The Rise of Expert Opinion: The Bank of England and Interwar Economic Governance, 1914–1940

Abstract

The Rise of Expert Opinion is a study of economic advice in the United Kingdom after the end of the First World War. It shows how the nation’s unresolved political and financial problems prompted a widespread search for expertise, most notably at the Bank of England. Through this endeavor, a group of newly hired advisers were able to gain reputations as leading experts on prevailing economic concerns. They served on government commissions and advisory committees where they found institutionalized channels for shaping policy. Seeking to uphold the tenets of economic orthodoxy, which included balanced budgets, free trade, and independent central banking, experts offered an intellectual defense of the Bank’s policies against its many critics, notably John Maynard Keynes. Their presence directly expanded the state’s responsibilities in industrial policy, imperial relations, and European reconstruction, areas in which the Bank had hitherto little role. It was through their subsequent reforms, coupled with the widespread interests in sustaining the primacy of the City of London as an international financial center, that experts became an integral component of modern governance. The broader aim of this research is to reconceptualize the structure of policymaking on a global scale. As expertise has become a dominant feature of central banks, national governments, and postwar international organizations, such as the World Bank and the International Monetary Fund, the dual role of economists as both policymakers and academics may appear commonplace. Yet recent historical scholarship has shown the importance of the First World War as a key turning point in economic governance. As interwar institutions sought to preserve prewar geopolitical arrangements, they turned to outsider advisers with specialties in highly technical domains. Their efforts to stabilize the global financial system in response to war and depression not only influenced how intellectuals conceptualized the “economy” as an object to be studied, but it more broadly transformed the nature of policymaking in times of crisis. By offering solutions to issues in the realms of domestic, imperial, and foreign policies, the Bank of England and its experts built the structural foundation of the interwar economic order.