John Maynard Keynes is generally regarded as the greatest and most famous economist of the Interwar era and perhaps of the entire twentieth century. However, during the early phase of his great fame, the 1920s, there was a rival aspirant to the title of “most world-famous economist.” This rival was Gustav Cassel of Sweden. In 1921 the latter was dubbed “one of the most brilliant economists in the world” by David Lloyd George, while in 1928 he was introduced to the U.S. House of Representatives as “the world's foremost economist.”Footnote 1 Later on several influential economists added their testimony to the honor thus so spectacularly bestowed upon him. “At the beginning of the 1920s he was no doubt the most famous contemporary economist,” wrote Friedrich von Hayek upon Cassel's death in 1945.Footnote 2 Joseph Schumpeter concluded in his History of Economic Analysis that Cassel was “the most influential leader of our science in the 1920’s—for such he was, whatever his critics (including myself) may say.”Footnote 3 The leading figures of the Swedish Stockholm School of Economics—Gunnar Myrdal, Bertil Ohlin, and Erik Lundberg—all bore witness to Cassel's fame despite having themselves crossed swords with him intellectually. Ohlin was of the opinion “that Cassel along with Keynes was the most famous economist of the Interwar era.”Footnote 4 Myrdal wrote that Cassel was “the world's foremost economist” after World War I.Footnote 5 Lundberg, a little more cautious, concluded that Cassel “was regarded—at least by politicians and businessmen—as the world's most famous or well-known economist.”Footnote 6 A few decades later Cassel's fame had evaporated. In the mid 1960s Myrdal noted that a generation had grown up “which scarcely remembers his [Cassel's] name.”Footnote 7
Now would it not be interesting if this question of who was the more renowned or distinguished in the 1920s—Cassel or Keynes—could finally be settled? How might this be accomplished? It occurs to me that a fruitful approach could be offered by the fact that there exists one weekly journal dealing with economic issues which has been more widely read than any other among economists, businessmen, and politicians during the twentieth century: The Economist. At the beginning of 2008 all articles published in that journal were made available in a database, viz The Economist Historical Archive 1843–2003. By examining articles in which Cassel and Keynes respectively were mentioned in the 1920s it ought to be possible to arrive at a reasonable measure of who was the more famous. The only problem is that the Economist is a British journal and might therefore tend to refer to British personages more readily than to individuals from other parts of the world, which would work in favor of Keynes.
I. A QUANTITATIVE PICTURE
A search for a name in this database reveals the number of “hits” classified by section: news articles, reviews, letters to the editor, advertisements, etc. A search for “Keynes” gives a straightforward result in this respect. A search for “Cassel,” however, does not work so well, because there were other individuals and companies bearing that name.Footnote 8 Consequently the “hits” have to be counted and classified manually. I have therefore made my own count and classification in the cases of both Keynes and Cassel. I have totted up the number of times their names appeared in each of the following sections year by year from 1919 to 1930: articles, notices, letters to the editor, book reviews, and books received. The last item may be a dubious measure.Footnote 9 Furthermore, mentions in advertisements have been excluded. If we count the first four items the result is as shown in Figure 1.
Figure 1. In how many articles, notices, letters to the editor and reviews 1919–1930 did Cassel and Keynes appear?
Source: The Economist Historical Archive 1843–2003.
If we take a closer look at the components underlying Figure 1 the result is as shown in Table 1.
Table 1. In how many articles, notices, letters to editor and reviews 1919–1930 did Cassel and Keynes appear?
Source:
The Economist Historical Archive 1843–2003.
The result of this quantitative exercise is quite obvious. Cassel and Keynes each received about the same number of mentions in the Economist in the years 1919 to 1923. Cassel was mentioned in 49 articles, notices, letters, and reviews; Keynes in 45 (if books received are also counted the outcome is 57 to 50). Cassel was in the lead in 1919–21, Keynes in 1922–23. After that Keynes was far and away the star turn. Henceforth in this article, therefore, I shall restrict myself to these five years and try to present a qualitative treatment of the Cassel versus Keynes issue.
This restriction is supported by Cassel himself, who, in his memoirs designates the years 1919–23 as the “fourth period” of his life and concludes with uncharacteristic modesty: “The result of my work during this period was for my personal part a certain degree of external success.”Footnote 10 Robert Skidelsky adopts a similar periodization in the second volume of his Keynes biography, entitling the years 1920–1923/24 “The Economic Consequences of the War.” This title, of course, alludes to Keynes’ book The Economic Consequences of the Peace from 1919, which made him a “world figure” at a stroke. “Until then he had been known only to small groups.”Footnote 11
Let us, before we continue the comparison of Cassel and Keynes, investigate if there were any other economists aspiring to the title most world-famous. A search for some “great” economists of this era—Francis Edgeworth, Irving Fisher, Alfred Marshall, Wesley Mitchell, Arthur Pigou, Thorstein Veblen, and Knut Wicksell—reveals that Fisher and Pigou could to some degree compete with Cassel and Keynes in 1919–23 but hardly with either of them in 1924–30.
According to Table 2 Pigou was mentioned always as much as Cassel, and more than Keynes, in 1919–20. In 1921 Cassel and Keynes took the lead; in 1922 they were outstanding. In 1923 Fisher was mentioned as much as Cassel and somewhat less than Keynes. In the five-year period Fisher was mentioned 20 and Pigou 21 times (if books received are counted the outcomes are 25 and 30, respectively).
Table 2. In how many articles, notices, letters to editor and reviews 1919–1923 did Fisher and Pigou appear?
II. A QUALITATIVE PICTURE
1919
In May 1919 Cassel wrote a letter to the editor asking why the world's industry and commerce did not return to normal activity after the war. His answer was this: “The most general and most essential cause of the present distress is, without doubt, the lack of stability in the monetary standards.” The first step towards creating stability would be to summon an international conference to discuss this problem.Footnote 12 In December Cassel wrote another letter to the editor. In the meantime the monetary situation had only gotten worse. He therefore urged once again that a conference be summoned. This conference ought not to have a political character but should “be composed exclusively by experts in practical finance and economic theory.” “A true apprehension of the problem is the first condition for a sound policy … we have no time to lose.”Footnote 13 References were made to Cassel's proposal in two articles. His plea for a conference “might do some good, especially if it brings home to us on this side of the Atlantic the point that the professor so effectively makes about European luxury and leisure being provided by America's work and thrift,” which would keep America from lending to Europe.Footnote 14 Not long after, several international financial authorities called for a conference of the kind Cassel had proposed.
In October it was announced that Keynes had been appointed a director of the National Mutual Life Assurance Society.Footnote 15 In the last issue of the year an extensive review of Keynes’ Economic Consequences of the Peace appeared. Keynes’ case against the Versailles Treaty was said to be “brilliantly presented, and closely and lucidly argued in great detail, with a mastery over a very wide range of intricate facts which probably no one else has had the opportunity to acquire.” It was “the most important and authoritative account of the Treaty that has yet appeared” and Keynes’ proposals were “the one alternative to dissolution and economic collapse in a great part of Europe.”Footnote 16 In the same issue, and in the same article that mentioned Cassel, Keynes was also cited on the question of inter-Allied indebtedness.Footnote 17
1920
A number of papers were published bearing on the upcoming international financial conference in Brussels in the autumn of 1920. Cassel's Memorandum on the World's Monetary Problems was scrutinized in August. Cassel was introduced in the following way: “Professor Cassel, as need hardly be said, is a first rate authority, and he has the rare gift of expressing himself as clearly as the difficulties of the subject permit.” The article presented long quotations from Cassel's paper and sometimes argued against them. The final verdict sounded like this: “In the limited space available it is impossible to do full justice to the Professor's most interesting and suggestive paper, which should be studied by all who are groping for a path back to order in finance and industry.”Footnote 18 A week later, in a letter to the editor, a reader claimed he had introduced the concept of “purchasing power parity” before Cassel although he had named it “a natural rate of foreign exchange.”Footnote 19 Cassel was also briefly mentioned in a reply to this letter as well as in a news article.Footnote 20
When the conference in Brussels had assembled, it endorsed Cassel's view (in his memorandum) that depreciated currencies should be stabilized and any belief that old parities could be re-established should be abandoned.Footnote 21 A letter to the editor, however, argued against Cassel's view that a long-term depression of prices would kill the spirit of economic progress.Footnote 22
Keynes appeared briefly in two articles in 1920, one on Italy and one on Austria, as well as in a review of a French book on the Treaty of Versailles in which an attempt was made to refute Keynes’ arguments against the treaty; the reviewer however concluded that this could not be accomplished “by a rhapsody.” In all cases Economic Consequences of the Peace was referred to.Footnote 23
1921
In May 1921 Cassel figured in a review of a book by T. E. Gregory.Footnote 24 A month later the International Chamber of Commerce held a conference in London at which Cassel fought against deflationary policies and for price stabilization. The Economist commented upon this: “Certainly, we must agree with the Swedish specialist that stability in prices and rates of exchange would be, if it could be secured, an immeasurable help towards revival of trade and confidence; but could we be sure that any ‘stabilisation,’ for example, of the Polish mark at its present level would long remain stable?”Footnote 25
In August an Appendix to a report on the cost of living in Britain, issued by a committee appointed by the Parliamentary Committee of the Trade Union Congress, came under scrutiny. In this Appendix the Committee secretary, Mr. Arthur Greenwood, had quoted “freely” from Cassel's memorandum of 1920, especially on the question of purchasing power parities.Footnote 26 The question of exchanges was dealt with by two different authors in letters to the editor.Footnote 27
In October a second memorandum, written by Cassel for the League of Nations, was published as a supplement to the Manchester Guardian Commercial. This memorandum was mentioned in an October article in the Economist and commented on at some length in November. Again the argument revolved around the possibility of stabilizing commodity price levels.Footnote 28 In the same November issue Cassel's purchasing power theory was mentioned in passing, while his second memorandum was referred to in a letter to the editor.Footnote 29
Keynes’ book on the peace treaty was mentioned in one review and two articles on Upper Silesia; according to one article a debate in the Polish Diet had been devoted to Keynes’ book.Footnote 30 A notice informed that he had been elected chairman of the National Mutual Life Assurance Society.Footnote 31 An article by Keynes in the Sunday Times dealing with the possibility of German bankruptcy was alluded to in two articles in September.Footnote 32
1922
In 1922, appearances by both Cassel and Keynes attained a peak in the Economist. In February and March, Cassel's proposals for monetary stabilization were at the center of a debate conducted via a series of four letters between D. M. Mason (attacking Cassel) and C. Craies (defending him).Footnote 33 Cassel also figured in an article dealing with deflation in the United States.Footnote 34 In April he was mentioned in one review—for not having been mentioned in a book by Jules Descamps—and three articles dealing with the conference at Genoa, where he participated as expert to the Swedish delegation and as member of an expert committee dealing with monetary questions.Footnote 35 Cassel's views at the conference were summarized in The World's Monetary Problem, which was described as a “masterly” work by “the great Swedish economist.”Footnote 36 In July Cassel was mentioned along with Keynes in an article dealing with South Africa, Australia, and the gold standard.Footnote 37 This article resulted in a letter to the editor from a South African reader.Footnote 38
In late September Cassel's plea for “stabilisation,” set out in his book Money and Foreign Exchange after 1914, was subjected to harsh criticism. “Everything, he tells us, is in a state of flux, as someone said three thousand years ago; but a more modern faith in the powers of man over Nature now adds the rider that everything must therefore be stabilised.” The article, in its own words, presented “a crude parody of Professor Cassel's views”: “The parody is intended to make prominent, by deliberate exaggeration, the weaknesses on the constructive side, of this and every other plea for the rational control of economic forces on an immense international scale.” Cassel's plea for monetary control exercised by central authorities was described as “the gentle, salutary guidance of a few men of genius manipulating the world's machine,” and ended with the following words: “But let us abandon dreams of an incredibly efficient all-inclusive world control that sets our lives in order for us, for such cannot be fully realised, and if they were, would only have the doubtful advantage of giving us stagnation instead of chaos.”Footnote 39 For Cassel, a sworn enemy of planning and social engineering, this critique must have been disturbing. The article triggered off a reaction from H. D. Henderson: “You make game, not merely of professor Cassel's particular arguments and suggestions, but of currency and exchange stability as an ultimately feasible or desirable ideal.” Cassel was also rehabilitated in a review in which his book was described as “a work distinguished both in style and treatment, packed with first-rate material, both by way of argument and illustration.” “A month which includes this volume is entitled to hold its head high.”Footnote 40
In October Cassel was quoted as describing the causes of rising German inflation in accordance with the German view.Footnote 41 A lengthy quote from his book on Money and Foreign Exchange was also presented and argued against: “If we have correctly understood the argument of this distinguished authority, he seems to hope to secure a much greater steadiness in wholesale prices by what he calls his ‘new rule for a true bank policy.’ By regulating the rate of interest, we are to affect the volume of banking credit and the course of prices.” This might work in normal times but “recent experience shows that, during the abnormal times through which we have lately passed, the influence of official rates on contraction and expansion is certainly very slow.”Footnote 42 In an overview of Sweden's economic condition it was mentioned that the “famous economist” Cassel had been appointed economic adviser to the Russian state bank and that he had declared that he had accepted the appointment because he was “deeply interested in the general restoration of the world.”Footnote 43
In an article on “Chaotic Exchanges” Cassel was referred to in passing and, finally, at mid-November, a scheme to stabilize the German mark, launched by a group of “distinguished experts” summoned to Berlin by the German government, was commented upon. Among the experts were Cassel and Keynes and they said the first condition of stabilization must be a two-year moratorium on all payments under the Treaty of Versailles. Some skepticism was aired in the article as to whether the proposals of the “distinguished authors” were “really workable.”Footnote 44
The first appearance by Keynes in 1922 was in connection with the annual meeting of the National Mutual Life Assurance Society.Footnote 45 When Keynes published A Revision of the Treaty this was acclaimed as a major event. Even if Keynes had not published Economic Consequences this new publication “would have put him in the front rank of economic writers.” It was written “with an exceptional gift for succinct exposition illuminated by philosophical comment and by glimpses of great depth of feeling.” It had to be “carefully studied by adherents and opponents alike.”Footnote 46
Next Keynes was mentioned in a notice in connection with a public meeting on the question of the Genoa conference and as editor of “two admirable volumes” in a series of Cambridge Economic Handbooks, written by H. D. Henderson and D. H. Robertson. “The vitality of Mr Keynes’ own style has, with the happiest results, been communicated to his disciples, and something of his dry wit.” A Revision of the Treaty was hailed as “the first work of any importance to appear in the New Year.”Footnote 47 Another mention came in connection with a French suggestion on reparations.Footnote 48 In a letter to the editor an American wrote that his fellow countrymen could very well agree on canceling inter-Allied debts “but they do want to know that the sums so cancelled will be used for the everlasting good of the nations involved, and not in preparation for future wars.”Footnote 49
In April Keynes was referred to in three articles regarding a scheme which he had published in the Manchester Guardian Commercial in view of the conference in Genoa.Footnote 50 New supplements with Keynes’ “masterly series of articles” on “Reconstruction in Europe” continued to appear in the Manchester Guardian Commercial for several months and were referred to in articles and reviews.Footnote 51 Keynes appeared at a company annual meeting, along with Cassel in an article on South Africa, Australia, and the gold standard, in one article on reparations and one on Germany.Footnote 52 A third volume in the series of handbooks appeared, authored by M. E. Robinson, and Keynes’ view regarding a levy on capital was presented in an article on the Labour programme.Footnote 53 Finally, as has been noted above, Keynes was one of the experts arguing, along with Cassel, for a moratorium on German reparations.Footnote 54
1923
In early 1923 Edwin Cannan earned praise for an article in the Economic Journal on the subject of Cassel's book on Money and Foreign Exchange.Footnote 55 An article by Cassel in the Skandinaviska Kreditaktiebolaget Quarterly Review, dealing with currency depreciation and dwindling production in Germany, was quoted.Footnote 56 When Cassel argued in favor of exchange-rate stabilization at a meeting of the International Chamber of Commerce held in Rome, he was “met with a very cool reception by the average public opinion in Italy.”Footnote 57 A notice in June announced that Cassel was going to give two lectures at the London School of Economics, while another notice gave out that he was to present a paper on “The Place of Money in Economics” in London.Footnote 58 The “Cassel-Hawtrey school” and Cassel's purchasing power theory were mentioned in a couple of reviews.Footnote 59 Cassel's name also appeared in an article on “English Bank Figures.”Footnote 60
The year ended well for Cassel. His magnum opus had been translated into English under the title Theory of Social Economy and was reviewed briefly in December, being hailed as “the most important event of the month in economic literature.” It was said that Cassel's earlier works on prices “have had a profound effect.” “He has, as happens to few economists in their lifetime, founded a school.” The first volume of the treatise was particularly recommended. “In arrangement and in point of view it is fresh, realistic, and of direct bearing on immediate problems.” The second volume was characterized as “much more technical” and loaded with economic jargon.Footnote 61 Finally there was a very unusual article dealing with “Professor Cassel on Protection.” The article opened by saying “that it will be of interest to our readers to know the views of Professor Gustav Cassel, the most distinguished of European economists,” whereupon a three-column extract from Cassel followed, dealing with the British debate on the issue of tariff protection. It was not explained whether this citation came from any of Cassel's books or articles or if it was excerpted from a letter written directly to the Economist.Footnote 62
For Keynes the beginning of 1923 was marked by mentions in four articles on the issues of reparations and the Ruhr occupation plus three articles on the National Mutual Life Assurance Society.Footnote 63 A new volume by D. H. Robertson, in the handbook series edited by Keynes, was dealt with in two reviews.Footnote 64 England and France pursued negotiations over the reparations question and the Economist reported that Keynes had summarized in a letter to the Times the financial conditions that should form the basis of a settlement between the two countries. To these conditions Keynes had added the suggestion that France should immediately withdraw its troops from the Ruhr area.Footnote 65
At a seminar a paper on the population question was discussed in which Sir William Beveridge argued against Keynes’ view that the growth of population in industrial countries was running ahead of the development of the world's agricultural resources.Footnote 66 Finally, in the same issue that devoted so much space to Cassel's views on protection, Keynes’ views on monetary policy commanded no fewer column-inches. The reason for this was that Keynes had published A Tract on Monetary Reform. As usual homage was paid to Keynes’ analysis and style. “There are many who will differ in varying degree from Mr Keynes’ conclusions and proposals, but whatever opinion may be held of Mr Keynes’ specific judgements, no one who reads his book will fail to appreciate the marvellous lucidity … with which he sets out the problem, analyses its causes and marches boldly to his conclusions.”Footnote 67
The year 1923 thus ended on a very encouraging note for both Cassel and Keynes as far as their treatment in the Economist was concerned. After that Keynes apparently ruled the roost. In 1924 he was mentioned decisively more than Cassel, and in 1925 five times more. The “contest” as to who was most famous had surely been decided, at least in the columns of the journal in question.
III. CONCLUSION
It seems—at least if we use the Economist as yardstick—as if Cassel was a little more world-famous compared with Keynes in the years 1919–1921 but that Keynes was fractionally more famous in 1922–1923 and decisively so from 1924 and onwards. However, Keynes’ marginal lead in 1922–1923 could be questioned, since he was mentioned twice in 1922 and three times in 1923 in connection with his assignments to assurance societies and companies, not in his capacity as a political economist. If we deduct these articles Cassel is slightly ahead up to 1923. If we furthermore take into consideration the fact that the Economist is a British journal, probably more inclined to mention a British economist than a Swedish (and probably more so in the 1920s than today), it does not seem far-fetched to argue that Cassel was in fact the world's most famous economist in the five years immediately after World War I. An investigation into journals outside of the English language area, not least German journals, would probably have underscored such a conclusion. Another factor worth putting on the scale is that Keynes was treated with the utmost deference in the Economist whereas opinions about Cassel were sometimes critical or ironical.
Cassel's fame came from his campaign for monetary stabilization, his theory of purchasing power parity, his high profile at the Brussels and Genoa conferences, and his critique of the treatment of Germany after the war. Keynes’ fame derived from his critique of the Versailles Treaty and the treatment of Germany, his articles on the reconstruction of Europe, his ability as editor of economic handbooks, and his plea for monetary reform. Both economists devoted their energies to the fateful questions of the day—the indebtedness, reparations, and monetary chaos that followed from the war—and both claimed, more or less, to have a mission to save the world. No wonder they were world-famous!
One might, in view of this, raise two questions: Firstly, were economists of the early twentieth century more devoted to fateful questions of the day than economists are today? Probably so.Footnote 68 Secondly, if that is the case, did they run the risk of being myopic? Probably not. In the case of Cassel and Keynes, at least, one can safely conclude that they had a sure eye for problems that, if not solved, would lead to future disasters. In the long run we are all dead, but if politicians had adhered to the advice of economists like Cassel and Keynes many lives could perhaps have been spared in the shorter run.
