Table Of ContentEXPLORATIONS IN ECONOMIC LIBERALISM
ALsoby GeoffreyE. Wood
FINANCIALCRISES AND THE WORLD BANKINGSYSTEM
(editor with Forrest Capie)
MACROECONOMICPOLICYAND ECONOMIC
INTERDEPENDENCE(editor withDonaLdR.Hodgman)
MONETARY AND EXCHANGERATEPOLICY (editor with DonaLd
R. Hodgman)
MONETARY ECONOMICS INTHE 1980s(editor with ForrestCapie)
UNREGULATEDBANKING: CHAOS ORORDER?(editor with
ForrestCapie)
Explorations in
Economic Liberalism
The Wincott Lectures
Edited by
Geoffrey E. Wood
City University BusinessSchool
London
Forewordby
Lord Harris ofHigh Cross
FirstpublishedinGreatBritain1996by
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ISBN 978-1-349-24969-5 ISBN 978-1-349-24967-1 (eBook)
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FirstpublishedintheUnitedStatesofAmerica 1996by
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ISBN978-0-312-15997-9
LibraryofCongress Cataloging-in-PublicationData
Explorations ineconomicliberalism:theWincottlecturesIeditedby
Geoffrey E.Wood.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN 978-0-312-15997-9
I.Freeenterprise. 2.Wincott,Harold. I. Wincott, Harold.
11.Wood,Geoffrey Edward.
HB95.E97 1996
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Contents
Foreword by Lord Harris ofHigh Cross IX
Notes on the Contributors xii
Introduction by Geoffrey E. Wood xv
Foreword by Lord Robbins to Chapter 1
The Counter-Revolution in Monetary Theory 3
Milton Friedman
Irving Fisher and the Quantity Theory 4
The Keynesian Revolution 6
The Counter-Revolution 10
Key Propositions of Monetarism 16
Concluding Cautions 19
2 Wages and Prices in a Mixed Economy 22
J. E. Meade
Introduction 22
Inflation: 'Anticipated' and 'Explosive' 22
Conditions for Full Employment without Inflation 25
Recent Changes in the Labour Market 28
Proposals for Restraining 'Explosive' Wage Inflation 31
Supply and Demand in the Labour Market 35
A Critical Look at the Proposals 39
Bringing Profits and Prices into the Net 42
Free Imports Most Effective Weapon 44
Note on the Measurement of Influences 45
Affecting the Allocation of Labour
3 Economic Freedom and Representative Government 50
F. A. Hayek
The Seeds of Destruction 50
The Danger of Unlimited Government 52
The Fundamental Principle 54
The Separation of Powers 57
v
VI Contents
Advantages of Legislative Separation 62
4 Aspects of Postwar Economic Policy 64
Lord Robbins
Introduction 64
A General Perspective 64
The Burden of Taxation 66
Incentives, Saving and Investment 67
Industrial Policy 69
Restrictive Practices 70
Growth and Inflation 73
.Causes of Inflation 75
The Remedy 79
5 The Credibility of Liberal Economics 82
Sir Alan Peacock
The Task. 82
The Background 84
The Supply of Liberal Political Economy 88
The Emotional Resistance to Liberal Political Economy 91
'The Intellectual Occasions of Hesitancy' 94
Retaining and Expanding Credibility 97
6 Economists and the British Economy 103
Sir Alan Walters
A Reminiscence 103
Lessons of Macro-Economic Management 104
Monetarism 1970 106
Consumption and Savings in the 1970s 108
The Discrediting of 'New Cambridge' 110
The Counter-Revolution in Expectations 112
Cost-Push and Expansionism 115
Expansionism and the Role of Money 119
Conclusion 120
7 The Pleasures and Pains of Modern Capitalism 126
George J. Stigler
The Pleasures 126
The Pains 132
Contents vii
The Balance of Pleasures and Pains 135
The Outlook for Capitalism 137
8 The Limits of International Cooperation 141
Deepak Lal
Introduction \4\
International Co-operation to Maintain Free Trading
and Payments Systems 141
The Theoretical Case for International Dirigisme 143
International Macro-economic and
Exchange Rate Coordination 145
International Environmental Externalities 152
The Greenhouse Effect 154
The Ozone Layer 160
Conclusions 164
9 Do Currency Boards Have a Future? 172
Anna 1. Schwartz
Introduction 172
What is a Currency Board? 172
Abandonment of the Currency Board System 175
Present-Day Currency Boards 177
Are Currency Boards the Wave of the Future? 179
Conclusion 182
10 Free Trade, 'Fairness' and the New Protectionism 186
Jagdish Bhagwati
Introduction \86
The WTO: The Main Agenda 187
Regionalism versus Multilateralism or FTAs versus FT 205
The WTO: Architecture, Not Engineering 210
Index 214
Harold Wincott
Foreword:
Harold Wincott - Doyen of
Financial Joumalism
Ralph Harris
I am not hopeful of conveying fully to a younger generation the en
during place Harold Wineott earned in the postwar transformation of
financial journalism. When I took up economics at Cambridge in 1945,
few people outside the Square Mile and perhaps the financial com
munities scattered around the provinces made a habit of poring over
the acres of anonymous, densely packed, columns headed 'City Edi
tor', 'Financial Editor' or 'Our Own Correspondent'.A real scoop might
justify 'from our special correspondent'.
By 1957, when the Institute of Economic Affairs set'up its first of
fice behind Throgmorton Street, some of the anonymity was being shed.
In the next decade I had the good fortune to meet a veritable academy
of City journalists withnames already winning wide recognition among
businessmen, politicians and even professional economists. Among the
most celebrated in their day were Oscar Hobson, Paul Bareau, Manning
Dacey, Richard Fry, Wilfred King, Maurice Green, followed later by
William Clarke,Andrew Shonfield, Patrick Hutber, Nigel Lawson, Peter
Jay, Christopher Fildes, and, of course, the everlasting Samuel Brittan.
All of them shared a serious, even scholarly approach to the interpre
tation of current affairs. And with few exceptions, they also shared a
broad commitment to market economy learned from close observation
of the real world.
I believe none of these famous names would begrudge pride of place
to Harold Wincott. Certainly, by the time of his death in 1969 at the
age of 62, his weekly articles in The Financial Times had become some
thing of a national institution. Unique among such a galaxy, this pre-emi
nence was achieved without the least claim to formal study, let alone
universityeducation.Indeed,hisapprenticeshipwasaltogethermorepractical.
Born in North London in 1906, he left Hornsey County School at 16.
His father wanted him to go into the small family business of heraldic
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