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Giblin, Lyndhurst Falkiner (1872–1951)

by Neville Cain

This entry is from the Australian Dictionary of Biography

Lyndhurst Falkiner Giblin (1872-1951), by William Dobell, c1945

Lyndhurst Falkiner Giblin (1872-1951), by William Dobell, c1945

University of Melbourne Archives, UMA/I/1026

Lyndhurst Falkiner Giblin (1872-1951), political economist, was born on 29 November 1872 in Hobart, son of William Robert Giblin, barrister, and his wife Emmely Jean, née Perkins. Educated at The Hutchins School, Hobart, and University College, London, he entered King's College, Cambridge, in 1893, graduating senior optime (mathematics and science) in 1896 (M.A., 1928). He rowed for King's but excelled at Rugby Union, representing not only his college and university but England too. Revisiting King's in 1938, an extraordinary career behind him, he was elected to an honorary fellowship and given the use of Keynes's rooms. When Giblin died the college established a studentship in his name.  

After coming down from Cambridge he and a fellow Kingsman joined to prospect for gold in the Cassiar-Stickine district of North British Columbia. The isolated life, if at times adventurous, was always harsh and ultimately meagre of reward; it was essential to work as lumberman, teamster or boatman to help pay one's way. Giblin's correspondence from this period conveys the deprivation, the routine and the eccentric acquaintance of his mining existence. In 1904 he joined the crew of a schooner bound for Australia, but the same year found him once again in London, where inter alia, he helped to teach ju-jitsu. After visiting a Solomon Islands plantation in 1905 he returned to Hobart and set about establishing an orchard. He also taught mathematics and explored Tasmania's high country, measuring more precisely certain peaks. In April 1909, bristling with criticism of his State's recent financial past, Giblin unsuccessfully contested the seat of Franklin as a Liberal Democrat. He then joined the Labor Party, gave elementary lectures to branches on economic subjects, and made his way to the State and Federal executives. In 1913 he won the State seat of Denison. When Labor took office Giblin gained a reputation for independence. He became unofficial adviser to the treasurer Joseph Lyons, persuading him of the need for an inquiry into the public debt. Upon the dissolution of the assembly in 1916 he did not seek re-election.

From March 1909, when he had been commissioned a lieutenant of the Intelligence Corps, Giblin had been active in the citizen forces. In January 1914 he became captain and during 1916 transferred to the 40th Battalion of the Australian Imperial Force. He was wounded at Armentières and Messines, and won the Military Cross in August 1917. Recovered, and promoted major, he fought in the third battle of Ypres, Passchendaele and on the Somme. He received the Distinguished Service Order on 3 June 1918, but a third wounding on 24 August at Bapaume removed him from the war.

Late in 1919 Giblin was appointed Tasmanian government statistician. He enlarged the office, extended the range of its data gathering, and became a protagonist of uniformity in State collections. Resuming the role of adviser to Lyons, he also drew close to two economists, (Sir) Douglas Copland and J. B. Brigden, and in 1924 helped form the Economic Society of Australia and New Zealand. He had Brigden's support in preparing Tasmanian claims for special grants under Section 96 of the Constitution. In 1927 these two, with Copland, Edward Dyason and the Commonwealth statistician, Charles Wickens, were appointed by Prime Minister Stanley Melbourne (Viscount) Bruce to investigate the Australian tariff. Their report, which attracted international notice as a major work in applied economics, appeared in 1929, when Giblin also took up the new Ritchie Chair of Economic Research at the University of Melbourne. Although Giblin was without formal economic learning, his intellect, varied experience and mathematical background ensured him prominence in a local profession which had yet to mature.

In the second half of 1930 he joined with Copland and Dyason to present the 'Melbourne' approach to Depression policy. Always closely in touch with Labor politicians, particularly Lyons and Edward Theodore, in 1931 Giblin became an observer at government-bank talks and Loan Council meetings. From April 1931 to December 1932 he acted as Commonwealth statistician in Wickens's absence, prepared the census of 1933 and served upon various advisory bodies—most notably the Copland Committee, whose report underpinned the Premiers' Plan; the Unemployment Secretariat Sub-Committee; and the (Sir) Wallace Bruce Committee. In 1933 Giblin became a founding member of the Commonwealth Grants Commission, which he left in 1936, having accepted, in October 1935, a seven-year appointment to the board of the Commonwealth Bank. His sojourn abroad in 1938 was followed, in December, by the chairmanship of a small informal committee, with (Sir) R. Wilson and (Sir) L. G. Melville as its other members, which examined certain economic implications for Australia of early Japanese participation in the conflict then threatening. After war with Germany broke out, this body, now designated the Commonwealth Advisory Committee on Finance and Economic Policy, was augmented first by Brigden and Copland, then by H. C. Coombs, (Sir) E. R. Walker and (Sir) Harold Brown among others. It filled a brains-trust role in relation to economic aspects of the war effort, and did much to create the intellectual framework within which post-war economic problems were considered. From the close of 1941 an elaborated departmental structure absorbed its tasks, but it survived formally into 1947. Then Giblin turned more fully on his history of the Commonwealth Bank, published posthumously in 1951.

He achieved eminence in Australian political economy as a relatively old man. Acquaintances were to recall a large, sagging figure of quiet presence, the head close cropped, the cheeks high, the attire eccentric—homespun trousers and jacket, improvised tie, stout boots dubbined rather than polished—and the mouth clamping an ancient pipe. Friends remembered a man sane, reposed, vastly commonsensical, wryly humorous. Giblin's writings, plain of style but leavened occasionally by a striking image, reveal two characteristics: first, a disdain for pure 'theory'; and second, an alertness to those economic distortions likely in a democracy—with which, in turn, was associated a keen sense of the politically possible. Although a fine intuition and feeling for relevant magnitudes took him far, it is arguable that he might have accomplished even more had he been less self reliant, less confident of teasing coherences from a commonsensical purview of the facts.

Giblin won professional renown in the fields of Federal finance, tariff policy, employment analysis, Depression diagnosis, and post-war economic management. He resisted the idea that Federal assistance under section 96 of the Constitution be rationalized in terms of 'disabilities' imposed upon underpopulated rural States by Federal tariff, wage and navigation policies. Aside from noting the difficulty of measuring usefully the costs of Federal policy, he argued that claimant-State disabilities were more general anyway and that the criterion for special grants should, accordingly, be relative financial need. But in relation to raising and spending money a claimant State should exhibit, by the standards of the Federation, a better-than-average record. Giblin's ideas achieved their fullest expression in Appendix J to The Case for Tasmania, 1930. Before this he had touched upon Federal finance in his presidential address to the Economic Society of Australia and New Zealand (1926) and, with Brigden's assistance, in a memorandum to the royal commission on the Constitution (1929). He had also estimated differences in the taxable capacities and fiscal efforts of the States and regularly updated the figures. By 1936 the Grants Commission was pursuing principles much along the lines he had advanced in 1930. Moreover, in 1938 he presented to the Rowell-Sirois Commission in Canada evidence which influenced post-war arrangements there for fiscal equalization.

Whatever the burden of tariff policy upon rural States, Giblin followed Brigden in claiming that it had bestowed advantages upon the great bulk of the Federation's citizens: it had reconciled two apparently inconsistent ambitions, to grow in population and to preserve the real wage. Thus the 1929 tariff report maintained that protection had supported real wages at the expense of rural rents, thereby sparing labour the normal consequence of its own increase. In contrast with the loose a priori reasoning with which Brigden had earlier defended protection, the report relied upon an empirical-statistical approach owing much to Giblin, and hinged upon the idea of protected activities being more labour intensive than those promoted by free trade. The argument, in places unsatisfactory, provoked debate about the tariff and income redistribution which culminated in the Stolper-Samuelson theorem of 1941. Giblin drew attention to the growth of certain rural assistance which in contrast with aid to manufacturing was not monitored by a board responsible to parliament, and he wrote with irony of a future which dispensed 'protection all round'. He also observed that the efficiency cost of the manufacturing tariff would fall with any sustained deterioration of the terms on which Australia sold its major rural exports. In 1930 he forecast such a decline, and in 1936, after several years of low export prices, claimed that Australia's contrived industrial development of the 1920s had in proportion (if accidentally) paid off.

In 1930, about a year before the 'multiplier' article by Kahn which was to contribute so vitally to Keynes's General Theory of 1936, Giblin applied a geometric series to the analysis of fluctuations in income and employment. He showed how the repercussions of dwindling export income and capital inflow would not, as intuition suggested, ramify without cease; rather they would, owing to leakages from the expenditure stream, sum to a finite value. His multiplier, expressing the ratio between initial change in external receipts and ultimate change in real income, was a function of spending leakages into imports and exportables. Certainly Giblin's exposition, confined to the foreign-trade variant of the multiplier, was less sophisticated than Kahn's; but it did portray an income mechanism of trade-balance adjustment which Kahn was to miss and which foreshadowed extensions of Keynes's 'closed system' of 1936 to the open-economy case. In any event his concept informed 'Melbourne' economic advice through 1930-31, and Theodore exploited it in his policy recommendations. Only slowly did Giblin draw upon Kahn's insights and he showed little interest in the more general implications of multiplier analysis for contemporary monetary debate.

Addressing himself to the collapse of Australia's external income in 1929-30, and presuming that overseas debt obligations would be met in full, Giblin argued that the only way of avoiding secondary effects upon income and employment was to modify appropriately the distribution of national expenditure between home and foreign goods. Early in 1930 he favoured a broadly gold-standard solution in which the domestic wage-price level, not the exchange rate, bore the burden of expenditure-switching. Accordingly, he sought to persuade workers that a wage-cut was in order. But then, as the Depression deepened, he came to share Copland's and Dyason's liking for domestic price stability and joined them in articulating a 'middle course' which comprehended 'inflationary' as well as 'deflationary' initiatives. Now, from exchange depreciation, credit creation and money-wage cuts, was to flow relative cost improvement in a setting of domestic price stability, while special taxation would ensure that rentiers shared in national loss. Such a policy, it was believed—along with a hoped-for improvement in export prices and an effort to lift efficiency all round—would promote recovery. Although direct action to reduce budget deficits was seen as integral to the task of keeping national spending within national means, it was also appreciated that fiscal balance must be in some degree a function of recovery itself. Inevitably Giblin approved the exchange and wage adjustments of early 1931, and the premiers' mid-year budgetary plan; but he also, as the Depression persisted, came to take a softer line on government spending. Here, however, an appreciation of Australian realities tempered a developing intellectual conviction, and he remained wary of bold proposals.

After 1941 the Finance and Economic Committee gave increasing attention to the post-war prospect. In particular it deliberated Australia's response to Article VII of the Mutual Aid Agreement. A central idea was that full employment would be compromised by balance of payments problems should major industrial countries not be committed similarly; Australia must at once urge the objective upon other countries and retain her freedom of action in relation to the exchange rate and the tariff. In 1943-45 Giblin wrote more generally upon the problems of reconstruction. Unlike some others he anticipated high employment as a result of delayed spending plans, and was apprehensive of related inefficiencies. He doubted the will of politicians not only to discriminate among investment projects but also to eschew inflationary finance; and he was fearful, too, of intransigent income bargaining by organized interests. Moreover, even if the employment ideal were spared such domestic follies the external constraint would remain. Failing, with many others, to anticipate the strength of post-war demand for Australian exports, he became anxious about the wherewithal for imports needed to keep domestic industries going. Finally, his opinion reputedly was influential in the adoption first of the 'special accounts' arrangement for controlling trading bank liquidity, and second, of two per cent a year as a realistic estimate of population growth upon which to premise reconstruction policy.

Giblin died on 1 March 1951 in Hobart, survived by his wife, Eilean Mary, née Burton, whom he had married on 29 July 1918 in London. He had no children. His estate was valued for probate at £9897 in Tasmania and £4408 in Victoria. A portrait by William Dobell hangs in the University of Melbourne.

Select Bibliography

  • S. J. Butlin, War Economy, 1939-42, vol 1 (Canb, 1955)
  • D. B. Copland (ed), Giblin, the Scholar and the Man (Melb, 1960), and for bibliography
  • C. B. Schedvin, Australia and the Great Depression (Syd, 1970)
  • R. L. Mathews, State and Local Taxation (Canb, 1977)
  • S. J. Butlin and C. B. Schedvin, War Economy, 1942-45, vol 2 (Canb, 1977)
  • W. Prest and R. L. Mathews (eds), The Development of Australian Fiscal Federalism (Canb, 1979)
  • Economic Record, Nov 1952
  • Stand-To (Canberra), Aug-Sept 1952
  • Australian Economic Papers, June 1973
  • Australian Economic History Review, Mar 1980
  • Giblin papers (MS 366, National Library of Australia).

Citation details

Neville Cain, 'Giblin, Lyndhurst Falkiner (1872–1951)', Australian Dictionary of Biography, National Centre of Biography, Australian National University, http://labouraustralia.anu.edu.au/biography/giblin-lyndhurst-falkiner-6303/text10871, accessed 21 November 2017.

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