A Legacy of Choice: Economic Thought and Social Policy in Australia, the Early Post-War Years

Abstract

This paper reports on aspects of research towards a PhD thesis on the history of economic thought and social policy from 1945-1966. Other aspects of the research have examined historical writings dealing with the 'Keynesian Reception' in Australia to 1945 in the light of my own reading of the literature published by professional economists during the war [see Smyth (1988)]. Nearly all the historical writing on the 'Reception' has emphasised the consensus which obtained within the profession regarding the new economics. Some also claim that liberal political principles, refashioned in the 1930s, were embedded in the Keynesian analysis and diverted the labour movement from socialist theoretical goals. A reading of E R Walker, D B Copland, H C Coombs, G Firth and Bruce Williams suggests that this 'consensus' concealed a significant diversity. The enlarging economic responsibilities of government since the Depression heightened uncertainties about the fundamental premises of neoclassical market economics causing some to attempt a revival of a 'political economy'. Even those who remained within the neoclassical tradition differed strongly over the potential scope of government intervention because of their contrasting social and political ideas and values. If 'consensus' is to remain a useful term for the period of the 'Keynesian Reception', these strands of diversity must be recognised if the postwar developments in economic thought and social policy are to be fully understood.