LSE professor James Meade was a Nobel Prize-winning economist whose work shaped twentieth century international trade policy. His archives are held by LSE Library and featured in the exhibition A Wealth of Ideas: economics and LSE. Inderbir Bhullar, Curator of Economics and Social Policy at LSE Library, discusses Meade’s work along with that of LSE stalwarts Lionel Robbins and Hugh Dalton.
Trade agreements are big news because they facilitate the transfer of big money. Billions and trillions of currencies swirl around the world on a daily basis as a result of countries agreeing the terms with which they will trade with each other. Globalisation is fundamentally driven by such agreements and yet, recently, the acronym-heavy world of free trade agreements has been delivered telling blows from those who feared what they meant for national sovereignty and chose to vote for Donald Trump, Marie Le Pen and Brexit. Whether we are bidding ttfn to TTIP, however, it is worth noting that LSE Library holds the papers of James Edward Meade, an instrumental figure in the formulation of such international trade policy during and in the aftermath of World War II.
Meade was awarded the Nobel Prize for Economics in 1977 jointly with fellow economist Bertil Ohlin for their “pathbreaking contribution to the theory of international trade and international capital movements.” Typical of many Nobel Prize winners, the award came following many, many years of contributions to the field.
Meade had taught economics at Oxford in the 1930s and showed particular interest in international trade but it was his move to the War Cabinet in 1940 that cemented his position as one of the founders of the General Agreement on Tariffs and Trade (GATT). The GATT was one of several international policy accords which emerged following the Second World War alongside the foundation of the International Monetary Fund and the World Bank. The final two came from discussions held at the Bretton Woods conference.
LSE Library also holds the archives of Lionel Robbins who went to the conference as a member of the Economic Section of the War Cabinet (where he met and worked with Meade). Robbins, who would later head LSE’s Economics Department for over 30 years, kept a meticulous diary of the conference which detailed the various discussions and deliberations held between representatives from the 44 attending countries. The diaries are available to freely access via the LSE Digital Library.
Whilst global trade had been relatively strong and healthy in the years prior to the First World War, the Interwar War years of the 1920s-30s saw a considerable move towards protectionism of trade. The passing of the Fordney–McCumber and Smoot–Hawley Acts in 1922 and 1930 respectively raised tariffs on thousands of imported goods into America. The impact of these acts when combined with the debilitating effect of the 1929 Great Depression helped to exacerbate the decline in global trade. Countries were less inclined to trade freely with each other and instead sought to protect their own industries and workers.
However during the Second World War plans were being made by British and American policymakers to re-mould world trade after the conflict had ended. James Meade was a key part of such work as a member of the Economic Section of the War Cabinet and in 1942, following inspiration from John Maynard Keynes’ proposed International Clearing Union, he wrote a paper called ‘A Proposal for An International Commercial Union’ which argued for freer trade, negotiated multilaterally and with lower tariffs. The paper drew mixed responses but crucially garnered the support of Hugh Dalton, who was President of the Board of Trade and would later become Chancellor of the Exchequer.
Dalton is another in this story who has close links to the School. He had studied at LSE and, from 1919-1935, taught in the Department of Economics, where one of his students was Lionel Robbins. Dalton’s time at LSE coincided almost exactly with William Beveridge’s Directorship, during which time the School’s teaching staff grew from 17 full time staff in 1919 to 79 by the time Beveridge left in 1937.
The School was growing in size and influence just as Dalton’s political career was also burgeoning within the Labour Party, for which he was elected MP for Camberwell in 1924. Dalton was part of a group of economists, including Meade, who involved themselves in the New Fabian Research Bureau, an organisation which sought to update Fabianism and shaped Labour policy for when it was in power in 1945.
Meade’s commercial union paper gave form to ideas about the future of post war international trade and these were discussed, revised and discussed further with firstly American officials and then as part of ongoing international conferences. In Geneva in 1947 23 countries met and agreed upon the General Agreements on Tariffs and Trade which had much in common with ideas in Meade’s 1942 document. Nascent proposals for an International Trade Organisation (again with resemblances to Meade’s international commercial union) were also deliberated by invitees though they proved subsequently unsuccessful.
Meade’s time in the Civil Service continued for a few years and he succeeded Lionel Robbins as Director of the Economic Section in 1946. He was in post relatively briefly and resigned in 1947 after a little over a year, frustrated by economic difficulties and disagreements with Dalton (who had become Chancellor). Robbins, who was now at LSE, invited Meade to come to the School and take the Cassell Professorship of Commerce giving him a chance to use and develop his experiences to teach and research international economics. Meade took the post and stayed at the School for ten years, during which time he published the two-volume work which would lead to his Nobel Prize, The Theory of International Economic Policy.
James Meade has been called one of the great economists of the twentieth century and his papers contain a wealth of materials that showcase why. some were included in the LSE Library exhibition about the history of economic thought in Britain and at LSE.
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