Crawford School of Public Policy

W.M. Corden, 1927-2023

Prema-Chandra Athukorala and Hal Hill Australian National University

Professor Max Corden AC was widely regarded as the most eminent Australian economist of his generation. Fleeing from Nazi Germany, Max and his family arrived as refugees, literally penniless, in Melbourne in January 1939. From these humble origins, through academic brilliance, hard work, a supportive family and community environment, and perhaps a modicum of luck (on which more below), he rose to become a giant in the international economics profession for five decades. He could well have become Australia’s first Nobel Laureate in Economics, for which he was nominated and short-listed. He made highly original and creative contributions in international economics, the economics of booming sectors, global macroeconomic interdependence, and Australian economic policy. Indeed, he was one of the most powerful intellectual voices behind the internationalization of the Australian economy in the 1980s. A graduate of Melbourne High School, for which he retained a life-long affection, the University of Melbourne, and the London School of Economics, he left a lasting legacy among his colleagues and students in the four universities at which he held appointments, University of Melbourne, Australian National University, Oxford University, and Johns Hopkins University.

Max’s life work was shaped by his origins. He believed in the power of ideas, and the utility of economics as a guide to making the world a better place. His work was motivated by the grand issues of the day. He believed that economics could be employed to shed light on these issues. With his unrivalled clarity of thought and expositional skills, he sought “to make complex issues simple to understand”, and readily accessible to a broader public audience.

Werner Max Cohn was born on 13 August 1927 in Breslau (then in Germany, now Wroclaw in Poland), the second son in a self-described lower-middle class secular Jewish family. After Adolf Hitler became Chancellor of Germany, life became increasingly difficult for the Jewish community, and in 1938 the Cohn family decided to emigrate. First Max and his brother took the long trip by train and boat to England, where they were met by an aunt. The parents followed six months later and the family set sail for Australia, for which they had been granted a visa. On arrival in Melbourne, they anglicised their names: Werner became Warner and the new family name was to be ‘Corden’: at the age of 12, Werner Max Cohn, the Lucky Boy in the Lucky Country (the poignant title of his 2017 memoir), became Warner Max Corden as he started a new life.

Enrolling first in middle school, Max attended the selective Melbourne High School from 1942 to 1945. He thrived at the school, consistently achieving high academic distinction, and on graduation was awarded a prestigious scholarship to both the University of Melbourne and its Queens College. The subject that most interested him was history, but his father advised him to take Commerce with its better employment prospects. He found little of interest in the accounting courses, but he did enjoy Economics, graduating in 1949 with a first class honours degree and subsequently a Masters degree. Disappointed not to be offered a tutorship, Max found work as a researcher for the Melbourne Argus newspaper which, given his interest in current affairs, he enjoyed. It also led to his first academic publication in the Review of Economic Studies. Later he worked as a Commonwealth public servant in the Department of National Development.

A life-long Anglophile, Max secured a British Council scholarship to pursue a doctorate at the London School of Economics, where he had the good fortune to study under James Meade, who became a major and enduring intellectual influence. Upon graduation, and by then married to Dorothy, the couple returned to Australia, first to the University of Melbourne (1958-61) and then the Australian National University (1962-67). In 1967 he was offered the Nuffield readership vacated by Sir Roy Harrod. In his memoir he described the decade that followed at Oxford as “the very best years”. He returned to the ANU in 1977, and succeeded Heinz Arndt as head of the Economics Department in the Research School of Pacific and Asian Studies in 1980. Then followed 16 years living in Washington DC, their longest period in any one location. In 1986 he took up a two-year position as senior advisor in the research department of the International Monetary Fund, followed by an appointment at the John Hopkins School for Advanced International Studies (SAIS). Retiring from SAIS in 2002 at the age of 75, he and Dorothy returned to Melbourne and Max returned to his alma mater, Melbourne University, as an emeritus professor.

For over half a century Max’s academic output was prodigious, of exceptionally high quality, and invariably motivated by a desire to understand the big economic issues of the day. He wrote six major books and a large number of articles mainly in the fields of international trade and open-economy macroeconomics.

In the post-war period, Australia had one of the world’s most protected, complex and politicized trade policy regimes (a fact that Max recalled from earlier dinner-table conversations with his father, who obtained work as a manufacturers’ agent and wholesaler for women handbags and other fashion goods). The standard tariff measures were a poor guide to the actual levels of protection, both because these just measured nominal rates of protection, and because of the extensive presence of “made-to-measure” quantitative restrictions. Especially after his move to Canberra Max began to advise senior officials of the old Tariff Board on how to measure the effective protective effects. This led inter alia to his seminal paper on the subject (Journal of Political Economy 1966), which was subsequently extended into a major book, The Theory of Protection (Oxford University Press, 1971), which in turn spawned a vast literature that played a pivotal role in the debates on trade policy reforms, both in developed and developing countries. Subsequently, he consolidated his work on trade theory into his magnum opus (he would sometimes reflect that this was the book of which he was most proud), Trade Policy and Economic Welfare (Clarendon Press 1974).

During the 1970s new issues beckoned and Max’s interests shifted accordingly. The UK was experiencing the effects of the North Sea oil discovery, in Australia mining boom was gathering steam, while globally the OPEC oil shock was perhaps the major issue of the day. The result of this interest was a major paper on booming-sector economics (the so-called “Dutch disease”) written with his Oxford student Peter Neary (Economic Journal, 1982), which remains a foundational reference on that subject, and is in fact his most widely-cited paper.

As oil prices began to fall sharply, the 1980s was the “lost decade” for many developing country commodity exporters, Max’s interests began to shift again, to open economy macroeconomics, particularly after he joined the IMF where much of his work was devoted to the developing country debt crises. He had earlier dabbled in macroeconomics with his diagrammatic expansion and exposition of the Australian dependent economy model (Review of Economic Studies 1960); with Heinz Arndt he was an early admirer of the Swan diagram. This work was extended and formalized in a major volume on the subject, Economic Policy, Exchange Rates, and the International System (University of Chicago Press, 1994), that paved the way for the model’s integration within the mainstream open-economy macroeconomics literature.

During his tenure at the IMF and subsequently at SAIS, Max wrote extensively on macroeconomic dimensions of economic growth and development, including revisiting of some of his early ANU work on Southeast Asia. Alongside several papers, two major books were published over this period. The first was the monumental multi-country study sponsored by the World Bank, Boom, Crisis, and Adjustment: The Macroeconomic Experience of Developing Countries (Oxford University Press, 1993), co-edited with his friends Richard Cooper, Ian Little and Sarath Rajapatirana. His last book, Too Sensational: On the Choice of Exchange Rate Regimes (MIT Press, 2002), was based on his 2000 Ohlin Lectures delivered at the Stockholm School of Economics, and it was a consolidation of his research in the field of exchange rate economics.

After returning to Melbourne, Max wrote papers on labour migration, education, the demographic transition in Australia, the Asian and global financial crises, and much else. Earlier a compendium of his major writings on the Australian economy was published in 1997 (The Road to Reform: Essays on Australian Economic Policy, Addition-Wesley). His last paper, written with his close friend Ross Garnaut at the age of 90, was on the economic consequences of Donald Trump (Australian Economic Review, 2018).

Max was the master economist who, to paraphrase Keynes, studied the present in the light of the past for the purpose of the future. He was essentially an applied theorist whose work was motivated by real-life issues, with a remarkable ability to state propositions and policy implications with great clarity and intellectual honesty. He understood symbols and employed diagrammatic exposition, but he spoke and wrote in words. He was generally not an empirical economist, but he took numbers seriously and they informed his thinking. In the classroom, he was a lively and articulate teacher, who drew on his remarkable retentive memory of the incidents of life and living that came his way to press home the argument. He was able to leave an indelible mark on Australian public policy without ever occupying any government office because of the clarity and rigor of his writings.

Max had a deep and abiding interest in the state of the world, and humanity in general (the latter including his strong support for refugee groups over many years). After his student days, when he was a member of the moderate ALP Club, he was not active in party politics.

Max Corden received many honours during his life. In 2001 he was awarded the Companion of the Order of Australia (AC). He was elected a fellow of the Academy of Social Sciences of Australia, and later of the British Academy. The ANU has named the Arndt-Corden Department of Economics in his (and Heinz Arndt’s) honour. A festschrift featuring many famous economists was published in his honour (Henryk Kierzkowski (ed), Protection and Competition in International Trade, Basil Blackwell, 1987). For many years the University of Melbourne has run an annual Corden Lecture. For several years he was a member of the Group of Thirty (G30) of eminent economists, an initiative of the Rockefeller Foundation. He was also a past president of the Economic Society of Australia. Max may have been a “Lucky Boy”, but he made his luck by seizing life’s opportunities, achieving so much, and giving back generously to the societies in which he lived.

This piece is forthcoming in Economic Record.

We thank friends and colleagues for helpful discussions, including several fine speeches at the service in honour of Max Corden at the University of Melbourne on November 2. We have drawn on Max’s 2017 memoir referred to in the text, and an extended 2007 interview with Bob Gregory recorded for the National Library oral history program, available at: https://nla.gov.au/nla.obj-209276034/listen. See also William Coleman, “A Conversation with Max Corden”, Economic Record, 82 (#259), pp. 379-395.