Towards the Managed Economy : Keynes, the Treasury and the fiscal policy debate of the 1930s book cover
1st Edition

Towards the Managed Economy
Keynes, the Treasury and the fiscal policy debate of the 1930s

ISBN 9780415379779
Published April 10, 2006 by Routledge
264 Pages

USD $220.00

Prices & shipping based on shipping country


Book Description

This is a major study of economic policy making in Britain between the wars. It provided the first full-length analysis of the early development of fiscal policy as a tool of modern economic management. The central question addressed is how Keynesian fiscal policies came to be adopted by the British government, with particular attention paid to the role of the Treasury and to that of Keynes himself.

Drawing extensively on unpublished documents hitherto untapped by economists or historians, Roger Middleton challenges the widely held view of official economic thinking as an ill-informed group of people holding ‘the Treasury view’ in opposition to Keynes’s prescriptions for deficient demand and mass unemployment. Instead he argues that acceptance of Keynesian economics during the Second World War resulted from political and administrative factors as much as a conversion to Keynesian theory. He investigates the form and impact of fiscal policy during the 1930s and, through a constant employment budget analysis, shows convincingly that at times of rising unemployment governments ignore at their peril the effects of automatic stabilizers upon budgetary stability.

Historians and economists welcomed this fresh perspective on a debate of historical as well as contemporary importance. Towards the Managed Economy is essential reading for all those interested in the rise and fall of Keynesian demand management. This classic text was first published in 1985.

Table of Contents

List of figures ii

List of tables viii

List of symbols and conventions x

Acknowledgements xi

1 Introduction 1

2 Mass unemployment and the interwar British economy 10

1 Unemployment 10

2 The British economy 1929–39 18

3 Policy issues and policy constraints: a conspectus 27

3 The Treasury, economic policy and public expenditure 31

1 The Treasury and economic policy 31

2 The course of expenditure 37

3 The Treasury and expenditure control 47

4 The revenue departments, taxation and policy 57

1 The revenue departments 57

2 The course and structure of receipts 62

3 Revenue forecasting 69

4 Taxation and economic activity 70

5 The budget and budgetary policy: introduction 78

1 Budget definitions 78

2 Fiscal window-dressing 80

3 Budgetary orthodoxy 83

4 Crowding-out 92

6 Budgetary policy 1929–39 96

1 Budgetary history 96

2 The transition of budgetary policy 109

3 Conclusions 120

7 An assessment of changes in fiscal stance 1929–39 122

1 The measurement of fiscal influence 122

2 The constant employment budget balance 124

3 Constant employment GDP 125

4 The characteristics of the fiscal system 127

5 The fiscal stance 1929–39 132

6 Conclusions 142

8 The ‘Treasury view’ and public works 144

1 The case for public works 145

2 The ‘Treasury view’ 1929–30 149

3 An IS-LM model of the ‘Treasury view’ 155

4 The ‘Treasury view’ 1931–9 165

5 Conclusions 171

9 Conclusions 173


I Dramatis personae 191

II The actual and adjusted budget definitions 193

III The estimation of constant employment receipts and expenditure 196

Notes 204

Bibliography 213

Index 233

View More