Fred Gruen

Fred Henry George Gruen (14 June 1921 – 29 October 1997) was an Australian economist, an early and influential voice in favour of free trade and tariff reductions in the 1960s and 1970s.

Grün was born in Vienna, Austria, and known as 'Heinzie' during his boyhood.

He left Vienna in 1936 on the £200 legacy of an uncle to receive an English education at Herne Bay College.

It was a good time for someone of Jewish descent to be leaving Austria.

His father Willy, a heavy smoker, died of lung cancer while he was at school in England and his mother Marianne (née Zwack) was engulfed in The Holocaust being taken first to Theresienstadt and thence to Auschwitz after which she was not seen again.

Gruen was unsure of what to do with himself after leaving high school.

With consequences that would ramify at the end of his life, he worked for some time for a printer.

In the same speech in which he promised to "fight on the beaches" Churchill announced widespread internment.

"I know there are a great many people affected by the orders which we have made who are the passionate enemies of Nazi Germany. I am very sorry for them, but we cannot, at the present time and under the present stress, draw all the distinctions which we should like to do."

Gruen was one such.

He was interned and shipped to Australia in the HMT Dunera, a boat that became famous for the talent it brought to Australia and for the unpleasantness with which its human cargo was treated.

They encountered a more relaxed attitude in Australia – one guard summing up the character of the 'friendly enemy aliens' and famously asking one of them to hold his rifle while he lit a cigarette.

Still, they were transported to a camp in Hay, a remote town in NSW.

Both on the boat trip to Australia and thence at Hay, Gruen benefited from the ubiquity of highly educated fellow inmates from musicians to philosophers of considerable standing in Europe.

These people became mentors, and Miss Margaret Read (later Mrs Margaret Holmes) of the Student Christian Movement assisted Gruen and others in accessing books and other University resources for study.

Gruen graduated from the University of Melbourne, though, given the difficulty he experienced studying – either in the camp or in war service (on one occasion not knowing if he would receive permission to sit the exam until two months before it was held) – Gruen described the results he achieved as mediocre.

After the war he married Ann Margaret Darvall in May 1947.

He commenced work as a graduate at the NSW Department of Agriculture, but it became clear to him that he could not get adequate training in Australia.

So the couple went to the United States.

He studied there for two years, first at the University of Wisconsin–Madison and then at the University of Chicago; five members of that university's economics department present at the time would go on to win the Nobel Prize in Economics.

Though he completed the examinations for his PhD, Gruen did not finish the degree as the intensity of his study led to a serious thyroid condition.

Without drugs that had been developed shortly before then, the condition would have been life-threatening.

However, it was successfully treated and its only legacy for the rest of his life was the exemplary balance Gruen kept in his life.

He worked hard and productively, but not obsessively for the rest of his life.

Returning to Australia he worked for 12 years in the NSW Department of Agriculture where he met, assisted and was assisted by many young people who later made their marks in agricultural and other areas of economics.

His sons David and Nicholas were born in August 1954 and April 1957 respectively.

In 1959 he moved to a research position at the Australian National University (ANU) in Canberra for five years under T. W. Swan (of Solow–Swan growth model fame) and thence to Monash University in Melbourne to become Professor of Agricultural Economics in 1964.

Gruen's achievements in nine years at Monash include leading a major long range forecasting study on Australian agriculture funded by the US Department of Agriculture.

It set-off the Australian 'tariff compensation' debate in the late 1960s.

Though John Freebairn subsequently tested its price projections for 1970 and found them "neither significantly more or less accurate than the naïve model price forecasts" the study achieved worthwhile technical advances which later contributed to the building of Australia's ORANI model mostly at Monash University.

Probably the most influential paper Gruen wrote during this period was never published.

The arguments were taken up in the 1970s generating considerable professional interest and controversy.

Gruen pointed to the way in which tariffs for manufactures imposed costs on export industries, particularly agricultural industries.

As an early and strong advocate of lower levels of industry assistance, Gruen's point was not to advocate additional assistance for farmers so much as to challenge the idea that farmers might have low levels of assistance removed before manufactures had higher levels of assistance removed.

He caviled at the "attitude ... that anything any farm pressure group asked for was ipso facto unjustifiable".

Gruen then commissioned Professor Peter Lloyd to write the survey of Australian economics of protection which would survey the tariff compensation debate.

Gruen also published a theoretical curiosity with Max Corden in 1970 "A tariff that worsens the terms of trade", though it was focused on a specific policy problem.

In response to growing unease at Monash University, Gruen attempted to engage with the more reasonable student radicals and set up complaints mechanisms.

Lloyd had been one of Gruen's main opponents in the tariff compensation debate and his survey argued that the case for tariff compensation had been overstated – including in a Green Paper on Rural Policy in 1974 of which Gruen was a co-signatory.

Gruen later agreed with Lloyd's analysis on the point.