Economics

Don’t let the title put you off: this book is not purveying social theory but investigates the historical process by which economics became a university discipline in Britain, focusing on how that event changed the nature of economic knowledge. It thus mixes intellectual and institutional history of the highest quality. ‘Constructing’ in the title refers to the cover image of the model built by Vladimir Tatlin and his colleagues of his planned 400-metre tower. Tatlin was a ‘constructivist’ in the sense of the Russian art movement that needed engineers not philosophers. The tower was never realised, much like the ambitions held for economics by Alfred Marshall, its champion at the University of Cambridge, c.1885–1908, who sits at the centre of this book.

In November 2011, amid the Occupy Movement that followed the 2008–9 recession, seventy-odd Harvard students walked out of their introductory economics course taught by Greg Mankiw, author of the world’s bestselling economics textbooks. The students protested that Mankiw’s faith-in-markets economics had little relevance for their crisis-riddled world. The walkout proved more than a campus stunt. Similar protests followed in universities across the world. Senior academics threw in support. New networks and organisations emerged, proposing alternative economics curricula, forums, and ideas. Their aim, as one campaigner put it, was to combat the ‘fantasy world of neoclassical economics – a faith-based religion of perfect markets, enlightened consumers and infinite growth that shapes the fates of billions’.

‘Dick Downing had a keen sense of what would make Australia a better country – for a strongly welfare minded economist – the knack of being in the right place at the right time.’ Thus Nicholas Brown, in his subtle and intelligent account of one of the shapers of Australia in the twentieth century.

In 2007, on the seventy-fifth anniversary of the Great Ocean Road, a bronze statue was unveiled at Eastern View, near Torquay. The statue, titled ‘The Diggers’, depicts two pick-wielding mates, one handing the other a drink. In name and form, the statue memorialises both the World War I Anzacs the road was built to honour and the repatriated soldiers who began constructing it in 1919. But the statue tells only half the story. As the anniversary date indicates, the Great Ocean Road was completed in 1932, at the height of the Great Depression. It provided work not only for returned servicemen, but also for thousands of unemployed a decade later. Many probably worked under both circumstances.

How will the year 2020 be remembered? No doubt the headline event was the coronavirus pandemic, which shuttered schools, factories, and hospitality services, leading to a contraction of per capita income for ninety-five percent of the world’s economies. For Europe, the acrimonious exit of the United Kingdom from the European Union would serve as a stark reminder of how fragile supranational institutions are in the face of popular fury. Following the murder of George Floyd, similar rage at police brutality marked a turning point in the Black Lives Matter movement in the United States, which preceded a combative presidential election that denied Donald Trump a second term. And the world endured one of its hottest years on record, with surface temperatures reaching nearly one degree above the 141-year average as fires burned through Australia and the United States.

Thirty-two years since his death, Colin Clark (1905–89) remains an obscure name in Australia and the discipline of economics. This relative anonymity may strike those who know of his academic achievements as odd, even unjust, as Clark was an outspoken and occasionally brilliant intellectual. A protégé (and later apostate) of John Maynard Keynes, a British Labour party candidate for South Norfolk, a Queensland state statistician, and a scholar at Cambridge, Monash, Oxford, and Queensland, the British-born Clark was a pioneer of national accounting and made numerous contributions to various fields of economics. These were tempered, however, by his ideological conservatism, peripatetic employment, and uneven record of economic forecasting.

The middle class has always been the target audience for the ever-optimistic, benign phrasing of Australia’s economic prospects. It is for them that there runs a vein of exceptionalism that believes no matter what the numbers say, the nation is immune to the dangerous excesses of the American brand of capitalism. This extends to debt. Despite the widely touted fact that we have among the highest levels of household debt in the developed world, we assume that any downturn will be temporary – the next mining or housing boom is just around the corner.

Who was John Maynard Keynes? Was he the bookish Cambridge don who penned ambitious theories to overturn the tenets of economics and political liberalism? Or was he Baron Keynes of Tilton, the ardent imperialist who viewed British rule as a benevolent force bringing justice, liberty, and prosperity to the societies it administered? Was he a meticulous Lothario who kept lists of his hookups with anonymous men on notecards? Was he also a political statesman who lambasted the intransigency of his colleagues during fraught negotiations in two world wars?

A survey conducted in the UK in 2017 asked people whether they trusted the opinions of a variety of experts, such as doctors, scientists, and nutritionists. Economists came second last in a big field, beaten to the bottom only by politicians. How can it be that practitioners of an academic discipline that traces its intellectual history back at least 250 years have sunk so low in popular esteem? It seems that the blame rests not with economists themselves, most of whom are honest and well-intentioned individuals whose main handicap, at least among the males of the species, is their legendary boringness and appalling taste in ties.