The Power of Economic Ideas: The Origins of Keynesian Macroeconomic Management in Interwar Australia 1929–39

Description

Economics, Keynes once wrote, can be a ‘very dangerous science’. Sometimes, though, it can be moulded to further the common good though it might need a leap in mental outlook, a whole new zeitgeist to be able to do so. This book is about a transformation in Australian economists’ thoughts and ideas during the interwar period. It focuses on the interplay between economic ideas, players, and policy sometimes in the public arena. In a decade marked by depression, recovery and international political turbulence Australian economists moved from a classical orthodox economic position to that of a cautious Keynesianism by 1939. We look at how a small collective of economists tried to influence policy-making in the nineteen-thirties. Economists felt obliged to seek changes to the parameters as economic conditions altered but, more importantly, as their insights about economic management changed. There are three related themes that underscore this book. Firstly, the professionalisation of Australian economics took a gigantic leap in this period, aided in part, by the adverse circumstances confronting the economy but also by the aspirations economists held for their discipline. A second theme relates to the rather unflattering reputation foisted upon interwar economists after 1945. That transition underlies the third theme of this book, namely, how Australian economists were emboldened by Keynes’s General Theory to confidently push for greater management of economic activity. By 1939 Australian economists conceptualized a new theoretic framework from one which they advanced comments and policy advice. This book therefore will rehabilitate the works of Australian interwar economists, arguing that they not only had an enviable international reputation but also facilitated the acceptance of Keynes’s General Theory among policymakers before most of their counterparts elsewhere. Acknowledgments Lists of abbreviations A word on the artwork Preface 1. The triumph of the economists? Part I. Backing into the Limelight: the Interwar Australian Economics Profession 2. Economic ideas and an assessment of Australian economists in the 1930s 3. The Australian economy during the Depression decade 4. The interwar Australian economics profession Part II. Triumph and Tribulation 5. The Premiers’ Plan and the economists 6. The agonistes of the economists, 1931–1932 7. The Australian recovery, 1933–1936 Part III. The March of Keynesian Ideas 8. The Royal Commission on Monetary and Banking Systems 9. Australia, 1936–1938: the nascent Keynesian state? 10. The economics of near-war Dramatis personae Bibliography