International Organizations and the Analysis of Economic Policy, 1919-1950

Published by EH.NET (December 2002)

Anthony M. Endres and Grant A. Fleming, International Organizations and the

Analysis of Economic Policy, 1919-1950. New York: Cambridge University

Press, 2002. xiv + 290 pp. $65 (hardcover), ISBN: 521-79267-3.

Reviewed for EH.NET by D.E. Moggridge, Department of Economics, University of

Toronto.

The purpose of this book is to explore the intellectual contributions of

economists who worked in or were consultants to important international

organizations between 1919 and 1950. The organizations in question are the

International Labour Organization, the Economic and Financial Section of the

League of Nations, the Bank for International Settlements and, after 1945, some

parts of the United Nations. In looking at these, the authors are concerned to

address five questions: “what was distinctive, innovative and significant in a

doctrinal history sense about research”; “what policy questions stimulated the

research undertaken and what policy position flowed from the research”; “what

intellectual influences acted on that research”; how did the research relate to

prevailing orthodoxies and changes therein; and “what limitations can be

identified in the economics as practised … in these organizations” (pp. 7-8).

The book proceeds by topic: business cycles, monetary policy, public investment

policy, trade policy, social economics, international finance and the full

employment movement of the late 1940s. However its coverage is occasionally

unexpectedly narrow: its discussion of late 1940s Keynesianism does not extend

to national accounting, presumably because the individuals concerned, one of

whom received a Nobel Prize in Economics for his work, were called “statistical

experts” and thus not considered economists.

Despite the authors’ claims for broad institutional coverage, their most

serious archival research centers on the International Labour Organization,

with the Economic and Financial Section receiving less attention and the Bank

for International Settlements receiving none. (All references to thinking in

that institution are to its published Annual Reports, despite the

availability of Per Jacobbson’s diary in the Library of the University of

Basle.) The restriction of their archival research to Geneva also means that

they ignore other possible relevant sources such as J.B. Condliffe’s papers and

diary at Berkeley, Alexander Loveday’s papers at Nuffield College, Oxford and

Gottfried Haberler’s papers at the Hoover Institution.

The patchiness in the archival research in the case of the League shows up most

clearly in the discussions of its business cycle research program. It has been

known for some years that Dennis Robertson had substantial correspondence with

Alexander Loveday (the Director of the Economic, Financial and Transit Section)

as well as Gottfried Haberler, and Jan Tinbergen (see Mizen, Moggridge and

Presley 1997). Indeed, it was Robertson who was first offered the job that

eventuated in Haberler’s Prosperity and Depression and it was Robertson

who was hired by Loveday as a consultant and adviser to Tinbergen, with the

result that one of the League-sponsored conferences devoted to Tinbergen’s work

was held in Trinity College, Cambridge in July 1938. Yet in the relevant

chapter Robertson does not make anything other than a cameo appearance at a

League meeting to discuss Tinbergen in September 1937 until he reviewed in 1945

the Report of the League’s Delegation on Economic Depressions (for which, at

Loveday’s request, he wrote a minimum program of action back in 1938).

As I have noted, the ILO archives seem to have been more thoroughly mined than

the League’s with the result that the chapters on monetary policy, public works

and social economics are devoted to the views of its experts. The exposition of

ILO views and their evolution is clear and well done. If there are any

difficulties it is placing these views in context, especially in relation to

the evolving ideas on monetary policy and of one particular economist, J.M.

Keynes. Here the problem is that the authors misread A Treatise on

Money, with its special case for public works, despite their quoting

secondary literature that should have reminded them that they were doing so

rather than, as they think, the opposite (p. 76). As a result the place of the

ILO is understated. On the Keynes front, there is also a problem as to the

relation of later editions of Prosperity and Depression to Keynes’s

views: the fact that Keynes favorably reviewed the second edition seems to have

eluded the authors. They also are in some difficulty with the work of J.R.

Bellerby at the ILO whose originality is understated because the authors are

unclear as to his formal training and possible intellectual influences, where a

reading of his Who’s Who entry might have helped.

The study is more successful in the area of trade policy, where the authors

demonstrate that the League’s economists did carve out a distinctive position,

and discussing Ragnar Nurkse’s International Currency Experience (1944)

and Course and Control of Inflation (1946). However, the discussion of

International Currency Experience is distinctive compared to other

chapters in the study in that it is less related to contemporary developments

of the 1940s than to the literature of the 1970s to 1990s. Perhaps, as a

result, it is misleading on the original Bretton Woods attitudes to freedom of

capital movements. The handling of the “full employment movement” of the later

1940s is more successful in retaining its links to contemporary discussions.

In the end the authors find that economists in international organizations were

generally cautious, guarded and tentative in their policy analysis. They also

suggest that in the 1920s in particular the macroeconomic and monetary analyses

of economists in international organizations were more a reflection of

contemporary orthodoxy than later, although there was some return to the 1920s

situation in 1940s. In between, perhaps because of disagreements within the

profession, in macroeconomic matters economists in international organizations

could be much more eclectic in staking out distinctive positions. In trade and

international monetary affairs, the League’s economists successfully staked out

distinctive positions, perhaps because in both cases the League was on the

sidelines rather than at the center of contemporary policy discussions. The

overall record of contributions is substantial. We are indebted to the authors

for highlighting it.

Reference: Paul Mizen, Don Moggridge, and John Presley (1995), “The Papers of

Dennis Robertson: The Discovery of Unexpected Riches,” History of Political

Economy 29 (Winter 1997), 573-92.

D.E. Moggridge is Professor of Economics at the University of Toronto. In the

past he has edited the papers of John Maynard Keynes, James Meade and Lionel

Robbins. He is currently engaged in preparing an edition of Dennis Robertson’s

professional correspondence for the Royal Economic Society and in writing an

intellectual biography of Harry Johnson.