Story: Economic thought

Page 5. The economics profession

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Economic theory emerged in New Zealand before there were economists. Economics only emerged as a distinct academic discipline in the 1880s, and as a profession in the 20th century. Before then it was taught within other disciplines, especially philosophy, but sometimes mathematics or history. The American Economic Association was founded in 1886, and the Royal Economic Society in Britain in 1890. At that time economics was seen as part of a liberal education and a preparation for a life of public service.

New Zealand economists

From 1869 New Zealand universities were founded. Economics was not among the first disciplines for which teachers were recruited. From the late 19th century economics was taught by teachers of other subjects. It became a part of commerce degrees, which were developed for accountancy qualifications. Some university teachers were significant thinkers in New Zealand.

James Hight taught at Canterbury College from 1901 to 1949. Primarily a historian, he later excelled as a university administrator. His students included some significant economists, including J. B. Condliffe who wrote an early study of New Zealand trade. His later career in the United States included a major study of world trade, The commerce of nations (1950). Douglas Copland, another student of Hight’s, became a leading economist in Australia.

Horace Belshaw was a professor in both Auckland and Wellington and had an international career with the United Nations’ Food and Agricultural Organisation. Albert Tocker, professor of economics at Canterbury College from 1921 to 1950, lacked the scintillating quality of these economists, but he made a major contribution to the understanding of international finance, with an analysis of New Zealand banking in relation to the international role of the British pound. The Canterbury school shared an interest in relating economic thinking to practical affairs, especially rural affairs, though these were also concerns of economists at other universities.

Allan Fisher at Otago University was notable for exploring economic change over time, in terms of the relative size of the agriculture, manufacturing and service sectors. He challenged common beliefs that farming was the backbone of the economy, and that a drift from rural areas to cities and towns was a cause of concern. Economic thinking has often shown that people’s assumptions are not always sound.

Economics exams

New Zealand universities quickly provided high-quality courses in economics. The scripts of final-year candidates were marked in Britain. Examiners were often from universities like Cambridge, the academic home of Alfred Marshall, who succeeded John Stuart Mill as the leading English economist of his generation. Some of his top students, including the influential economist John Maynard Keynes, examined New Zealand students’ papers. Remarks by examiners show that New Zealanders were as well served academically as students at leading British universities.

Business studies

In the 1930s American economist Edward Chamberlin developed a theory of monopolistic competition. Chamberlin argued that where there were many firms producing similar products, firms developed minor differences and sought to attract brand loyalty. If they were successful they became price setters, not price takers.

This theory inspired the development of business management as a distinct academic discipline. Economics had previously moved from philosophy and liberal education towards public administration, and training the public service. It now became a business subject, and eventually part of the curriculum of business schools. Economics, sociology and other disciplines grew independent, and left philosophy as a minor (but respected) component of the arts. Economics itself became a minor (but respected) component of business education. Management, marketing, operations research, finance and other subjects became independent of economics.

How to cite this page:

Gary Hawke, 'Economic thought - The economics profession', Te Ara - the Encyclopedia of New Zealand, (accessed 6 July 2020)

Story by Gary Hawke, published 11 Mar 2010