Birmingham School (economics)
Encyclopedia
The Birmingham School was a school of economic thought that emerged in Birmingham
, England
during the Post-Napoleonic depression
that affected England following the end of the Napoleonic wars
in 1815.
Arguing an underconsumption
ist theory – attributing the depression to the fall in demand due to the end of the wars and end of war mobilization – Birmingham School economists opposed the gold standard
and advocated the use of an expansionary monetary policy
to achieve full employment
.
The leading thinker and spokesman for the Birmingham School was the banker Thomas Attwood
. Other notable figures included George Frederick Muntz and Thomas Attwood's brother Matthias Attwood. Economists who lent the Birmingham School some support included Arthur Young, Patrick Colquhoun
and Sir John Sinclair
.
Dismissed at the time as "currency cranks" or "crude inflationists", the theories of the Birmingham School are now recognized as embryonic versions of the Keynesian economics
of the 1930s. Some of Attwood's writings contain formulations of the multiplier effect and an income-expenditure model. Joseph Schumpeter
, in his 1954 History of Economic Analysis wrote that "it is from these writings that any study of modern ideas on monetary management ought to start".
Birmingham
Birmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
during the Post-Napoleonic depression
Post-Napoleonic depression
The post-Napoleonic depression refers to a post-war economic depression experienced by European countries following the end of the Napoleonic wars....
that affected England following the end of the Napoleonic wars
Napoleonic Wars
The Napoleonic Wars were a series of wars declared against Napoleon's French Empire by opposing coalitions that ran from 1803 to 1815. As a continuation of the wars sparked by the French Revolution of 1789, they revolutionised European armies and played out on an unprecedented scale, mainly due to...
in 1815.
Arguing an underconsumption
Underconsumption
In underconsumption theory in economics, recessions and stagnation arise due to inadequate consumer demand relative to the amount produced. The theory has been replaced since the 1930s by Keynesian economics and the theory of aggregate demand, both of which were influenced by...
ist theory – attributing the depression to the fall in demand due to the end of the wars and end of war mobilization – Birmingham School economists opposed the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...
and advocated the use of an expansionary monetary policy
Expansionary monetary policy
In economics, expansionary policies are fiscal policies, like higher spending and tax cuts, that encourage economic growth. In turn, an expansionary monetary policy is monetary policy that seeks to increase the size of the money supply...
to achieve full employment
Full employment
In macroeconomics, full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so....
.
The leading thinker and spokesman for the Birmingham School was the banker Thomas Attwood
Thomas Attwood
Thomas Attwood was a British economist, the leading figure of the underconsumptionist Birmingham School of economists, and, as the founder of the Birmingham Political Union, a leading figure in the public campaign for the Great Reform Act of 1832.He was born in Halesowen, and attended Halesowen...
. Other notable figures included George Frederick Muntz and Thomas Attwood's brother Matthias Attwood. Economists who lent the Birmingham School some support included Arthur Young, Patrick Colquhoun
Patrick Colquhoun
Patrick Colquhoun was a Scottish merchant, statistician, magistrate, and founder of the first regular preventive police force in England, the Thames River Police.-Early life:...
and Sir John Sinclair
Sir John Sinclair, 1st Baronet
Sir John Sinclair, 1st Baronet was a Scottish politician, writer on finance and agriculture and the first person to use the word statistics in the English language, in his vast, pioneering work, Statistical Account of Scotland, in 21 volumes.Sinclair was the eldest son of George Sinclair of...
.
Dismissed at the time as "currency cranks" or "crude inflationists", the theories of the Birmingham School are now recognized as embryonic versions of the Keynesian economics
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
of the 1930s. Some of Attwood's writings contain formulations of the multiplier effect and an income-expenditure model. Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
, in his 1954 History of Economic Analysis wrote that "it is from these writings that any study of modern ideas on monetary management ought to start".
See also
- Manchester SchoolManchester capitalismManchester Capitalism, Manchester School, Manchester Liberalism, and Manchesterism are terms for the political, economic, and social movements of the 19th century that originated in Manchester, England....
, other contemporary school associated with British industrial capitalism