Intermezzo: the Americanisation of economics
The third quarter of the twentieth century saw the rapid and comprehensive ‘internationalization’ of economics (Coats, 1996). Actually this term is a polite euphemism for Americanisation.
The increasing dominance of the United States can be seen in every aspect of the discipline, from the pinnacle of research achievement to the structure, content and graphic design of first-year undergraduate textbooks. Thus 63 of the 74 Nobel Prizes in economics awarded between 1969 and 2013 went to Americans, either native-born or long-term permanent residents; between 1980 and 2013, it was 49 out of 56 (http://nobelprize.org/nobel-prizes/economics).A substantial number of the very best economists from all over the world came to work at the best American universities, only now as free agents, not as refugees. Publication in US journals (and therefore in English) was increasingly seen by overseas scholars as essential in order to establish their professional standing and influence public policy. By 1989, 20 of the top 27 economics journals were published in the United States (Lee, 2009, 45). It might be objected that this is not an unbiased statistic, since its compiler, Art Diamond, was himself an American, but this is precisely the point: no such list compiled by someone outside the United States would have carried such (global) authority.
Additional influence was exercised through the graduate schools, which increasingly attracted the brightest and best of the world’s students; by 2000, 54 per cent of those enrolled in US PhD programmes in economics came from overseas (Fourcade, 2006, 173). American dominance was evident in almost every element of postgraduate education, from the now-universal requirement of a PhD as a pre-condition of academic employment to the introduction of a substantial coursework element in the degree (neither being generally found even in Anglophone countries such as Australia or the United Kingdom until late in the twentieth century).
Last, but not least, was the Americanisation of undergraduate education in economics, with Samuelson’s Economics and its many imitators making massive inroads into the national textbook markets of almost every country on the planet and encouraging lecturers, tutors, course designers and university managers to adopt the American approach to the teaching of economics.To a considerable extent, the Americanisation of economics was a rather straightforward consequence of the hegemonic position of the United States at the end of the Second World War; it was one important dimension of the nation’s overwhelming ‘soft power’. This was not confined to popular culture, though jazz and the Hollywood cinema were important elements in it. The economic strength of the United States at the end of the Second World War was simply overwhelming; the economy had doubled between 1938 and 1945, now accounting for half the world’s industrial output and three-quarters of its gold reserves. Its intellectual dominance had been strengthened by the influx of European refugee economists after 1933, which contributed (as we have seen) to the triumph of neoclassical formalism over what now appeared to be an outdated and parochial tradition of American Institutionalism.
Globalisation also played a part. The cost of transport and communications fell steeply and continuously after 1945, making the movement of people and ideas much easier, and this, too, disproportionately benefited the global hegemon. English became the global language, in academic life no less than in finance, trade and industry. Thus when the European Society for the History of Economic Thought was set up in 1996 it adopted English as its lingua franca from the start, while the European Journal of the History of Economic Thought, with editors drawn from Austria, France, Ireland and Portugal, rarely publishes papers or book reviews in any other language.
But the Americanisation of economics was also the result of deliberate action by private and public sector organisations.
This included the provision of fellowships and scholarships, by the Rockefeller and Ford Foundations and by federal government agencies, to enable the brightest and best of overseas economists to visit the United States. It was also significant that the two crucial Bretton Woods institutions, the International Monetary Fund and the World Bank, had their headquarters in Washington, where they had close links with the US Treasury and its Wall Street connections. It was thus no accident that the neo-liberal policy prescriptions imposed on many developing countries in the 1980s and 1990s came to be known as the ‘Washington Consensus'. Often they were implemented by local officials with Ivy League PhDs in economics, who had apparently studied American economic life more closely than the country's democratic political system: the ‘Chicago Boys' in Pinochet's Chile, for example, and the ‘Berkeley Mafia' in Suharto's Indonesia.Late in the century, US military and political power seemed to be in irreversible decline, as argued by the historian Paul Kennedy in his influential The Rise and Fall of the Great Powers (1988). But the nation's cultural and ideological hegemony remained largely intact, and it could indeed be seen as increasing, with the growing acceptance of neo-liberal ideas around the world, not least (after 1991) in the former Communist countries of Eastern Europe. In Western Europe, the former Co-ordinated Market Economies were increasingly coming to resemble the Anglo- Saxon Liberal Market Economies, with the increasing power of finance enforcing ‘shareholder value' — short-run profit maximisation — as the only sustainable objective of the large corporation. In some ways, then, the ‘soft power' of the United States was still growing. Certainly there was no evidence that the Americanisation of economics was under serious threat.