The Finlay Lectures

Posted on June 1, 2015 by John O'Brien
Outside UCD for the Second Finlay Lecture, 16 May 1934. [Left to Right] Thomas Finlay, J.C. Flood, Bertil Ohlin, H. Kennedy, George O'Brien

Outside UCD for the Second Finlay Lecture, 16 May 1934. [Left to Right] Father T. Finlay, J.C. Flood, Bertil Ohlin, H. Kennedy, George O’Brien

“So here to-day, delivering the first of a series of lectures, which will have many successors, but no predecessor, delivering it in Ireland, which has lifted a lively foot out of its bogs to become a centre of economic experiment and stands almost as remote from English nineteenth century Liberalism as Communist Russia or Fascist Italy or the blood beasts in Germany” – John Maynard Keynes, “National Self Sufficiency”, First Finlay Lecture at UCD, April 1933.

“The Lecture, in addition to being a fitting memorial to my very kind friend and distinguished colleague, has become one of the leading public events of the year in the College. We have been lucky in securing some of the leading economists – amongst others, Keynes, Stamp, Ohlin, van Zeeland, Robbins, Hayek, to deliver the lecture. This has given our students the opportunity of hearing distinguished people lecture … It has given the College some publicity abroad, since some of the lectures have been reprinted and translated into other languages always with a reference to their original delivery in the College”– James Meenan “George O’Brien: a Biographical Memoir” (1980), pg. 171.

[Note: a list of the Finlay, O’Brien and Finlay-O’Brien Lectures is below]

In the middle of the 20th century, University College Dublin was host to several notable academics, economists and statesmen. The Finlay Lecture was established in 1931 to honour Farther Thomas Finlay, the retiring UCD Professor in Political Economy. Prominent speakers included John Maynard Keynes, Bertil Ohlin, F.A. Hayek, Lionel Robbins, Roy Harrod, John Hicks, Colin Clark and Michael Oakeshott. These lectures were big occasions in Dublin. The Keynes lecture was attended Ireland’s political aristocracy: Eamon de Valera, Sean Lemass, Douglas Hyde, WT Cosgrave, Richard Mulcahy, Desmond Fitzgerald, and most of the Free State’s cabinet. The ensuing events had a strong attendance as well.

The lectures were primarily organised by George O’Brien (Professor of Political Economy at UCD) and Dr. J.C. Flood. Upon his retirement, O’Brien too had a lecture named after him, which initially alternated with the Finaly Lecture. Later both were merged as the “Finlay-O’Brien Lecture”. Owing to a lack of funding and sponsorship, the last ‘Finlay-O’Brien lecture occurred in 1996, with a talk on monetary union by Barry Eichengreen.

While the lectures were doubtlessly of scholarly merit, they were also often political. Given the ‘Economic War’ being fought across the Irish Sea, the visit of Keynes to Dublin was in large part diplomatic. Both Keynes’ lecture and his meeting with de Valera afterwards tried (and failed) to stop Fianna Fail’s policies. The visit of Lord Josiah Stamp of the Bank of England in 1938 at the end of the ‘War’ was surely political (indeed Stamp had collaborated with Keynes for the 1933 lecture). Politics was probably in the minds of the hosts too. For the 1937 Finlay Lecture, Keith Hancock, a Historian, lectured against the idea of self-sufficiency that Keynes appeared to tolerate 4 years earlier. Looking at the list of Finlay Lectures, there would appear to be a bias towards the more classical-liberal or right-of-centre economists and speakers.

It is of course easy to overstate the importance of the Finlay Lectures. Obviously other events and lectures occurred, and there is no evidence that any of them had an influence on policy. Whether listeners agreed with the Keynesians or Mount Pelerin Society members who appeared was predetermined. For instance, it would be wrong to cite Paul Krugman or Thomas Piketty’s recent lectures in Dublin as explaining the future course of Irish policy. Nevertheless the lectures offer a very interesting view on the course contemporary thinking. Or even the present’s: Paul van Zeeland, a Belgian statesman, calling for a customs and monetary union in 1942 is rather noteworthy! The series produced two excellent and well cited papers: Keynes’ ‘National Self-Sufficiency’ and Hayek’s “Individualism: True and False”. The lectures given by Ohlin and Salaman became relatively well known works as well. Perhaps UCD should consider reinstating the lectures.

Finlay Memorial Lectures (1933-)

1933: John Maynard Keynes – “National Self-Sufficient”.

  • The full text was published in the June 1933 edition of Studies, and is available here. The article in a shorter form was published in the New Statesman and Nation, the Yale Review, and a German version in Schmollers Jahrbuch.  Mark C. Nolan has written a great book “Keynes in Dublin: Exploring the 1933 Finlay Lecture”, which is the source for much of the following.

The best known Finlay Lecture was the first. In it Keynes departed from the liberal adherence to free trade (“let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national”) and called for more government intervention (“money thus spent would not only be better than and dole, but would make unnecessary any dole”). His opposition to “an irrelevant accountancy” and the whims of the City or “the best opinion of Wall Street” that stopped projects such as house-building would not be out of place today.

In the lecture, Keynes is often quoted as saying “…if I were an Irishman, I should find much to attract me in the economic outlook of your present government towards greater self-sufficiency.” T.K. Whitaker said this apparent sympathy to Fianna Fail’s economic policy “was the worst advice an influential economist ever gave to Irish policy-makers. It confirmed the then government in persisting in a futile attempt for a small and poor country, to reach full employment, at acceptable incomes, by protecting domestic production”.

However this is selective. Keynes immediately followed his flattery by warning that Ireland would likely be too small for full self-sufficiency to work, and encouraged Dublin to retain economic links with Britain. He also went on to oppose “economic nationalism” and rash decisions, such as “evils of insane and unnecessary haste” of Stalin’s Russia. The Times of London remarked that “It marks the first occasion on which Mr. de Valera’s economic policy has been subjected to close criticism by an acknowledged expert [21/4/1933]. Moreover this is clear from coverage in the Irish Press (de Valera’s newspaper) which stated:

“Economists like the rest of us can be very human, and British economists, even of world renown, can be very British. Mr John M. Keynes sees no good in the policy of self-sufficiency now in force here. He believes, as he said yesterday at University College, Dublin, that this people should retain “the traditional British market … Mr Keynes’ words show how unwise wise men can be when they speak on countries with economics that they do not fully understand” [Irish Press, 20/4-1933, page 6]

Keynes had a private talk with de Valera for an hour and a half. On de Valera, Keynes wrote home: “he impressed me distinctly favourably … I was very glad to find that his mind was moving from his insane wheat schemes to peat proposals which are at any rate harmless and might quite conceivably turn out well”. WT Cosgrave, on the other hand, was “such a nineteenth century liberal!” [Skidelsky, “John Maynard Keynes” (2003), pg. 497].

Nonetheless, Keynes’ accommodating words towards a degree of protectionism must have disheartened his host George O’Brien, who at the time was writing anti-de Valera articles for The Economist (that paper also took a dim view Keynes “Self Sufficiency” articles in the New Statesman and Nation).  Although Keynes and O’Brien seemingly got on well, the dinner that evening was “a total failure”. Oliver St Gogarty “talked too much.” Worse still, Keynes was called to the telephone … When he came back he said: “You’d be interested to know that the United States had just left gold”. The short silence that was felt to be appropriate was broken by Gogarty: “Does that mattter?”. [Meehan, “George O’Brien, pg. 171].  O’Brien further recounted: “Later in the evening he brought an interminable anecdote related by a longwinded narrator to an end with the most effective yawn I ever witnessed. He was no glad sufferer of fools or bores” [George O’Brien, “John Maynard Keynes,” Studies (June 1946)].

1934: Bertil Ohlin (Professor at the High School of Commerce, Stockholm) – “The Mechanism of Expansion”

The article referred is part Ohlin’s analysis and part a literature review of the Stockholm School of Economics. There he stated that much of what Keynes wrote in the General Theory had been anticipated by Swedish economists. Ohlin later regretted that he did not publish this lecture in English until 1937.

“I thought that it was a bit distressing that I was not ready to publish the Dublin lectures before Keynes book was out. Otherwise, economists around the world who found Keynes’ presentation sensational could not have avoided noticing the very large similarities concerning the theoretical foundation and the policy conclusions. But such a reaction was perhaps at least partly a result of vanity from the Stockholm School and from my side, because it is uncertain how much faster these ideas would have made an international breakthrough by an earlier publication. [Lars Jonung, “The Stockholm School of Economics Revisited”, page 28]

From The Irish Press [17/5/1934, pg. 2]: Ohlin “referred to prices and output and put forward many monetary theories. There might be, he said, optimism about business conditions in the next couple of years. Expansion would be helped by creating new industries and expanding ones for the home market”

1935: T.E. Gregory (LSE and a member of the Free State’s Commission of inquiry into banking, currency and credit.) –“International Finance in Its Modern Setting”.

Irish Press [1/6/1933, pg. 2] “The most urgent need of the day was to provide machinery by means of which it would be possible to adjudicate between the claims of creditor and debtor States. States should be allowed to become bankrupt respectably if the need arose, and stable currencies should be restored because currency instability cut at the root of long term lending and short term lending alike, and at the same time furnished a mass of restrictive legislation which seriously hampered the material well-being of mankind,”

1936: Per Jacobsson (Economist at the Bank of International Settlements and member of the Free State Banking Commission) – “The Business Cycle and other Economic Variation”.

The Irish Times [29/10/1936, pg 3]: “Mr Jacobsson spoke of the necessity for the financial reconstruction of Europe after the war and of the breaking down of the monetary structure in 1931. Much of his lecture was concerned with the causes of the depression of 1929. He held that monetary stability broke down because it was not grounded on a fundamental basis of economics.”

1937: Keith Hancock (Professor of History, University of Birmingham) – “Economic Empire”

Irish Independent [15/12/1937, pg 12] “Self-Sufficiency Not Possible: The present frenzied attempt to hamper economic society into the shape of the sovereign state were grounded on ignorance of history and of sociological reality … No political empire, however big, he said, had ever been nearly adjusted to the economic energies of the people living inside it: economic enterprise had always leaked or burst through political frontiers, inwards or outwards, or both. The mercantilist plan of Imperial self-sufficiency simply could not be achieved. But the attempt to achieve it might bring untold evil upon humanity. The modern British Empire, like that of Venice, had been in large measure a by-product of commerce. The theory of reluctant annexation which was such an easy mark of scoffers, was repeatedly supported by the facts.”

1938: Josiah Stamp (Economist and Director Bank of England) – “The Bearing of Recent American Experience on Economic Theory”

The Irish Times [1/11/1938, pg 8]: Lord Stamp “said that an orthodox treatise on economic analysis written ten years ago would need to be altered or expanded to-day in some important respects … He referred particularly to three fundamental effects:- (1) A general expansion of theory from that of the forces of equilibrium playing around relatively static situations disturbed in various ways, to the recognition that the stationary states so analysed were really only instantaneous photographs of stages in a process of change, and to the working out of more dynamic aspects of theory. (2) As the interferences with lassier faire had drown in numbers and degree for various non-economic reasons, the economics of the remaining “free field” required new examination … (3) The theory of risk-taking had spread from mere business enterprise to the problem of holding all exchangeable economic resources over various periods of time.

1940: A.M. Carr-Saunders (Director of the LSE) – “The Functions of Universities in the Modern World”

1941: W.G.S. Adams (Warden of All Souls College, Oxford) – “Social Adventure in Ireland”

Father Finlay died in 1940. Adams paid tribute to the “great influence” Finlay had on social movements and agricultural co-operatives.

1942: Paul van Zeeland (Belgian statesman) – “Post-War Reconstruction”

Irish Independent [18/11/1942, pg. 3] “Post-war reconstruction must be along international lines” … “We had an opportunity of solving our problems after the first world war but we missed it and now we are paying the penalties. After this war we will have an opportunity again, and we must not miss it” … “One idea that would come forward was that of the regional grouping of nations close together along economic lines for production and consumption. The basic economic unit would be greater than the national State, which however, would remain the true unit. Two characteristics were necessary for the plan – a Customs union and a single monetary unit. National banks would continue their functions.”

1943: Redcliffe Salaman, “The Influence of the Potato on the Course of Irish History”.

Irish Times [28/11/1943] “The potato reached Ireland at a time when people were reeling under the punitive Elizabethan campaign. It suggested that because so much land was laid waste this new foodstuff won its place – being easier to raise and store than were the cereal crops Before the Cromwellian campaign it had become already the staple food of the peasantry. During the eighteenth century the entire working population fell under its sway. The failure of the potato in 1845 and 1846 prostrated the people; for having no case, they had nothing wherewith to buy food and still less to exchange and barter.”

1945: J.A. Venn (President of Queen’s College Cambridge) “The Economics of Agriculture”.

1945: F.A. Hayek (LSE) – “Individualism: True and False”

Hayek’s lecture was as much political philosophy as economics. In it he attempts to define true individualism (of Adam Smith, Adam Ferguson, Burke  de Tocquiville, Manderville, et al) and false individualism (of Rousseau, Cartesian rationalism, Physiocrats). Hayek would later expand his concept of ‘True Individualism’ in the Constitution of Liberty. Some quotes:

“under the sign of “neither individualism nor socialism” we are in fact rapidly moving from a society of free individuals towards one of a completely collectivist character” [1]

“It is the contention [of True Individualism] that, by tracing the combined effects of individual actions, we discover that many of the institutions on which human achievements rest have arisen and are functioning without a designing and directing mind; that as Adam Ferguson expressed it, “nations stumble upon establishments, which are indeed the result of human action but not the result of human design”; and that the spontaneous collaboration of free men often creates things which are greater than their individual minds can ever fully comprehend. ” [6-7]

“As the belief that individualism approves and encourages human selfishness is one of the main reasons why so many people dislike it … These terms, however, did not mean egotism in the narrow sense of concern with only the immediate needs of one’s proper person. The “self”, for which alone people were supposed to care, did as a metter of course include their family and friends” [13]

“Here I may perhaps mention that only because men are in fact unnequal can we treat them equally. If all men were completely equal in their gifts and inclinations, we should have to treat them differently in order to achieve any sort of social organization. Fortunately, they are not equal; and it is owing to this that the differentiation of functions need not be determined by the arbitrary decision of some organizing will but that, after creating formal equality of the rules applying in the same manner to all, we can leave each individual to find his own level. There is all the difference in the world between treating people equally and attempting to make them equal. While the first is the condition of a free society, the second means, as De Tocquieville describes it, “a new form of servitude.” [16].

Hayek had gotten to know George O’Brien in the 1943, after O’Brien discovered a box of letters at the house of the son of the Irish economist John Elliot Cairnes. The box contained letters from Cairnes to John Stewart Mill, and from Mill’s father, James Mill, to David Ricardo. Hayek encouraged O’Brien to publish an article in Economica, which he did. O’Brien also wrote a favorable review of The Road to Serfdom in the June 1944 edition of Studies (and as Dublin correspondent for The Economist, O’Brien was probably ideologically closer to Hayek than to Keynes or Keynesians). When Hayek did visit Dublin in December 1945, he remarked that the city reminded him instantly of the Vienna he had known before 1914 and that O’Brien “had the best cellar of any professor of Political Economy that he had ever met.” [Meehan, ‘George O’Brien’, pg. 174].

1948: Lionel Robbins (LSE) – “International Economic Disequilibrium”

Susan Howson, “Lionel Robbins”, pg. 686 (2011): “by international economic disequilibrium he meant imbalances in the balance of payments. While it is hardly surprising that there should be disequilibrium after a major war, it was surprising that there had been so little progress towards equilibrium in three years since the war … Why was there a dollar shortage?”

1949: Andre Siegfried (French Academy) – “The new appearance of the world after two world wars”

1950: George Schwartz (Sunday Times columnist)

1951: Roy Harrod (Oxford University) – “John Maynard Keynes”.

1952: John Jewkes (Oxford University) “The Economist and Public Policy”

Irish Times [18/10/1952, pg. 6] “…said that the only true economic security lay in flexibility and the power to make swift adjustments. Discussing the part that should be played by professional economists in the framing of public policy in the past century-and-a-half the science of economics had passed through periods when controversy raged within it and public respect for its principles had waned. He hoped that that was not to happen again. For there were in these days, sharp disputes, particularly about the functions of the price system and the role to be played by competition within the profession. And the man in the street might well ask whether the world was one degree the wiser or wealthier by reason of what economists had said and done in the past few years.

The causes of this might lie in errors by economists themselves. There was a disposition for economists to build too much conjecture on too little fact. What was needed was more observation and less speculation. Economists too were not sufficiently interested in what should be the central interests of economic science – the causes of the wealth of nations. So that when as now the richer countries of the world were striving to raise the standard of living of the backward areas, no one seemed to know at what point, and in what way, it was best to provide aid in order to assist these areas to help themselves.

Perhaps the greatest error of certain economists was, however, to attempt to predict the future. Economic science provided no techniques for foretelling events, Professor Jewkes provided a number of illustrations drawn from the actions of several countries, where over-reliance upon estimates about the future had led to public economic polices which had done serious harm.

The role of the economist, he stressed, was not to predict or to claim to predict, but to provide an understanding of the world which was actually around us. Statesmen and business men, inevitably, must often make economic decisions in which all the relevant facts were inherently unknowable. That was their burden. Economic science could not lighten that burden by devising methods of prophesy. It could do no more than explain the position from which decisions had to be made, list the possible lines of choice and indicate where mutually frustrating policies were being pursued. Where economics and statesmen could usefully collaborate was in trying to devise economic institutions, and to encourage economic habits which would enable countries to adjust themselves to inevitable change.”

1953: Douglas Copland (National University Canberra) – “Authority and Control in a Free Society”

Irish Times [1/5/1953. pg. 7] “A case for the limitation of Government control in society was made yesterday by Sir Douglas Copland … He spoke of the fundamental conflict between authority and freedom, and referred to its application to modern society. He said that there was now less enthusiasm for the unlimited development of control and welfare economics than there was 40 years ago. He pointed out that the social revolution had run its course … In assessing the part played by economists, he said that they should demonstrate facts, but not attempt to pass moral judgments … Nationalisation and the creation of near-monopolies had not proved very effective. Private enterprise have greater initiative in the handling of labour problems. He claimed that the solution of these problems would not be found by a direct relationship between a central government and individuals, but in more indirect contracts between voluntary and semi-governmental bodies.”

1955: Colin Clark (Oxford) “The Decay of Parliamentary Institutions”

1956: Sir Edward Bridges (Permanent Secretary to the British Treasury) “Doctrine of modern budgets”

Irish Independent [29/4/1956] “Up till 1940 the relation between revenue and expenditure was the essence of the Budget: the new doctrine of the modern Budget was that it was one of the most important weapons used by the Chancellor of the Exchequer as part of his duty to regulate the economy of the country …”

1958 John Hicks (Oxford) “Wages and Inflation”

Irish Times [3/5/1958, pg 4] “‘Trade Unions Blamed for Rising Prices’: The professor said that the rise in prices, which had been going on both in Ireland and England ever since the war, was only a special case of what had been happening nearly everywhere. Between 1953 and 1957 retail prices in Ireland rose by 12%; in England by 15%, but even in the United States they rose by 5%, and there were many countries which had experienced much larger increases … the rather larger rise like that of Ireland and England … must have some connection with the devaluation of 1949, which had enabled prices in these countries to rise relatively to those in the United States without upsetting their balance of payments unduly.

Professor Hicks said that there was a lot of dispute about the causes of the rise in prices; whether it was due to the pull of demand (the tendency of governments and others to spend too much), or whether it was due to pressure on the side of costs, ultimately to the action of trade unions. He contended that while both factors might have played a part in some cases, the second was probably the dominating factor, even in the United States, and certainly elsewhere. In the circumstances that had existed, the behavior of trade unions was quite intelligible. They were only asking for what seemed to them to be reasonable, and what in many cases other people thought to be reasonable too. But nevertheless it did have these unfortunate consequences, and action on several fronts to moderate or prevent the resulting inflation inevitably was having to be taken”.

1959 Sir Hugh Beaver (Managing Director of Guinness) “The State and industrialisation”

Irish Times [30/5/1959, pg. 7] He said “that he had found much to commend in the programme for economic expansion, announced by the Irish Government last year. Sir Hugh quoted the following from the programme: “We have to find projects for the production of goods, which (a) if they have to be sold abroad will sell in open competition with those of other countries, or (b) if they have to be sold at home, will not, by reason of poor quality or high price, impose a drag on the rest of the economy.” He said that that line of thinking must inform all sound policy.

Taken altogether, Sir Hugh continued, the efforts of the British Government in the 25 years between 1934 and to-day had, he imagined, constituted as great an attempt at direction of industrialisation as had ever been made in a non-totalitarian country, and were certainly the greatest experiment in collaboration, voluntary or enforced, between Government and private enterprise … The result was that one-fifth of the whole working population in Britain was now in some or other scheduled area. The Parliamentary Select Committee on Estimates of the British Parliament last year expressed very strongly the view that such a solution was “ridiculous”

Assistance and inducements to new ventures should not be such he added as to lead the industries so helped to be non-competitive from the start and likely in the end to become a liability on the country rather than an asset to it. In the end a country’s material prosperity must, under Government, depend on its own will and its own efficiency.

1962 C.F. Carter (University of Manchester) “The Problem of Scientific Research in Ireland”

  • Published in the Irish Banking Review, September 1962.

1965 Frank Walter Paish (LSE) – “The Working of the British Economy”

1967 George Shackle (University of Liverpool) “On the nature of profit”

1970 Michael Oakeshott (LSE) “Civil Association”

1971 Hugh Clegg (Warwick) “The University’s Contribution to Industrial Management” / “The Obligation of Universities to Management”

1980 – Barbara Solow – “A New Look at the Irish Land Question”

1984 Assar Lindbeck (University of Stockholm) “What is wrong with European economies”

O’Brien Lecture (1963-)

1963 – Roy Harrod – “International Monetary Problems”

1966 – Sir John Coulson (British Diplomat) – “The Operation of a Free Trade Area”

1971 – Sir Eric Roll – “Economics and Economic Policy after Keynes”

1974 – Alec Cairncross – “Inflation”

1978 – R.D.C. Black – “The Present Position and Prospects of Political Economy”

1986 – Richard Portes – “Sovereign borrowing, debt and default: the lessons of history for current projects”

Finlay-O’Brien Lecture

1994 – Jeffery Sachs

1996 – Barry Eichengreen (Berkeley)

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