S. R. Dennison

Robertson on economic policy

Part 1 The background: introduction biography relating with J.M. Keynes. Part 2 The policy papers: the credit squeeze wage inflation incomes and claims commentary on reflections of an ex-magus reflections of an ex-magus the Radcliffe report Mr Lloyds fireworks. Part 3 Selected papers: a study of industrial fluctuation 1915 new introduction on sticking to ones last the role of persuasion in economic affairs memorandum in banking and finance is another slump coming?. Appendices selected poems of Dennis Holme Robertson: the non-econometricians lament John Milton after Novara St Georges chapel bibliography of the writings of Dennis Holme Robertson.

Is Another Slump Coming

Since the middle of 1932, speaking very roughly, the number of employed persons in this country has grown by two million, and the number of unemployed has been halved. The volume of industrial production has increased by something like a half, and the general level of business activity by a third. The general level of wholesale prices is higher by a third; the total national income, measured in money, is perhaps greater by about a quarter.

Relations with J. M. Keynes

When he returned to Cambridge in 1919, to his Fellowship at Trinity and a university lectureship, Robertson worked in close collaboration with Keynes until the early 1930s. This is well-documented, not only that almost everything each of them published contains a tribute to the other, but also in a number of commentaries on their work.1 Perhaps the outstanding case of the former is Banking Policy and the Price Level (1926) in the Preface of which Robertson wrote, ‘I have had so many discussions with Mr J. M. Keynes on the subject matter of chapters V and VI and have rewritten them so drastically at his suggestion, that I think neither of us now knows how much of the ideas therein contained is his and how much is mine’. In turn, Keynes wrote to Robertson on 10 November 1925 that he liked ‘the latest version though God knows it is concise’ and that Chapter V was ‘splendid — most new and important. I think it is substantially right and at last I have no material criticism. It is the kernel and real essence of the book.’ He went on, ‘It will be interesting to see whether anyone, and who, will when it is published see what you are driving at. You will be lucky if you get five understanding readers within two years, after that there will be lots.’ In the first comment Keynes was right, as shown by various reviews, not one of those now available showing any grasp of the argument.2 The second was too optimistic, as for over sixty years many economists have found it very hard going and confessed failure fully to understand.

On Sticking to One’s Last

Three years ago our then President, Mr Hawtrey, in a challenging address entitled ‘The Need for Faith’,1 commented on the loss of self-confidence which had overtaken the race of economists. This he attributed to their lack of faith. Faith in the utilitarian calculus, faith in the invisible hand, had wilted away, and nothing had taken its place. Nothing short of an enlargement of the scope of economics to embrace all the elements of the good life, so I took his final sentences to mean, could get our science back upon its feet, and restore to its practitioners self-confidence in addressing their fellow men.

Reflections of an Ex-Magus

On 25 July 1957, the Chancellor of the Exchequer (Mr Peter Thorneycroft) announced in the House of Commons that the Government had decided to set up a Council on Prices, Productivity and Incomes with the following terms of reference: Having regard to the desirability of full employment and increasing standards of living based on expanding production and reasonable stability of prices, to keep under review change in prices, productivity and the level of incomes (including wages, salaries and profits) and to report thereon from time to time. On 1 August, the Chancellor wrote to Robertson to say that the Prime Minister hoped that he would accept appointment as a member of the new Council. He said that it would be ‘quite a small body’ with (in confidence) Lord Cohen (Lord of Appeal) as Chairman, and ‘no more than two or three other members’. He added that the work should not make ‘too heavy demands on your time’, and suggested that they should have a talk before reaching a decision.

Incomes and Claims

It is a great honour to speak to this Summer School; and I do so with the humility and respect due from one who lives a rather selfish and sheltered life to those whose work, whether paid or unpaid, brings them into contact with the poverty and distress which is still, though happily on a scale so much diminished within my own lifetime, to be found in this country. I judge that my particular role in your otherwise most attractive programme is the traditional one of the economist — that of the skeleton at the feast. Perhaps that is too gloomy a view; but anyway, what I shall try to do, though I am sure you little need it, is to paint a general picture of the economic framework within which your beneficent activities have to be conducted, and to set out in some sort of order the rival claimants to yourselves on the resources into which you have to dip in order to fulfil your functions.

A Study of Industrial Fluctuation, 1915: New Introduction

It goes without saying that I have been deeply gratified by the suggestion that this book should be included in the London School of Economics series of reprints. Nevertheless I have been filled with misgiving. You do me wrong to take me out o’ the grave, I seem to hear this child of mine complain. ‘You begot me, he cries out’ in the twenty-third and twenty-fourth years of your age, which were but the third and fourth of your acquaintance with the Muse of Economics — you insisted, for your private reasons, on flinging me forthwith into the world. Unhousel’d, disappointed, unanel’d, … With all my imperfections on my head. — promised me that if you came back from the war you would make amends, and broke your promise — adding insult to injury some years later by stealing my theoretical bones for a horrible little younger son, himself, thank goodness, long since a corpse.’

A Memorandum Submitted to the Canadian Royal Commission on Banking and Finance

In the admirable statement issued on the morrow of his appointment, the Governor of the Bank of Canada alluded to the ‘broad economic objectives of high-level employment, price stability and sustained economic growth’. As a means to the attainment of these ends, he emphasised the need for the coordination of financial policy with general economic policy, the former in turn consisting in the three ‘interdependent and to some extent interchangeable’ strands of monetary policy, fiscal policy and debt-management policy. I shall try to arrange my remarks in the light of these two dissections, the one of ends, the other of means; bearing in mind as regards the second that, as I understand it, the Commission’s primary concern is with the genus ‘financial’, and within that genus with the species ‘monetary’.

The Credit Squeeze

In putting one’s thoughts together about the credit squeeze, it is a little difficult to know where to begin.

The Radcliffe Report

In May 1957 the Chancellor of the Exchequer, Mr Thorneycroft, appointed a Committee ‘to enquire into the working of the monetary and credit system, and to make recommendations’. The Chairman was Lord Radcliffe, a distinguished judge, who had already shown his expertise as an odd-job man over the Royal Commission on the Income Tax, the BBC, an abortive constitution for Cyprus, etc. The other members consisted of two economists, Professors Sayers and Cairncross, both products of Cambridge; two bankers, one being Oliver Franks, the versatile Chairman of Lloyds Bank; two industrialists, one having also long civil service experience; and two trade union characters. The Committee produced a unanimous report in August 1959; a considerable literature has already grown up around it, which will doubtless grow further when the four fat volumes of Memoranda and oral evidence, which have mercifully been delayed, become available in March. The report has been debated for one day in each of the Houses of Parliament, and the Government has disclosed its attitude towards some, though only some, of its findings; in respect of others, the Chancellor very reservedly said, ‘I must leave people to judge our policy by what we do rather than what we say.’