Arbitration settled on its infamous 1968 ‘nil wage order’ which disrupted the wage system, although arguably the recent shocks to the economy would have tested any wage setting system. Before long New Zealand was in a period of double-digit inflation (i.e. more than 10 percent p.a.) and disorganized wage setting. There was a lot more besides: the National Development Council planning experiment, microeconomic reform, and export diversification.[5]

Lang was at the centre of these policy issues, often personally. His negotiating skills, tested against the British on butter and lamb quota, were so cosmopolitan that Whitehall officials called him the ‘Hapsburg Diplomat’. It was he who suggested converting the original Kirk-Douglas contributory superannuation scheme into a two tier one with a government-provided tax funded flat rate universal first tier, and a private contributed earnings related second tier – arguably a policy insight of genius.

Institutionally, there is a cabinet minute that all expenditure proposals require a Treasury paper, giving it the power to comment on virtually anything which comes before cabinet. While the oral tradition of the 1980s had it that Lang and Muldoon instituted it, it goes back to at least the 1920s, and was probably formalized in the cabinet manual of 1949 (where Ashwin’s presence lurks). But even in economic areas which did not directly involve spending, Treasury could be very active, often with personal involvement from Lang. The standard arrangement was a desk officer who reported (in those days) to a section head, and thence up through a layered hierarchy with the Secretary of the Treasury at the peak. On wage setting, the desk officer often worked directly with Lang.

The Treasury from the 1930s to the 1970s might be called the Ashwin-Lang Treasury, very different from the primary focus on keeping the government accounts which preceded it, and pragmatic and practical in contrast to the one which followed it. The path of Dick Campbell as an advisor to Coates in 1926, through the Brain’s Trust of the 1930s came together with the keepers of the public purse from day one of the government of New Zealand, to the modern Treasury, which Ashwin founded and his greatest apprentice, Lang presided over. (The detailed history has to include the Economic Stabilisation Commission of the 1940s, but again it is an Ashwin institution, where Lang began his public service career.)

Lang wrote about the Treasury shortly after he left in 1977, although still in the careful considered style of a public official. Perhaps the article’s subtitle ‘Control and Advice’ tells it all.[6] The control of the public finance had been there from the beginning. From Ashwin’s time the advice role became as important.

He set down three key principles.
– The Treasury policy advice was competent and broad based. Under him the Treasury attained the excellence which it prides itself on (although not always attaining it). He described his best as ‘absolutely first rate’.
– While ‘Treasury has no monopoly on wisdom … it does have … the professional ability to stand aside from narrow, sectoral, geographical or partisan interests, to assess and analyse the available options without self interest, and to provide the Government with clear, independent advice and a basis on which it is possible to make rational decisions.’[7] (While accepting this as a goal, and acknowledging the Ashwin-Lang regime usually attained it, the Treasury is under constant fiscal pressure, and this biases its decisions towards fiscal conservatism. The ‘control and advice’ are bolted together.)
– A close effective working relationship with the Minister, or where the minister is ineffective for whatever reason – recall the long periods Nash was overseas in the 1940s – with the prime minister, and preferably both.

However the Ashwin-Lang Treasury suffered two weaknesses which appeared soon after Lang’s retirement. The first was that as numbers of policy analysts grew it was no longer possible to coordinate them through a personal network, even had the institution been led by someone of Ashwin’s or Lang’s charisma. This led to a structured hierarchical organization. But policy shifted from a pragmatic empiricism coordinated by one man, to an emphasis on theory (‘the policy framework’) for coordination. Unfortunately it became a narrow anti-empirical theory, which became the check for internal consistency even if there was not always coherence with the real world.

Second, the structure consisted of two economic policy divisions, in addition to two finance policy divisions, and four investigating – that is expenditure control – divisions, plus various operational activities which have now been largely shed. The internal economics division was primarily concerned with short term economic management – monetary and fiscal policy, taxation policy, and the budgets and mini-budgets. The external division was concerned with foreign trade policy, in coordination with other government departments. It is far from clear where economic growth fitted in. The issue appeared to be addressed by the separation of the internal economics division a few years later into Economics I and Economics II, the former to deal with short term macroeconomics the latter with the long term. The story is yet to be written, but at its heart is the inherent tension between fiscal control and growth policies.[8]

(In addition there was the New Zealand Planning Council, a quango outside government, was also nominally concerned with thinking about the long term (it having no operational responsibilities). However it was never really committed to ‘planning’ in any normal meaning of that word, and with the exception of the work centred around Bryan Philpott, had a very short term focus – no longer than the direction current government policy was moving. Much of the work, again Philpott’s being a notable exception, was of very poor quality – a combination of the conventional wisdom and platitudes – and little is recalled today. What is extraordinary about the Planning Council is how little influence it had, either then, or in the long term.)

The systematic refining of fiscal control that Lang describes in his 1977 paper ruled out Vogelist investment and direct promotion of industrial development. They were to be replaced with nothing but fiscal prudence and minimal market intervention, and a promise that these would generate a climate for economy growth. The analysis had no connection with the actual growth of the New Zealand economy in the previous hundred years. It was not necessarily based on fiscal extravagance, but the historic record is that fiscal subsidisation and other forms of industry assistance was associated with rising per capita incomes and expanding population.

The issue is nicely illustrated in Michael Bassett’s The State in New Zealand 1840-1984, an assiduous, if somewhat erratic, compilation of state economic activity in New Zealand.[9] Bassett, a born-again anti-interventionist as a minister in the Fourth Labour government, tries to put the case for the policies his government adopted in the book from a historical perspective. Yet the picture he presents is that the government actively promoted industrial development, with an outcome of broad economic success. On more than one occasion private initiatives were failing, and the state stepped in to assist a now successful business. On others – Tasman Pulp and Paper is an example – there would have been no private initiative without government support. In particular, under the First Labour government in the late 1930s and 1940s, the economy grew at a similar rate to the Asian economies of the 1970s and 1980s. Yet economic intervention had sharply increased. Conversely when the government stopped assisting industry there is no better example than the tenure of the Fourth Labour Government economic growth languished. While correlation is not causality, the unintended message of the book – if not the explicit message of its author – is that New Zealand’s economic success has been a partnership between public and private sector.

The story of the major projects, or ‘Think Big’ is commonly used to illustrate the dangers of interventionism. The energy based projects were successful in engineering terms, and some were constructed within budget. But while they may have been commercially viable on the projected assumptions, one assumption proved fatally wrong. The real price of oil (of world energy) was assumed to remain high and to continually rise. But just as the new plants were being commissioned in the mid 1980s, the world price of oil collapsed. By this time the New Zealand economy was stagnating, the economy disinflating with high nominal and real interest rates (which raises the cost of servicing the capital), while the exchange rate was over valued, so the projects’ commercial viability was heavily hit.

The contracts between the private owners and the government which established each project – unavoidable given the government supplied the energy on which the projects were based – had the public taking the downside risk. When the adverse factors came together, the government ended up writing off the loans it had made or guaranteed, adding to the fiscal deficit.[10] This was a fundamental defect in this Vogelism, but not so evident in earlier periods when the economy grew. This time the slow growth of the economy exposed the shortcoming, while the magnitude of the schemes relative to the total size of the economy, meant the failure could not be easily hid. The debate had been about whether the projects contributed positively to the economy. It should have been about what happened if they did not[11] It was said that the pre-1984 New Zealand economic system ‘privatised the profits’ and ‘so.cialised the losses’. That certainly applied to the major projects, including New Zealand Steel.

What if Lang had still been Secretary during the ‘Think Big’ debate? Treasury would have still resisted the government direct and indirect funding of the projects, and they would have failed, for the political circumstances was against it. But it is also plausible to argue that common-sense Lang would have required sufficient of an internal debate to identify the key element of risk. Recall that Ashwin set up Tasman so if it had been a commercial disaster, Fletchers would have first gone down the tubes.

Lang died before Bassett’s book was published, so I never had an opportunity to discuss it with him. But although he was more market and fiscally prudent, he certainly was not a supporter of the extremism of the post-1984 commercialisation policies. He may have wanted less government involvement and more market direction than, say, Sutch, but he would have still seen a place for a partnership between government, business and the unions, arising out of his Economic Stabilisation commission days, but also well grounded in the Central European democratic tradition from whence he came.

While he served Muldoon for over half his secretaryship, Lang had a far greater respect for Bill Rowling, who was his minister in 1973 and 1974, and whom he continued to see when Rowling became prime minister. (Later, Rowling was to select Lang as one of his committee to establish the Museum of New Zealand. In the memorial corner behind the marae their pictures are next to one another.)

The replacement of the Holyoake-Muldoon regime by the Kirk-Rowling one was a breath of fresh air to many senior civil servants. Lang showed his delight in a paper he gave to the New Zealand Institute of International Affairs in August 1973. Nominally it was about the economic policies which would be consequent upon the sort of foreign affairs policy which Kirk had described the previous day, but while Lang was probably supportive of Kirk’s vision, he describes a view of the development of the economy which he would have advocated anyway. Much of the paper is the carefully argued officialese, but sometimes Lang offers a personal view.

The 1972 election had had a strong environmentalist element, not only in the appearance of the Values Party (the precursors to the Greens) but in Labour’s own campaigning. It would be improper for a senior public servant to address such elements directly, so Lang considered ‘The Club of Rome’s Limits to Economic Growth. He concluded

“Economic growth properly defined simply means increased standards of living. It does not necessarily mean increased production or increased use of goods. The fruits of growth may, for example, be concentrated entirely on improvements in our social system. Nobody can say that dealing more adequately with the sick, improving the lot of unfortunate minorities, using resources fro crime prevention, or spending money on the rehabilitation of criminals is undesirable. In other words unless we have economic growth we cannot use increasing resources to improve our standard of living. Thus if we have a choice – and this choice is open to us – that there should be no growth we automatically opt in favour of not raising our living standards in the widest sense. I think that the right answer – and this of course is a personal view – lies in trying to attain a somewhat higher level of economic growth than in the past but to use nearly all of the benefits in the field of our social environment rather than the provision of additional material goods. Moreover, unless we are able to sustain a reasonable rate of growth we will not be able to attain the degree of political independence hoped for …”[12]

No other Secretary of the Treasury has so publicly argued for the merits of public spending over private spending. He went on to consider economic structure:

“We need thus to develop appropriate policies for growth and structural change in the economy, in parallel with our changing foreign policies. We should be consciously aiming to create an open, adaptable economy, based on natural advantages and talents. We are some distance from that objective at the present time. Despite great advances in exports of manufactured goods over recent years , many of our industries are still micro-copies of the industries of the large industrial countries in both structure and techniques. That is a direct result of excessive protection and is in my view inappropriate to New Zealand conditions. We have much still to do to shape our industrial sector to our own individual strengths. I believe that a prerequisite tot he fulfilment of our foreign policy goals, is the implementation of effective innovative industrial policies, embracing market research, technology, fiscal incentives, tariff reforms, adjustment assistance for firms and industries, and an active labour market policy. …

“As abroad objective of foreign and economic policy, promoting both grwoth and independence, this prescription will meet with little quarrel. However, when it comes to the question of methods and some of the basic implications, such as the pattern of employment, then the voices of dissent will certainly be heard. There are those who believe that we need high and continuous protection for industrial development and the maintenance of full employment. Many people who hold such views are laso opposed to a more open economy generally, to membership of multinational organisations and to foreign investment. In essence they believe the right policy for us is a kind of ‘Fortress New Zealand’. And this bests fits our national aspirations. While such a policy is tenable it is inconsistent with the kind of foreign policy I have discussed earlier, and is also inconsistent with reasonable economic growth.

“I believe that the fears expressed by some manufacturers and trade unions at the prospect of a move towards a more open economy are exaggerated and under-estimate the basic strengths of large sections of our industry.”[13]

This is clearly an alternative to the Sutch vision of the economy, as it was then interpreted by many manufacturers and unionists, and indeed it addresses a key element to Sutch in the 1960s, who saw nationhood as being like other successful rich economies – the ‘mature economy’ as he called it – with a ‘balanced industrial structure Lang saw the case for a specialist economy reflecting the peculiarities and strengths of New Zealand. But it was not a colonial economy.

“… as a part of a comprehensive policy aimed at modifying our industrial structure, we should aim to use our native scientific and technical resources, for example by hiring out to a greater extent the services of the DSIR on a contract basis and where this is feasible, also purchase technology direct from overseas for application by New Zealand companies. This would lessen our present reliance on the technology provided by overseas companies and it should in time lead to the development of special technologies designed for New Zealand conditions and for the industries in which we have a special advantage. Technologies of this type could well have their own export value. Over a period of say 20 years we might create by such means, a New Zealand industrial structure which is unique, resilient, innovative, and competitive as our agriculture.”[14]

These were not the only sentiments of Lang which Sutch would have applauded.

“I am convinced that our highly educated labour force is sufficiently adaptable to develop industries and activities where we are as good or better than any other country. It also goes without saying that the extent to which we can develop an open economy is limited by the need to avoid unemployment. The maintenance of full employment in New Zealand is a permanent goal of economic policy. However full employment in the sense of everyone who wants a job having one is not sufficient. It is of equal importance that people get satisfaction from the work they do.”[15]

As it happens Lang is more favourably disposed to agricultural development than Sutch – perhaps more optimistic about its trading and pricing potential. And although it is not explicit, he would have used a different balance of micro-policy instruments. But one might envisage the two men in a civilised conversation, identifying their differences and agreeing to disagree on some key assumptions, rather than the conventional portrait of each at the other’s throat. They are more in harmony there than, say, Lang and the Rogernomes.

Not long after Muldoon took the premiership, Lang retired. Perhaps at 58 he thought he could make a new career. (This man who said he was ‘not the business type’ became a director of many major companies.) He was probably exhausted after eight tough years. Almost certainly he wanted to give his successor, and close friend, Noel Lough, a chance at the top job he was that kind of man. But undoubtedly a reason was his distaste for Muldoon’s style illustrated by the extremely discourteous way Muldoon treated Rowling.

The myths include his taking a senior official to see Muldoon shortly after he was elected prime minister. As they walked back he remarked, ‘my father said nothing in this world was perfect. But you have just met a perfect bastard.’ On another occasion when Muldoon acted unilaterally, Lang was heard to say, ‘he has a right to reject my advice, but he could at least show the courtesy of listening to it first.’

After he retired Lang discreetly flitted around the margins of economic policy. Muldoon cut him out. So did, largely, the following governments. Had his practical commonsense skills been applied to the 1991 health reforms for instance – health policy was always a special interest – a lot of its stupidities would never have happened. He turned his policy talents elsewhere: on setting cardiac surgery criteria; he was consulted on the 1989 review of the Prime Minister’s Department; he was a representative of the public on the Press Council, where he used his intelligence, common sense, experience, and sense of justice. He passionately promoted the arts: as chairman of the Wellington Sculpture Trust he is associated with many of the out-of-doors sculptures which grace Wellington.

After he died, the Trust created the Henry Lang Memorial Sculpture in the grass park surrounded by Parliament House, its Executive Wing, the Treasury building, the Reserve Bank building and the Bowen State Building which once housed Sutch. (You can also see it by looking from Plishke’s Massey House.) Lang would have been modest enough to see Brett Graham’s ‘The Navigator’ as a tribute to all the public servants who were ‘absolutely first rate.’

But there is a caution. He told Ann Beaglehole, ‘I mean the one thing you’re not to allowed to do in New Zealand, if you want to get anywhere at all under any circumstances, is indicate you’re intelligent. That’s fatal.’ He was echoing Michael Joseph’s Secular Litany, written three decades earlier. ‘That we may avoid distinction and exception/ Worship the mean, cultivate the mediocre.’

Sometimes one is at a watershed of history but realises it only years after. At the time of the 1984 Economic Summit, there was a furious argument among officials as to whether there should be consultation or whether the market measures should be pursued unilaterally. An anti-Summit Treasury official remarked to me something like ‘Henry is trying to get back involved in economic policy, but we wont let him.’ Nationbuilding had been abandoned.

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Biographical Sources
Beaglehole, A. (1986) Interview of Henry Lang, MSC 3806, Alexander Turnbull Library Oral History Archive.
Easton, B.H. (1997) ‘Regarding Henry’, Listener, May 17, 1997, p.60.
Lang, H. (1973) ‘The Relationship between Economic and Foreign Policy,’ New Zealand Foreign Affairs Review, August 1973, p.16-25.
Lang, H. (1977) ‘The Role of the Treasury – Control and Advice,’ Canterbury Chamber of Commerce Economic Bulletin, 610 No 4/1977.
Martin, J. (2000) ‘Lang, Henry George’, DBNZ Vol V, p.278-279.

The chapter has used ex-Treasury officials’ oral traditions surrounding Lang. They are yet to be recorded. [Added in 2004: Malcolm McKinnon collected many in his interviewing for Trerasury.]

[1] L. Tyler (2000) Plishke, Ernst, Anton’, DBNZ Vol V, p.415.
[2] Otherwise uncited quotations come from the Beaglehole (1986).
[3] Lang (1977) p.4.
[4] The balance of payments constrained model is described in B.H. Easton (1997) In Stormy Seas, Dunedin, Ch 2.
[5] For details see Easton (1997) Chs 5,6.
[6] Lang (1977).
[7] Lang (1977) p.5.
[8] But see B.H. Easton (1997) The Commercialisation of New Zealand, Auckland, Chs 1, 2, 6 for a preliminary analysis.
[9] M. Bassett (1998) The State in New Zealand, Auckland.
10] This is a simplification, for some projects were bailed out in other ways but still at the public’s expense.
[11] The economic debate got hooked on the question of the discount rate (roughly the rate of return required to justify public spending), as a result of Treasury being unwilling to publish its account of its policy to require a real rate of 10 per cent p.a. The consequence of this prolonged, and ultimately inconclusive, debate was that economists did not move on to the issue of the management of risk.
[12] Lang (1973) p.19.
[13] Lang (1973) p. 20.
[14] Lang (1973) p. 21.
[15] Lang (1973) p. 20.

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