Economic subjects have been taught at The University of Melbourne since its establishment in 1855; with the formal establishment of the Department of Economics occurring in 1944.
Nineteeth century politics
In the nineteenth century, the discipline was universally known as political economy; and the foundation chair, the Chair of Modern History and Literature, Political Economy and Logic, was within the Faculty of Arts. Over time, as in other parts of the world, the disciplines of history and political economy were separated from their moral philosophy base, and then from each other.
At Melbourne, the separation of history and political economy was slow to take place, partially for political reasons. Separate Chairs of History and of Economics and Sociology were created in 1912, but the latter remained unfilled when the University Council refused to accept the Premier's conditions for the appointment of the Professor.
Douglas Copland's influence
Political Economy remained within the Department of History until the creation of the Faculty of Commerce in 1925. The first Professor of Commerce, Douglas Copland, insisted that the subject be brought under his control and that arts students share classes with commerce students.
The first commerce degree focused on business management, with the study of economics as its lynch-pin. It was tailored to meet the needs of part-time, mature-age students already at work in business, the public service and education. It was also suitable for school-leavers.
Many of the first students had outside qualifications, particularly in accounting, but lacked knowledge of theoretical economic concepts and their application, as well as an overview of the institutional anatomy of the Australian economy within its international setting. In the troubled international environment of post-World War I years, this lack was keenly felt.
As a very public economist determined to influence government policy, Copland revitalised the study of economics. One of his strong ambitions was to train professional economists equal to their counterparts abroad. In this he was helped by two developments.
The first was his association with the Social Sciences Division of the Rockefeller Foundation of New York. Appointed as its Australian representative, he developed lasting links with leading economists in North America, Britain, France, Germany, Italy, Austria, Czechoslovakia, Holland, the Scandinavian countries and China. Scholarships were provided for Australians to study abroad and for overseas scholars to visit Australia.
The second development was the Ritchie bequest to establish a Chair of Economic Research. Located in the Faculty of Arts but directed from the Faculty of Commerce, it was occupied by Lyndhurst Giblin from 1929 until the outbreak of World War II. The Ritchie Chair served as the catalyst for the establishment, in 1930, of an Honours School of Economics within Arts, with students being directed by Giblin and Copland. Honours students were encouraged to proceed to the MA research degree, after which they were given help, often with Rockefeller funds, to study abroad at leading universities. With the outbreak of World War II, they became key Commonwealth bureaucrats, directing the war effort.
Creation of Faculty of Business and Economics
Under the Commonwealth Reconstruction Training Scheme, former service personnel were given financial assistance to study full-time for five years after the war. In anticipation of the great boom in full-time undergraduates, the Faculty of Commerce was reorganised to become the Faculty of Economics and Commerce, with Economics to the fore. The Faculty name was changed to Faculty of Business and Economics in 2010.
Economics as a discipline became increasingly popular among school-leavers as well as with returned soldiers. The rapid expansion of the Department had begun. In 1946 there were 1335 students enrolled within the entire Faculty. Impressive as this figure seemed then, it is less than the enrolment figure for a single subject today!
Increased enrolments have led to specialisation and diversity of subject offerings, greater opportunities for research, a multiplication of chairs and the need for a more specialised staff.
There has also been a greater diversity among students. The Commonwealths immigration policy brought students with a non-British background, while in the early 1950s Commonwealth funding through the Colombo Plan brought Asian students to the Faculty and the Department, often with preferences for the study of finance and business management.
The present Department of Economics has a growing international record as an institution of world class learning; in this it has built on the solid foundations laid by its predecessors.