No Nuggets Here

Nugget Coombs:  A Reforming Life
by Tim Rowse
Cambridge University Press, 2002 $59.95 (419 pages)

Back in 1984, Hugh Stretton, whose word is law in such matters, described Dr H.C. ("Nugget") Coombs as one of Australia's premier "Social Democratic Intellectuals".  Beginning in the dark years of the early 1930s, Coombs set out "to improve the world" using a network of national institutions, including the Commonwealth and Reserve Banks, the federal public service and the Australian National University, as his springboard.

Coombs' career as a reformer is clearly of great interest to the Australian reader and yet Tim Rowse has ended up writing an exceedingly dull book about him.  The reader's heart sinks as earnest summaries of the deliberations of impersonal bureaucratic committees in which Coombs was involved alternate with a succession of paraphrased policy statements.

Rowse has unwisely succumbed to the cult of impersonality which was a deliberate part of Coombs' modus operandi.  A commitment to seeking reform through committees and institutions placed a premium on "amiable impenetrability".  The best way to further social democratic change in Australia was by damping down confrontation of any kind, whether personal or ideological.  For his part, Rowse was never going to do anything that would disturb the calm as indicated by his willing compliance with a ban placed on interviews with Mrs Coombs.

Reading Rowse's account can, in truth, only be persevered with because of a prior knowledge of the important events making up Coombs' life and times.

The Great Depression of the 1930s was, for Coombs, "the most significant event" he ever experienced.  An important reason why the Scullin Labor Government failed to cope with the Depression was because it lacked advice from sympathetic experts who understood precisely how complex economic and financial mechanisms operated.  Labor always seemed to prefer simple views and solutions.  The Depression confirmed its atavistic distrust of the banking system (dismissed as "the Money Power"), making it vulnerable to crackpot remedies peddled by Jack Lang or Major Douglas.

The challenge was serious and Coombs' response was suitably bold.  He enrolled at the London School of Economics where a doctoral thesis on central banking was intended to train him up as an expert who would solve technical problems for a reforming government without arousing hostile conservative passions.

Coombs joined the Commonwealth Bank after he returned to Australia, but his agenda was effectively stymied, the ALP still stubbornly equating university-educated economists with deflationary orthodoxy.

The Second World War, when government control of the economy foreshadowed an eventual Hayekian road to serfdom, was Coombs' salvation as a reformist.  He was summoned to Canberra where he advised the Treasury on the conversion of the banking system into a publicly regulated wartime utility.  After 1942, the Labor Government appointed Coombs to administer its schemes of wartime rationing and post-War reconstruction.

When peace came, government intervention turned to the task of overcoming poverty through full employment.  Coombs sought to counteract Labor's nativist economic outlook by seeking to link the creation of more liberal post-War international trading arrangements to this mighty objective.

Coombs adapted Sidney and Beatrice Webb's strategy of "permeation" to suit Australian circumstances.  He was not wedded to a single party, although Liberal party hotheads insisted he was.  Worthy aims were best achieved by forging and maintaining agreement among key policy-makers and then getting their priorities rubber-stamped by elected politicians.  Polarisation was, for Coombs, a dirty word.  He did not support Chifley's attempt to nationalise the private banks because it was controversial and divisive.  It hindered the development of a cooperative understanding between private and public bankers.

Menzies defeated Labor in 1949, but Coombs stayed on as Governor of the Commonwealth and then the Reserve Bank until he retired in 1968.

The presence in the Menzies cabinet of a rural socialist rump in the form of the Country Party provided Coombs with enough leverage to continue to peddle, if ever so discreetly, a social democratic line.  Until the Reserve Bank was created in 1960, the private banks were subject to a regime of semi-voluntary regulation administered by the Commonwealth Bank which, at the same time, was active in offering "socialist competition" in the market for financial services.

Coombs opposed the eventual splitting-off of the Reserve Bank from the Commonwealth Bank for as long as he could.  He also sought, although without success, to outflank rivals in Treasury by implanting like-minded economists in the Australian National University.  Such setbacks were indicative of a broader unfavourable trend.  Coombs could delay, but not prevent, the historic transition from a Chifley-style guided economy to a Hawke-era market mediation.

The Keynesian apparatus of 1945 was in truth fatally flawed.  Australia's full employment policy, despite its inflationary potential, did not rest on stable institutionalised wage restraints.  Its nemesis came in the 1970s when wage pressures spiralled out of the control of the Arbitration Commission.

Coombs, as an adviser and consultant to the Whitlam Government, was fated to witness the destruction as well as the creation of Australia's post-War settlement.  His 1972 appointment as a high-powered economic adviser highlighted Labor's continuing shortage of technical expertise.

The failure of the Whitlam experiment marked a crisis of faith for Coombs.  He was bent on using public-sector institutions to foster social change and yet the collapse of the Keynesian paradigm made this approach seem passé.  Coombs sought to re-energise policy-making by pressing for a more "responsive" style of public administration.  Bureaucrats, he insisted, needed to take account of a range of new lobby groups, including women, arts practitioners, Aborigines and the conservation movement.

The painful split between ministers and career public servants that occurred when Whitlam was Prime Minister troubled Coombs deeply.  As a remedy he recommended the creation of a Cabinet Office to promote "rapport".  This proposed body was to be fully amenable to the ministry of the day.  It was to be composed "for a particular government predominantly of persons sympathetic with their general political philosophy".  It is likely that such an arrangement would have served to further speed up the promiscuous mingling of lobbyists, advisers and career bureaucrats in Canberra.

Rowse's coverage of Coombs' post-Whitlam years is too patchy to allow us to judge in detail if these notions of responsiveness and rapport were as inimical to good governance as any policy of "relevance" tends to be.  It is clear, though, that Coombs caused needless heartache as Chancellor of the Australian National University when, in an effort to get rid of confrontation by caving in to it, he opted for appeasement when faced with a demanding group of modish New Left students.

Coombs was active as a policy advocate, concentrating in his latter decades on indigenous issues and the environment, up until he suffered a serious stroke two years before his death in 1997.  He never experienced a period of idleness mixed with good health in which to reflect calmly on whether any of the changes he was busy forging might have consequences other than the ones he intended.  This is an important question for reformers, past and present, and the stages of Coombs' career are directly pertinent to it, but sadly Rowse's lifeless account seems almost deliberately intended to stifle rather than stimulate ongoing interest in his reforming aspirations.