Earlier this year The Journal of Australian Political Economy published a _special issue_ devoted to recollections and implications of 50 years of Political Economy courses at Sydney University.

One assumed that exposure to this specialist outlet would remain restricted to the faithful. But here it is referred to in Murdoch’s The Australian, 25 August 2025 – “Economy not just ’numbers on a page’: PM sets reform guard rails”, and the editorial, “Good economic numbers all about living standards”.

The connecting link is a certain Anthony Albanese, contributor to the special issue with numerous other ex-students, on what “political economy” means to him and his policy agenda. Both articles leverage the Albanese piece to throw in their two bits about the Labor Government’s productivity roundtable.

The first core Political Economy course, Economics I(P), was mounted in 1975. It was the product of considerable upheaval in previous years and would signal further upheaval in future years as staff and students pushed for further courses to facilitate a full degree sequence. There followed an Honours degree in 1990 and a separate Discipline established in 2000.

The articles in The Australian were followed by another in the Australian Financial Review on 31 August. Authored by financial economist Warren Hogan, it is titled “Why my dad fought against ‘Albonomics’ at Sydney University”. Hogan (Jr) claims:

“The PE mob refuse to recognise the positive role of the scientific method at the get-go. As a result, they miscast the problem and then put forward policy solutions that come at a tremendous cost to our economy and, ultimately, our community.”

Thus does Hogan condemn the Albanese Government’s policy orientation and Political Economy’s presumed failings in leading astray the impressionable young Anthony and his cohorts. Hogan further claims:

“Economics, particularly the microeconomic foundations, are incredible analytical tools that help us explain the complex and daunting processes within our economy.”

Complete baloney. The root cause of the dispute at Sydney University was dissatisfaction with the hegemonic school of thought within tertiary Economics teaching and research – that of Neoclassical Microeconomics. Neoclassical Economics houses an abstract conception of the “market economy”. It has very little to offer regarding an understanding of complex real world economic systems.

Where is the representation of the limited liability corporation, central to the modern economy for 150 years? It is missing. How is the employment relation and labour remuneration analysed? Totally cockeyed. The appropriation and degradation of nature? Don’t ask.

More, as a closed system, Neoclassical Economics has nothing to offer regarding informed policy prescriptions for social betterment. Little acknowledged, it offers only superficial succour to those who want to impose “free market” nostrums (deregulation, privatisation, etc.) on society, ideas which emanate from the ether without having to undergo critical examination.

For example, when the Industries Assistance Commission was established in 1973 to confront the problematic tariff regime, the IAC eggheads’ prescription for immediate tariff reductions was premised on the happy presumption that re-employment of the unemployed would happen automatically. This other-worldly mentality survives in the IAC’s latter-day incarnation in the Productivity Commission.

The vacuum in economic understanding is due to the fact that Neoclassical Economics caters rather to methodological and ideological norms. Methodological imperatives have been imbibed from physics and mathematics envy (Classical mechanics, the calculus). Hence, postulates of optimisation, equilibrium, full information, statics. Ideological norms involve the marginalisation of the sources and character of economic power.

One can’t mathematise the corporation and the prescribed spectacles conveniently blank out the corporation’s intrinsic capacity for anti-social abuse and criminality, facilitating impunity.

As to general orientation, here’s a doozy from the prestigious American Economic Review, March 1976, “The Value of Human Life in the Demand for Safety”:

“My aim is to separate the other uncertainties of living from those associated with risk of loss of life. Thus it is assumed that all relevant variables and functional relationships are known, the only uncertainty being the actual time of death. Let a person be infinitely sensitive; have full information of all prices, probabilities, and his preferences; and be interacting in competitive markets with zero transaction costs. Let him choose among life histories such as to maximise expected lifetime utility, the von Neumann-Morgenstern postulate. The objective function is of the form:

E(U) = ∑δ (t) u (.) p (.)

whereby expected lifetime utility is separable into discounted single period utilities, δ (t) is the utility discount function, u (.) is a single period utility function, and p (.) is the probability of being alive.”

This is an exemplar of what passes for “scientific method” in mainstream economics. Neoclassical theory was long labelled “positive” (value-free). It has been variously defended as robust through “testing predictions” (Milton Friedman, 1953) or “falsification” (Karl Popper, 1934; English translation 1959). Nothing of the kind happens, as the theoretical structure is rooted in a priori axioms.

Thomas Kuhn’s iconic (if over-generalised) 1962 The Structure of Scientific Revolutions found a broader audience for the concept of “paradigms” and the day-to-day pedestrian practice of “normal science” within them. In Kuhn’s world, in a process of accumulating tension with “the facts”, the long-accepted paradigm is overthrown and replaced by another one.

The only significant paradigm overthrow in economics began after the 1870s when Neoclassical Economics displaced its predecessor, Classical Economics. However, the driving force was more analytical elegance than a superior systematisation of empirical evidence. Some even argue that respectable Classical Economics was throwing up some unpalatable social implications, from the likes of J.S. Mill, Karl Marx and Henry George, so some manufactured obfuscation was in order.

Beforehand, Economics was artificially created as a distinct subject for inquiry from the late 18th Century. At the centre of which concoction is rational Economic Man, devoid of a conditioning environment. In the Neoclassical takeover, Classical Economics’ institutional fabric is jettisoned and Economic Man is further refined. “Methodological individualism” is born and becomes entrenched.

Another “Kuhnian” revolution occurred in the 1930s, when orthodoxy couldn’t account for bothersome mass unemployment. Thus John Maynard Keynes (and others) puts macroeconomics at the forefront. His model, centred on inductive generalisations linking select aggregate variables, involved a methodological and conceptual break from orthodoxy in which uncertainty, the integration of monetary and real values and time dependence were fundamental to decisions regarding the driving force of investment.

But it was a strictly partial break as Neoclassical orthodoxy remains untouched (voguish diversions notwithstanding). “Keynesian” macroeconomics was merely pragmatically added to the syllabus (aided by a National Accounts statistical framework given a fillip by World War II). Moreover, the long-term general tendency has seen the “profession” modify the radical character of Keynesianism to neutralise its conceptual friction with orthodoxy. Ditto for the policy implications for which fiscal austerity and inflation-targeting (repressing aggregate demand to constrain wages growth) become the sole conventional wisdom for achieving “macroeconomic stability”.

Meanwhile, the Reserve Bank of Australia frets that enrolments in years 11 and 12 High School Economics ( a crude version of the University syllabus) have plummeted, feeding through to lower tertiary enrolments. RBA researchers can’t confront that 16-year-olds might be reluctant to hitch their careers to a dead horse.

There will never be another paradigm overturn in Economics. Economics is Neoclassical Economics – period. The self-confident insularity of the Economics “profession” and academic autonomy inhibits any change. The brutality of Stalin’s Lysenkoism aside, 150 years of Neoclassical hegemony constitutes one of the great intellectual scandals.

There has been perennial contrary opinion for 200 years, but it has been perennially marginalised. An independently-minded Economic History has also threatened, so economic history had to be appropriated as well – even (as recently) abolished from the curriculum.

Peculiar circumstances led to the atypical “breakthrough” at Sydney University (as at the University of Massachusetts Amherst, another rarity).

In 1968 and 1969, Warren Hogan (Sr), subsequently his Auckland University lecturer, Colin Simkin, were appointed as professors at Sydney University. These were the last days of the “God Professor”. Hogan and Simkin, with authoritarian proclivities, abused their authority. Opposition from academic staff arose almost immediately. Simultaneously, the department was hiring a significant number of young academics to “modernise”, but four of them (including yours truly) readily joined the dissenters.

In the classroom, Hogan and Simkin put themselves to lecture in the first- and second-year core courses. They were, to put it charitably, not good teachers of mass audiences. Hundreds, thousands of students over several years were nonplussed.

Unofficial surveys by the Student Economics Society and tutors exposed the damage. So sack the tutors! Steve Keen (then student activist, now noted economic theorist) summarised one such survey in the student newspaper Honi Soit (18 October 1973): “prof Simpkin (sic) Tops Poll’. One responder noted: “Economics as it is now given is a complete and utter fucking waste of time.”

Students organised a “Day of Protest” in July 1973, boycotting classes and designing an alternative syllabus. More of the same occurred on a “Day of Outrage” in July 1974. Students subsequently came out in their hundreds in demonstrations year after year.

Thus did a rare critical mass of both academic staff and students decide that “modernisation” meant something dramatically different from the professorial ambitions (with then vice-chancellor Bruce Williams’ support). Paradoxically, the personal intellectual interests of Hogan, Simkin and Williams were more eclectic than the agenda they sought to impose on the syllabus.

In the weekly Bulletin magazine, 21 January 1986, there appeared an article titled “Marxists have to settle for a ‘bessie’ degree”. The author was one Tony Abbott, polishing his literary panache to match his Jesuitism (he was then training for the priesthood) and his pugilism. To resolve the ongoing dispute, the University had decided to create a second Economics degree to facilitate Political Economy and cognate courses. Warren Hogan (Sr), pictured resplendent in his pastel safari jacket and above the caption “Glebe patio intellectuals defeated”, claimed that the new degree, with its inevitable lower standards, was bound to fail.

Fifty years later, we’re still here.

(A Political Economy 50th Anniversary Celebration is being held on 23 October.)

The views expressed in this article may or may not reflect those of Pearls and Irritations.