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2018 | Buch

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James Edward Meade

verfasst von: Prof. David Reisman

Verlag: Springer International Publishing

Buchreihe : Great Thinkers in Economics Series

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book reviews James Meade's prolific contribution to economics and its lasting impact. Few economists have written so much and on so many different topics. Meade was awarded the Nobel Prize in Economics in 1977 (jointly with Bertil Ohlin) for his contribution to international economics, but could just as easily have been awarded this for his contribution to the economics and politics of the managed economy. His commitment to the middle ground, neither free market nor command, runs through the whole of his published work, from Planning and the Price Mechanism in the shadow of post-war rationing to The Intelligent Radical’s Guide to Economic Policy and Full Employment Regained? when inflation combined with stagnation reopened the debate between the monetarists and the Keynesians. Meade was active in politics, most prominently in the debates in the 1960s about the European Economic Community and in the 1980s on the formation of Britain’s Social Democratic Party. As a person, he can best be described as a cultured Englishman, quiet and open, much in the mould of Coase, Mirrlees or Hicks.

This book draws upon the whole of Meade’s published work. It incorporates insights from unpublished papers and surviving correspondence kept at the London School of Economics and Political Science as well as interviews with family members and associates. The book will be of interest to economists but also to the students of politics and philosophy that Meade himself would have wanted to reach.

Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract

Meade was born in 1907 and died in 1995. Educated at Oxford, he also spent a year at Cambridge as a member of the ‘Cambridge Circus’ that discussed key macroeconomic issues in the years leading up to Keynes’s General Theory in 1936. After a number of early books and essays (some of them for the New Fabian Research Bureau), he joined the Economic Intelligence Service of the League of Nations and in the war the Economic Section of the War Cabinet Secretariat. From 1947 to 1957 he was Professor of Commerce at the London School of Economics, where he wrote The Theory of International Economic Policy (1951, 1955) for which he was awarded the Nobel Prize in 1977. From 1957 until his retirement in 1969 he was Professor of Political Economy at Cambridge.

David Reisman

2. Social Policy

Abstract

Meade, an advocate of the middle ground, believed in the free economic market but also in moderate levelling to produce a sense of common citizenship. His case for equality, in common with other social democrats like Tawney, Titmuss, Durbin and T.H. Marshall, was based on income-related utility differentials, the Rawlsian veil of ignorance, the sense of community, the need for compensation and empowerment but, above all, the social consensus that makes justice the popular choice.

David Reisman

3. Taxation and Expenditure

Abstract

Having decided on market allocation combined with statist social engineering, Meade relied on politicians and civil servants to devise and implement the taxes, transfers and investments. Income taxes should be broadly proportional but with a surtax on higher incomes. More important, there should be an expenditure tax, in line with the proposals of Nicholas Kaldor, that would cap divisive ostentation and encourage productive saving. Taxes on capital transfers such as estate duties would limit the intergenerational transmission of wealth but an annual levy would be excessively disruptive, both economically and socially. The national debt should be eliminated save as a short-term macroeconomic tool.

David Reisman

4. Growth and Development

Abstract

Meade wrote his Neo-Classical of Economic Growth in 1960. Following on from the dynamic models of Harrod, Domar, Lewis and others, he attempted to show how Keynesian constructs like the propensity to save and the investment multiplier could generate a steady-state rate of growth. Later he was to relax his restrictive assumptions to allow for government intervention, the open economy, uncertainty and entrepreneurship. Meade in the 1960s chaired the Economic Survey Mission to Mauritius. It wrote an influential report on demographic trends, commodity prices, export-led growth and managed growth in an overpopulated Third World country.

David Reisman

5. The International Economy

Abstract

Meade had been a witness to the beggar-thy-neighbour economic nationalism that had perpetuated the economic stagnation of the 1930s. He was always a free trader, determined to eradicate protective tariffs and non-tariff barriers. Free trade extended to a flexible parity, more malleable than the nineteenth-century gold standard but adjustable only with the permission of a cross-border organisation like the International Monetary Fund. Depreciation would always be preferable to deflation where institutional rigidities in wages and prices meant that downturns would mean excess capacity and involuntary unemployment.

David Reisman

6. Customs Unions

Abstract

Free trade was best but Meade, like Viner, saw that regional groupings were emerging. Meade sought to explain the complex relationship between trade creation and trade diversion when policies are coordinated within a group. Some alliances such as the new European Economic Community were imposing a common external tariff that altered the world flow of trade. Meade would have preferred a global solution on the lines of the General Agreement on Tariffs and Trade (GATT) that he had done so much to create in the wartime civil service. He knew nonetheless that he had to take a position on Europe and Britain’s role in the drive towards integration. Recognising there were outside options, he was always ambivalent.

David Reisman

7. Demand Management

Abstract

In the 1930s Meade, like most Keynesians, assumed that prices would be stable but that monetary and fiscal management were needed to reduce the slack in the Great Depression. The key would be public spending on infrastructure. It would prime the income-expenditure pump and end the vicious cycle of under-consumption. Meade evaluated the various monetary and fiscal tools assessing interest rates, taxes, transfers and other instruments to establish which would have the quicker impact. Meade was an internationalist, all too aware of the harm that free riders could do. Global cooperation was essential if the world as a whole were to lift itself out of underemployed potential. Meade in the 1950s changed his focus. He began to identify inflation as the greater problem.

David Reisman

8. Stagflation

Abstract

Demand-pull inflation could be contained using standard macroeconomic tools. Non-competitive conditions in the factor market were a challenge to microeconomic policy as well. By the 1950s Meade was concerned about the power of the unions to force the economy into an unattractive combination of unacceptable price rises and avoidable unemployment, in excess of the structural or frictional minimum. The only solution to cost-push inflation was a new tool: incomes policy. It would propagate a norm in line with productivity gains and would enforce it through compulsory arbitration. The level of total demand would be fixed by a pre-announced rule in such a way as to back up the norm. The market would not solve the problem. It was a surprising concession for a market liberal to make.

David Reisman

9. Competition and Control

Abstract

The price mechanism knows best. When, however, the market underperforms, the government must step in to limit the damage. Oligopolistic cartels, like trade unions, must be regulated by a competition commission as well as international free trade. Small firms should not be denied a level playing field, if only to equalise power in the nation as a whole. Natural monopolies such as the post office and the railways should be nationalised outright in order to guarantee free market charging and non-exploitative pay. Spillovers and externalities (including commercial advertising) should be regulated by taxes and subsidies in the sense of Pigou. Meade’s assumption of consensus and general agreement (the ‘social welfare function’) has been questioned by economists in the public choice school.

David Reisman

10. The Cooperative Way

Abstract

Meade’s search for a Third Way, neither pure capitalism nor pure statism, led him to the cooperative enterprise on the model of Mondragon in Spain and the John Lewis Partnership in Britain. The suppliers of labour power and capital alike would share in ownership and in the profits. This would make industrial relations more harmonious and would boost efficiency by giving both sides of industry an incentive to do their best. Meade does not propose internal democracy through allowing the workers to choose their supervisors or the board of directors. He expects that the unions will continue to represent their members should internal disputes arise. As attachment is easier in a small firm; it is another reason to look carefully at the economies of scale that economists like Galbraith attribute to the large corporation.

David Reisman

11. Economic Planning

Abstract

The British economy in wartime had been planned and some in the 1930s and 1940s also admired the Soviet model. Many authors, including Hayek, Robbins Durbin and Franks, had written about the future of top-down control. Meade’s proposal was a mix. There was no case for an imperative plan. Prices and quantities should be determined by supply and demand. Since, however, information and coordination are always problematic where decisions are decentralised, there is a need in a market economy for an indicative plan that would reduce wasteful duplication and minimise supply-chain inconsistency. Although control is undesirable, grants and concessions would provide a useful nudge.

David Reisman

12. What Meade Meant

Abstract

Meade was a political economist, following in the footsteps of Smith and Marshall, who wanted to do good. Always meticulous in his scientific standards, he was a socially committed persuader as well. His goal was agathotopia, ‘a good place to live in’. Wishing to bring about social change, he ranged widely over a number of policy issues. The coverage makes it difficult for some readers to grasp the links between his pure, often abstract, economics, and the political balance which he most wanted to sway. Polite and self-effacing, he believed that public opinion was on his side.

David Reisman

Backmatter

Titel: James Edward Meade
verfasst von: Prof. David Reisman
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-69281-4
Print ISBN: 978-3-319-69280-7
DOI: https://doi.org/10.1007/978-3-319-69281-4