Great News from Canberra for the History of Economics

Recently, the Australian Bureau of Statistics initated a move to transfer Economic History and the History of Economic Thought from the classification of Economics into a miscellaneous groupong including philosophy and Religion.

This was regarded by scholars in these fields as an appalling misjudgement on the part of ASB. Apart from any career implications such as in academic appointments, promotion, teaching, research grant awards and the recruitment of students (plus concerns about 'tenure', which was not a concern of mine having refused tenure during my professorial career on grounds that it is 'protectionist', as in the old Guild systems), there were serious concerns that the ASB proposal represented a complete misunderstanding by data processsors in a government statistical function of the intimate and integrated nature of economic history and the history of economic thought in the broader discipline of modern economics.

It would have separated what is presently modern neoclassical economics, with its largely mathematical content, from the rich theory of economics as it developed from the 18th century (and earlier), and which has recently turned the subject into the study off 'fairy stories' about purely abstract mathematica economies without any contact with the real world.

Advising countries on development on the assumption, say, of infinite velocity of the key variables, when in fact history shows that development is a far more complex, 'slow and gradual', as emphasised by Adam Smith, process that is closely connected to non-economic influences (history, culture, ideas, politics, and so on)that should be accounted for, and would have the results, and has the results, of costly programmes emanating from neoclassical advisors to such as the World Bank, IMF and the major aid donors among governments that have been prevalent since the mid-20th century, let alone the damage done to the candidate countries and their economies.

The campaign, led by the History of Economics Society, and in particular Sandra Peart, its current President (see her Blog: Adam Smith Lives!), and supported by other history of economics associations across the world, several of the Nobel Prize Winners in Economics, and many distinguished scholars working in mainstream economics, who still connect to the history of our subject (it's the next generation that we are concerned about), which Sandra Peart has documented in her excellent Blog, has had the effect that the Australian Bureau of Statistics in Canberra, Australia, has relented and re-considered its earlier proposals.

We should be grateful for their decision. Bureaucrats do no like changing their minds and when they do we should be encouraged. I believe the history of economic thought and economic history have emerged stronger a result and we should build on our relief from what would have been the beginning of the extinction of it, and the crippling of economics itself, if these proposals had gone forward.

Here is the message I received this morning from Glyn Pritchard, of ASB, in response to the letter of protest I wrote after being alerted to this problem by Sandra Peart of 'Adam Smith Lives!' Blog:

"Thank you for your submission to the Australian Standard Research
Classification review.

Your concerns with regard to the proposed treatment of Economic History and
History of Economic Thought have been formally noted by the review team,
and your submission and interest together with others on this issue has
been taken into consideration. On the basis of the information received by
the review team, the proposal with regards to these research fields has
been revised. The revised proposal is to keep Economic History and History
of Economic Thought within Economics. The revised proposal is based on
extensive feedback on this issue and the core reasoning behind this
proposal is as follows:

the techniques used in Economic History research are identical to those
used in other areas of applied economics- the subject matter is
historical economic data;

the History of Economic Thought can be described as being primarily
concerned with the development of economic theory.

The current thinking is therefore to align these categories with the
respective sub-categories of applied and theoretic economics. I appreciate
your input to this process and the classification in its entirety is not
due to be finalised until November 2007. Publication of the new
classification is expected early in 2008.

I hope that this addresses your concerns and thank you again for your
submission. If you have any further concerns please contact Dr David Brett
- david.brett@abs.gov.au .

ABS appreciates such feedback in informing its deliberations for this
review.

Regards

Glyn Prichard, Director
Innovation and Technology National Statistical Centre, ABS