The DAE Review 1984–1987: A Four-Year Inquisition

In 1984, the General Board of the University of Cambridge unusually and unexpectedly launched a formal Review of the Department of Applied Economics. This protracted and unorthodox Review, allegedly instigated by the orthodox camp in the Faculty and running across four years, forms the final element of The DAE Trilogy, following the first, which involved the closure of the outspoken Godley-Cripps Cambridge Economic Policy Group, and the second episode, which saw the termination of the iconic Stone-Barker Cambridge Growth Project—both through hostile funding decisions by the SSRC/ESRC. Using archival materials and interviews with contemporary actors, this third part which, in time, ran parallel to the second offers a revealing keyhole to peep into covert and submerged aspects of the relationship between the warring orthodox and heterodox groups, and through this between the DAE and its parent body, the Faculty of Economics. For three attritional years, DAE and its staff lived under the Damoclean sword, uncertain about its future, its leadership, its organisational structure and its constituents, indeed of its very survival. Insecurity was rife, demoralisation mounted, the departures lounge filled up. When it ended in 1987, the Review achieved the outcome of transferring authority and power over the DAE from the heterodox to the orthodox camp in the Faculty. The year 1984, when this hostile review was launched, is ironically also especially remembered for the award of the ‘Nobel’ Prize in economic science to the DAE pioneer Richard Stone—though, given the way the Review went—it was perhaps also apposite in an Orwellian sense. The trilogy of DAE episodes marked the termination of macroeconomic modelling, whether analysing structural change as in the Cambridge Growth Project, or engaging with current macroeconomic policy issues as in the Cambridge Economic Policy Group; it also signposted the change of direction towards applied microeconomic research within the mainstream, neoclassical theoretical frame; it constituted a sea change in the intellectual orientation of the Department of Applied Economics.