In countries such as America and Australia aspirations have always been high. But in recent times in Australia there has been a tendency for current expectations to rise beyond the limits of current resources. Once expectations and demands become excessive serious economic problems, conflict, disillusion become inevitable.

In Australia we have been suffering from severe inflation and exceptional unemployment. These occurred because of the attempt to simultaneously meet demands for excessive government programmes and excessive wages and salaries. Massive and sudden transfers of resources to these areas led to the highest unemployment since the great depression of the thirties.

Clarifying what is possible within our current resources is a vital task for politicians. Improving our understanding of, and our capacity to be effective within the limits imposed by reality, is also an important role for universities.

This brings me finally to the challenge to democratic leadership in the kind of world our universities are helping to create.

Despite the problems I have been discussing it is obvious that democratic political institutions have exhibited remarkable capacity to adapt to change. Ultimately however institutions depend for their survival and respect on the quality of the men who hold office within them.

The more rapid social change is, the more complex issues become, the more essential it is for democratic politicians to explain the problems they face clearly and realistically.

The constant search for the easy way out, promises which win votes but cannot be fulfilled, destroy democracy. Democracy ultimately depends on the understanding and goodwill of the people, and democratic politicians are among those who bear the responsibility for explaining reality and expanding understanding.

They in their turn need the tools for this task. They need the knowledge and understanding that it is in part a responsibility of the universities to generate.

I have commented on the unparalleled burst of knowledge in the physical sciences and the unmatched power that they have placed in the hands of politicians. It seems man can do almost anything so long as it involves technology. But it is in our understanding of society that we are now desparately in need of new knowledge.

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Scientific knowledge has placed unparalleled power in politicians' hands. Our capacity to see that it is used for good is scarcely better than it would have been if man had possessed that power two thousand years ago. Our criteria for judgement are still so often inappropriate to the circumstances. What does this say of the way in which we have pursued learning and understanding? What we need more than anything is an adequate recognition of ourselves.

This may sound a very pessimistic view. I believe that the reverse is the truth. To understand and respond to present and future challenges is a major task of politicians. The paradoxes of our time are great. The possibilities of our time are unlimited for advancing mankind through the uses of our resources in humane and realistic ways.

We need to establish an environment in which respect for institutions and the way they operate, for the manner in which politicians go about their business, leads to moderation and reason in public debate, where violence and the extreme view are rejected, where rational argument can predominate. We need to have it understood that extreme ways of pursuing objectives degrade the spirit of our democratic institutions. We need it understood that progress and reform can be achieved through moderation, that democracy is strong when people deal rationally with each other, with compassion, without hatred.

Universities do not exist in isolation from the larger society. The values they teach or assume, the knowledge they produce will profoundly affect the future.

If the Chair endowed today can contribute something to this broader purpose Australia will be well satisfied.