At the time of Copland’s arrival, the University of Melbourne was only just emerging from its late Victorian chrysalis. The wearing of gowns was theoretically compulsory for the undergraduates, and turning out for the weekly parade of the University Rifles practically inescapable. Farrago and the Melbourne University Labor Club were yet to be born. It was ‘a demi-rural retreat … a resort, also, for sons and some daughters of gentleman and a few others’, in the words of one student from the early 1920s (Fitzpatrick 1961, p. 9). Historians of the University have tended to portray it at this period as provincial, introverted, unambitious in its teaching, and (outside the natural sciences) desultory in its research (Fitzpatrick 1961, Blainey 1957, Selleck 2003).

Indeed, by the time of Copland’s arrival, economics had been, in the words of one historian, ‘abandoned’ (Selleck 2003). It was not strictly extinct: a solitary economic historian taught one course on ‘political economy’. But Copland was accurate in informing the readers of the Economic Journal that there was ‘scarcely’ any economics at Melbourne. Copland’s appointment was intended to promote a resurgence, and even before arriving he energetically began to organise that. He would create a Bachelor of Commerce. It would – very deliberately – have the underpinnings of a quality degree; students could not obtain a BCom without doing either mathematics, or science or a modern language. He informed the Registrar: ‘You may consider it a rather ambitious program but I thought it wise to state at the outset my ideas regarding the work of the school’ (UMA DBC 3 October 1924).

He was ‘dramatically’ successful. Not long after his arrival he wrote: ‘We are finding the popularity of economics a little embarrassing. So many students are seeking admission, and just at present our time is occupied with incessant interviewing’ (UMA DBC 19 March 1925). He obtained 323 students for the new BCom in 1925. He firmly headed off rival claims for resources (such as a putative sociology department),^[1] and pushed for more of his own. He wanted a ‘cinema machine’ to allow students of Industrial Organisation to observe factory operations without necessitating an excursion, and obtained £50 from the Chamber of Commerce for a duplicating machine.

This last gratuity was not accidental. Part of Copland’s strategy was to ‘establish good relations with the business community from the very beginning of his time in Melbourne’ (Scott 1988, p. 3). Despite the fact that Melbourne was the seat of most company headquarters, the university had no links to business. Now faculty meetings were to be held on occasion at the Chamber of Commerce. The new faculty was to include Sir Robert Gibson, the new power in the Commonwealth Bank. Perhaps with an eye to successful alumni Copland was active in the Commerce Students’ Society, and succeeded in tempting the Prime Minister to accept an invitation to address it.^[2] Copland drew a creditable harvest from his cultivation of business interests.

Copland also moved to provide a professional society for economists. No society or organ had existed in Australia since the Australian Economist had expired in 1898 with the ebb of the 1890s slump, and the redirection of controversy towards Federation. The Australian and New Zealand Association for the Advancement of Sciences did maintain an Economics and Statistics ‘Section’, but it was ‘somewhat anaemic’. However, at the 1924 meeting of the section the economists ‘attended in force’, and with ‘an almost evangelical fervour’ received Copland’s proposal to establish an Economic Society. Nineteen twenty-four, said Giblin, ‘might perhaps be called A.E.1 – the first year of economists in Australia’ (Giblin 1947, p. 1). With his ‘characteristic drive’ Copland set about founding a society, with a Central Council of the Economic Society established at the University of Melbourne in August 1925, and Copland duly elected President.

The next step was to establish a voice of the profession – the Economic Record, whose first issue appeared in November 1925.^[3] ‘From the first number’, Copland with his co-editor R. C. Mills, ‘read every article, every note and most of the reviews that were offered for publication’, and did so for 22 years (Giblin 1947, p. 2). The 1000 copies of the first issue were ‘soon exhausted’; a reprint of 500 was ordered, and another 150 sold. Given Australia’s population was six million, that volume of sales compares very decently with the 3000 copies that, Keynes told Copland, the Economic Journal sold. Years later Giblin was to venture accurately: ‘it is fair to say that in no other branch of studies, literary or scientific, has Australia produced another journal so highly recognised and esteemed in other countries’ (Giblin 1947, p. 4).

The Economic Record reflected Copland’s vision, as Australian economics engaged in problem-solving rather than science-building. In Copland’s conception the Record would have no brief to pursue and extend pure theory. Its concern was with a particular question that had become socially significant. New adventures overseas in matters of pure theory were ignored. By way of illustration: in the late 1920s and early 1930s the theoretical issue of monopoly was an international preoccupation of economic theorists. Under the ‘applied’, problem-solving approach a problem of pure theory could never occupy the attention of Australian economics.

Complementing the problem-solving approach was an outlook that was historicist rather than universalist. No single theory could apply in all circumstances. The universalist theory that the classical economists pretended to follow was in fact a legacy from British conditions in the nineteenth century. The truths in Australia would differ. As Brigden wrote in the inaugural issue of the Economic Record:

Consequently, the elucidation of the Australian circumstances was critical. An accompanying stress on empiricism is pervasive in the Record, which may be said to be possessed of a ‘somewhat naïve faith not untypical of the time that a knowledge of “the facts” would point the way to the proper course of action’ (Richmond 1983, p. 250).

Finally, the Australian economists adhered to a ‘summary’ repudiation of laissez-faire as obsolete.

Refusing liberalism, they did not embrace socialism. The vision of Brigden, Copland and Giblin was of a publicly regulated but privately owned economy.

The Record’s first issue of November 1925 carried a paper that was to epitomise these attitudes, and to provide an assault on some classical precepts that was to have repercussions internationally. This was Brigden’s ‘The Australian tariff and the standard of living’ (Brigden 1925). It advanced the heterodoxical thesis that a tariff may enhance the living standard of the average inhabitant. Copland and Giblin had urged Brigden to submit the paper to this inaugural issue of the Record. ‘You have argued the case with great ingenuity’, wrote Copland, without actually accepting the case himself. Brigden took up the proposal: ‘It is a sporting challenge … Although I risk myself, the Society may benefit from the interest aroused’ (quoted in Harper 1989). It provoked the first controversy in the Record, and Brigden was to spar with free trade advocates, such as F.C. Benham (1900-1960), in the Record through the mid-twenties (see Benham 1926; Brigden 1927a, 1927b; Giblin 1927a).

What was Brigden’s argument? ‘The Australian tariff and the standard of living’ actually contains two separate protectionist arguments: a ‘terms-of-trade’ argument, and a ‘returns-to-labour’ argument. Both arguments assume a two-sector economy; in our terminology, ‘food’ and ‘manufactures’.

The terms-of-trade argument holds that a reduction in tariffs on manufactures would increase food output, and by glutting the world market, reduce the value of food in terms of manufactures, so that an actually smaller amount of manufactures could be imported, despite the increase in food exports. In brief, a tariff cut reduces the terms of trade. On a theoretical level, the terms-of-trade argument is a familiar article of textbooks, and unproblematic.

The returns-to-labour argument turns on the marginal productivities of labour. That marginal productivities might be such that a tariff reduction could reduce real wages had been previously anticipated in 1887 in the Principles of political economy of Henry Sidgwick (1838–1900). He considered a country producing manufactures under protection, and food such that ‘additional food produce could not be obtained except at rapidly increasing expense’ (Sidgwick 1887, p. 497). If protection to manufactures is abolished, then labour will be reallocated to food, and marginal productivity in food will diminish so ‘rapidly’ that the purchasing power of the wage may fall, despite the rise in the amount of manufactures a unit of food may purchase.^[4]

Sidgwick’s argument was reported, with much pooh-poohing, by Charles Bastable in various editions of Theory of international trade. Edgeworth then took up the defence of Sidgwick’s claim against Bastable’s not-very-telling criticisms, and skirmishes between Bastable and Edgeworth continued in the Economic Journal between 1897 and 1900. Any diligent reader of past issues of the Economic Journal would already be well aware of Sidgwick’s theoretical argument. And as Brigden had been a student of Edgeworth, and one to whom he ‘owed much’ (Brigden 1926), it is more than plausible that Brigden became acquainted with this controversy directly from the man whom ‘no heterodoxy could shock’ (Brigden 1926, p. 144).^[5]

But Brigden provided a novel path by which assumptions about productivity could yield the result that tariffs are improving of worker’s welfare. The ‘Sidgwick Assumption’ – a ‘rapid’ deterioration in the marginal productivity of labour in food – is refused. Instead in Brigden’s argument, labour is assumed to operate with diminishing marginal productivity in food, but with constant marginal returns in manufactures. Given this, increasing tariffs will not reduce the marginal productivity of labour in manufactures (by assumption), and so will not reduce the wage in terms of manufactures. However, with manufactures now more valuable in terms of food, the marginal product of labour in manufactures evaluated in terms of food is higher. This induces a reallocation of labour from food towards manufactures. The marginal product of labour in food is thereby increased. The upshot is that the manufactures wage is unchanged, and the food wage is increased. The utility of the worker (that is, the ‘standard of living’) must rise, as long as the worker consumes some non-zero quantity of food. Four further implications may be demonstrated (see the appendix to this chapter) and are simply noted here: