ESHET at Greece
Aimed at the Stabilisation of Commodity Prices
— Keynes’s Hopes Betrayed and the Transmutation Process
of the International Control Scheme
Toshiaki Hirai[* Faculty of Economics, Sophia University, Tokyo 102-8554. E-mail: hirai-t@sophia.ac.jp.
The paper originates in Hirai (2000, Ch.5). I am grateful for invaluable comments by Profs.Kazuhiko
Yabe (Tokyo Metropolitan University) and Katuyoshi Watarai (Waseda University).
]*
Sophia University
Introduction
The commodity problem has been a serious issue between the producing developing countries and the developed powers ― a North-South problem. After the WWII the problem has been dealt with based on a Commodity-by-commodity Approach until 1968, when the secretariat proposed a comprehensive programme at UNCTAD II. In May 1976 the UNCTAD general assembly discussed the Integrated Programme for Commodities. Henceforward there occurred a long battle between the producing countries, which suffered from the fall of the prices of commodities and put forward the Integrated Programme for Commodites, and the developed countries which disliked the idea. The two sides have, at long last, agreed to set up the Common Fund in July 1989 with the purpose of the stabilization of commodities and the improvement of exports incomes.
Dr Corea [the then UNCTAD Secretary-General] had stressed in his report that the essential purpose of the proposed Fund would be the provision of the finance needed for the creation and operation of buffer stocks that might be established under commodity agreements to be negotiated under the Programme…. A further function envisaged was that where no such agreements yet existed, the Fund would be empowered to intervene under agreed conditions in particular commodity markets in exceptional emergency situations (Maizels, 1992, p.116).
As far as the buffer stock operations are concerned, the agreement had the first account (however, it has not been made use of). Although the International Natural Rubber Agreement was equipped with the buffer stock system, it did not apply to the first account. Even this agreement ended in October 1999, and now there exists no international commodity agreement equipped with the buffer stock system. Therefore, the Common Fund has not been successfully operated from the very beginning.
The idea of the Common Fund can be traced back to Keynes’s buffer plan in the 1940s.1
In this paper we examine Keynes’s activities as a planner of buffer stocks of primary commodities in the context and background of the UK political scene in the 1940s. Among other things, it is our aim to clarify (i) the significance of a buffer stock plan in Keynes’s economic thought, and (ii) how and why the plan was transmuted in the political situation of the time.
In July 1940 the Chancellor of the Exchequer’s Consultative Council was established with the aim of helping and advising “the Chancellor on special problems arising from war conditions” (Moggridge, 1992, p. 636). Keynes accepted to be a member of the Consultative Council. It was for the first time since 1919 that Keynes entered into any formal connection with the Treasury. In August he “took a further step into the Treasury: he received a room in the building” (Moggridge, 1992, p. 638). This was to get him deeply involved in Treasury matters, though he continued to act as an unpaid adviser to the Chancellor. Thereafter he was to be engaged on a range of important assignments, which can be classified in three categories:
(i) as a negotiator with the United States over external war finance and the balance of payments crisis (e.g., the Anglo-American Mutual Aid Agreement (1942) and the Anglo-American Financial Agreement (1945));
(ii) as a planner of the post-war world economic order (e.g., the International Clearing Union (1942) and a Central Relief and Reconstruction Fund plan (1941)) ─ the commodity problem dealt with in this paper belongs to this category;
(iii) as a planner of the post-war domestic order (e.g., The White Paper on Employment (1944) and the Beveridge Plan (1944)).
As will be imagined from the above, Keynes occupied a powerful position in the United Kingdom as a policy maker. Within the British Empire, too, his authority and influence stood secure. On the wider, international front, however, he repeatedly saw setbacks in seeing his aims realized, chiefly as a result of the power of the United States.
This paper proceeds as follows. In Section 2 the initial situation surrounding the commodity problem is explained. In Section 3 the Fifth Draft (14 April 1942) of the buffer stock plans ─ the most important version that Keynes really placed his hopes in ─ is examined. In Section 4 comparison is made between the following three drafts and the Fifth Draft; we then go on to see how Keynes was forced to come to a compromise with other camps. Section 5 discusses the road along which the world proceeded thereafter, while Section 6 presents our conclusions.
The Initial Situation
A. The First Stage
Commodity policy was at first discussed in close connection with the relief problem.
At the outbreak of World War II, Britain made a desperate effort to prevent strategic commodities from falling into enemy hands. To achieve this objective it was necessary to buy up large quantities of primary commodities, as a result of which the U.K. found herself in possession of excessive stockpiles.
To cope with this situation, a ‘Ministerial Sub-Committee on Export Surpluses’ was set up in July 1940 to discuss what measures should be adopted “to deal with surpluses in producing countries of commodities which should be denied to the enemy by our blockade” (JMK.27, p. 3) ─ restriction of production, purchase and storage, destruction, etc. It was when the Prime Minister stated in August that Britain should be committed to “a policy of building up stocks of food and raw materials for post-war relief purposes” (JMK.27, p. 3) that the surplus commodity problem came to be bound up with the post-war relief problem.
The Sub-Committee recommended that Britain “should purchase, with or without American help, £200 million pounds in surplus commodities, linking the purchase with the goal of restricting or regulating future production” (JMK.27, p. 3). In November Leith-Ross was appointed to represent Britain in the necessary negotiations.2 Keynes became the Treasury representative on the official committee set up to advise him.
Keynes believed that “if this is [to be] anything at all it [must be] a world scheme of the greatest possible post-war significance, which the United States, if they understood it, would want to be very much in at the first row” (JMK.27, p. 5). He insisted that any plan should be drawn up on the principle of internationalism and in complete collaboration with the U.S.
In November Leith-Ross suggested that any plan concerning the problem of surpluses should have the following three objectives:
to accumulate commodities in preparation for post-war relief initiatives;
to relieve producing countries of the collapsed markets due to the war;
to carry out production adjustment in order to prevent (a) the re-emergence of surplus commodities during the war, and (b) the occurrence of disequilibrium after the war.
Keynes whole-heartedly agreed that these objectives should form the basis of any plan for dealing with the surplus commodities problem. In December he recommended that commercial firms be set up, part of the capital of which should be raised in the relevant producing country. In this connection, in February 1941 he advised that the U.K. should not purchase surpluses other than at a price at least 10 per cent below the yearly average in the lowest year of recent years (examining the buying prices of various commodities, he reached the conclusion that the U.K. had until then been paying too high prices). He put this policy before the official committee on 19 February, which was accepted — It should be kept in mind that this proposal took into account Britain’s rapidly deteriorating financial position.
In May 1941 Keynes put forward an international version of the “ever-normal granary” (an international buffer stock plan)3. On a visit to Washington in the same month, he discussed the surpluses problem with Dean Acheson of the U.S. State Department. Keynes took this opportunity to explain his thoughts on the problems that could be anticipated after the war. His ideas, with which Acheson was in accord to a degree well beyond his expectations, included: (i) an outline of a post-war relief and reconstruction program for Europe (this might be an embryo for the Central Relief and Reconstruction Fund4); and (ii) a conception of the ‘ever-normal granary’ for a unification of primary commodity prices throughout the world.
Keynes believed that the commodity surpluses accumulated throughout the world could be turned to advantage in the task of putting Europe back on its feet once the war was over. In other words, the solution of the commodity problem could assist in that of the relief problem.
Since the end of 1941 Keynes became more deeply involved with the commodity problem5. His efforts in this regard began with the First Draft of his international buffer stock plan (January 1942), followed by the Second (February), the Third (March), and the Forth (April), none of which are extant. The surviving drafts are the Fifth (April 1942) through the Eighth (May 1943).
B. Background
In order to understand Keynes’s activities regarding the commodity problem in the 1940s, we need to know his social philosophy and past activities. The following points are, among others, worth noting.
The first point is Keynes’s view of the market society (social philosophy) underlying his buffer stock plan. Since the early 1920s he had been advocating the ‘New Liberalism’ and finding his way towards Monetary Economics, criticizing laissez-faire philosophy and economics. This approach runs through The End of Laissez-Faire (1926), the Treatise (1930) and the General Theory (1936)5. Keynes does not hold the view that if left to the law of supply and demand, an optimal resource allocation will be attained, arguing that it rests on an unrealistic assumption. Rather he maintains that some intervention or adjustment by the government (or some organization) is required in order to stabilize the market economy.
The second point is concerned with his activities in the Lancashire cotton industry in mid-1920s. Keynes recommended setting-up cartels and merger for rescuing it. The view that some sort of organization is required in order to make the market economy adjustable is here recognizable6.
The third point is that Keynes has been studying and investigating the commodity problem with great care since 19237 8. He has been compiling and analyzing statistics on staple commodities, believing that “a certain amount of information … as to the correlation between changes in the volume of stocks, and successive phases of the trade cycle, is necessary to a full understanding of the latter” (JMK.12, p. 268).
The earliest paper of the series which eventually leads to the international buffer plan is “The Control of Raw Materials by Governments” (The Nation and Athenaeum, 12 June 1926; JMK.19, Part II, pp. 546-552), in which he argues that in the case of primary commodities characterized by violent oscillations in price and supply, government intervention by some means or other is inevitable and proper. This was followed by “The Policy of Government Storage of Foodstuffs and Raw Materials”9 (Economic Journal, Sep. 1938; JMK.21, pp. 456-470), in which he suggests that the British government “should offer storage to all Empire producers of specified raw materials, either free of warehouse charges and interest or for a nominal charge” (JMK.21, p. 465).
As will be shown below, the buffer stock plan rests on the perception that the competitive market system causes violent fluctuations in prices because it abhors buffer stock, so that in order to prevent them (and stabilize producers’ incomes) an international buffer stock plan would be required.
“The International Control of Raw Materials”10 (The Fifth Draft)
― A Stabilization Plan for Prices
The Fifth Draft is entitled “The International Control of Raw Materials” (14 April 1942; JMK.27, pp. 112-134)11, which was adopted as an official Treasury memorandum and was circulated to other departments. It was the buffer stock plan which Keynes really hoped to get through, being composed of four sections and two appendices. Let us examine them except for Appendix II which is a table.
A. ‘The Internationalisation of Vice-President Wallace’s “ever-normal granary”, in Preference to Restriction, is the Basis of These Proposals’ [Section I]
The significance and purpose of this plan emerge clearly from the above title. There are two methods of conducting international control of raw materials: (i) restricting production, and (ii) stabilizing prices. The plan declares that method (i) does not bring about general advantages, so that individual and general stabilization of prices should be aimed at. This corresponds to the international version of Vice-President Wallace’s ‘ever-normal granary’. This policy is required because the international competitive system is incapable of preventing violent fluctuations in commodity prices, which not only jeopardize trade but also make it difficult for firms to hold sufficient buffer stocks. In depression prices plunge and a quantity of stock piles up because firms cannot abruptly vary scales of production, while in boom prices rise rapidly and stock is depleted, which will induce un-economical over-production and thus sow the seeds for the next collapse.
It is an outstanding fault of the competitive system that there is no sufficient incentive to the individual enterprise to store surplus stocks of materials beyond the normal reserves required to maintain continuity of output. The competitive system abhors the existence of buffer stocks which might average periods of high and low demand, with as strong a reflex as nature abhors a vacuum, because such stocks yield a negative return in terms of themselves. It is ready without remorse to tear the structure of output to pieces rather than admit them, and in the effort to rid itself of them12; which should be no matter for surprise because the competitive system is in its ideal form the perfect mechanism for ensuring the quickest, but at the same time the most ruthless, adjustment of supply or demand to any change in conditions, however transitory (JMK.27, p. 131).
This serious failing occurs on account of a comparatively high cost of storage, speculators’ operations, and a lack in incentive for retailers or manufacturers to purchase commodities in advance. Over a long period laissez-faire orthodoxy has prevented the creation of an institution that could usefully bridge a remarkable gap in the production mechanism. In order to rectify the defect dogging the present system we need to take international collective action.
Having stated so much, the essence of this proposal should be clarified:
[P]rices are subject to gradual changes but are fixed within a reasonable range over short periods; … Thus we should aim at combining a short-period stabilization of prices with a long-period price policy which balances supply and demand and allows a steady rate of expansion to the cheaper-cost producers (JMK.27, pp.114-115).
The main purpose of the plan should be to stabilize the violent short-run price fluctuations in international commodities and to allow for price changes in the long run so that supply and demand might be balanced in order to give cheaper-cost producers scope for a steady rate of expansion, and, through this, to secure a certain level of living standard for producers.
B. ‘The Outline of a Plan’ (Section II) — Setup of the ‘Commod Control’
In order to attain the above-mentioned goal, international buffer stock organizations, called Commod Controls, are proposed here, through which (price) stabilization policy should be implemented to redress the shortcomings of the competitive market system.
Each Commod Control, which deals with an individual commodity, is to be composed of representatives of the major producing and consuming countries while its management is to be left to independent specialists.
The object of each Commod Control is to perform the following tasks:
to stabilize the price of that part of world output which enters into international trade, and to maintain stocks adequate to cover fluctuations of supply and demand in the world market (JMK.27, p.115).
a. Price Stabilization
The central function of the Commod Control is to stabilize the price of the commodity concerned (therefore to stabilize producers’ incomes) through buffer stock management. This is the crux of the plan, and to this end the Commod Controls have the following tasks.
(i) Fixing the Basic Price
Each Commod Control should fix the initial ‘basic price’ of its Commod (as the commodity is called) at a reasonable level, on the basis of the existing conditions, and thereafter be allowed to lower (raise) the price by an appropriate amount if stocks exceed (dip from) a stipulated figure, or increase (decrease) at a rate faster than a stipulated rate. Change in the basic price should be small and gradual. In particular, downward revision should not exceed 5 percent.
(ii) Management of Stocks
Each Commod Control should be allowed to keep stocks at the most convenient place, and be willing to buy (sell) the Commod at any time at a price of, say, 10 per cent below (above) the basic price. In order to prevent stock from deteriorating, it should also be allowed to make transactions independently, or enter into agreements with merchants. No Commod Control takes on any responsibility for holding purely domestic stock. It should not accept (e.g.) more than 25 percent of the annual average value of exports from an exporting nation.
b. Restriction of Production
The plan does not rule out restriction of production, but rather assigns it a supplementary role. The following are envisaged:
(i) Export Quotas
If, for unforeseen reasons, the necessity of contracting output at a rate faster than that to which producers could adjust themselves should arise, or if production should fail to fall in response to a fall in price, then producing countries would be allotted export quotas in proportion to the average value of exports in the last three years (this plan is generous to producing countries which would protect their own producers through subsidies, although in this case the quota allotted should be reduced).
(ii) The Maintenance of Production Capacity
It might be necessary to provide producers with appropriate incentives so that they would possess potential production capacity in excess of normal requirements, which will alleviate the difficulty of accurately adjusting supply to demand.
As stabilization policy alone would not be sufficient, the additional measures indicated above should be implemented. The plan, moreover, allows the producing countries to grant subsidies to their producers in emergency situations so that the producers might be assured of incomes which could not be otherwise guaranteed.
c. Finance
As for financing these arrangements, the plan envisages the following: (i) profits arising from the difference between selling prices and buying prices; (ii) provisions through either the International Clearing Union13 or an arrangement between central banks; (iii) issues of permanent or semi-permanent loans secured on the stock of each Commod Control.
d. The General Council for Commodity Controls
The plan proposes the “General Council for Commodity Controls” to regulate and coordinate the various Commod Controls.
The General Council should be responsible for: (i) ensuring that the provisions of each Commod Control are in conformity with the general principles; (ii) reviewing the conditions of each Commod Control, and making policy recommendations for the sake of the general interest, the maintenance of stable prices, and control of the trade cycle; (iii) authorizing or imposing modifications in the basic prices and the stipulated level of stocks.
The buffer stock plan clearly regards the stabilization of commodity prices as its overriding objective, arguing that this is superior to any restriction plan, for it avoids the difficult task of fixing fair quotas and making adjustments acceptable. It also requires no policing. Furthermore, any restriction plan would forfeit the advantages of international free competition which the buffer stock plan does not deny.
In fact, the buffer stock plan aims at combining the advantages of price stabilization in the short term with the realization of the long-term “economic price” (defined as “the long-period equilibrium costs of the most efficient producers on the assumption that the return to the latter is sufficient to provide them with proper nutritional and other standards in the conditions in which they live” (JMK.27, p. 123), without impairing the workings of international free competition.
C．Commodity Control as a Means Contributory to the Prevention of the Trade Cycle [Section III]14
Commodity control by means of the buffer stock — that is, the procurement of commodity surpluses resulting from falling effective demand, and the release of commodity stock in the contrary case — can also, according to the plan, contribute to the prevention of the trade cycle.15 This is considered to be superior to public works policy because it works effectively in both directions in terms of scale and speed.
buffer stock controls to deal with the epidemic of intermittent effective demand are therefore the perfect complement of development organizations ... to offset a deficiency of effective demand which seems to be endemic (JMK.27, p. 122).
… we have at our disposal a weapon capable of producing large effects by rapid action, and of operating in the negative as well as in the positive direction, so that it can function as a stabilizing factor both ways. … Organised public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organization (and above all they cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle (JMK.27, pp.121-122).
If a Commod Control can stabilize the incomes of producing countries by procuring at stable prices the commodities in surplus which emerge due to an initial fall in effective demand, then a vicious cycle can be controlled at the initial point in time (in the reverse case, it can check excessive boom by releasing stock).
The buffer stock plan is here spoken of not only as a solution to deficient effective demand which was the main concern in the General Theory, but also as a solution to excessive boom.
D. Some Difficulties Reviewed [Section IV]
The difficulties likely to emerge with this plan are here examined. It is emphasized that the plan aimed at stabilizing prices has the following advantages over a restrictive plan.
It can avoid the difficult task, which can easily provoke rancor on one side or another, of determining fair rationing and providing acceptable means of adjustment.
(2) Monitoring is not required.
(3) Even if there were a few producers who preferred to keep out of the plan, there would be no problems. These firms lose the right to share in the management of the plan, and would not be able to get help in storage problems in the places concerned, while it is not clear what they would gain by doing so.
The fundamental idea of this plan is that an appropriate international policy should be to stabilize short-term price fluctuations, and bring the long-term ‘economic price’ to fruition.16 If everything were left to the buffer stock plan alone, however, there might be cases in which matters get worse. Some restriction plan might then be required as a temporary and complementary measure. Certainly it should be temporary, for otherwise the advantage of international free competition would be lost.
Restriction schemes, when they are unavoidable to supplement the buffer stock arrangements, should be regarded as a means of temporary relief ─ not a normal or a persisting expedient. For they tend to crystallize the price and the distribution of output between different countries as they exist at the date of the scheme’s inception … In this way the signal advantages of free international competition, namely its adaptability to changing conditions, both of demand and supply, and the proper advantage it gives to the cheapest producers, are needlessly thrown away. ‘Stabilisation’ must not rest on the absurd assumption that conditions of demand and of supply are fixed, or that the chief purpose is to protect the increasingly uneconomic producer from the natural effects of world competition. Our object should be to combine the long-period advantages of free competition with the short-period advantages of ensuring that the necessary changes in the scale and distribution of output should take place steadily and slowly in response to the steady and slow evolution of the underlying trends (JMK.27, p.126).
This plan has another important implication. It also secures stable living standards for the producers concerned by guaranteeing adequate incomes. If a country should be seen to attain a low cost by lowering its living standard, a Commod Control is faced with the choice of either holding excess stock or cutting the basic price, which would bring the living standard of many countries below an adequate level. In order to avoid any such situation, each government, the plan says, should be allowed to provide its producers with subsidies which should be confined within a reasonable range since the system is flawed in much the same way as a restrictive plan.17
E. Appendix I
Here Keynes’s view of the market society considered in the Introduction, emerges most vividly. After presenting the data which show that internationally traded commodities are subject to violent price fluctuations, he states that this comes from a fatal defect of the competitive market system in that it abhors buffer stocks.
Now, we have seen the principal contents of the Fifth Draft. This type of plan will not suffer from such conflict between internationalism and nationalism as will complicate the relief problem.
In the case of the relief problem, it can not be addressed without taking into consideration who the rescuers, and who the rescuees are. Thus according as the position of some country changes with the evolvement of the state of affairs, the voice of nationalism might become larger and larger.
On the other hand, the buffer stock plan aims at stabilizing the short-run price fluctuations of primary commodities, and securing the living standard of producers, through realization of the long-run economic price. Thus it embodies in its very nature a strong tenet of internationalism.18
4．“The International Regulation of Primary Products” (The Sixth to
the Eighth Draft) ― Transmutation Process
We are now in a position to examine the subsequent drafts. Our main concern is with how the plan went on changing19.
We can detect some substantial differences between the Fifth Draft and the following ones, all of which are entitled “The International Regulation of Primary Products” (the Sixth Draft [28 May 1942], the Seventh Draft [August 1942. JMK.27, pp.135-168], and the Eighth Draft [February 1943. JMK.27, pp.168-194]).
The buffer stock plan drafts which follow the Fifth Draft underwent significant transformation due, in the main, to the drastic introduction of a ‘restrictive plan’; so drastic that they lose the clarity and the first principle which characterized the Fifth Draft.20 Actually, they are the product of having accepted the claims of various governmental departments, which means that Keynes’s hopes were progressively frustrated.
Let us begin with the Seventh Draft rather than the Sixth, for JMK.27 takes up the former in the text while the latter is dealt with in an appendix (JMK.27. pp.488-501) in terms of points of difference.21 The Eighth Draft will be then examined.
The Seventh Draft ─ Drastic Introduction of a ‘Restrictive Plan’ in Disguise
We will examine the Seventh Draft in comparison the Fifth. The main difference between the two lies in the fact that the Fifth Draft sets the ‘stabilisation of prices’ (= ‘stabilisation’) as an absolute objective, and clearly states that the ‘regulation of the volume of output’ (= ‘restriction’) should be avoided, while the Seventh Draft deals with restriction as if it could be equally ranked, in importance, with stabilization. Paragraphs 13 and 14 are typical, which deal, respectively, with restriction in the form of quota regulation of exports or organized restriction, and the relationship between stabilization and restriction.
Notwithstanding that the declared emphasis is placed on stabilization, far more space is allotted to restriction in relation to the objective of guaranteeing reasonable incomes for the producers ─ and this to such an extent that the plan can hardly be said to regard restriction as a temporary or supplementary measure.
This qualitative transformation gives us a distinct impression of retreat from the basic principle which characterized the Fifth Draft. It was, in fact, made as a kind of compromise bowing to criticism, mainly from the Ministry of Agriculture and Leith-Loss22, that the articles concerning ‘restriction’ were insufficiently dealt with.
Preface [Section I]
In the Seventh Draft as in the Fifth Draft, two main objectives are declared: (i) “the moderation of excessive fluctuations of prices about the long-term equilibrium price”, and (ii) “the maintenance of long-term equilibrium between supply and demand at a price which provides to the majority of primary producers a standard of life in reasonable relation to the standards of the countries in which they live”.
That is to say, the former objective is the stabilization of prices, the latter the stabilization of producers’ income. The plan states that the first objective is to be attained through buffer stock operations, while references to the second objective is made in relation to restriction.
But to attain the second objective and to bring about long-period evolutionary changes, restriction or regulation of output may be necessary (JMK.27, p.137).
The Fifth Draft clearly stated that the two objectives could be attained with the buffer stock operations while the Seventh refers to the ‘restriction’ from the beginning, meaning a tactical retreat. The next passage follows the above quotation.23
A complete scheme must bring both these sets of arrangements [buffer stocks and restriction] into a consistent whole (JMK.27, p.137).
b. The Internationalisation of Vice-President Wallace’s ‘Ever-Normal Granary’
[Section II]
This is, in substance, similar to section I in the Fifth Draft, but it contains the following passage.
The following proposals, whilst providing for the expedient of quota regulation [restriction] where it seems unavoidable, are particularly directed to buffer stock stabilization (JMK.27, p. 141).
Immediately after this, we see “the treatment of the two aspects — price stabilization and output regulation — must be closely associated in practice”, which indicates that ‘restriction’ is seriously considered here as compared with the Fifth Draft.
c. The Outline of a Plan [Section III]
This section qualitatively differs from Section II, ‘The Outline of a Plan’ of the Fifth Draft, in that the former has additional paragraphs — Paragraph 13 dealing with restriction and Paragraph 14 dealing with the relation between stabilization and restriction.
Paragraph 13
This deals with the quota rationing of exports, the need for which is delicately expressed:
But there is likely to be general agreement that such schemes [quota rationing of exports, and organized restriction] may prove to be necessary in the case of certain commodities even in the new circumstances, that any proposals for the international regulation of primary products must, therefore, provide for their possibility, and that careful precautions should be taken in handling an instrument which, if abused, is so liable to impoverish the world as a whole and waste its potential resources. In any event, there is one use of quota restriction which is in principle acceptable, namely, where it is avowedly temporary and for the purpose of effecting a smooth and gradual transfer from one source of supply to another (JMK.27, p.149).
The following suggestions are mainly directed to the provision of suitable machinery within the general framework of international control, to decide when orgnised restriction is justifiable and the general lines it should follow with a view to keeping it within the narrowest practicable limits (JMK.27, p.150).
Very intricate expression, indeed, to the effect that a restriction plan, hazardous as it may be, might be temporarily required. Thus, although a stabilization system by means of buffer stock should be the crux of the plan, a restriction plan as an auxiliary means needs to be taken into consideration without impairing the stabilization plan.24
Paragraph 14
Here a link is proposed between the ‘stabilization of prices’ and the ‘restriction of output’. Having emphasized once again that the regulation of rationing should work as an auxiliary means for stabilization, the following procedure is set out.
The regulation plan begins by deciding on ‘standard rationing’ for each exporting country. When a tendency to accumulate stocks is observed, a Commod Control undertakes buffer stock operations in such a way that it lowers the price, and accepts the commodity concerned based on the ‘standard rationing’. If this tendency were to drag on, and the price were to go down below a reasonable economic price, the Commod Control should implement a “genuine restrictive plan”.25
Some Difficulties Reviewed [Section V]
This differs from Section IV of the Fifth Draft on the following points.
(i) In the Fifth Draft priority of ‘stabilization’ over ‘restriction’ was clearly stated, and a ‘restriction’ plan was treated as the last resort. In the Seventh Draft these points are deleted.
(ii) In Paragraph 21 a passage which stresses the raison-d’être of a restriction plan is inserted.
(iii) Paragraph 16 of the Fifth Draft emphasized that a restriction plan should be temporary; this remark is deleted from the Seventh Draft.
(iv) In Paragraph 24 a passage in which commodities suitable for buffer stock control are examined is inserted.
(v) The last passage dealing with excessive liquidity in Paragraph 18 of the Fifth Draft is deleted from the Seventh Draft.
(vi) In Paragraph 27 a passage to the effect that the plan is compatible with further development of the state trading is added.
As is clear from (i), (ii) and (iii), much attention is paid to a ‘restriction plan’ here.
e. Appendix
Here the following are added.
(i) In Appendix I, some examples of the damage to consumers that comes from price instability are shown, and a passage to the effect that stabilization will contribute to ironing out wage negotiations and social policy is added.
(ii) In Appendix II, some examples are given of the consequences of uneconomical production fostered with subsidies and protection policies — chronic surplus capacities, high prices, and reduced volume of international trade —and the need to do away with them is stressed.26
The Eighth Draft27 ─ Enlargement of the Commod Control and Further
Degeneration
The Eighth Draft differs from the Seventh in that the provisions of the Commod Control are greatly enlarged. It rather comes to the Fifth and Sixth Drafts as far as composition and expression are concerned.
What attracts us is an elaborate presentation of organization, followed by statement of the objectives of this plan.
The expression, ‘an international version of the ever-normal granary’ which had been used up to the Seventh Draft, is deleted (in general the items peculiar to America are deleted), and an argument in favor of preventing the trade cycle is put in Appendix II. Finance, in contrast, comes to the fore. The section, ‘Some Difficulties Reviewed’, which had been seen from the Fifth Draft on, is deleted and incorporated in the various places concerned.
On the whole, here in the Eighth Draft a system is elaborated with great clarity.
a. Preface [Section I]
This was greatly changed. In Paragraph 2, the reasons are mentioned why the producers of primary commodities suffered in the 1930s (this was not seen in the Seventh Draft). The two objectives of the plan are the same in the two drafts, and what follows has the same contents as the Seventh Draft.
b. The Outline of the Plan [Section II]
This has a distinctive feature, as compared with the Seventh Draft, in that the role of the organization is clearly and concretely worked out. At first the General Council is dealt with. Membership, obligations, the voting right of participating countries, and the way of electing the ‘General Executive’ and so forth are prescribed.
We then come to Commod Controls, whose functions are greatly enlarged ―‘price control, buffer stocks, export rationing, regulation of production, encouragement of new sources of supply, maintenance of reserve capacities’ (In the drafts up to the Seventh Draft buffer stocks were the only task to be performed). The main Commod Controls are those dealing with buffer stocks and export rationing, for which provisions are stipulated respectively in Paragraph 12, ‘Buffer Stocks’ and Paragraph 14, ‘The Quota Regulation of Exports’. In addition, constraints to the general rights of the Commod Control and the function of the General Executive are specified.
Paragraph 13, ‘The Finance of Buffer Stocks’, which is newly written, specifies in great detail how to procure the finance required, the role which the International Clearing Union (a stabilizing factor) should play, and how to deal with mal-administered Commod Controls.28
In the Eighth Draft, it should be noted, the stabilization of prices recedes even further in terms of the main objectives. In the Seventh draft, the importance of buffer stocks was still emphasized in the form of ‘an international version of the ever-normal granary of Vice-President Wallace’ (albeit the position of buffer stocks was played down as compared with the Fifth Draft). Now, in addition to a buffer stock plan and quota regulations, so many other regulations are introduced that the nature and function of a Commod Control drastically change. Moreover, while in the Seventh draft the ‘rationing regulation’ was declared to be temporary, in the Eighth this expression disappears. Each Commod Control is supposed to be responsible for any or all of the above-mentioned tasks29. albeit the principal Common Controls are those responsible for buffer stocks and export quotas.
5. The Path Which the World Walked Thereafter
Finally we will briefly trace the destiny of the international regulation plan for primary commodities.
In May 1943 the Eighth Draft was accepted by the War Cabinet. Its broad outline was handed over to the United States in the conference on food at Hot-Springs, which discussed the general principles of the commodity policy.
In the Anglo-American conference on postwar economic problems in September in which the official document of the Eighth Draft was handed over to the United States, the following agreement was reached:
The agreed document contained somewhat less emphasis on buffer stocks and probably greater safeguards against the improper use of quantitative restrictions than the original British plan. However, it also contained few restrictions on national sovereignty (JMK.27, p.196).
That is, the American side was negative toward a buffer stock article. On the British side, moreover, severe opposition was put up against any such agreement, among others, from the “Misnistry of Agriculture (which wanted to see stricter quota regulations) and the Bank of England (which wanted greater scope for State trading)” (Mizels, 1992, 93 n.14), and the need for a commodity-by-commodity approach was advocated.
Thereafter the commodity problem took the form of a proposal to the Conference on Trade and Employment in Washington in autumn 1945. On the whole this proposal represented a position against the idea of buffer stocks, and included articles of commodity agreement among governments.
The final result was a survival of the commodity agreement articles in the GATT30 and the Economic and Social Committee of the United Nations.31
In the event, notwithstanding Keynes’s self-sacrificing efforts this plan bore no more fruit than did his plan for an International Clearing Union.32
6. Conclusion
In this paper we have sought to clarify (i) the significance of a buffer stock plan in Keynes’s economic thought, and (ii) how and why the plan was transmuted in the political situation of the time.
Our conclusions are:
(i) Keynes firmly believed that violent fluctuations in the prices of primary products were attributable to the fatal defect that the competitive system abhors buffer stocks, and in order to stabilize prices (and guarantee some living standard to producers) an international organization should be set up. The Fifth Draft, the main emphasis of which was placed on the stabilization of prices, ideally epitomizes his stance, for it is firmly grounded in his social philosophy ─ the New Liberalism.
(ii) However, the buffer stock plan made a series of transformation due to political concessions and compromises. The essential transmutation is that in the drafts following the Fifth Draft restriction on output was increasingly emphasized. The Sixth to Eighth Drafts are quite different, in spirit, from the Fifth, and were not the ones Keynes hoped to bring to fruition.
The Second World War started with hostilities between the United Kingdom and Germany. At the outset the UK hardly imagined that the war would prove so long and arduous. In fact, the country was in desperate straits up to the end of 1941 in military and economic terms.
It was then that the Pacific War broke out. The United Kingdom’s colonies in the South East Asia were occupied by the Japanese Army, but in turn was to have the USA, which had hitherto kept a neutral position, as an ally. This was to greatly salvage the British economy from possible disaster although the price to be paid was an overwhelming advancement of the USA and retreat of the UK in the international political and economic scene.
Keynes’s influence on the international economic problem in the UK was very powerful. For the postwar world order he drafted various plans, some of which were approved as official plans, and, as a representative of the UK, entered into negotiations with the USA. However, faced with military and economic exhaustion the UK received massive assistance from the USA through the Lend-Lease system, and Keynes’ proposals such as the regulation plan for primary commodities and the plan for the international monetary system (the International Clearing Union) were given short shrift to. It was the USA which was to rule the roost all round.
Keynes himself was deeply concerned about the deterioration of the British financial position as the war proceeded. As in the First World War, Keynes was to play a key role in loan negotiations with the USA. This was indeed a continuum of humiliation.
The USA, which had been the largest nation in terms of economic performances before the First World War, showed an odd attitude on the international political and economical scene in the inter-war period.33 There is no doubt that a tradition of non-interference or isolationism vis-à-vis Europe contributed to this attitude, together with American people’s widespread aversion to war even in 1941. Taking these into consideration, it was not clear how the USA would act in the post-war international order. No wonder many proposals concerning the post-war world system were put forward by the British side, followed by alternative proposals by the American. As a matter of fact, it was not until 1949 that the USA came consciously to play a leading role in the post-war world order.34
As stated at the beginning of this paper, the Common Fund in 1989 inherited the essential characteristics from Keynes’s buffer plan. If Keynes, who never dreamt of the demise of the British Empire and the independence of the Colonies, would have been told by a new-comer into the Heaven that the Common Fund had been a long struggle between the South and North Sides, how would he have responded to it?
1) For the Common Fund, see Maizels (1992, pp.116-124), and for a relation between the Common Fund and Keynes’s buffer plan, O’Neill (1977, pp.14-16).
2) He became the head of Post-war Commodity Policy and Relief Department.
3) See a passage in Keynes’s letter to Acheson dated 4 June 1941: “The international discussions relating to particular commodities, taken in conjunction with the arrangements for carrying and financing surpluses, might naturally lead on to a more ambitious policy for stabilizing within reasonable limits the prices of the leading internationally traded raw materials and even for some kind of international holding cartel which would apply the idea of the ever normal granary to the international field” (JMK.27, p.24).
4) On which see JMK.27, p.46.
5) A similar criticism of the laissez-faire credo is clearly seen in his later years in the underlying idea of the Clearing Union. See JMK.25, pp. 21-23, and 31-33 in his memorandum, “Post-War Currency Policy” (dated 8 Sep. 1941). See also his argument on commercial policy (Chapter 2, JMK.26).
On Keynes’s “New Liberalism”, see Clarke (1988, Chapter 4, “The Politics of Keynesian Economics, 1924-1929”) who takes Keynes as a New Liberalist succeeding to the Edwardian New Liberalism (pp. 13-14, 78-80); Freeden (1986), and Cranston (in Thirlwall ed., 1978) both of whom regard Keynes as a “Centrist Liberalist”, distinct from a “New (or Left) Liberalist”, in that the former refuses faith in the state as a disinterested agent of the community, stresses an ideological difference between liberalism and a socialist/trade-unionist Labor party, and has less reflective, philosophical and synthetic mind (see Freeden, 1986, pp. 128-129, 12-14, and 171-172); and Skidelsky (1992, Chapter 7, “Keynes’s Middle Way”) who supports Freeden and Cranston subject to several qualifications. In his paper, “Keynes’s How to Pay for the War: A Reinterpretation”, read at the History of Economic Thought Conference (University of Bristol, 1997), Skidelsky maintains that Keynes (1940) advocated his fiscal policy (deferred pay) based on the spirit of “the middle way”. See also Fitzgibbons (1988, Chapter 9, “The Political Ideals”). Moggridge (1992, Chapter 18, “Industry and Politics”) maintains that Keynes’s political thought evolved from the New Liberalism in the 1920s to the “Liberal Socialism” in the 1930s and later. Peacock (in Crabtree and Thirlwall eds., 1993) describes Keynes as an “end-state” liberalist in contrast with a “contractarian (or “procedural”) liberal”. Peacock seems to take Keynes within the context of classical liberalism rather than that of the “New Liberalism”. See also Maloney (1985, pp. 159-161) in relation to Freeden’s (1978) evaluation of Hobson as leader of the New Liberal movement.
It should be noted that Robertson and Henderson, both of whom took part in the Liberal Summer School and the writing of Britain’s Industrial Future (1928), are in the same camp as Keynes as far as social or political philosophy is concerned: see Freeden (1986, pp. 172-173). Furthermore, Hawtrey’s social philosophy is much like Keynes’s. For example, Hawtrey (1926) states that “The defects of the market as a test of value taken in the fundamental ethical sense arise partly from the imperfection of human judgment in selecting objects of consumption, and partly from the inequality of incomes. On both grounds the individualist system is open to criticism” (p. 216). See also Hawtrey (1944, pp. v-vi).
6) See Harrod (1951, pp. 379-386).
7) In fact, he was a great and reckless speculator of the commodity markets from 1920 through 1937, especially wheat, while developing his theory of futures market. Fantacci, Marcuzzo and Sanfilippo (forthcoming) beautifully analyzes the relation between Keynes’s theory and his speculative activities. According to it, “[t]he most striking characteristic of Keynes’s speculative activitiy in wheat futures is the systematic prevalence of long position over the period 1935-1937. He is regarded as the “overlooked” forerunner of the modern theory of finance. See De Cecco (2009) and Kregel (2009), both in Bateman, Hirai and Marcuzzo, eds. (forthcoming).
8) Keynes (1923) first discussed his ‘theory of normal backwardation (‘forward prices below spot prices’)’ in relation to the commodity markets. See Dimand=Dimand (1990, 114-115) and Fantacci, Marcuzzo and Sanfilippo (forthcoming, section 2). His main investigations were published in The London and Cambridge Economic Service, which started in 1923. They are reproduced as Chapter 3 of JMK.12. Keynes is responsible for the following issues: April 1923, June 1924, July 1925, February 1926, March 1927, August 1929, and September 1930. He also published the following in the Memorandum Series by the Royal Economic Society: “Stocks of Staple Commodities” (with J. Rowe, No.3, September 1927); “Stocks of Staple Commodities” (with J. Rowe, G. Schwartz and others. No.17 (Aug. 1929), No.24 (Oct. 1930), and No. 69(Nov. 1937)). See also J. Rowe, “Studies in the Artificial Control of Raw Material Supplies” (No.23, “Sugar” (Oct. 1930), No.29, “Rubber” (April 1931), and No.34, “Brazilian Coffee” (Feb. 1932)).
9) This is brilliantly analyzed by Dimand=Dimand (1990, pp.113-118).
10) This buffer stock plan was endorsed by Harrod, Meade, and Kahn.
11) This plan was stimulated by Harrod, who was moved by a paper read at a meeting which was published as Keynes (1938). See Harrod (1951, p.531). Harrod was an important figure who drove Keynes toward various international schemes. For this draft, see Maizels (1992, pp.92-93). In his letter to Keynes dated 4 May 1942 No.29, Univ. of Tokyo) Harrod wrote: “... It will be the business of the economists to draw a list of the spheres in which internationa1 or concerted action is desirable. I suggest a tentative list as follows: 1. International bank. 2. Stabilization of primary commodity prices. 3. Other measures to combat the trade cycle, including concerted action upon interest rates, public works expenditure, etc. 4. Regulation of international capital movements and of the rate and nature of such capital developments as depend on foreign capital. 5. Welfare. 6. Tariffs et loc genus omne.” 12) This perception might be related to the following: ‘the present economic system lacks in proper preparation for dealing with excessive circulating capital’ (TM.2, p.130).
13) In Sections VIII and IX in ‘Proposals for an International Clearing Union’ (August 1942. JMK.25, pp. 169-195), there appear provisions for control over primary commodities.
14) How seriously Keynes thought of this aspect (a tool for aggregate demand management) is emphasized by Dimand=Dimand (1990, p.118). It should be also noted that Keynes endorsed Meade’s “variations in social insurance contributions” as a tool for aggregate demand management. See JMK.27, p.318.
15) For a similar view, see an idea, which Meade put forward and Keynes accepted in the Beveridge Plan in the making, to the effect that the trade cycle could be prevented by changing the rate of contribution according as the economy goes.
16) In relation to this point criticism came from the Bank of England that it was too laissez-faire. In a note to Hopkins dated 15 April 1942 Keynes made a rejoinder, which interestingly enough reveals his stance: “I infer … that the Bank considers the buffer stock proposals to be far too laissez-faire, in as much as they still allow a place for private trading. International agreements, by which prices were absolutely fixed and quotas rigidly determined for every producer and perhaps for every consumer also, so as to freeze or stereotype world trade into a mould … seem to me terrifying, not least from our own special point of view. … I suspect that this bias towards rigidly controlled state trading on Russian lines influences the general critical approach. The same bias seems to appear in … the Deputy Governor’s letter. In reply to … I can only plead guilty of aiming at a plan which does take a middle course between unfettered competition under laissez-faire conditions and planned controls which try to freeze commerce into a fixed mould” (JMK.27, pp.110-111).
Keynes always distinguished himself from a complete controller, declaring himself, for example, a ‘believer[s] in full-blooded international planning’ (JMK.27, p.138).
17) In Section IV, besides these, the following are examined: (i) the definition of commodities, the difference between the highest and lowest price, the largest and smallest size of stock, the valuation for basic prices entrusted to the General Council of Commod Controls; (ii) an estimation of the size of stock which a Commod Control should possess (a figure between three months’ and a year’s international trade); (iii) the advantages which the introduction of the International Clearing Union (supposing it came into existences) as to finance would bring about; (iv) the advantages of the stock of raw materials of producing countries being fluid in all cases.
18) Keynes thought that this plan (although it should by its very nature be internationalist) should be discussed only between the UK and the USA as far as the initial stage is concerned. See his note to Sir Richard Hopkins dated 23 February 1942 (JMK.27, pp.106-107).
19) Dimand=Dimand (1990, pp.118-121) is not aware of how Keynes’s successive drafts suffered qualitative degeneration, for the description there is confusing due to inadvertent use of quotations from various versions of drafts.
20) In a letter to Harrod dated 26 May (No.32, University of Tokyo), Keynes said: “… I have endeavoured in the revise to give him [Leith-Ross] a fair show and bring in substantial passages providing a schematism for restriction whilst, nevertheless, maintaining the general atmosphere of approach of the former document [the Fifth Draft]”.
The Sixth Draft was sharply criticized by Harrod. See his note on "The International Regulation of Primary Products" (June 9th 1942. No.88, Tokyo University), saying that “The revised draft on buffer stocks [the Sixth Draft] differs from its predecessor mainly by the matter now contained in paragraphs 15 and 16 [which correspond to, respectively, 13 and 14 in the Seventh Draft] together with consequential changes. The original draft [the Fifth Draft] contemplated that by restriction schemes and quotas; the new draft stresses the supplementary schemes giving them a prominence which, in my submission, might endanger the main plan and be contrary to public policy”.
It was Fergusson, Permanent Secretary, Ministry of Agriculture and Fisheries, who dissented the Sixth Draft, saying that “Agricultural Departments in most countries believe that under modern conditions the adjustment of supply to demand can only be achieved by schemes for the regulation of production and marketing”. See “Note of Dissent by Sir D. Fergusson” (30 July 1942. No. 97, University of Tokyo).
21) The Sixth Draft is kept as No.85 of Keynes=Harrod Correpondence, Department of Economics Library, University of Tokyo.
22) See his note on the Treasury Memorandum, “The international Control of Raw Materials”, May 20th 1942 (No.83, University of Tokyo).
23) Immediately after this the importance of the ‘stabilization of price’ is emphasized, while it is underlined that the restriction of production should be temporary.
24) In Paragraph 13, the concrete items of ‘an appropriate organization’ are mentioned as follows: (i) conditions and methods for exporting governments’ applying rationing regulation to the General Council; (ii) temporary export rationing based on the last three years’ exports; (iii) the necessity of inquiring into the fundamental causes if rationing regulation should be required to be continued; (iv) the role of a Commod Control while rationing is in effect (the determination of the basic price, the determination of the total amount of rationing, the volume which a Commod Control should purchase, and so forth); (v) the period of a regulation plan.
Here also, in contrast with the point hitherto asserted that rationing regulation should be temporary, it is treated as acceptable if continued reasons exist. Thus the overall intention of the plan is kept obscure.
25) Section IV, ‘Commodity Control as Measures Contributory to the Prevention of the Trade Cycle’ is, in substance, the same as Section III of the Fifth Draft.
26) The Sixth Draft differs greatly from the Seventh on the following points.
(i) Paragraph 4 in the Seventh Draft.
(a) The function of a Commod Control.
In the Seventh Draft the ‘new sources of supply’ are ‘left to the state of nature’ while in the Sixth draft some form of ‘regulation’ was taken into consideration.
(b) Presentation of the objective of a regulation plan.
The Six Draft aimed at (i) ‘limiting and smoothing out the short-term fluctuations of price’, and (ii) ‘securing an economic price and a gradual transference of trade in cases where it would appear likely that otherwise over-production would inevitably involve producers generally in prolonged distress’
(ii) Paragraph 12(i) of the Seventh Draft.
In the Sixth Draft concrete figures were mentioned concerning the voting right of exporting and importing countries in a Commod Control.
(iii) Paragraph 27 of the Seventh Draft.
The Sixth Draft here contained the same item (dealing with excessive liquidity) as the last passage of Paragraph 18 in the Fifth Draft. It was stated that the regulation plan concerned is compatible with further advancement of the state trading.
27) The Eighth Draft is organized as follows: I. Preface; II. The Outline of the Plan (10. General Assembly, 11. Commod Control, 12. Buffer Stocks, 13. Finance of Buffer Stocks, 14. Export Rationing); III. Conclusion (which was put as the closing passage of the ‘Preface’ in the Seventh Draft).
28) Paragraph 12 was originally the crux of the plan. This can be said to be substantially the same as in the Seventh Draft. Paragraph 14 almost succeeds Paragraph 13 of the Seventh Draft, both of which stipulate that this regulation would be required if the ‘basic price’ equating supply and demand through the operation of buffer stocks were to prove lower than the ‘international economic price’ that would provide producers with a reasonable living standard.
29) “In the following plan carefully guarded proposals for restriction have, therefore, been added to the less questionable proposals for stabilizing prices with which it begins” (JMK.27, p.171).
30) For this see Maizels (1992, pp.104-105).
31) The above is based on JMK.27, pp.196 and 199. Some ideas found in Keynes’s regulation plan of the primary commodities (buffer stocks, export rationing and so forth) were to be incorporated into some international commodity agreements such as the International Wheat Agreement (cf. Keynes’s memorandum, “The Wheat Problem”), the International Coffee Agreement, the International Sugar Agreement and so forth although they were concluded under the aegis of ICCICA (Interim Co-ordinating Committee for International Commodity Arrangement). For this see Maizels (1992, 104) and Gordon-Ashworth (1984).
32) Kahn was involved with ‘the post-war situation of raw materials’ at the Ministry of Supply in 1943-4, and worked with Keynes on buffer stocks at the Board of Trade. On this, see Marcuzzo=Rosselli (2005, 33). Kahn went on advocating a buffer stock plan along the same line as Keynes, criticizing the commodity-by-commodity approach in the 1950s. For his manuscripts on buffer stocks which was commissioned by FAO ― Kahn’s Papers, RFK/2/10-12 ―, see Palma (1994).
Davidson (1991, Chapter 9) emphasizes the necessity of this type of plan in order to make the world economy stable. He maintains that the collapse of the buffer stock plan implemented during the 1945-72 period led to the marked instability in the world economy. See p. 177.
33) See Kindleberger (1973, p.292).
34) See Kattner (1991, Ch.1).
References
Bateman, B., Hirai, T. and Marcuzzo, M.C., The Return to Keynes, Harvard University Press, 2009 (forthcoming).
Clarke, P., The Keynesian Revolution in the Making 1924-1936, Clarendon Press, 1988.
Corea, G., Taming Commodity Markets, Manchester University Press, 1992.
Cuttner, R., The End of Laissez-Faire, John Brockman Associates, 1991.
Davidson, P. Controversies in Post Keynesian Economics, Edward Elgar, 1991.
De Cecco, M., “Keynes and Modern International Finance Theory” in Bateman, Hirai and Marcuzzo eds. (forthcoming).
Dimand, R. and Dimand, M., “J.M. Keynes on Buffer Stocks and Commodity Price Stabilization”, History of Political Economy, No.1, 1990.
Fantacci, L., Marcuzzo, M.C. and Sanfilippo, E., “Speculation in Commodities: Keynes’s ‘Practical Acquaintance’ with Futures Markets”, Journal of the History of Economic Thought, 2009 (forthcoming).
Fitzgibbons, A., Keynes’s Vision: A New Political Economy, Clarendon Press, 1988.
Freeden, M., Liberalism Divided: A Study in British Political Thought 1914-1939, Clarendon Press, 1986.
Friedman, M. The Fluctuations in Incomes of Primary Producers: a Critical Comment, Economic Journal, vol.64, September 1954.
Gordon-Ashworth, F. International Commodity Control: A Contemporary History and
Appraisal, Croom Helm, 1984.
Harrod, R., The Life of John Maynard Keynes, Macmillan, 1951.
Hawtrey, R., Economic Problem, Longmans, Green and Co., 1926.
Hawtrey, R., Economic Destiny, Longmans, Green and Co., 1944.
Hayek, F. “A Commodity Reserve Currency”, Economic Journal, vol.53, June-September, 1943.
Hirai, T., Keynes, Schumpeter and Hayek, Minerva, 2000 (in Japanese).
Kahn, R., Kahn’s Papers, King’s College, Cambridge
Kaldor, N., “The Role of Commodity Prices in Economic Recovery,” Lloyds Bank Review, July 1983.
Keynes, J.M., “Some Aspects of Commodity Markets,” Manchester Guardian Commercial, 1923.
Keynes, J.M., The End of Lassaize-Faire, Hogarth Press, 1926.
Keynes, J.M., How to Pay for the War, Macmillan, 1940.
Keynes, J.M., “The Policy of Government Storage of Foodstuffs, and Raw Materials”, Economic Journal, vol.48, September 1938 (JMK.21, pp.456-470).
Keynes, J.M., “The Wheat Problem” (Memorandum for the meeting held on 2 Feb. 1939. JMK.21, pp.505-508).
Keynes, J.M., The Collected Writings of John Maynard Keynes, Vol.12 (Economics and Correspondence: Investment and Editorial), Macmillan, 1983.
Keynes, J.M., The Collected Writings of John Maynard Keynes, Vol.25 (Activities 1940-4: Shaping the Post-war World: The Clearing Union), Macmillan, 1980.
Keynes, J.M., The Collected Writings of John Maynard Keynes, Vol.26 (Activities 1941-6: Shaping the Post-war World: Bretton Woods and Reparations), Macmillan, 1980.
Keynes, J.M., The Collected Writings of John Maynard Keynes, Vol.27 (Activities 1940-6: Shaping the Post-war World: Employment and Commodities), Macmillan, 1980.
John Maynard Keynes, Correspondence and Memoranda with Roy Harrod, Department of Economics Library, University of Tokyo.
Kindleberger, C., The World in Depression 1929-1939, University of California Press, 1973.
Kregel, J., “Keynes’s Influence on Modern Economics: Some Overlooked Contributions of Keynes’s Theory of Financi and Economic Policy” in Bateman, Hirai and Marcuzzo eds. (forthcoming).
Maizels, A., Commodities in Crisis, Clarendon Press, Oxford, 1992.
Maloney, J., Marshall, Orthodoxy and the Professionalisation of Economics, Cambridge University Press, 1985.
Marcuzzo, M. C., “Keynes and his Favourite Pupil” in Marcuzzo, M.C. and Roselli, A. ed., Economists in Cambridge: A Study through their Correspondence 1907-1946, Routledge, 2005.
Meade, J.E., International Commodity Agreements, Llyods Bank Review, no.73, July 1964, pp.28-42 (Howson, ed. 1988, 18).
Meade, J.E., A Strategy for Commodity Policy, Scandinavian Journal of Economics, vol.80, 1978, pp.349-359 (Howson, ed. 1988, 20).
Moggridge, D., Maynard Keynes: An Economist’s Biography, Routledge, 1992.
O’Neill, H., A Common Interest in a Common Fund, UN, 1977.
Palma, G., “Kahn on Buffer Stocks,” Cambridge Journal of Economics, 18, 1994, pp.117-127.
Skidelsky, R., John Maynard Keynes. Vol.2. The Economics as Saviour 1920-1937, Macmillan 1992.
Thirlwall, A. ed., Keynes as a Policy Adviser, Macmillan, 1982.
