The elusive arthur pigou

Download 301.04 Kb.
Date conversion21.02.2016
Size301.04 Kb.
1   2   3   4

5. The ‘Prof’
Pigou’s 1908 appointment to the chair in Professor of Political Economy at Cambridge University was controversial.21 Pigou was only 30 years of age upon succeeding Marshall and, although he had shown great promise in the application of the theoretical tools that Marshall had developed, the extent of his experience and maturity of thought was limited by his young age. Pigou, however, was close to Marshall and had embraced the Marshallian theoretical framework, teaching it with distinction as a Fellow. The other candidates all had greater experience: Foxwell at Cambridge, William Ashley from Birmingham University, and Edwin Cannan from the London School of Economics. But Foxwell and Ashley were proponents of the historical method in economics, with Ashley being the leading protagonist on the protectionist side of the debates surrounding Chamberlain’s proposals, and Cannan had not embraced Marshallian thought so unequivocally as Pigou. The ‘electors’ (the selection panel for the post)22 may well have recognised Cannan as a strong candidate but, in the judgement of Ronald Coase (1972, p.482-483), they probably only seriously considered the two candidates from Cambridge. That is, the ‘electors’ choice was fundamentally between Foxwell and Pigou. The voting pattern of the electors is not known, although it is certain that Marshall was active in lobbying in Pigou’s favour and that some of the electors found that activity to be inappropriate, unwarranted and distressing. As a consequence, while Pigou was elected as Marshall’s successor at Cambridge, it is almost certain that he did not enjoy the unanimous support of the electors.23 One further consequence of this controversy was the rekindling of the antagonism that Foxwell felt towards Pigou, which had commenced when Marshall initially appointed Pigou in 1901 to take his general course in economics. After the election of Pigou in 1908 to the Cambridge Chair, Foxwell was particularly bitter towards Marshall over the behind the scenes role he played in the lead up to the election, which, in an effectively two horse race, Foxwell saw Marshall as acting against him to deny him the post that he felt he had already earned. However, in a letter written to a colleague shortly after his failure to be appointed Foxwell describes Pigou as “a brilliant man and personally an excellent fellow” and comments that Pigou had “been particularly kind and delicate in his communications with me” (Foxwell, written approximate one week after the election, letter to Clara Collet, cited in Coats, 1972). Foxwell’s antagonism in the light of such expressed sentiment may suggest his embitterment lay more squarely with Marshall’s behaviour and his own (failed) ambitions of securing the chair in Political Economy at Cambridge.
The ‘Prof’s’ Idiosyncrasies as Teacher, Mentor and Scholar
Notwithstanding the background controversy to Pigou’s elevation to professorship, his appointment was properly marked with a celebratory dinner. From 1908 to 1943, Pigou continued to work as Professor of Political Economy at Cambridge. During that time he worked in a particularly hard and focussed way, but always setting time aside for playful socialising as well as energetic recreation. From early in his professorship Pigou was generally referred to as the ‘Prof’, especially by the few who were privileged to enter into his private life. One such person, Donald W. Corrie, who read and commented on the manuscript of Wealth and Welfare (Pigou 1912) recalled –
“a rapidity with which he [Pigou] could relax after serious work and plunge with boyish enjoyment into any sort of hair brained spree, and at [illegible] notice assume the gravity of the Professor of Economics in discussion with Layton, Fay or Keynes” - (letter to Saltmarsh ACP1/Corrie, Page 4 (back) of February 19, 1960)24
But to the general student body, the recollection of Pigou is perhaps slightly different from that of Corrie. Austin Robinson, an undergraduate in Pigou’s classes, recalls Pigou’s eloquence and clarity of exposition, but also notes a degree of reserve:
“We admired Pigou; after a lecture we would sometimes shyly ask him a question, and he would answer, either jocularly or even more shyly. But most of us as undergraduates hardly knew him outside a lecture room ...” (1968).
As a student at Cambridge University and as a young fellow at King’s College, Pigou had been active in public debate through the Cambridge union, but this changed drastically sometime after his elevation to professorship. While he continued to be a supporter of his colleagues and mentor to younger economists at Cambridge, he became much more circumspect and withdrawn when it came to professional matters. This appears to be partly related to Pigou’s experiences during World War I (see Section 7, under the subheading The Ordeals of a Pacifist).

In regard to his own work, Pigou attempted to develop or refine his contributions without generally attending conferences. Rather, he would read published materials and respond formally, either via published articles or noting correction to errors made in subsequent editions of his books. He remained essentially a theoretical economist developing his line of thought with little collaboration, although he did seek assistance in mathematical and other analysis (Robinson, 1968). For example, Pigou sought out the assistance of Keynes in the revising of Wealth and Welfare in 1912-13, and called upon the strong mathematical abilities of the young Frank Ramsey during the late 1920s (Duarte, 2009). Ramsey provided mathematical assistance in relation to two propositions Pigou was developing, one being on credit and the other on unemployment, both of which were subsequently published as articles in the Economic Journal (1926, 1927b). Ramsey also assisted Pigou with revisions and modifications which would appear in the third edition of The Economics of Welfare and in the development of Pigou’s treatise on public finance (1928). It has been argued by Collard (1996, p. 588), Duarte (2009, p. 461) and Gaspard (2005, p.3) that Ramsey’s two major economic articles, A Contribution to the Theory of Taxation (1927) and A Mathematical Theory of Saving (1928) directly arose from considerations arising from his collaboration with Pigou during this time. An argument substantiated by correspondence from Pigou to Keynes –

“Ramsey is writing out a paper on some results he got in the course of doing sums for me – with a marvellously simple generalised formula about taxes. Don’t let him be too modest to produce it for the Journal"
(Pigou, before March 1927, letter 4124 to Keynes, cited in Bridel & Ingrao, 2005, p. 160)
During the late 1930s, Pigou would also seek the mathematical assistance of D.G. Champernowne who was appointed Lecturer in Statistics during 1938.

It was in this manner that Pigou developed his economics: in singular contemplation; loyal to the Marshallian apparatus; utilising qualitative analysis rather than statistical argument; using germane mathematical argument; drawing upon his philosophical grounding and; seeking assistance from time to time from selected colleagues. These were the tools he honed in his professorial role in order examine what was “good” in terms of ethics and the economic welfare for individuals and society and to develop tools for public policy to effect that which could be considered “good” of individuals and society.

His method of supporting colleagues and potential colleagues also tended to be private in character, relying on deep reflection on text, quite private discussion and correspondence. His mentoring and support for Joan Robinson is perhaps the best example of this, although it is not the only one.25 Aslanbeigui and Oakes (2009) outline the considerable support Joan Robinson received from Pigou when she was working on The Economics of Imperfect Competition, with Pigou providing algebraic support for Robinson’s treatment of some issues. This work by Pigou was subsequently published in Economic Journal as a note in the 1933 March edition of the journal, but in this note he generously paid tribute to Robinson for her original insights.

Joan Robinson was eventually appointed Faculty Lecturer in 1938, suffering a nervous breakdown in that same year. Pigou wrote a letter to her in the spring of 1939 enquiring about her well-being and offered her to stay at his house in Buttermere as a place to convalesce. In the summer of 1939, Pigou wrote a further letter taking the opportunity to advise her on her teaching. That letter, reproduced in full in the appendix to this chapter, is of considerable historical importance for revealing Pigou’s approach to mentorship and highlighting his preferred approach to writing up the outcome of scholarly research. In regard to mentorship, the letter reveals that Pigou is not willing to constrain original scholarship or the dissemination of new ideas, but, in the interests of recognising the depth and scope of past writers in the history of economics, he urges caution against extreme polemics other than in formative debate and discussion. In regards to his own writing, the basis of Pigou’s approach to rhetoric is implicitly outlined in that letter. The key point being that he did not seek to emphasise differences between scholars. When direct comparison is called for, then the emphasis is on commonalities. Again, extreme polemics are to be avoided and it is evident that Pigou would never have expressed the expectation that his work would ‘revolutionize ... the way the world thinks about economic problems’.

Finally, Pigou tended to avoid appointment to committees that were administrative in nature and he started to lose vigour in his lecturing style as he became older (Robinson 1960). Indeed, Pigou recorded his sadness and frustration from ailing health problems that derived from suffering heart attacks in 1927 and 1938, as discussed in section 6, in a poignant poem, which draw extensively on imagery from Dante’s Inferno. That poem, in the form of correspondence to his friend D.W. Corrie, is also reproduced in the appendix to this chapter.
Major Scholarly Contributions – A General Overview

Pigou was a scholar of high international repute, writing over a dozen books and contributing over 100 articles. His first truly great work, Wealth and Welfare, was published in 1912, four years after his professorial appointment. Pigou commences this book by writing that ‘welfare’ cannot be defined, but, ‘economic welfare’, or the part of ‘welfare’ that is directly related to the national income, can be defined, at least to the extent that economic changes are seen to lead to an improvement in economic welfare. In that regard, Pigou associates three social changes with an increase in economic welfare: 1) an increase in the magnitude of the national income; 2) an increase in the absolute share of the national income accruing to the poor; and 3) a diminution in the variability of the national income, especially in the part that accrues to the poor.

A fundamental issue of the book concerns the respective harmony (consistency) and inconsistency (disharmony) between each of the three goals above. Economic welfare is enhanced, at least in a probabilistic sense, when an outcome enhances one or more of these three goals without detracting from the other goals. But Pigou does not rule out the possibility of an economic welfare improvement even in the face of ‘disharmony’, such as when there is a trade-off between efficiency and distributive fairness.

In general, the book is based on a synthesis of the Marshallian analytical apparatus and the mature variety of utilitarian philosophy associated with Sidgwick. Using the analogies introduced in his subsequent book, The Economics of Welfare (1920), Pigou attempted to add to the ‘light’ of economic theory to make it more capable of yielding ‘fruit’ for the broader community. The most enduring feature of this book is the discussion of ‘hindrances’ to the maximisation of national income that result from divergences between the levels of utility of private individuals, who act without regard to others, and social utility, which includes spill over welfare consequences for individuals who are not the direct parties to economic exchanges. With Wealth and Welfare, Pigou therefore laid the foundations for the study of ‘externalities’ (although, again, without using the term) that result from investment. He did so by confining his analysis of welfare to ‘that part of welfare that can be brought into relation with the measuring rod of money’ and focusing on changes in aggregate expenses across the industry to identify marginal supply prices.

Although Pigou’s work was well received, his analysis was not without criticism. Allyn Young (1913), in an otherwise appreciative review of Pigou’s Wealth and Welfare, identified a flaw in Pigou’s analysis of industries with increasing returns. To calculate the supply price, Pigou examined changes in the total supply of the industry. But Young (1913) demonstrated that Pigou’s aggregate approach to supply had the effect of attributing rents that firms realise from economies of scale to the marginal net product of resource. As a result, Young questioned Pigou’s conclusion that taxes and bounties could be considered for industries that do not exhibit constant returns to scale. It was Pigou’s particular treatment of industry wide increasing returns that J.A.  Hobson (1914) utilised in his attack on marginalism. Hobson argued that Pigou’s analytical argument concerning industry returns ‘virtually endorses the criticism that “marginalism” assumes a statical condition of industry’. Marshall would also later be found to have harboured doubts as to Pigou’s use of the statical method in this regard and expressed concern that the theory required some consideration with regard to its translation into realism (Bharadwaj, 1972). This would not be the only time that Pigou’s adherence to analytical technique would undergo criticism. Pigou’s friend and colleague at Cambridge, John Clapham (1922a, b), would also take him to task over his use of analytics without its relatedness with historical data. In 1926, Piero Sraffa produced a seminal paper which showed that increasing and decreasing returns were incompatible with Marshallian partial equilibrium analysis.26 Pigou (1928b) would acknowledge elements of Sraffa’s argument, but responded with his own counter-argument to Sraffa’s claims.27

Pigou built upon the framework developed in Wealth and Welfare to produce The Economics of Welfare first published in 1920. Nearly double the length of Wealth and Welfare, Pigou added further sections related to labour relations, public finance and the size and distribution of the national dividend. Subsequent revisions of The Economics of Welfare were published, the last and fourth edition in 1932. During its various iterations Pigou revised his treatment of the laws of returns responding to criticisms and errors in his original work, and added to and removed sections. Pigou would later develop sections removed from The Economics of Welfare into other complete books. Pigou’s consideration of the variability of the national dividend was originally included in Wealth and Welfare and the first edition of The Economics of Welfare, but this was eventually removed, revised and extended, and published as a new book Industrial Fluctuations (1927). His discussion of public finance would be reproduced in The Political Economy of the War (1921) and later extended into A Study in Public Finance (1928). It was, however, Pigou’s major theoretical considerations first outlined in Wealth and Welfare and subsequently popularised in The Economics of Welfare (which is perhaps best regarded as a subsequent edition of Wealth and Welfare) which established welfare economics as a field of study internationally, as well as making it an integral component in the education of Cambridge economists during the 1920s and 1930s.

Pigou’s welfare analysis would later be displaced by the 1930s development of the ‘new’ welfare economics, which was primarily promoted by economists associate with the London School of Economics. Lionel Robbins’ (1932) influential paper changed the tone and scope of economic inquiry emphasising economics as a positive science, narrowing economic inquiry to that which excluded normative propositions. Robbins effectively argued for value neutrality in economics suggesting that interpersonal comparisons of utility were unscientific and condemned Pigouvian arguments of progressive income taxation based on the assumption that the marginal utility of income declined so that total utility could be increased by income transfers from the rich to the poor (Aslanbeigui, 1990, pp. 621-622). John Hicks (1935), influenced by the work of Vilfredo Pareto, took up the challenge to develop welfare analysis based on an ordinalist view of utility.

Pigou would not formally respond to the challenge of his position on welfare economics or its displacement by the new welfare economics in the 1940s, until 1951 when ‘Some Aspects of Welfare Economics’ appeared in The American Economic Review. Pigou’s focus remained on the ability of the concept of the diminishing rate of marginal utility to inform policy development on problems of poverty and inequality. In accepting the fact that utilities are not measurable, Pigou proceeded in his analysis to consider comparability which he believed something could be said. Comparability of economic welfare between representative groups of people was considered possible by Pigou ‘on the basis of analogy, observation and intercourse’ such that a certain level of economic welfare may be presumed to yield similar amounts of satisfaction, emphasising, however, the requirement to consider income distribution with the desirability of economic efficiency. Pigou’s ultimate conclusion that ‘if economic welfare were not something to which the notion of greater or less were applicable, Welfare Economics would vanish away’ provided comment on the various arguments concerning the strict conditions of Pareto’s laws in applied policy development and theoretical augmentation in order to remain workable at practical levels. Pigou’s cardinal approach to measurements in welfare considerations would later re-emerge in the works of John Rawls (1972) and Amartya Sen (1970).

Ronald Coase (1960) would later challenge the Pigouvian analysis of externalities and the requirement of government intervention in the form of taxes and bounties and present an alternative mechanism. Coase argued that in a zero transaction-cost world, the assignment of appropriate property rights would provide a basis for negotiation between two parties that would lead to the internalisation of the externality. Even in a world in which transaction costs existed, Coase argued that government intervention may also incur high costs which would not permit optimal solutions to be met.28

Pigou would also suffer a professional blow from within the circle of his own colleagues at Cambridge, in particular from John Maynard Keynes, in Keynes work The General Theory of Employment Interest and Money (1936). In the late phase of the Great Depression, Keynes attacked Pigou’s analysis on the basis that it represented the classical view which Keynes found deficient in addressing the persistent and high unemployment that was being experienced. He did this by utilising powerful rhetoric, when criticising Pigou’s work on unemployment as representative of the classical view, which he employed as a foil in order to advance his own ideas.

The method of polemics which Keynes adopted in The General Theory affronted Pigou in two ways. Firstly, Keynes challenged the analytical foundations of what had been one of Pigou’s consistent concerns during the course of his professional career as an economist; the consideration of unemployment and its impact on society. Pigou had published Unemployment in 1914, Industrial Fluctuations in 1927 and extended his consideration of unemployment in The Theory of Unemployment published in 1933 which Keynes would argue seemed ‘to get out of the Classical Theory all that can be got out of it’. Pigou’s position that frictional resistances prevented appropriate wage adjustments to take place instantaneously implied labour market imperfections were the fundamental source of unemployment. Based on these views, Pigou believed that monetary or fiscal policy could be used to moderate fluctuations in employment and flexibility in wage rates would ensure full employment. Keynes, however, having observed the persistence of unemployment during the depression, even in the presence of declining money wages, argued that unemployment was an equilibrium phenomenon and rejected the proposition that competitive markets would, in the long run, be self-correcting to a level of full employment. Rather, Keynes asserted that markets could settle at certain levels of unemployment and he argued that nominal wage cuts would not alleviate the problem of unemployment. Keynes advocated government spending (by deficit creation) as a means to increase effective demand and, as a consequence, also increase employment.

Secondly, Pigou disapproved of the way that Keynes sought to promote and disseminate his own theories. In short, Pigou saw Keynes as creating a straw man in order to discredit Marshallian analysis. Pigou responded by an equally scathing review of the General Theory making pointed reference to Keynes’ attack on his intellectual predecessors:

“Einstein actually did for Physics what Mr Keynes believes himself to have done for Economics. He developed a far-reaching generalisation, under which Newton’s results can be subsumed as a special case. But he did not, in announcing his discovery, insinuate through carefully barbed sentences, that Newton and those who had hitherto followed his lead were a bunch of incompetent bunglers” - (Pigou, 1936, p. 115)
It is generally accepted that the relationship between Pigou and Keynes over the course of their respective careers was respectful and productive. One of Pigou’s earlier actions as Professor of Political Economy had been to privately fund Keynes’ lectureship at Cambridge before Keynes’ election as a fellow in 1909 (Kahn, 1984, p. 189). Pigou certainly valued the advice Keynes gave on his manuscripts, be it economic or philosophical in nature and both were involved in the day to day activities of the Cambridge School. Also, regardless of the controversy surrounding Pigou’s and Keynes’ theoretical analysis it should be recalled that both Pigou and Keynes in the early years of the 1930s jointly signed policy advice recommending government spending to combat unemployment. Both men were unwell with heart conditions during the period of controversy surrounding The General Theory and they both continued to work closely on the administration of the Economic Tripos and King’s College and matters regarding policy.

But, notwithstanding this, Pigou does appear to have interpreted Keynes’ actions as detracting from the importance of Pigou’s prior theoretical contributions (Collard, 1981; Leeson, 1998). Pigou had, for instance, considered the nature of ‘involuntary’ unemployment and had earlier developed work on an employment multiplier. Leeson (1998) further points to the inconsistency of Keynes’ rhetorical attack of Pigou as a ‘classic’ in light of Pigou’s obvious recognition of failures of the price mechanism and his prescriptions of government intervention when such failures occurred. Ambrosi (2003), on the other hand, considers Keynes’ actions as a response to earlier frustrations arising from Pigou’s reception to ideas Keynes’ was forming from the early 1930s. Pigou’s review of Keynes’ A Treatise on Money had contained a barbed criticism of Keynes’ ‘carping at “current economic theory” – whatever precisely that may be’ and pointed out that Keynes’ theory had Robertsonian foundations (Pigou, 1931 as cited in Bridel and Ingrao, 2005 p.161). However, in reconstucting their theoretical work Ambrosi (2003) finds Pigou’s and Keynes’ research agendas were not dissimilar in many respects.

The controversies with Keynes during the 1930s probably diminished Pigou’s reputation. As such, he may have been considered as one of ‘yesterday’s men and women’ resisting the change lead by ‘today’s men and women’. But, in typical fashion, Pigou continued to carefully analyse the issues raised by Keynes’ General Theory, responding with his own further consideration on the matter. Pigou’s immediate response was to produce ‘Real and Money Wage Rates in Relation to Unemployment’ (1937), a controversial article which Keynes sought to delay from being published being of the view it was ‘the work of a sick man’, a comment due in part to Pigou’s ill-health at the time, but also because of his disagreement with Pigou’s assumptions concerning the monetary system and the flexibility of real wages. Pigou continued to develop his analysis concerning employment incorporating the implications from Keynes’ General Theory. This work included Employment and equilibrium: a theoretical discussion (1941) and the article ‘The Classical Stationary State’, published in 1943, in which Pigou developed a link between real balances of wealth and consumption and, in the process, suggesting a mechanism by which an economy could ‘self-correct’ in response to falls in aggregate demand. Real wealth was defined by Pigou as the sum of the money supply and government bonds divided by the price level and Pigou argued that as unemployment rose, the price level would drop which in turn would raise real balances. Consumers with increased real levels of wealth would then increase consumption, moving the economy towards full employment. Pigou, however, conceded that an economy could settle at a level of employment below the full employment rate when prices and wages were sticky. Pigou’s real balance effect, now popularly known as the ‘Pigou effect’, provided a link between Keynes’ framework and the equilibrium model.

Pigou followed that work with Lapses from Full Employment (1945) and five years later he would articulate his views of Keynes’ theory in Keynes' 'General Theory': A Retrospective View (1950). In this article Pigou accepted certain elements of Keynes’ work, but as Collard notes, also maintained several reservations as well (Collard, 198, p.127). Pigou continued to work long after his retirement at the age of 66, not only in the contemplation of employment, but in studies on income (Income, An Introduction to Economics and Income Revisited: Being a Sequel to Income), British economic history (Aspects of British Economic History 1918-1925) and money (The Veil of Money).

Leadership at Cambridge
At King’s College, Pigou made numerous contributions to the Elector’s Committee for fellowships, with his judgement on the intellectual talents of applicants held in very high regard. As Saltmarsh and Wilkinson have highlighted: “His colleagues came to listen for his verdict, as foxhounds listen for the tongue of the oldest and sagest hound in the pack” (1960, p. 11). Notwithstanding Pigou’s worsening health problems as his tenure increased, Pigou’s ‘sense of justice’ was recalled as an outstanding feature in handling the problems of running the faculty during his Professorship. As Robinson (1960) recalls, “If you were working with him, you had to satisfy him that what you proposed was a completely just solution of the problem at hand”.

But the ‘Prof’ did not stamp his authority on the future direction of the economics program in that he never attempted to shape the discipline in his own image. The manner in which he worked – his quiet isolation and his innate shyness – did not lend themselves to the qualities of leadership that Keynes later weld, especially with the younger generation of Cambridge economists who had collaborated with him during the development of the General Theory. Nevertheless, it was under the leadership of Pigou that many of the second generation of Cambridge economists were trained, including many of the younger Cambridge economists who gravitated into Keynes’ camp.

But none of this means that Pigou was indifferent to Cambridge appointments. Rather, he was more concerned with the intellectual qualities of the appointee, and on that score he had confidence in the judgement of Keynes, than with appointing protégées who followed in his exact footsteps. Indeed, in 1935, he invited J. R. Hicks to apply for the post of lecturer at Cambridge. Hamouda (1993, p. 290) has speculated that Pigou’s job offer to Hicks was motivated by a desire to balance the authority of Keynes and his younger followers, on the one hand, with Pigou, Robertson and Hicks on the other. But another interpretation is also evident that is simpler, less Machiavellian, and more consistent with Pigou’s personality. That is, notwithstanding the divide between the ‘old’ and the ‘new’ welfare economics, with Pigou and Hicks on different sides of that divide, Pigou simply recognised Hicks’ great intellectual qualities and he sought to employed him on that basis. Interestingly, Hicks appeared to like Pigou and was happy to engage him in discussion on issues in economics and he found a subtle way of achieving that end: “The thing to do is never to press him [Pigou], or argue with him; just throw out a remark to see if it tempts him” (Hicks, November 12, 1935, letter to Ursula Webb, as cited in Marcuzzo & Sanfilippo, 2008, p.86).

It is perhaps true that, from the mid-1930s onwards, that the intellectual distance grew over time between Pigou and the younger economists who were associated with Keynes, including Richard Kahn, James Meade, Austin and Joan Robinson, and Piero Sraffa (although the closeness of that association varied). But for a largely singular scholar like Pigou, that distance may well have been more incidental than deliberate; and appeared more deliberate and cultivated than it actually was. Moreover, the distance was implicitly reciprocated by the younger economists too, who were intent on extending economics and taking it in directions inspired by Keynes. Also, Pigou was approaching 60 years of age when the General Theory was published, so he naturally had a very different manner to that of Keynes in his intellectual engagements with his younger colleagues and students.

Pigou’s method of leadership is also revealed in his actions to smooth over the tensions which had developed at Cambridge during the 1930s. Dennis Robertson, who succeeded Pigou to the Chair of Political Economy in Cambridge University in 1944, had, unlike Pigou, continued to harbour some bitterness towards Keynes after the 1937 debates leading to estrangement between the two scholars, with the younger economists gravitating towards Keynes’ circle. In a study of the correspondence between Pigou and Keynes, Bridel and Ingaro (2005) outline how the deterioration of Keynes and Robertson’s working relations came to a head with the formation of a research project investigating depression and recovery in Britain. Pigou is shown to have been sensitive to Robertson’s resentment at being excluded from the project and attempted to diffuse the situation by suggesting the formation of an advisory committee to the project which would include Robertson, Keynes and himself. The committee members of the project, which had included Austin Robinson, Sraffa and Champernowne, bitterly fought Robertson’s inclusion from that advisory committee. Pigou’s attempt to smooth things over failed, with Robertson resigning from his position at Cambridge and taking a position at the London School of Economics. However, the episode demonstrates Pigou’s sensitivity towards his colleagues and the sensitivity shown in this case was not an isolated incident. For example, in his correspondence to Keynes during World War II, Pigou expresses general concerns for Keynes’ health and concerns for Sraffa’s possible internment as an enemy, war having been declared between Britain and Italy. Pigou wrote to Keynes advising him that he had suggested to Sraffa to write to Keynes’ mother to ask her “to keep a friendly eye on his mother when he gets pinched” (Pigou, letter 12 June 1940 to Keynes, cited in Bridel & Ingrao, 2005, p. 159).

The final period of Pigou’s Professorship before his retirement must be considered in the context of the stresses around him, including his own health which was to deteriorate significantly in the late 1930s. But in the dire political and economic times of the Second World War, Pigou maintained his position and, to a large extent, his working relationships with others around him.

Politics and Short Periods of Public Service
Pigou is reported as not having a natural aptitude for government and administrative work and is recalled as disliking “grassing” and “jaw” (Saltmarsh & Wilkinson, 1960, p.10). And, as Takami (2011) has pointed out, there is no evidence to suggest that Pigou, unlike many of his colleagues, joined the Fabian Society, which was active at Cambridge. Nor did he sympathise with socialist doctrines. Austin Robinson (1968) describes Pigou as a liberal in 1912, “neither an extreme radical nor a socialist”, a position corroborated by Saltmarsh and Wilkinson (1960, p.14) who suggest that Pigou was “no party man”.

Nonetheless, he still performed some public service, although perhaps not as much as he would have if his experiences during Wold War I had not had such an effect on him. After providing part-time assistance to the Board of Trade during World War I, he then served on the Cunliffe Committee on Foreign Exchange (1918-1919), and the Royal Commission for Income Tax (1919-1920). He also served on the Chamberlain Committee on the Currency and the Bank of England Note Issue (1924-1925), the report from which precipitated the restoration of the gold standard at the old parity of exchange, a move Keynes would later savage because of its adherence to traditionalism. In 1930, Pigou joined the Committee of Economists, chaired by Keynes (other members of the Committee included Robbins, Sir Josiah Stamp and H.D. Henderson) to review current economic conditions in Great Britain and the causes, and to advise on conditions of recovery. At Cambridge Pigou avoided committee work. A major exception to this was his forty-year long commitment to the committee of Fellowship Electors.

1   2   3   4

The database is protected by copyright © 2016
send message

    Main page