Macroeconomics and the Pursuit of Ruralism

This chapter looks at Colin Clark’s growing disconnect with conventional economics, including proposals for a rural nirvana and opposition to tariff protection and wage rigidity. Clark disagreed with post-war planners’ dreams of an industrial Australia and considered that prospects of becoming a net exporter of manufactures unrealistic given prevailing conditions. Clark wanted Australia to reduce its tariffs to kill off inefficient industries and free resources for more productive ends. In 1942 Clark became the unofficial economic advisor to B. A. Santamaria and his National Catholic Rural Movement (NCRM). Consistent with the NCRM’s philosophy, he proposed an extraordinary migrant co-operative land settlement plan for Queensland. It envisaged the formation of settler co-operatives to allow the creation of farming communities supporting some 250,000 European settlers on the agricultural and pastoral areas of the state. Given his belief that Australia’s inflation problem was due to excessive taxation he favoured lower public spending, especially on welfare. Higher taxes simply led to demands for higher wages which employers would willingly grant. This meant that wages rose faster than real production, causing prices to rise and perpetuating inflation.