• John Singleton with Arthur Grimes, Garry Hawke and Frank Holmes
• Auckland University Press
There is daunting physicality to this book that will frighten off most business leaders who should indeed tackle it. And yes, it is at times heavy going, but not half as heavy as it feels.
Central banks like our Reserve Bank are, indeed, central to our lives. Mostly we are unaware or disinterested in just how central they can be – at least until inflation or exchange rate fluctuations kick in. But take look at extreme examples of how politics and abused central banking manipulation can run amok, such as Zimbabwe, and you get the picture.
New Zealand, of course, had its own less extreme but nevertheless crippling example of the impact of political pig-headedness versus considered central bank management. We called it Muldoonism, back in the late 1970s and early ’80s. And this book provides documented and researched revelation, explanation and evaluation of just why we ended up with markedly better central bank and more constructive supporting legislation now than we had then.
It took something approaching an economic and social catastrophe to change the way New Zealanders thought about the economy. Now, with almost 20 years of sensible management of monetary policy under our belt, it is time to remember why things are the way they are. Reminders and explanations are important because it is too easy for politicians, in particular, to forget and bend to vested voter interests that want to tamper.
The Reserve Bank was, unquestionably, at the forefront of enlightened economic thinking when things hit the wall back in ’83 and it responded, thankfully, as the book’s title suggests, innovatively and independently. Now we have central bank that, whatever the critics say, delivers positively to the New Zealand economy.
The economist authors of the book tell an important story in surprisingly easy-to-digest terms and language. It is, obviously, an academic history – but it is equally an invaluable one that is entertainingly
illustrated with compelling social cartoon commentary.
Understanding the critical economic role of an independent and thoughtfully managed central bank should be every top manager’s mission. The painful experience of the Muldoon years proved to be the strongest argument for adopting central bank autonomy in the late 1980s. But, as politicians who prefer to tinker with our lives know, hard learned lessons are soon forgotten and that can provide opportunities to indulge personal power yet again.
This book is worth the effort it takes to read. It is also written well enough to score three out of five.