ABSTRACT
Once lecturing in Australia I referred to ‘mainstream economics’. A famous teacher there corrected me: not mainstream, he said, but ‘billabong economics’; a ‘billabong’, it seems, is a raging torrent that in spring rushes down the hills, sweeping all before it, only to run out in the desert and dry up in stagnant pools. It struck me that that is just what has happened to mainstream economics. The mainstream today refers to the ideas of the ‘Keynesian Revolution’ blended with the traditional principles of supply and demand, or ‘marginalism’. When first propounded in the late 1940s this new synthesis swept all before it, rushing on into the desert wastes of high theory. Everyone thought, now will the desert bloom, and fruitful policies be harvested! But it has been a billabong.
