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Economic Advice at the Centre of British Government, 1939–19411

Published online by Cambridge University Press:  11 February 2009

Alan Booth
Alan Booth
Affiliation:
University of Sheffield
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Extract

Like other advanced countries in the twentieth century, Britain has witnessed a remarkable expansion in the size and functions of government. Increasing public intervention has necessarily been accompanied by a vigorous expansion in the number of specialists and professionals employed in the public service. In recent times there has been increasing academic interest in the role of one particular category of specialist, the economist. We have the definitive account by Howson and Winch of the economic advisory council and its committee on economic information, the purely advisory bodies of academic economists and representatives of producer interest groups which encouraged officials and ministers to take a longer, broader look at trends in the national and international economies in the thirties. From the post-1945 period we have a number of studies of specific departments and a growing collection of memoirs written by disenchanted or self-justifying economists on leaving government service. For the crucial period of the second world war, however, when administrators and politicians seemed to accept the need for professional economic advice from within the bureaucracy, comparatively little systematic research has been undertaken. There are memoirs, but many have been written long after the event and tend to be discursive and occasionally unreliable as to detail. Fortunately the state papers relating to the war are available and should be a reliable source from which to make judgements about the work and effectiveness of economic advisers in this crucial period.

Type
Articles
Information
The Historical Journal , Volume 29 , Issue 3 , September 1986 , pp. 655 - 675
Copyright
Copyright © Cambridge University Press 1986

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References

2 Coats, A. W., Economists in government: an international comparative study (Durham, North Carolina, 1981), p. viiGoogle Scholar.

3 Ibid. pp. 3–26.

4 Howson, Susan and Winch, Donald, The economic advisory council, 1930–1939: a study in economic advice during depression and recovery (Cambridge, 1977)CrossRefGoogle Scholar.

5 The best bibliographical source is found at the end of Coats's chapter on Britain in Economists in government, pp. 63–6.

6 A notable exception is the essay by Chester, D. N.: ‘The central machinery for economic policy’, in Chester, D. N. (ed.), Lessons of the British war economy (Cambridge, 1951), pp. 5–33Google Scholar.

7 See Robbins, Lord, Autobiography of an economist (London, 1971), chs. 8 and 9CrossRefGoogle Scholar. Jewkes, John, A return to free market economics? Critical essays on government intervention (London, 1978), ch. 3CrossRefGoogle Scholar; SirCairncross, Alec, ‘An early think-tank: the origins of the economic section’, The Three Banks Review, CXLIV (1984), 50–9Google Scholar.

8 Booth, Alan and Glynn, Sean, ‘The state records and recent economic historiography’, Economic History Review, 2nd ser. XXXII, 3 (1979), 303–15CrossRefGoogle Scholar.

9 Ibid. p. 313–5.

10 D. H. Robertson, fellow of Trinity College, Cambridge, 1914–38; Reader in economics, University of Cambridge, 1930–8; Cassel Professor of economics, University of London, 1939–44; economic adviser to the Treasury, 1939–44.

11 Sir Richard Hopkins, second secretary, Treasury, 1928–42; permanent secretary, 1942–5.

12 Sir Frederick Phillips, under secretary, Treasury, 1932–9; joint third secretary, 1939–42.

13 See Howson, and Winch, , The economic advisory council, pp. 151–2, 156–64Google Scholar.

14 Howson and Winch tend to shy away from a direct admission that the committee had marginal impact. In an ambiguous footnote they attempt to pin the blame on Neville Chamberlain. Ibid. p. 157.

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16 Economic advisory council, pp. 150–1.

17 H. D. Henderson, joint secretary, economic advisory council, 1930–4; member, committee on economic information, 1931–9; fellow of All Souls, Oxford, 1934–51; member, Stamp survey, 1939–40; economic adviser, Treasury, 1939–44.

18 Sir J. Stamp, member, economic advisory council, 1930; chairman, committee on economic information, 1931–9; head of Stamp survey, 1939–40.

19 P.R.O. CAB 89/9, ‘The work of the survey in the first year of war’, 15 Oct. 1940.

20 Henry Clay, Jevons Professor of political economy, Manchester, 1922–7; professor of social economics, Manchester, 1927–30; economic adviser, Bank of England, 1930–44; member, Stamp survey, 1939–40; economic adviser, board of trade, 1940–4.

21 Howson, and Winch, , Economic advisory council, p. 151Google Scholar.

22 He was ‘president’ (an unusual civil service position) of the interdepartmental committee on economic policy and a member of the parallel ministerial committee.

23 SirAnderson, John, The organisation of economic studies in relation to the problems of government (London, 1947), p. 12Google Scholar.

24 Ibid. p. 13.

25 For example, in connexion with the special areas policy: Booth, Alan, ‘An administrative experiment in unemployment policy in the thirties’, Public Administration, LVI, 2 (1978), 152Google Scholar.

26 There was much intriguing between Labour and anti-Chamberlain tories: Pimlott, Ben, Hugh Dalton (London, 1985), pp. 258–61Google Scholar.

27 The papers of the Stamp survey give no more than the formal reasons for its establishment: P.R.O. CAB 89/9, ‘The work of the survey in the first year of war’. There is nothing in P.R.O. PREM 1 about the appointment of Stamp.

28 P.R.O. CAB 89/1, P (F and E), 24th informal meeting, 3 Aug. 1939.

29 P.R.O. CAB 89/1, P (F and E), 25th informal meeting, 6 Sept. 1939.

30 P.R.O. CAB 89/1, P (F and E), 26th informal meeting, 7 Sept. 1939; see also P.R.O. CAB 72/1, EP (M) (39), 5th meeting, 27 Oct. 1939.

31 P.R.O. CAB 72/1, EP (M) (39), 8th meeting, 9 Nov. 1939. The case was made in P.R.O. CAB 72/2, EP (M) (39) 31, ‘Machinery for the establishment of a central information service in connection with exchange stability and priority policy’, report by Stamp, Lord and SirWilson, Horace, 6 11 1939Google Scholar.

32 The following paragraphs are based heavily upon material from a programme of interviews with economists who served in Whitehall during the war. Interviews were recorded and the transcripts sent to the interviewee for correction and elaboration.

33 Robinson, E. A. G., university lecturer in economics, Cambridge, 1929–39Google Scholar; member C.E.I.S. and economic section, 1939–42; economic adviser and head of programmes division, ministry of production, 1942–5.

34 Harrod, R. F., lecturer in economics and fellow of Christ Church, Oxford, 1922–78Google Scholar; Admiralty S branch, 1940; P.M.S.S., 1940–2; economic adviser, Admiralty, 1943–5.

35 MacDougall, G. D. A., lecturer in economics, Leeds, 1936–9Google Scholar; Admiralty S branch, 1939–40; P.M.S.S., 1940–5.

36 Lindemann, F. A. (Cherwell, Lord), professor, experimental philosophy, Oxford, 1919–56Google Scholar; fellow, Wadham college, Oxford, 1919–56, student, Christ Church, Oxford, 1921–56; personal assistant to Churchill, 1939–45; paymaster general, 1942–5.

37 The history of the P.M.S.S. is covered in G. D. A. MacDougall, ‘The prime minister's statistical section’ in Chester (ed.), Lessons.

38 On Hemming's eccentricities see Robbins, , Autobiography, pp. 170–1Google Scholar.

39 Harrod, R. F., The Life of John Maynard Keynes (Pelican edn, 1972), p. 592Google Scholar.

40 Chester, , ‘Central machinery’, p. 5Google Scholar.

41 The ‘chancellor incident’ has left no trace on the public records. This account is based upon Stamp's own interpretation of events as recorded by his biographer: Jones, J. H., Josiah Stamp: public servant (London, 1964), pp. 337–40Google Scholar.

42 The burden on the Treasury was immense. See Hancock, W. K. and Gowing, M. M., British war economy, in History of the Second World War, United Kingdom civil series (London, 1949), pp. 93, 217Google Scholar.

43 , J. and Jewkes, S., The juvenile labour market (London, 1938)Google Scholar.

44 The first papers for the survey by Jewkes and Robinson can be found in P.R.O. CAB 89/9 and date from Jan. 1940.

45 Cairncross, , ‘Think-tank’, p. 52Google Scholar.

46 Harris, José, William Beveridge: a biography (Oxford, 1977), p. 363Google Scholar.

47 Dennison, S. R., The location of industry and the depressed areas (London, 1939)Google Scholar.

48 This story went into the collective folk wisdom of the economic section. It was recalled at interview by four wartime members of the section

49 Interviews with Sir Alec Cairncross, John Jewkes and Sir Austin Robinson.

50 P.R.O. CAB 89/9, ‘The work of the survey in the first year of war’, annex 2.

51 Cairncross, , ‘Think-tank’, p. 53Google Scholar.

62 Ibid. p. 53.

53 Chester, , ‘Central machinery’, pp. 25–6Google Scholar.

54 Hancock, and Gowing, , British war economy, pp. 217, 221Google Scholar; Addison, Paul, The road to 1945 (Quartet edn, 1977), p. 116Google Scholar.

55 361 H. C. Deb. 4 June 1940, cols 769–70 as cited by Chester, , ‘Central machinery’, p. 7Google Scholar.

56 Ibid. pp. 6–7.

57 P.R.O. T230/12, ‘Note on the organization of the central economic information service’, n.d. [midsummer 1940].

58 Chester, , ‘Central machinery’, p. 8Google Scholar.

59 See, for example, the comments on Greenwood and Attlee, Labour's first two coordinating ministers, in Addison, The road to 1945, pp. 113–14.

60 Interview with Sir Austin Robinson.

61 The economic policy committee met only four times between mid-May and early September, and conducted only very mundane business (P.R.O. CAB 72/3). The lord president's committee met regularly in June and July under Chamberlain, less frequently in August and September under Attlee, and resumed meeting at least once each week from late October, under Anderson. Apart from agricultural prices, which it failed to resolve, its business was very low-grade, involving, inter alia, compensation and the means test (P.R.O. CAB 71/I). The production council met regularly, but with very little point as Beaverbrook, the minister of aircraft production and a driving force in the economy at this time, failed to attend after the first meeting (P.R.O. CAB 92/56). The food policy committee did meet, but was deadlocked over food imports (P.R.O. CAB 74/2).

62 P.R.O. T 230/12, paper by Robbins, dated 4 Nov. 1940

63 P.R.O. CAB 72/2, EP (M) (40) 26, ‘Steel, timber, wool’, 5 Apr. 1940 and P.R.O. CAB 72/4, EP (M) (40) 36, ‘The balance of payments in the first year of war’, 30 May 1940,

64 Harrod's doubts began before the Stamp papers cited above; see Cherwell papers, Nuffield College, Oxford, H 101 (unsigned memo from Harrod, 2 Feb. 1940). See also an unsigned note from Harrod to Lindemann of an interview with Francis Hemming, dated 26 Apr. 1940 in H 101. The ‘defeatist’ tag can be found in Cherwell papers F81/2, Harrod to Lindemann, n.d. but probably June 1940.

65 Ibid.

66 Autobiography, p. 169.

67 The papers can be found in P.R.O. CAB 72/24. There are fourteen papers, none of which appears to have been drafted for any specific committee.

68 The survey first raised this issue on 7 September 1939; P.R.O. CAB 89/1, P (E and F), 26th meeting.

69 Taylor, A. J. P., Beaverbrook (London, 1972), p. 444Google Scholar.

70 The official historian points to the poaching of skilled labour by one munitions firm from another: Postan, M. M., British war production (London, 1952), pp. 149–52Google Scholar.

71 Chester, , ‘Central machinery’, p. 8Google Scholar.

72 Wheeler-Bennett, John W., John Anderson: Viscount Waverley (London, 1962), p. 219CrossRefGoogle Scholar.

73 Cherwell papers, F86, ‘English statistical experience since the outbreak of war’, unsigned memo. 14 July 1941.

74 Interview with Sir Donald MacDougall.

75 Cherwell papers, F86, ‘English statistical experience’.

76 Harrod, R. F., The Prof. A personal memoir of Lord Cherwell (London, 1959), p. 213Google Scholar.

77 Churchill, Winston, The Second World War (London, 1949), vol. 11Google Scholar: Their finest hour, p. 608. Churchill's wartime directives on statistical organizations can be found in P.R.O. PREM 4/68/7.

78 Hancock, and Gowing, , British war economy, p. 222Google Scholar.

79 Thus the account of Hancock and Gowing (who had access to both the public records and the Cherwell papers) follows this pattern: ibid. pp. 220–1.

80 Cherwell papers, F.86, ‘English statistical experience’.

81 Harrod, , The Prof. p. 189Google Scholar.

82 Ibid. p. 193.

83 Interviews with Sir Alec Cairncross, Professor Jewkes and Professor Meade.

84 See the comments of Winant, U.S. ambassador to London, cited by Wheeler-Bennett, , John Anderson, p. 271Google Scholar.

85 Having taken a course in political economy as an undergraduate at Edinburgh.

86 Anderson, , The organization of economic studies, p. 7Google Scholar.

87 Robbins, , Autobiography, p. 175Google Scholar.

88 Interview with Professor Meadc.

88 Meade's work on the national income accounts provided continuous employment, but it was not as directly integrated into policy-making before December 1940 as the foundation studies.

90 P.R.O. T230/13, EC (S)(41) 1st meeting, 14Jan. 1941.

91 At this point Meade, Stone, Jewkes and Miss Watts were all engaged on the national income work; ibid.

92 The tactics of the P.M.S.S. were so described at interview by one of its wartime members, D. M. Bensusan Butt.

93 P.R.O. T230/13, ‘Future policy’, memo, by Jewkes, 22 Jan. 1941.

94 Ibid.

95 The first, prepared in August 1941, concentrated upon the mobilization of resources for the war effort (P.R.O. T 230/13, ‘Notes for quarterly survey’, 1 Aug. 1941) and the second took as its theme movements in civilian consumption (P.R.O. T 230/13, ‘Second quarterly survey’, 7 Nov. 1941).

96 The most accessible source is Chester, ‘Central machinery’ pp. 15–17.

97 Ibid. p. 11.

98 Hancock, and Gowing, , British war economy, p. 220Google Scholar.

99 Booth, Alan and Coats, A. W., ‘Wartime economists on the role of the economist in government’, Oxford Economic Papers, XXXII (1980), 192–4Google Scholar.

100 ‘Think-tank’, pp. 54–5.

101 The most spectacularly successful examples concern economists outside the economic section: Keynes's brilliant ‘guesstimates’ of the national income and Reddaway's use of household budget data on points rationing. Both are discussed in Booth, Alan, ‘Economists and points rationing in the Second World War’, Journal of European Economic History, XIV (1985)Google Scholar. The cabinet office economists were, of course, using these same skills as a matter of routine, as the previous Cairncross quote suggests.

102 Interviews with Sir Alec Cairncross and Professor Jewkes.

103 Ibid.

104 Booth, Alan, ‘The “Keynesian revolution” in economic policy-making’, Economic History Review, 2nd ser. XXXVII (1983)Google Scholar; P.R.O. T 230/15, economic section discussion papers, 1943 and P.R.O. T 230/16, economic section discussion papers, 1944.

105 The section met weekly to discuss the papers which would go forward to the various committees.

106 The collected writings of John Maynard Keynes (30 vols. London, 1971 onwards), vol. XXII, Activities 1939–1945: internal war finance, pp. 1–155, 195–354Google Scholar.

107 Booth, , ‘Points rationing’, pp. 306–7Google Scholar.

108 Booth and Glynn, ‘State papers’.