The Historiography of Economics

British and American Economic Essays, Volume III

A.W. Bob Coats, Roger Backhouse, Bruce Caldwell, Roger E Backhouse, Bruce Caldwell

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136018640
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

This is the third and final volume of collected papers of A.W. Bob Coats. Coats began to collect material for this volume in the years following the publication of the second volume in 1993, but sadly died in 2007, before the work was completed.

The volume has now been completed under the editorship of Roger Backhouse and Bruce Caldwell. Along with his articles, the compilation of the volume also reflects Coats' interest in and commitment to book reviews, a selection of which have been chosen for inclusion. The book also includes a comprehensive bibliography.

In addition to a preface by Backhouse and Caldwell, the volume also reproduces the obituary that was published in History of Political Economy, a memoir published in 1996, and an interview with Grant Fleming, published the previous year. Together, the introductory materials, articles and reviews serve as a fitting tribute to the body of work of Bob Coats.

Part I

Articles

1 Memoirs of an economist watcher

A. W. Bob Coats

I. Family background; formative social and political attitudes

Oddly enough, my first clear recollection of an encounter with an economic proposition dates from the age of six or seven, when my father (who died suddenly from the pneumonia when I was eight) casually remarked that the Colman Mustard Company derived most of its profits from the residue people left on their plates. Unfortunately at the time I did not appreciate the analytical subtlety of this observation. Nor, I suspect, did my father, who probably only wanted to particularize the familiar maxim: waste not, want not. Nevertheless, the point evidently stayed in my mind, though I cannot claim it as the origin of my subsequent fascination with economics. The evolution of my attitudes to economics will be considered later. First, however, let me briefly sketch some relevant features of my personal and socio-economic background, which may shed some light on my subsequent intellectual activities. ¹

Though settled in an undistinguished London suburb, now a thriving center of Asian culture and politics, both my parents came from West country farming stock and had a practical, down-to-earth acceptance of the social as well as the natural world. To the best of my memory ours was an unanalytical, even unintellectual household, though book-loving, and – mainly through my mother – with a strong belief in the value of education at all levels. As a child I spent many family vacations on an uncle's farm; but despite occasional references to the farming community's hardships during the depression of the thirties, my parent's non-ideological Toryism was unshakable. I enjoyed a happy, modest but comfortable upbringing cushioned against contemporary economic distress by my father's pension and my mother's salary as a teacher. Real incomes were stable or rising for those in employment or on fixed incomes, owing to low or falling living cost and low interest rates, which fueled a significant housing boom.

As a schoolboy I was vaguely aware of poverty and hardships elsewhere, especially in the South Wales mining communities, for at school we periodically collected shoes, clothing, and other items for families suffering from unemployment. Yet although the conditions were conductive to open class conflict, especially in the so-called depressed areas, in my hometown there was remarkably little evidence of radicalism. The local populace was largely indifferent to or contemptuous of the vocal minority of Mosleyite “blackshirts;” and my closest personal encounter with communism came from an embittered uncle (ironically a skilled craftsman in the prosperous building trade) whose periodic outbursts against the capitalist system were generally treated by his family as tiresome irritants, if not evidence of mental imbalance!

Looking back, I am mildly embarrassed to realize how little impact contemporary economic, social, and political issues had on my adolescent outlook. The failure of the existing socio-economic order should have been obvious enough. But while struggling with my conventional Christian upbringing en route to a mature agnosticism, I had (and still have) little patience with doctrinaire socialism or communism. I have never been, nor ever will be, one of the “men of system,” to cite Adam Smith's phrase. I recall reading, probably in the early 1940s, a number of outspoken indictments of the British governing class in the series of bright yellow-jacketed Left Book Club volumes published by Victor Gollanz. The volume in that series that impressed me most at that time was rather different, i.e. The Socialist Sixth of the World (1939), by Hewlett Johnson, the so-called ‘Red Dean of Canterbury.’ Possibly I was more impressed by his high ecclesiastical status than by the quality of his arguments and evidence. Although warning against the dangers of presenting “too rosy and optimistic [a] view of life in the Soviet Union” (ibid., p. 18), he nevertheless painted a glowing picture of an alternative form of society that was both more productive and morally superior to capitalism, which, he claimed, unlike the Soviet Union, involved the denial of justice, freedom, opportunities for creative living, and fellowship. Johnson's naive Christian Socialist plea for Anglo-Soviet cooperation was, of course, far more acceptable during the war once the Russians became our allies. And doubtless it provided an early stimulus to my thinking about comparative socio-economic systems.

During the ‘thirties the evils of the Soviet regime were insufficiently publicized in Britain and, when publicized, insufficiently heeded. Likewise, far too little was known of the horrors and dangers of Nazism, other than its threatening territorial aggrandizement. Ours was a complacent, head-in-the-sand society, admirably characterized in the ironic adaptation of Kipling's poem: “If you can keep your head when all around you are losing theirs, … maybe you haven't fully grasped the situation!” Eventually it became clear even to the government that war was both necessary and unavoidable. But unlike the Americans' protracted crisis and soul-searching over Vietnam, Britain's declaration of war in 1939 posed a profound moral dilemma only to confirmed pacifists. It was obviously a “just war.” Fortunately, I was too young for military service when hostilities broke out. It never occurred to me to try to avoid enlistment, however, and in due course, after one year at university (of which more anon), I volunteered and was “called up” for aircrew training in the Royal Air Force (RAF), the least unattractive branch of His Majesty's armed forces.

II. Wartime experiences, postwar problems, democratic socialist beliefs

During my military service I travelled widely in Britain, South Africa, and the Middle East – no doubt in the process getting the bug that helps to explain my subsequent academic restlessness. The places I saw, the books I read, and the people I met in the years away from “civvy street” greatly expanded my mental horizons, but clarified and strengthened rather than transformed my overall political and social viewpoint. (There was, however, one significant exception, for despite the comparatively relaxed and unhierarchical atmosphere in the RAF I acquired an anti-establishment bias that I have retained, more or less intact, ever since.) Like so many of my generation looking to the future, I became convinced of Britain's need to break with the past and find a “middle way” between the extremes of so-called “free” market private enterprise capitalism and centralized economic planning, whether socialist or communist. The implementation of major, even fundamental postwar economic and social reforms designed to achieve a more just, equitable, and prosperous society seemed not merely desirable and necessary: it was also a moral obligation on those of us fortunate enough to have survived the greatest wartime dangers and sacrifices. The broad, enthusiastic wartime campaign to eradicate Want, Disease, Ignorance, Squalor, and Idleness, so vigorously promoted by Sir William Beveridge (himself a Liberal) and others, clearly pointed the way towards some form of democratic socialism, which I favored then, and still do. But in the early postwar years practical difficulties took precedence over ideological alignments. Despite the bitter battles between the Labour government and the Conservative opposition, politics seemed much less a problem than economics, for, unlike, the situation in some former belligerent countries, Britain's pre-war governmental, constitutional, legal and cultural structures remained essentially intact. And it was some time before I came to appreciate that this much-vaunted institutional stability and continuity was not just a source of pride, but also a serious obstacle to change. At the time the Labour party's reforms seemed to mark the dawn of a brave new era. In retrospect, however, they seemed more like a missed opportunity for genuinely radical reconstruction.

During the past half century the question of the role of the state in economic and social affairs has absorbed an enormous amount of intellectual energy, much of it unfortunately wasted owing to the activities of ideological polemicists and partisan hacks on both sides of the debate. Given capitalism's lamentable inter-war performance in Britain it was surely inevitable that the balance of postwar opinion would support a significant increase in state ownership/control/regulation/management, or some combination of these; and, in the long run, the effects of this increase are still with us, notwithstanding periodic determined efforts to reduce governmental functions and responsibilities, to cut government expenditure drastically, and, as the propagandists put it, to “roll back the state,” and “get government off our backs.” On the whole, these efforts have had remarkably limited success, despite a dramatic recent shift in the ideological climate. The simplistic early postwar socialist faith in the desirability and efficacy of nationalization, to take one conspicuous example, has given way to even more uncritical devotion to privatization. Yet, contrary to the true believers in both camps, experience demonstrates that there are no panaceas. How much enhanced understanding and hope of solving major problems there might be were it generally recognized that all the interesting and important issues lie somewhere in the intractable difficulties of getting reliable evidence and balanced assessment of past experience, there has been little progress in economic thought and policy on these matters.

Both before and after World War II a number of British democratic socialist economists were endeavoring to formulate a theoretical rationale for what we now call a mixed economy – i.e., a combination of planning and the price mechanism. ² This is not the place to assess their success or failure. At least their work was constructive, and not incompatible with the dominant post-war Keynesian economic ideas. By contrast, many of the critics of socialist economics were purely destructive. A prime example, unworthy of its author's deservedly high standing as an economist, methodologist, philosopher and intellectual historian, is Hayek's shrill polemic (1944). Ignoring the subtleties and practical policy significance of the issues, Hayek treated planning (a weasel word, if ever there was one) sweepingly as “the organization of everything;” described most planners as militant nationalists; identified what he termed the socialist roots of Nazism; and argued that Britain was already moving along the Germanic path (ibid., pp. 106, 135–36, 152). The choice, he claimed, lay between the impersonal forces of the market and dictatorial totalitarianism: there was no intermediate stopping point. I find it astonishing, and indeed appalling, that Hayek has recently been lauded as an accurate forecaster of things to come, notwithstanding all the evidence to the contrary.

III. Transatlantic economic education, 1942–53: “great books,” and methodological controversy

My first formal encounter with economics occurred in wartime, initially in a suburban London state grammar-school sixth form and, a year later at the University College of the South West, Exeter. The contrast between the two could hardly have been greater. At school I received a clear and helpful if uninspiring introduction to economic history, and basic principles of economics via Benham's (1941) remarkably effective, durable, and widely used elementary text. At Exeter the instruction was ...