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2024 | OriginalPaper | Buchkapitel

15. Hawtrey’s Social Philosophy: Welfare and Value

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Abstract

Hawtrey is, first and foremost, widely known today as an economist in Cambridge, who developed a theory of monetary economic fluctuations. Different from Pigou’s theory focused on psychological factors and Robertson’s one focused on real factors, Hawtrey grasped economic fluctuations as purely monetary phenomenon caused by the behavior of banks. He is also widely known as an economist, who provided the theoretical basis for the so-called Treasury View.

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Fußnoten
1
Good and Bad Trade (Hawtrey 1913) represents it.
 
2
See “Public Expenditure and the Demand for Labour” (Hawtrey 1925).
 
3
See The Art of Central Banking (Hawtrey 1932).
 
4
Trade and Credit (Hawtrey 1928) represents it.
 
5
Hawtrey was examined by Laidler (1993) as “the root of the Chicago Tradition”.
 
6
For this, see Deutcher (1990), which deals with Hawtrey’s contribution to macroeconomics.
 
7
Like Leonard Woolf and Lytton Strachey (both born in 1980 and Apostles), Hawtrey, one year younger, was an ardent follower of G.E. Moore. Moore’s ethics is of great significance when considering the ideas of this generation (including Keynes).
 
8
Hawtrey left two works in the same area in later years. One is Economic Destiny (Hawtrey 1944). The other is an unpublished book, Right Policy: The Place of Value Judgements in Politics (consisting of 18 chapters). It is presumed to have been written in the mid-1960s) (Hawtrey Papers 12/2, Churchill College, University of Cambridge). This book is examined in Hirai (The Journal of the History of Economic Thought, 34-2, 2012).
 
9
The purpose of welfare and false ends is also discussed in detail in Ch.12, Economic Destiny (Hawtrey 1944). By the way, in Right Policy, the ends are classified into “Instinctive Ends” and “Intermediate Ends” or “False Ends”.
 
10
In Ch.13 of Economic Destiny, defensive products are renamed to “utility products” (and yet a similar differentiation is made). In Ch.6 of Right Policy, “creative products” are renamed to “plus products” and distinguished from “utility products”.
 
11
A similar recognition can be seen in Economic Destiny. “The first condition of making competitivist institutions function is that monetary authorities should refrain from this disastrous action. It is practicable to maintain a sufficiently stable flow of money, and, if that is achieved, the worst troubles will be overcome. Not only can trade depressions and general unemployment be avoided, but the dislocations of international trade and the foreign exchanges can be kept within manageable limits” (Hawtrey 1944, pp.359–360).
 
12
In Economic Destiny (pp.250–251) Hawtrey also points out that the dissatisfaction with the current wage theory is due to the lack of consideration for profits. He points out that the underdeveloped profit theory and the underdeveloped wage theory are closely related.
 
13
In Chapter 10 of Economic Destiny, “international anarchy” is cited as the biggest cause of economic turmoil during the interwar period. As usual, Hawtrey does not list any relevant literature (only Dickinson’s name is mentioned). The situation of the British controversy over international politics at that time is analyzed in detail in Yoshikawa (1989), and we need to read the above with the help of these. In Right Policy, Chapter 16 deals with “conditions for peaceful coexistence” and Chapter 17 deals with “a concert of great powers”.
 
14
The following statement is recognized in Economic Destiny.
It may be that positive action will be required from the Government amounting to something not far short of full-blown collectivism. If so, the most effective way of exercising control, whether it be a temporary departure from competitivism or a transition to collectivism as a permanency, will be for the Government to take over the functions of the wholesale dealer, not only the wholesale dealer in the strict sense, who buys in order to sell, but the selling side of those producers who supply retailers direct. And where there is a big retailer who has assumed the wholesaler’s functions and buys from numerous independent producers direct, the Government would have to intervene in his buying business. (Hawtrey 1944, pp.354–355)
 
15
In Economic Destiny, Hawtrey shows the way to collectivism and the way to the “third possibility” (which seems to correspond to the New Liberalism). Although he does not make judgment on which is better, there is a clear sense of criticism of competitivism (which is called the “individualist system” in The Economic Problem).
It will be possible either to withdraw Government control step by step as industries regain normal capacity and normal demand, or to make it permanent, to suppress profit-making, and to transform the profit-making traders into salaried servants of the State. It would be impossible to effect this great transition at a stroke without acute political controversy, and difficult to do so without violence. It is not unlikely that people will shrink from the fateful step, and will yet be unwilling to give up the control which keeps the door open to it. There is thus a third possibility, a continuance of profit-making under Government control. Indeed if collectivism is to be the ultimate solution, there is much to be said for a relatively prolonged trial of the intermediate stage, in which the administrative staffs of the Government will learn the ways of trade and industry, and traders will learn to accommodate their operations to public policy. Perhaps after some years the country might lapse painlessly into collectivism without any serious controversy. If, on the other hand, the ultimate choice were to revert to competitivism, the experience would still be found to have been salutary, and the possibility of a re-establishment of control would remain as a restraint on the abuses of profit-making. (Hawtrey [1944] p.358)
 
16
Economic Destiny concludes with the following passage about profit earning.
Is profit-making to be tolerated? Supporters of competitivism maintain that it is indispensable as the motive of enterprise. Its abuses have been partially rectified by levying ransom upon it for social services. Ransom is a compromise. Is it raising direct taxation beyond the practicable limit and making the fiscal machine top-heavy? And even so does not ransom fail to effect any real reconciliation between profit-making and wage policy?
To these questions no one can give a decisive answer, but it is to be hoped that the issues will be brought out into the open, and that those who take part in making the choice will do so with an understanding of the consequences. (Hawtrey 1944, p.360)
By the way, the dissertation (6/5/2, Churchill College, University of Cambridge) that Hawtrey read at Morley College (London) before 1914 begins with the following sentence. “Anyway, in theory, socialism is a natural sequel of democracy”.
 
Literatur
Zurück zum Zitat Deutcher, P., R. G. Hawtrey and the Development of Macroeconomics, London: Macmillan, 1990. Deutcher, P., R. G. Hawtrey and the Development of Macroeconomics, London: Macmillan, 1990.
Zurück zum Zitat Hawtrey, R., Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations, Constable & Company, 1913. Hawtrey, R., Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations, Constable & Company, 1913.
Zurück zum Zitat Hawtrey R., “Public Expenditure and the Demand for Labour”, Economica, March o.s., 5., 1925. Hawtrey R., “Public Expenditure and the Demand for Labour”, Economica, March o.s., 5., 1925.
Zurück zum Zitat Hawtrey, R., The Economic Problem, London: Longmans, Green and Co., 1926. Hawtrey, R., The Economic Problem, London: Longmans, Green and Co., 1926.
Zurück zum Zitat Hawtrey, R., Trade and Credit, London: Longmans, Green and Co., 1928. Hawtrey, R., Trade and Credit, London: Longmans, Green and Co., 1928.
Zurück zum Zitat Hawtrey, R., The Art of Central Banking, London: Longmans, Green and Co., 1932. Hawtrey, R., The Art of Central Banking, London: Longmans, Green and Co., 1932.
Zurück zum Zitat Hawtrey, R., Economic Destiny, London: Longmans, Green and Co., 1944. Hawtrey, R., Economic Destiny, London: Longmans, Green and Co., 1944.
Zurück zum Zitat Keynes, J.M., The End of Laissez-Faire, London: Hogarth Press, 1926b, in JMK.9, 272–294. Keynes, J.M., The End of Laissez-Faire, London: Hogarth Press, 1926b, in JMK.9, 272–294.
Zurück zum Zitat Keynes, J.M., A Treatise on Money, 1 and 2, London: Macmillan (TM) (JMK.5 and 6), 1930a [1971]. Keynes, J.M., A Treatise on Money, 1 and 2, London: Macmillan (TM) (JMK.5 and 6), 1930a [1971].
Zurück zum Zitat Keynes, J.M., The General Theory of Employment, Interest and Money, London: Macmillan (GT) (JMK.7), 1936 [1973]. Keynes, J.M., The General Theory of Employment, Interest and Money, London: Macmillan (GT) (JMK.7), 1936 [1973].
Zurück zum Zitat Laidler, D., “Hawtrey, Harvard, and the Origins of the Chicago Tradition”, Journal of Political Economy, Dec. 1993. Laidler, D., “Hawtrey, Harvard, and the Origins of the Chicago Tradition”, Journal of Political Economy, Dec. 1993.
Zurück zum Zitat Pigou, A.C., The Economics of Welfare, London: Macmillan, 1920. Pigou, A.C., The Economics of Welfare, London: Macmillan, 1920.
Zurück zum Zitat Yoshikawa, H., Peace Theory of the UK in the 1930s—Leonard Woolf and the League of Nations, Sapporo: University of Hokkaido Press, 1989. Yoshikawa, H., Peace Theory of the UK in the 1930s—Leonard Woolf and the League of Nations, Sapporo: University of Hokkaido Press, 1989.
Metadaten
Titel
Hawtrey’s Social Philosophy: Welfare and Value
verfasst von
Toshiaki Hirai
Copyright-Jahr
2024
DOI
https://doi.org/10.1007/978-3-031-40135-0_15