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The rise and fall of economics in Australian universities
Economic Papers (Economic Society of Australia), March, 2003 by Philip Maxwell
1 Introduction
The Economics degree emerged during the 1940s and 1950s as a relevant and desirable qualification for young Australians planning a career in the public sector or business. Its appeal was enhanced by the country's strong economic performance in the 25 years after 1945, together with the expansion of the university sector beyond Australia's six original "sandstone" universities, (1) which gained particular momentum between 1965 and 1975. During the past 15 or 20 years a change has apparently been occurring. While the media reports economic measures widely, economics has lost its previous popularity. At one level the practice of "economic rationalism" espoused by certain conservative politicians, and supposedly practised by policy makers in countries such as Australia, has led to an apparent backlash. Many social and political commentators have heaped scorn on economics and economists.
In parallel there has been a longer-term phenomenon described of the "hardening of the discipline" coming up against the "softening in preparation" of students. Associated with this has been the rise of several more fashionable fields of study, which students perceive as being equally or more suited to their vocational needs. These include fields such as marketing, finance, management, information systems, communications and environmental studies
Perhaps the economics discipline has passed its peak and is now in decline. Millmow (1997, p. 88) makes this point more provocatively when he says:
It is now plainly apparent that university economics is, as it were, in the decline stage of the product life cycle; economics major enrolments continue to decline and the forward indicators secondary school enrolments and expressions of interest in doing economics at university are not heartening.
Even though greater research activity in departments provides some substitute for declining funds from teaching, the key to continuing viability remains in enrolment levels.
If recent trends continue, the significant economics departments that existed in almost every Australian university in the mid-1990s, may largely disappear. My argument is that this will not happen. Indeed one of our successors may write about "The Fall and Rise of Economics" 50 years from today. The remainder of this paper has three sections. The second section briefly considers the extent of the rise and decline.
Combining a product cycle perspective with rudimentary demand/supply analysis, the discussion in the third section assesses key factors that have influenced these recent trends. Using this framework the final section optimistically considers how the economics discipline is likely to rise again.
2 The Extent of the Rise and Fall
Following the establishment of Economics degree programs in British universities in the early 1900s, it was possible by the 1930s to study economics in Australian universities, though relatively few students did so. The events of the Depression elevated economics to centre stage. The influence of Keynes with his solutions to the ubiquitous problems of unemployment and stagnation in The General Theory caught the public's imagination. The subsequent appearance of Samuelson's Economics and parallel Principles texts played an important role in popularising economics to a greatly expanded population of university students. The central place of economics courses in Commerce and Economics degree programs, combined with effective first-level teaching and good Principles texts, encouraged students to complete economics majors as part of their studies. Writing in this journal, Abelson and Valentine (1985, p. 2) commented that
The number of economists in Australia has grown in leaps and bounds since 1945. Before the war, a handful of economists taught at the major universities and a small group of economists worked in the Commonwealth Government and in private industry. By 1981 there were over 18,000 employed persons with an undergraduate or postgraduate degree in economics.
Yet, if recent trends are a guide, the early to mid-1980s may have been the height of the influence of the economics paradigm. One indicator of the status of the discipline can be seen in terms of the full-time academic staff levels in Australian University Economics departments in selected years between 1956 and 2000, shown in Table 1.
There was continued growth in the number of, and staffing in, economic departments between 1956 and 1989. A steady state followed until 1995, as former CAE departments gained university status. In that year, 30 separate economics departments employed approximately 650 economists, with the eight remaining universities having about 60 more. (2) By 2000 there were again only 24 separate economics departments employing an estimated 535 full time academic staff. Approximately 100 economists lectured in the other fourteen universities. A net group of between 60 and 70 economists had left the university system.
In late 2001 eight large departments (with 30 or more full-time academics) accounted for more than half the total. There were nine middle-size departments (with 14 to 25 full-time academics) and nine small departments (with establishments of between 5 and 12 full-time academic staff). The size of the large departments appeared to remain stable during the 1990s but there was decline in several of the middle-sized and small departments.
