James E. Meade
Born on 23 June 1907, I was brought up in the City of Bath in England. At school – Lambrook School (1917-1921) and Malvern College (1917-1926) – my education was concentrated on the Latin and Greek languages. At the university – Oriel College, Oxford (1926-1930) – I continued my classical education until 1928. I then moved over for two years to the newly-started School of Philosophy, Politics and Economics.
My interest in economics had the following roots. Like many of my generation I considered the heavy unemployment in the United Kingdom in the inter-war period as both stupid and wicked. Moreover, I knew the cure for this evil, because I had become a disciple of the monetary crank, Major C.H. Douglas, to whose works I had been introduced by a much loved but somewhat eccentric maiden aunt. But my shift to the serious study of economics gradually weakened my belief in Major Douglas’s A+B theorem, which was replaced in my thought by the expression MV = PT.
In 1930 I was elected to a Fellowship at Hertford College, Oxford, with freedom in the first year to continue my study of economics as a post-graduate student. As a result of having lived as a child next door to his great aunt, I already knew Dennis Robertson who invited me to go to Trinity College, Cambridge, as his student for the academic year 1930/31. This resulted in the intellectually most exciting year of my life.
At Cambridge I made a close friendship with Richard Kahn and became a member of the ‘Circus’ with him, Piero Sraffa and Joan and Austin Robinson, which discussed Keynes’ Treatise on Money and stimulated the start of its translation into the General Theory. Keynes appeared at the weekends when Richard Kahn reported to him our discussions of the week and when we met on Monday evenings at the Political Economy Club in Keynes’ rooms in King’s College. Thus I abandoned the formula MV = PT for I = S.
To spend this particular year reading essays to Dennis Robertson as one’s supervisor, and, simultaneously, enjoying membership of the group round Keynes was indeed an intellectual treat.
From 1931 to 1937, I was a Fellow and Lecturer in Economics at Hertford College, Oxford. The teaching of economics as a regular subject for examination was relatively new in Oxford and we were a young group of enthusiasts, including, in addition to Eric Hargreaves, my old tutor at Oriel College, Roy Harrod, Henry Phelps Brown, Charlie Hitch, Robert Hall, Lindley Fraser and Maurice Allen. My job was to teach the whole corpus of economic theory, but there were two subjects in which I was especially interested, namely, the economics of mass unemployment and international economics. In the 1930s one was aware of two great evils – mass unemployment and the threat of war. I thought – and I still think – that the government of the United Kingdom could, in those days, have altered the course of world history by listening to Keynes on employment policy and by backing to the hilt the League of Nations for the preservation of peace. In Oxford there was a strong branch of the League of Nations Union with Gilbert Murray as its chairman and Margaret Wilson as its secretary. In 1933 Margaret and I were married. Was there some positive feedback between my interest in Margaret and my interest in international affairs?
Margaret had close links with Geneva where she had spent some years as a student while her parents had been wardens of the Quaker Hostel there and where she had gone back as secretary to Gilbert Murray. At the end of 1937 I joined the Economic Section of the League of Nations in Geneva as editor of the World Economic Survey and produced the two issues for 1937/38 and 1938/39. These were the seventh and eighth issues of the Survey, which had been preceded in 1930 by a prototype volume entitled, The Course and Phases of the World Depression, prepared by Bertil Ohlin. The preparation of the World Economic Survey was backed by the more specialised volumes written by the established members of the section, including, Rasminsky, Tirana, Nurkse and Hilgerdt. Haberler, with Marcus Fleming as his assistant, had just produced Prosperity and Depression; and Tinbergen, with Pollak as his assistant, followed by Koopmans, were busy applying statistical tests to the theories outlined by Haberler. Loveday, the Director of the Economic Section, seemed to have the knack of picking his team.
After the outbreak of war, in April 1940, we left Geneva with our three children aged 4 years, 2 years and 2 weeks only to become part of the disordered refugee crowds fleeing across France from the German army. After some adventures, we reached England where I became a member of the Economic Section of the War Cabinet Secretariat. I remained a member of the section till 1947, becoming Director in 1946. Under the inspiring wartime leadership of Lionel Robbins, and in close cooperation with Keynes in the Treasury, the Section became an influential body, having the day-to-day task of giving advice at a moment’s notice on any economic problem ranging from points-rationing for foodstuffs to the price policies of nationalised industries. For myself, three major tasks stand out. First and foremost, in 1940 and 1941, Richard Stone and I prepared the first official estimates of the UK national income and expenditure, and we did so in a form which constituted what was, I believe, the first true double-entry social accounts prepared for any country. Second, there were the discussions and drafts leading up to the White Paper on Employment Policy of 1944 in which the UK government accepted the maintenance of employment as an obligation of governmental policy. Third, there were the discussions, state papers and conferences leading up to the post-war international financial and economic settlement, namely the International Monetary Fund, the International Bank for Reconstruction and Development and the General Agreement on Tariffs and Trade. I was especially concerned with the last of these.
In 1947 I became Professor of Commerce at the London School of Economics where Lionel Robbins was our leader in the Economics Department with its large and rich team of economic colleagues. Of these, I will mention only Professor A.W.H. Phillips to whom I owe an immense intellectual debt of gratitude for education in the treatment of dynamic systems. There I embarked on an over-ambitious project. My interest in economics has always been in the whole corpus of economic theory, the interrelationships between the various fields of theory and their relevance for the formulation of economic policy. In Oxford before the war, I had, with this interest in mind, written a short textbook entitled, An Introduction to Economic Analysis and Policy. It was now my intention to rewrite this work. I realised that it might be necessary to do so in more than one volume. So, as I was appointed at the LSE to teach international economics, I started on The Theory of International Economic Policy. It grew into my two books, The Balance of Payments, and Trade and Welfare, with their two mathematical appendices. The former examined the international relations between a number of national economies constructed on the Keynesian model; the latter applied the theory of economic welfare to international transactions.
These books took up practically the whole of my ten years at the LSE; but even so they did not cover the whole of the international problem, there being little or no reference in them to the international aspects of economic growth or of dynamic disequilibrium. My original project was over-ambitious; but the part which I did manage to cover was sufficient, eventually, to gain for me the Nobel award.
In 1957 I moved from London to the chair of Political Economy in Cambridge, which I held till 1967, when I resigned to become a Senior Research Fellow of Christ’s College, Cambridge. I relinquished that Fellowship on retirement age in 1974. During these years I set out to confine my over ambitious project, planning to write one or two volumes on the domestic aspects of economic theory and policy. So far I have written four volumes in this series: The Stationary Economy, The Growing Economy, The Controlled Economy, and The Just Economy. But even so, I have managed only to make a beginning. The frontiers of knowledge in the various fields of our subject are expanding at such a rate that, work as hard as one can, one finds oneself further and further away from an understanding of the whole. I believe this experience to illustrate the basic problem of our subject. Sane economic policy must take into account simultaneously all aspects of the economy; but a soundly-based understanding of the whole and of the relationship between its parts becomes more and more difficult, if not impossible, to attain.
How then should a seventy-year old best use his remaining years? Since 1974 I have taken time off to act as full-time chairman of a committee set up by the Institute for Fiscal Studies to examine the structure of direct taxation in the United Kingdom, the committee consisting of a number of first-rate economic theorists and of leading practitioners in tax law, accountancy and administration. I have learned as much in the last three years as in any other comparable period of my life, but with an added realisation of how little over a half century of study one has in fact managed to learn of the whole range of economic policy issues.
Such in brief outline has been my intellectual development. But whatever I may have achieved would have been impossible without the advantages of my family background: a loving mother, a father concerned only to give me the best start in life, a wife who gives unfailing support, and four, happily married children providing seven lively grandchildren.
This autobiography/biography was written at the time of the award and first published in the book series Les Prix Nobel. It was later edited and republished in Nobel Lectures. To cite this document, always state the source as shown above.
James E. Meade died on December 22, 1995.
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