A Modest Member of Parliament [Bert Kelly], “The accent is on the indicative,” The Australian Financial Review, April 23, 1976, p. 3. Republished in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 142-43, as “Indicative Planning.”

Mavis nurtures the delusion that a ministerial reshuffle is imminent and she keeps trying to edge me into the limelight.

When she discovered that the Prime Minister and Eccles did not agree about tariffs she has been desperately searching for some other economic hare which I could chase and she has come up with Indicative Planning.

She admits that she doesn’t know what it means but it has a nice rounded sound about it and she knows it won’t make Mr Fraser cross.

When I tried the idea out on Eccles he snorted and said nasty things about Indicative Planning. Evidently there are two kinds of Government planning. The first is Imperative Planning, in which the Government tells you what to do and you have to do it. This is the kind of planning they have in Russia and it doesn’t seem to work very well.

But in Indicative Planning, the Government and industry sit around together and discuss their problems and then indicate what the targets for each industry should be. It all sounds so sensible, and I could see why Mavis was so keen on the idea. She thinks that anyone espousing so responsible a course would swiftly emerge from the ruck and be made a minister immediately.

But when Eccles had shredded the idea through his mean little mind Indicative Planning looked rather different. Its first problem is that governments are no better than private citizens at foretelling.

When I first entered Parliament Fred watched me with eager interest, not because I was shortly to become Prime Minister, but because I would be close to the centre of things and would get the best advice as to what would happen to the market for our products. I found Fred’s interest flattering and I told him all that the Government machine told me, and when I sold cattle so did Fred.

But things are different now. Fred still watches every move I make on my farm, but now when I sell cattle he buys! Long and bitter experience has taught him that governments are just as fallible as the rest of us.

Eccles says that if any Government servant was able correctly to foretell the supply and demand situation for any product a year or so ahead he would not for long be working for the Government but he would shortly be sitting in the south of France with his feet in a bucket of champagne!

But not only is the advice that governments give likely to be wrong because it is given by humans, it is also likely to be wrong because it is given by governments.

For instance, if the Government were to say that the future price for barley was going to be high then many farmers would switch to barley and the supply would rise, so the price would fall.

The Government’s voice is so loud that many people listen to it and so its advice would tend to be self-defeating. Even if it were right at the beginning it is likely to be wrong at the end.

But even if the Government was right, as indeed it must sometimes be, there is still a danger in the Government telling farmers what the future holds.

Let’s assume again that the Government told the farmers that the price of barley was going to be at a level that would return a profit and this advice was correct. There would still be a hidden danger.

In my electorate my farmers are uniformly excellent, but in other less worthy areas about a third of the farmers will be good at their job, a third average and a third poor.

But if the Government suggested that farmers should switch to barley, then the bad third who were losing money because they weren’t good at growing barley would come grizzling to the Government saying, “You got us into this mess, now you look after us.”

The Government tried this in 1930 with the Grow More Wheat Campaign and the sores still hurt.

The dairy industry is in a mess at the moment and even Eccles hasn’t got any easy solutions. Some very responsible groups say that what they want is not Government hand-outs, not subsidies that encourage dairy farmers to grow more and more of what the world needs less and less as the old butter bounty did, but they ask that the Government tell them what should be the size of the national dairy herd, and when they know that, the industry will make the necessary painful adjustments.

But Eccles says that the Government should not tell the industry this for two reasons: it would almost certainly be wrong; and even if it were right, it would still be dangerous.