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Keynes and his Contemporaries

This book examines how the Cambridge School economists, such as J. M.


Keynes, constructed revolutionary theories and advocated drastic policies based
on their ideals for social organizations and their personal characteristics.
Although vast numbers of studies on Marshall, Keynes, and Marshallians have
been published, there have been very few studies on the ‘Keynesian Revolution’
or Keynes’s relevance to the modern world from archival and intellectual view-
points which focus on Keynes as a member of the Cambridge School. This book
approaches Keynes from three directions: person, time, and perspective.
The book provides a better understanding of how Keynes struggled with prob-
lems of his time and it also offers valuable lessons on how to survive fluctuating
global capitalism today. It focuses on eight key economists as a group in ‘a public
sphere’ rather than as a school (a unified theoretical denominator), and clarifies
their visions and the widespread beliefs at the time by investigating their common
motivations, lifestyles, values, and habits.

Atsushi Komine received his Master’s and Ph.D. in Economics from Hitotsubashi
University, Japan. Since 2008, he has been Professor of the History of Economic
Thought at Ryukoku University, Kyoto. From 2001 to 2002, and from 2009 to
2010, Dr Komine was an Honorary University Fellow of Exeter University and a
Visiting Fellow of Clare Hall, Cambridge University.
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165 Keynes and his Contemporaries Economics
Tradition and enterprise in the Warren Young
Cambridge School of Economics
Atsushi Komine
Keynes and his
Contemporaries
Tradition and enterprise in the
Cambridge School of Economics

Atsushi Komine
First published 2014
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2014 Atsushi Komine
The right of Atsushi Komine to be identified as author of this work has
been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patent Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in
writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Komine, Atsushi.
Keynes and his contemporaries: tradition and enterprise in the Cambridge
School of Economics / Atsushi Komine.
pages cm. – (Routledge studies in the history of economics; 166)
Includes bibliographical references and index.
1. Neoclassical school of economics. 2. Keynesian economics. 3. Keynes,
John Maynard, 1883–1946. I. Title.
HB98.2.K66 2014
330.15’6–dc23
2013045613

ISBN: 978-0-415-63888-3 (hbk)


ISBN: 978-1-315-77470-1 (ebk)

Typeset in Times New Roman


by Cenveo Publisher Services
Contents

List of figures xvi


List of tables xvii
Author profile xviii
Preface and acknowledgements xix
List of abbreviations xxi

Introduction: Marshall and his disciples 1


0.1 Main theme 1
0.2 Scope, methodology, and structure 2
0.3 Marshall’s mission 5
0.4 Fay and cooperation 10
0.5 Pigou and optimum organizations 11
Appendix: the Cambridge School of Economics 14
Notes 15

1 Robertson and appropriate control of industry 17


1.1 Democratic control in industry 17
1.2 Three grievances in capitalism 18
1.3 Towards an ideal organization 20
1.4 Appropriate control and Robertson’s economics 24
1.5 Conclusions 26
Notes 27

2 Two types of dealers in Hawtrey’s economics 28


2.1 Theoretical grandparent 28
2.2 Inherently unstable economy 29
2.3 Keynes’s Treatise 30
2.4 Dealers in commodity markets 30
xiv Contents
2.5 Dealers in securities markets 32
2.6 Conclusions 35
Notes 35

3 The ‘conversion’ of Henderson 37


3.1 Collaboration and divergence 37
3.2 The logic of collaboration 38
3.3 Two elements of Henderson’s ‘conversion’ 42
3.4 How and why did Henderson’s position change? 43
3.5 The entrepreneur-in-chief 46
3.6 Conclusions 49
Notes 49

4 Lavington on effective entrepreneurship 51


4.1 Staunch guardian or pioneering rebel? 51
4.2 The nature of capitalism and Lavington’s
theoretical contributions 52
4.3 Four types of entrepreneurs 57
4.4 Conclusion 64
Notes 65

Appendix to Chapter 4: Lavington’s life in Cambridge 67


A.1 Before entering Cambridge 67
A.2 Year 1 (1908/09) 67
A.3 Year 2 (1909/10) 69
A.4 Year 3 (1910/11) 71
A.5 Graduation and civil service 73
A.6 Return to Cambridge 74
A.7 Death 76
Notes 77

5 Keynes and the revision of the Economics Tripos 80


5.1 Establishment of the Economics Tripos 80
5.2 Marshall’s curriculum 81
5.3 The five phases of the revision 86
5.4 Concluding remarks 92
Notes 97
Contents xv
6 Keynes and women’s degrees 101
6.1 As a University officer 101
6.2 Stage I: Total failure 102
6.3 Stage II: Compromise 104
6.4 Stage III: Virtual victory 109
6.5 Concluding remarks 111
Notes 111

7 Keynes and semi-autonomous bodies 115


7.1 Understanding Keynes’s stance 115
7.2 Older and younger pioneers 115
7.3 Reforming the University 117
7.4 Ideal of semi-autonomous bodies 123
7.5 Concluding remarks 125
Notes 125

Concluding remarks 128


C.1 Summary 128
C.2 The Marshallian tradition 134
C.3 Keynes’s enterprise 137
C.4 Concluding thoughts 142
Notes 143

Bibliography 145
Name index 160
Subject index 163
Figures

2.1 Security market 33


3.1 The three linked elements (before May 1929) (i) the cause of
unemployment (ii) current recognition (iii) optimal solution 41
3.2 Another set of three linked elements (after June 1929) 43
4.1 The ratio in his thinking between his observation of reality
and a request from his ideal world 64
C.1 Chart summary 129
Tables

A.1 Lectures list (1908/09) 68


A.2 Lectures list (1909/10) 70
A.3 Lavington’s scores (Part I) 70
A.4 Lectures list (1910/11) 71
5.1 The final plan of economics subjects, 1903 84
5.2 Revision (1), 26 November 1910 88
5.3 Revision (2), 31 January 1911 90
5.4 Revision (3), 22 February 1911 91
5.5 Summary of each phase 95
6.1 Outcome of vote on Report A (December 1920) 104
Author profile

Atsushi Komine was born in Tokyo in 1965 and received his Master’s and Ph.D.
in Economics from Hitotsubashi University. Since 2008 he has been Professor of
the History of Economic Thought at Ryukoku University, Kyoto. From 2001 to
2002, and from 2009 to 2010, Dr Komine was an Honorary University Fellow of
Exeter University and a Visiting Fellow of Clare Hall, Cambridge University.
Dr Komine was a co-editor of History of Economic Thought (2004–2008) and
Annals of the Society for the History of Social Thought (2010–2013). He has been
a director of the Japan Society for the History of Economic Thought since 2007
and is among executive members for the joint conferences of ESHET and
JSHET. He is also a reviewer for books and proposals for publication for
Routledge.
Dr Komine is the author and editor of several books, including W. H. Beveridge
in Economic Thought: A Collaboration with J. M. Keynes et al. (2007) and
Poverty and Welfare in the History of Economic Thought (ed. 2011). His recent
papers include ‘The diffusion of economic ideas: Lionel Robbins in Italy and
Japan’ (with F. Masini) in Kurz, Nishizawa, and Tribe (eds. 2011), The
Dissemination of Economic Ideas, Edward Elgar, ‘Beveridge on a welfare soci-
ety: an integration of his trilogy’ in Backhouse and Nishizawa (eds. 2010), No
Wealth but Life: Welfare Economics and the Welfare State in Britain, 1880–1945,
Cambridge University Press, and ‘The making of Beveridge’s unemployment
(1909)’, The European Journal of the History of Economic Thought, Routledge,
11(2), 2004.
Dr Komine has collaborated with M. C. Marcuzzo, R. E. Backhouse, B.
Bateman, and E. Biagini, among others.

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