Susan Howson

The Origins of Lionel Robbins's Essay on the Nature and Significance of Economic Science

An Essay on the Nature and Significance of Economic Science by Lionel Robbins (1932, 1935, 1984) is often credited with bringingAustrian economic theory and methodology into English economics, as well as providing the still most widely used definition of economics: “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses” (1932, 15). The footnote attached to this first statement of the definition cites works by Carl Menger, Ludwig von Mises, F. W. Fetter, Richard Strigl, and Hans Mayer. Denis O’Brien (1988, 24) in his intellectual biography of Robbins has pointed out, however, that the sources on which Robbins drew were “threefold: English classical economics, Jevons and Wicksteed, and the Austrians.” In his evaluation of Robbins’s Austrian connection,

Why Didn't Hayek Review Keynes's General Theory? A Partial Answer

Bruce Caldwell in his interesting article “Why Didn’t Hayek Review Keynes’sGeneral Theory?” (1998) poses an intriguing question, to which of course there may be no definitive answer. As he emphasizes, Hayek himself later gave more than one answer to the question as to why he had never published a direct attack on John Maynard Keynes’s General Theory of Employment, Interest, and Money by way of a review or otherwise. Caldwell also wonders whether there might exist any other sources besides Hayek’s recollections available to shed light on the question. As the biographer of Lionel Robbins I share Caldwell’s frustration over the lack of correspondence between Hayek and Robbins. As Caldwell notes, the two men were too close to write to each other. They did not meet or correspond before Hayek was invited to give four University Advanced Lectures in Economics at the London School of Economics in the Lent Term of 1931. Although there is no reason to doubt Hayek’s recollection that Robbins had been so impressed with Hayek’s critique of the theories of William Trufant Foster and Waddill Catchings in his Zeitschrift article “Gibt es einen Widersinn des Sparens?” (Hayek 1930) as to propose that Hayek be invited to lecture at LSE (Hayek 1994, 74–75), the invitation did not come directly from Robbins (Hayek 1935b, vii). (And, incidentally, contrary to the claims of Joan Robinson and others [Caldwell 1998, 550], the invitation was made and accepted

Lionel robbins's art and the state

In his comprehensive survey of the literature on the economics of the arts up to a decade ago, David Throsby (1994, 2) pointed out that Lionel Robbins, in an essay published in 1963, was “the first British economist of modern times to analyze the economic role of the state in support for the arts in financing public museums and galleries” and that he was followed soon after by Alan Peacock (1969), who had been a junior colleague at the London School of Economics (LSE), and by William Baumol (Baumol and Bowen 1966), who had been his graduate student as well as a colleague at LSE. The essay “Art and the State,” which Robbins (1963) included in a collection of his papers in political economy, was not, however, written as an academic article for fellow economists. It was first prepared to be given as an address to the annual general meeting of the Friends of the City Museum and Art Gallery in Birmingham, England, in March 1958. Robbins was at the time the chairman of the

Money and monetary policy since 1945

INTRODUCTION In the years since the Second World War the role of money, and the use of monetary policy, has been peculiarly subject to the whims of intellectual fashion in economic thought, in Britain as elsewhere. At the outset the most commonly held view among British economists was that ‘money does not matter (much)’ for maintaining high employment, fostering economic growth or controlling inflation. By the 1970s, however, monetary policy had become a major issue in public policy debate; under Mrs Thatcher in the 1980s it became front page news. The ‘monetarist’ view that money matters a lot especially so far as inflation is concerned had come to dominate among economists and policy makers. The objectives of monetary policy have also changed, from facilitating government borrowing at low interest rates to supporting a fixed exchange rate and then to combating inflation with a floating exchange rate, to exchange-rate stability and back to price stability. The monetary history to be described here runs from the nationalization of the Bank of England by the first majority Labour government in 1945–6 to the restoration, by another Labour government, of operational independence to the Bank in 1997–8. For the purposes of this chapter it is divided into four periods: (i) the immediate post-war policies of the 1945–51 Labour governments under Prime Minister Clement Attlee, when the Keynesian’ downgrading of monetary policy was still in the ascendant; (ii) the 1950s Conservative governments’ revival’ of monetary policy which, in spite of confused aims and uncertain methods, effectively reassigned it to the preservation of external balance with a fixed exchange rate; (iii) the 1970s and early 1980s, which saw new attempts at monetary control in competition and credit control’, the adoption of monetary targets (that is, announced targets for the rate of growth of the money supply somehow defined) and the medium-term financial strategy of Mrs Thatcher’s first government; and (iv) another reorientation of monetary policy after the abandonment of monetary targets, first towards exchange-rate stability and then back to price stability by means of inflation targeting.

Cheap Money and Debt Management in Britain, 1932–51

The twenty years from the spring of 1932 to the spring of 1952 are the longest period during which Britain has enjoyed continuously low interest rates. In the first thirty years of the twentieth century there had been two `cheap money’ periods of approximately a year and a half each before the First World War and three shorter spells in 1914, 1922 to 1923 and 1930 to 1931. In the years since 1952, nominal interest rates have never again been as low as they were in 1932 to 1951.’ During the prolonged cheap money regime, which survived the Second World War and post-war reconstruction, it was not only short-term, money-market rates of interest that were low — the traditional meaning of ‘cheap money’ — but also long-term interest rates — particularly, but not only, on government debt. Furthermore, low long-term rates were, like short-term rates, part of a cheap money policy pursued by the authorities with varying degrees of success. The policy took different forms over the twenty years, being first a matter of lowering high interest rates on government debt in the midst of a severe depression, then a matter of maintaining low interest rates on government borrowing during a major war, and finally an attempt at further lowering rates from their war-time levels as a small contribution to a brave new socialist post-war world.

Lionel Robbins: Political Economist

It is hard to think of a more committed public intellectual in Britain in the twentieth century than Lionel Robbins—except, of course, John Maynard Keynes. For six decades Robbins engaged in public debate on economic policy issues in lectures and talks, contributions to newspapers and magazines, and articles and books. He had the opportunity to influence UK economic policy directly during the Second World War. After the war he exerted a strong influence on government policy toward the arts and higher education. The irony is that he is also known for his apparent claim in his best-known book, An Essay on the Nature and Significance of Economic Science, that academic economists should not indulge in such activity. The present essay describes how he fulfilled what he saw as his duty to use his expertise to enlighten nonexperts, especially once he became professor of economics at the London School of Economics in 1929.

International Organizations and the Analysis of Economic Policy, 1919-1950 (review)

of the role accorded by Say to the enlightened entrepreneur. A fascinating paper by Emmanuel Blanc raises several methodological issues from the perspective of Say and utilitarianism, and also explores the implication of Say’s proposal (touched on also by Kitami) that Dumont contribute to the Cours complet. Six detailed studies devoted to Say on money and banking—by André Tiran, Gilles Jacoud, Alain Beraud, Pascal Bridel, Michel Lutfalla, and J.-François Renaud—reveal a Say who will be unfamiliar to many readers, the studies extending beyond the law of markets to encompass the quantity theory, forced savings, and economic crises. Here too will be found much material for an evaluation of Say’s practical political economy. And this may be said also of the papers by Karine Goglio, Michael Gootzeit, José Maria O’Kean and José Manuel Menudo, and François Vatin on entrepreneurship and related issues. Say emerges in multidimensional terms as a child of his time in one of the most impressive collections of serious scholarly writings I know of. It will serve as a major corrective against the blatant caricaturization from which Say has suffered.Yet at the end of the day we are still left with thirty papers; the daunting task of integration remains.

External Financial Markets, Capital Mobility and Monetary Independence

The rapid growth of external financial markets (the eurocurrency markets) since the early 1970s has contributed greatly to the financial integration of the world economy. By increasing the mobility of capital across international borders the existence of external financial markets — markets for financial assets located outside the countries in whose currency the assets are denominated — also appears to threaten the abilities of the monetary authorities of small open economies to pursue independent monetary policies. This paper considers the question of the extent to which these markets have increased the international mobility of short-term capital and whether the resulting degree of capital mobility makes it impossible for small open economies to pursue independent monetary policies.

The Economic Advisory Council 1930-1939: A Study in Economic Advice during Depression and Recovery

Acknowledgements 1. Introduction 2. The council and the slump 3. Economic advice during the crisis 5. The committee on economic information 1932-9 6. Conclusions Appendices Notes Bibliography Index.

The Economic Advisory Council 1930-1939.

The experience of the Economic Advisory Council provides the relevant policy background to the Keynesian revolution in economic theory, and to the adoption of the principles of economic management in Britain during the Second World War. This study of this pioneering advisory institution against the inter-war setting of depression, financial crisis and recovery is based on government records, supplemented by other contemporary sources. The book deals with the political and economic origins of the E.A.C. in the post-1918 decade; the role of the Council and its committees of inquiry as the world slump began to make an impact on an already depressed British economy; and the part played by individual economic advisers in the dramatic events which led to the fall of the second Labour Government and Britains departure from the gold standard in 1931. Throughout the nineteenthirties the work of the Council was carried on by the Committee on Economic Information, which helped to provide the National Government with solutions to the complex and novel problems of a post-gold standard world. In addition to assessing the significance of the E.A.C. experiment, the book reprints a number of reports and gives a guide to the relevant documents in the public archives.