The struggles to teach political economy and the aftermath – we all lost

I started my undergraduate studies in economics in the late 1970s after starting out as an Arts student in the early 1970s studying philosophy, politics, history, anthropology and statistics. The Vietnam War movement and other things interrupted my first years of studies and it wasn’t until the Federal government introduced the National Employment and Training (NEAT) scheme in 1974 that I was able to get some government support to resume my studies, this time as an economics student with statistics and polot a student combining politics, law and economics. The major student rebellions of the late 1960s around the world had ended and the Monetarists had seized control of the academy, which led to major shifts in the way economics was taught. The world is much poorer as a result of these changes and the end-game problems of neoliberalism that we are all struggling with now – housing crises, welfare retrenchments, aftermath of privatisation and outsourcing, casualised labour markets offering poorly paid jobs with precarious outlooks, rising income and wealth inequality, and the climate crisis to name just a few of the individual crises that are now converging into the poly crisis we are enduring now – are directly related to the shifts in the economics profession in the 1970s. I was a student then young academic through this early period and when I read an article in the Australian Financial Review this morning (September 1, 2025) – Why my dad fought against ‘Albonomics’ at Sydney University (usually behind a paywall) – I could hardly believe what I was reading.

The AFR article was written by one Warren Hogan, an Australian economist who works in the financial sector and regularly appears on the Murdoch’s shock media channel Skynews.

His article is intended as a defense of his father, Warren Hogan, who was one of the principle protagonists in the 1970s as a professor of economics at Sydney University that heralded in the shift in the way economics was taught.

Hogan senior was a towering figure in the academy in my formative years although growing up and being educated mostly in Melbourne in those days I missed out (fortunately) on having direct contact with him as a student.

I saw plenty of him though at conferences and other events and had zero respect for his position.

What has motivated this AFR article (August 31, 2015) from Hogan junior is the fact that 2025 is the 50th anniversary of the creation of some new courses in economics at Sydney University (Economics I(P) and Economics II(P)) which marked the beginning of the political economy group at that university.

Hogan junior, an antagonist of the current Federal Labor government, is using this anniversary to continue his attacks on the current government.

The link he is making is that the current prime minister – Mr Albanese – studied within this political economy group at Sydney University from 1981 and is somehow a radical student as a result.

As an undergraduate student, Albanese was active in student politics and was part of the protest that occupied the famous clock tower at Sydney University in protest for some of the changes that were being pushed by Hogan senior to the economics curriculum.

You can read a bit about the role Albanese took at that time in this previous AFR article (April 12, 2022) – Albanese’s unconventional economics training.

Just the title of Hogan junior’s article – that the Prime Minister, somehow, has a distinctive economics doctrine – Albonomics – that is drawn from his undergraduate economics education – is farcical.

To characterise Albanese as a radical or somehow tainted by his undergraduate education in political economy could not be further from the truth.

And within that conclusion lies much of the problem we are facing with the dominance of mainstream economics in policy making.

Students of the 1970s political economy courses might have learned interesting and valuable things in their studies, but they also were remiss in not learning other things, which, in part, is why the progressive side of economics fractured some badly and became caught up in the growing post modernist emphasis on identity and things like hermeneutics.

I’ll come back to that.

Hogan junior is clearly miffed that his father wasn’t accorded the respect he demanded from many academic staff at Sydney university in the 1970s and beyond.

Hogan senior was appointed in to the chair in economics at Sydney University in 1968 and the following year another conservative (New Zealand) economist, one Colin Simkin was also appointed as a professor.

Simkin was a fan of Karl Popper and his falsifiability criterion as a basis for so-called ‘scientific activity’.

Popper also broadened his work into attacks on Marxism and attracted all the usual suspects who considered held out that Capitalism was the only way forward.

I was involved in a lot of those debates as a student in philosophy and political science in the 1970s.

I was more attracted to the work of Thomas Kuhn, Imre Lakatos and – Paul Feyerabend – and the idea of – Confirmation holism – all of which rejected Popperian thinking.

But that is a digression.

The appointment of those two professors began a period of massive turmoil at Sydney University.

The two of them pushed through a major restructuring of the economics curriculum, essentially importing the American model that had rejected Keynesian economics in favour of highly abstract, mathematically-oriented micro theory and Monetarist macroeconomic concepts.

Australian universities mostly went down this path – and students were told that the new approach was more rigourous and scientific – and reflective of the global trends where economics, ever the inferior lot, sought to imagine they were objective scientists like physics and chemistry.

I have some familiarity with the way the current mainstream took over the academy and expunged the Keynesian elements.

It was an aggressive, nasty, non-collegiate putsch.

I saw Hogan senior at events and he wasn’t a nice character.

But what they did to the economics program – and others like them (most of whom had received doctorates from US graduate programs or at the ANU – Hogan’s case) – was to abandon curricula that attempted to combine historical, social and political aspects with an understanding of the way the economy worked within that broader framework – and replace it with highly abstract theories that had little or no resonance with the real world.

I am reminded of a beautiful section in a book by American economist (and Marxist) Paul Sweezy who wrote in 1972 in the – Monthly Review Press – an article entitled Towards a Critique of Economics.

He argued that orthodoxy (mainstream) economics in recent times had:

… remained within the same fundamental limits” of the C19th century free market economist. He said they had “therefore tended … to yield diminishing returns. It has concerned itself with smaller and decreasingly significant questions … To compensate for this trivialisation of content, it has paid increasing attention to elaborating and refining its techniques. The consequence is that today we often find a truly stupefying gap between the questions posed and the techniques employed to answer them.

He then cites a wonderful example of mainstream written reasoning which the modern mainstream economists would be proud off.

It is taken from Debreu’s 1966 mimeo on Preference Functions and don’t laugh too much as you try to comprehend it:

Given as set of economic agents and a set of coalitions, a non-empty family of subsets of the first set closed under the formation of countable unions and complements, an allocation is a countable additive function from the set of coalitions to the closed positive orthant of the commodity space. To describe preferences in this context, one can either introduce a positive, finite real measure defined on the set of coalitions and specify, for each agent, a relation of preference-or-indifference on the closed positive orthant of the commodity space, or specify, for each coalition, a relation of the preference-or-indifference on the set of allocations. This article studies the extent to which these two approaches are equivalent.

In my so-called economics “education” I have read countless articles like this one – saying nothing about anything that will be of any benefit to humanity.

Studying mainstream economics with all the mathematics that came with it is like playing a boring version of chess.

And the students at Sydney University at the time were infuriated by Hogan and company’s takeover of the Department of Economics and complained the new subjects were too abstract, irrelevant to the real world, and more importantly, sought to promote a particular conservative manifesto (capitalism is best) at the expense of broader understandings and options.

I recall some junior academics at the University at the time ran a survey of students who railed against the new approach.

The nontenured staff were not renewed for the next academic year and the survey was prevented from being made public by one of Hogan seniors’s professorial mates.

Other staff who had previously taught development economics did not have their contracts renewed and in 1973 there was a mass student protest (of which the current Australian PM was a part of).

After a few years of infighting, a University enquiry recommended that the existing Department of Economics being separated into two entities, the new entity being the Department of Political Economy.

That recommendation was rejected by the Vice-Chancellor (an orthodox economist) and the only concession that was made was the introduction of the new courses mentioned above.

The orthodox economists in the Department held the power and there were often accounts of bias, discrimination and worse against the political economists.

More student protests and a resistance against any further political economy subjects from the senior professors followed.

In the early 1980s, the orthodox professors tried to get the small number of alternative courses scrapped.

And after more protests, the University’s Academic Board took over the dispute and some concessions and administrative separation granted.

But the disputes continued.

In the AFR article yesterday, Hogan junior claimed that his father was the victim of “a vicious and one-eyed pursuit of both the man and the ball”.

That is certainly not how I recall the struggle.

I agree with Hogan junior that it was “a great ideological battle” but it was not a “battle between the socially progressive left-wing political economists and those advocating for the application of the scientific method in economics”

It was a battle between academics who believed in offering their students a broad education on economic matters and situating that discipline within the cognate disciplines of sociology, philosophy, history and politics, etc.

They rejected the sterile approach that the mainstream holds out as being ‘scientific’.

There is nothing scientific about mainstream economics.

I recall the following statement from Post Keynesian economist Paul Davidson [in the book by Bell and Kristol The Crisis in Economic Theory, Basic Books, 1981, p.157] which describes how mainstream economics uses methods and approaches that renders it unable to embrace real world problems:

There are certain purely imaginary intellectual problems for which general equilibrium models are well designed to provide precise answers (if anything really could). But this is much the same as saying that if one insists on analyzing a problem which has no real world equivalent or solution, it may be appropriate to use a model which has no real-world application. By the same token, if a model is designed specifically to deal with real-world situations it may not be able to handle purely imaginary problems.

Post Keynesian models are designed specifically to deal with real-world problems. Hence they may not be very useful in resolving imaginary problems that are often raised by general equilibrium theorists. Post Keynesians cannot specify in advance the optimal allocation of resources over time into the uncertain, unpredictable future; nor are they able to determine how many angels can dance on the head of a pin. On the other hand, models designed to provide answers to questions of the angel-pinhead variety, or imaginary problems involving specifying in advance the optional-allocation path over time, will be unsuitable for resolving practical, real-world economic problems.

That was the crux of it.

Hogan senior’s mainstream approach was really just a fictional version of the world designed to provide authority to the emerging neoliberalism.

I recall in a 2nd year microeconomics course we were studying how the provision of unemployment benefits causes unemployment to be higher and the terminology was a comparison between a ‘robustly independent income earner’ and an ‘indolent welfare dependent’ unemployed person.

At the same time the lecturer claimed the material was objective and value-free.

He should have studied linguistics and how language frames and can distort our perceptions of reality.

But the progressive side is not without criticism.

Hogan senior initially got offside with the staff at Sydney economics because as I recall he wanted to make first-year statistics compulsory for economics students.

Now while the citations I have provided above talk about the vacuousness of the mainstream approach, I am not against simplified (abstract) modelling.

Clearly, it is essential if you want to gain some traction on a real-world problem that is complex.

But the models have to be capable of capturing real-world dynamics.

For example, a model that claims central banks control the money supply via the money multiplier will always be false and provides no relevant information to the user.

And to be useful to society economists have to have applied skills, which in part come from a deep understanding of mathematical statistics.

I recall an honours graduate from Sydney’s political economy program (yes, eventually they won their struggle and separated into a separate department) applied for a job at my research centre.

We do a lot of technical work and this applicant was unable to even calculate a percentage much less conduct more refined econometric analysis.

The point is that I would have supported the introduction of more quantitative courses had I been an academic at Sydney University at the time Hogan senior came along.

And that also goes to the problems that political economics created in the 1970s when the academics (across the globe) became sidetracked by post modernism and methodology.

I wrote about that in this blog post (among many others) – Moving on from the post-modernist derailment of the Left (December 27, 2016) – and I won’t repeat that analysis.

Our 2017 book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017) – also traverses this territory.

Suffice to say that the ‘leftist’ academy were bogged down in deconstructing the hermeneutics of some such or another. Or telling us about “The legitimation of panopticism reinvents itself as the project of system” or that “The historicization of agency is, and yet is not, the fiction of millennial hedonism” (all courtesy of the – Postmodernism Generator – go to bottom of that page to have a play).

But it was in my field – macroeconomics – that the damage was extreme.

The political economy academics essentially abandoned the field to the conservatives and provided no contest.

Suddenly, political economists were writing about the ‘fiscal crisis of the state’ and accepting all the fictional nonsense that parades as modern macroeconomics including the government is like a household (financially constrained) and all the rest of the fictions that accompany that deeply flawed starting point.

And if you listen to our Prime Minister and his Ministers who are labelled as progressive talk about macroeconomics you will only hear nonsensical mainstream utterances that Hogan senior would have given 100 per cent to if submitted as essays by one of his undergraduate students.

Conclusion

I supported the political economic struggles in the 1970s and beyond and was horrified by the way the mainstream professors aggressively sought to impose their orthodox views and get rid of dissent.

I recall one professor at Monash, where I was a Masters student calling me in one day and saying “Billy you are very bright but you are a pop sociologist and should consider leaving this program”.

I earned high distinctions throughout even in the hard core economics subjects while practising my ‘pop sociology’.

But the intent to stifle alternative thinking was intense and for the most part worked.

Which is why our policy making departments in government are in such a deplorable shape and why the politicians utter nonsense.

That is enough for today!

(c) Copyright 2025 William Mitchell. All Rights Reserved.