The Theory of Economic Policy

PREFACE THE following pages owe their origin to a short course of lectures on Theories of Economic Policy which I delivered at the London School of Economics in 1939. The main views which they contain were all set forth in the two lectures there devoted to the Classical system. But the limitations of time within which I had to work left me dissatisfied with my treatment andl contemplated a further development before publication. Then came the war with nearly six years' suspension of academic activities, and after that three more very strenuous years in which the reconstruction of our faculty arrangements absorbed most of the waking hours of my life. So that it was not until last year, when the University ·of Manchester did me the honour of asking me to deliver the Simon Lectures for 1950, that I was able once more to take up my investigations where I had left them in 1939. The work this involved was embodied in the first three· lectures of the present book, which, although somewhat expanded, remain in substance as they were then delivered. lowe my many friends at Manchester a deep debt of gratitude, not only for their invitation and their kindly tolerance as listeners, but also for sending me back to a branch of our subject which I have always found especially congenial. When, however, I came to revise these three lectures for publication, it seemed to me that, even on the very broad plane of generalization which I had chosen, my treatment would be lacking if I did not add sections dealing with the attitude of the Classical Economists to vii viii THE THEORY OF ECONOMIC POLICY socialism and with their more general position in the history of social philosophy. An invitation in the spring of this year to hold a visiting fellowship at the Institute for Advanced Study at Princeton, supplemented by a generous travelling grant from the Rockefeller Foundation , afforded an ideal opportunity in which to carry through the necessary work, which in the end proved to involve a doubling of the original number of lectures. I should like to express my warmest thanks to Dr. Robert Oppenheimer, the Director of the Institute, and to Dr. Walter Stewart, the head of the Economics Section, for the unforgettable kindness and hospitality which I enjoyed as their guest. The introductory section of Lecture I sets forth the scope …