Arndt vs. Mortimer: Clash of the Dominant Strands of Australian Developmental Thought

by Contributing Writer Nicholas Ferns
Throughout 1972, a series of seminars were held at Monash University in Melbourne to examine “Indonesian society and politics” under the Suharto regime. Organized by the Monash University Association of Students, these seminars resulted in the publication of Rex Mortimer’s Showcase State. (Mortimer would go on to produce similar analysis of the development of Papua New Guinea.) Informed by the burgeoning field of dependency theory, Mortimer and his colleagues critiqued the dominant orthodoxy of Australian scholarship on economic development. A particular target of Mortimer’s analysis was Heinz W. Arndt, a leading developmental economist and head of the Australian National University’s Indonesian Economy Project.
According to Mortimer and his fellow dependentistas, Arndt and other orthodox developmental economists were affiliated with the American ‘end of ideology’ school, closely associated with Walt Rostow’s modernization theory (Gilman, 16). For Mortimer, Arndt was “to a greater degree than most Indonesianists in Australia, and most Indonesian intellectuals outside the governmental in-group… highly optimistic about the progress of Indonesia’s Western-conceived development effort.” (121) In contrast, Mortimer suggested:

The division of the world into countries that are growing relatively richer and countries that are growing relatively poorer is not simply the product of some historical accident … but constitutes a network of interactions which is systematically enforced by the wealthy club. (129)

This critique illustrated the divisions within the two dominant Australian understandings of economic development that emerged in the late 1960s and early 1970s.
Heinz Arndt and Rex Mortimer emerged as the respective voices of the ‘orthodox’ (modernization) school and the ‘critical’ (dependency) school. Arndt, whose family had escaped Nazi Germany in the 1930s, steadily moved towards what could be considered a conservative understanding of economic development. By the late 1960s, he was heavily involved in the Australian National University’s Indonesian Economy Project, which placed him in a position to assist the Department of External Affairs in their provision of aid to Indonesia.
Rex Mortimer provided an interesting contrast. A young communist who unlike Arndt never really lost his radicalism, Mortimer was a late entrant into academia. Studying under Indonesia expert (and Volunteer Graduate Scheme pioneer) Herb Feith at Monash University, Mortimer was drawn to the radical ideas of development scholars such as Andre Gunder Frank and Dudley Seers.
Between 1945 and 1975, two schools of thought defined Australian developmentalism. The first, which emerged from the work of Eugene Staley and Paul Rosenstein-Rodan in the mid-1940s, emphasized the role of government policy in driving economic growth, which would thereby facilitate the development process. For these theorists, increased production needed to be actively encouraged in order to safeguard the welfare of poorer peoples. This growth-centric model assumed a level of orthodoxy throughout the 1950s and 1960s, manifested most clearly in the work of West Indian born-British economist, W. Arthur Lewis, and American modernization theorists such as Walt Rostow.
In Australia, this approach was epitomized in the immediate post-war period by John Crawford and Douglas Copland, and then later by Heinz Arndt. Arndt’s analysis broadly adhered to the modernization school, and would come into conflict with the more radical approach of scholars such as Rex Mortimer later in the decade. Department of External Affairs officials were particularly drawn to these ideas in the 1950s and 1960s, and the growth-centric approach influenced early post-war aid policies, particularly the Colombo Plan and the Paul Hasluck period in PNG.
The second school of developmentalist thought revised the Western-oriented, growth-centric assumptions of Rostow and his international counterparts. From the 1950s onward, economists challenged the orthodox position, arguing that developmental policy brought benefits not to the poor, but rather to those already in a position of economic and political power. Raul Prebisch developed the earliest iteration of what eventually became known as dependency theory in 1950, and by the mid-1960s the notion had taken hold (Arndt, 120). One of the earliest demonstrations of the political power of dependency theory was the 1964 UN Conference on Trade and Development (UNCTAD), which posed significant challenges to Australia’s previous conception of its own developmental position. By the late 1960s, dependency theory attracted an Australian following, most evident in the work of Rex Mortimer. As seen in the anecdote that begins this essay, Mortimer particularly challenged the optimism of the growth-centric developmental orthodoxy.
Mortimer’s ideas appealed to non-governmental organizations (NGOs) that sought to supplement official aid programs. The most prominent of these was the Australian Council for Overseas Aid (ACFOA), an umbrella organization that directed the work of dozens of development NGOs. (Jemma Purdey (362-364) discusses the power of Mortimer’s ideas with ACFOA member organizations such as Community Aid Abroad.) As the government persisted with large programs that supposedly promoted economic growth, ACFOA became more firmly convinced of the need to tackle the causes of poverty at a grassroots level (Sutherland, 68, 180). While there were pragmatic reasons behind the growing distance between ACFOA and the Department of Foreign Affairs, including the absence of official financial support, differences over developmental ideas were pivotal in separating the two institutions (Kilby, 132). The contrast between ACFOA’s approach and the departmental adherence to the orthodox growth model was more powerful than the political forces that drew them together.
Ultimately, the challenge of the dependency school faded away relatively quickly. Mortimer’s untimely death from cancer in 1979, combined with a broader shift in international economic thought, ensured that the orthodox emphasis on growth remained most influential in aid policy-making. Despite this, the challenge posed by Mortimer and his colleagues complicated Australian attitudes towards development for well over a decade.
Dr. Nicholas Ferns recently completed his PhD at Monash University. His research examines postwar Australian foreign aid and colonial administration policies through the lens of development. He is also more broadly interested in the study of Australia in world affairs, with a particular interest in US-Australian relations. He tweets @nickjohnferns .