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2024 | OriginalPaper | Buchkapitel

7. On the Commodity Control Scheme

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Abstract

In this chapter we examine Keynes’s activities as a planner of buffer stocks of primary commodities in the context and background of the UK political scene in the 1940s. Among other things, it is our aim to clarify (i) the significance of a buffer stock plan in Keynes’s economic thought, and (ii) how and why the plan was transmuted in the political situation of the time.

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Fußnoten
1
He became the head of Post-war Commodity Policy and Relief Department.
 
2
See JMK.27, p.46.
 
3
See JMK.25, pp.21–23, and 31–33 in his memorandum, “Post-War Currency Policy” (dated 8 Sep. 1941). See also his argument on commercial policy (JMK.26, Chapter 2)
 
4
Keynes’s “New Liberalism” is extensively examined in Chap. 11 of the present book.
 
5
See Harrod (1951, pp.379–386).
 
6
They are reproduced as JMK.12, Chapter 3.
 
7
See also J. Rowe, “Studies in the Artificial Control of Raw Material Supplies” [No.23, “Sugar” (Oct. 1930), No.29, “Rubber” (April 1931), and No.34, “Brazilian Coffee” (Feb. 1932)].
 
8
See De Cecco, “J.M. Keynes and International Finance” and Kregel, “Some Overlooked Contributions of Keynes’s to the Theory of Finance and to Economic Policy”, both in Bateman, Hirai and Marcuzzo, eds. (2010).
 
9
See Dimand = Dimand (1990, pp.114–115) and Fantacci, Marcuzzo and Sanfilippo (2009).
 
10
This is brilliantly analyzed by Dimand = Dimand (1990, pp.113–118).
 
11
This buffer stock plan was endorsed by Harrod, Meade, and Kahn.
 
12
For this draft, see Maizels (1992, pp.92–93).
 
13
See Harrod (1951, p.531).
 
14
This perception might be related to the following: “the present economic system lacks in proper preparation for dealing with excessive circulating capital” (TM.2, p.130).
 
15
In Sections VIII and IX in “Proposals for an International Clearing Union” (August 1942. JMK.25, pp.169–195), there appear provisions for control over primary commodities.
 
16
How seriously Keynes thought of this aspect (a tool for aggregate demand management) is emphasized by Dimand = Dimand (1990, p.118). It should be also noted that Keynes endorsed Meade’s “variations in social insurance contributions” as a tool for aggregate demand management. See JMK.27, p.318.
 
17
For a similar view, see an idea, which Meade put forward and Keynes accepted in the Beveridge Plan in the making, to the effect that the trade cycle could be prevented by changing the rate of contribution according as the economy goes.
 
18
Keynes thought that this plan (although it should by its very nature be internationalist) should be discussed only between the UK and the USA as far as the initial stage is concerned. See his note to Sir Richard Hopkins dated 23 February 1942 (JMK.27, pp.106–107).
 
19
Dimand = Dimand (1990, pp.118–121) does no refer to how Keynes’s successive drafts suffered qualitative degeneration, for the description there is confusing due to inadvertent use of quotations from various versions of drafts.
 
20
The Sixth Draft is kept as No.85 of Keynes = Harrod Correspondence, Department of Economics Library, University of Tokyo.
 
21
Immediately after this the importance of the “stabilization of price” is emphasized, while it is underlined that the restriction of production should be temporary.
 
22
Section IV, “Buffer Socks as a Measure Contributory to the Prevention of the Trade Cycle” is, in substance, the same as Section III of the Fifth Draft.
 
23
Paragraph 12 was originally the crux of the plan. This can be said to be substantially the same as in the Seventh Draft. Paragraph 14 almost succeeds Paragraph 13 of the Seventh Draft, both of which stipulate that this regulation would be required if the “basic price” equating supply and demand through the operation of buffer stocks were to prove lower than the “international economic price” that would provide producers with a reasonable living standard.
 
24
“In the following plan carefully guarded proposals for restriction have, therefore, been added to the less questionable proposals for stabilizing prices with which it begins” (JMK.27, p.171).
 
25
For this see Maizels (1992, pp.104–105).
 
26
The above is based on JMK.27, pp.196 and 199. Some ideas found in Keynes’s regulation plan of the primary commodities (buffer stocks, export rationing, and so forth) were to be incorporated into some international commodity agreements such as the International Wheat Agreement (cf. Keynes’s memorandum, “The Wheat Problem”), the International Coffee Agreement, the International Sugar Agreement, and so forth although they were concluded under the aegis of ICCICA (Interim Co-ordinating Committee for International Commodity Arrangement). For this see Maizels (1992, p.104) and Gordon-Ashworth (1984).
 
27
Kahn was involved with “the post-war situation of raw materials” at the Ministry of Supply in 1943–1944 and worked with Keynes on buffer stocks at the Board of Trade. On this, see Marcuzzo = Rosselli (2005, p.33). Kahn went on advocating a buffer stock plan along the same line as Keynes, criticizing the commodity-by-commodity approach in the 1950s. For his manuscripts on buffer stocks which were commissioned by FAO—Kahn’s Papers, RFK/2/10–12—see Palma (1994).
Davidson (1991, Chapter 9) emphasizes the necessity of this type of plan in order to make the world economy stable. He maintains that the collapse of the buffer stock plan implemented during the 1945–1972 period led to the marked instability in the world economy. See p.177.
 
28
See Kindleberger (1973, p.292).
 
Literatur
Zurück zum Zitat Davidson, P., Controversies in Post Keynesian Economics. Edward Elgar, 1991. Davidson, P., Controversies in Post Keynesian Economics. Edward Elgar, 1991.
Zurück zum Zitat Dimand, R. and Dimand, M., “J.M. Keynes on Buffer Stocks and Commodity Price Stabilization”, History of Political Economy, No.1, 1990. Dimand, R. and Dimand, M., “J.M. Keynes on Buffer Stocks and Commodity Price Stabilization”, History of Political Economy, No.1, 1990.
Zurück zum Zitat Gordon-Ashworth, F., International Commodity Control: A Contemporary History and Appraisal, Croom Helm, 1984. Gordon-Ashworth, F., International Commodity Control: A Contemporary History and Appraisal, Croom Helm, 1984.
Zurück zum Zitat Harrod, R., The Life of John Maynard Keynes, London: Macmillan, 1951. Harrod, R., The Life of John Maynard Keynes, London: Macmillan, 1951.
Zurück zum Zitat Keynes, J.M., A Tract on Monetary Reform, London: Macmillan (JMK.4), 1923 [1971]. Keynes, J.M., A Tract on Monetary Reform, London: Macmillan (JMK.4), 1923 [1971].
Zurück zum Zitat Keynes, J.M., “The Policy of Government Storage of Foodstuffs, and Raw Materials”, Economic Journal, vol.48, September 1938a (JMK.21, pp.456–470). Keynes, J.M., “The Policy of Government Storage of Foodstuffs, and Raw Materials”, Economic Journal, vol.48, September 1938a (JMK.21, pp.456–470).
Zurück zum Zitat Kindleberger, C., The World in Depression 1929–1939, Berkeley, CA: University of California Press, 1973. Kindleberger, C., The World in Depression 1929–1939, Berkeley, CA: University of California Press, 1973.
Zurück zum Zitat Maizels, A., Commodities in Crisis, Oxford: Clarendon Press, 1992. Maizels, A., Commodities in Crisis, Oxford: Clarendon Press, 1992.
Zurück zum Zitat Marcuzzo, M. C. and Rosselli, A., eds., Economists in Cambridge: A Study through Their Correspondence 1907–1946, Routledge, 2005. Marcuzzo, M. C. and Rosselli, A., eds., Economists in Cambridge: A Study through Their Correspondence 1907–1946, Routledge, 2005.
Zurück zum Zitat Palma, G., “Kahn on Buffer Stocks”, Cambridge Journal of Economics, 18, 1994. Palma, G., “Kahn on Buffer Stocks”, Cambridge Journal of Economics, 18, 1994.
Metadaten
Titel
On the Commodity Control Scheme
verfasst von
Toshiaki Hirai
Copyright-Jahr
2024
DOI
https://doi.org/10.1007/978-3-031-40135-0_7