European Society for the History of Economic Thought

European Society for the History of Economic Thought 1st Conference, Marseilles, February 1997

Keynes and the French Guardians of the Say's Law Rist, Rueff and the Keynesian Revolution in the Making, 1919-1931

Alain Alcouffe professor of economics Université des Sciences Sociales of Toulouse Lirhe/Cnrs place A. France 31042 Toulouse cedex [email protected]

A. Alcouffe,

Keynes and the French Guardians of The Say's Law

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Keynes and the French Guardians of The Say's Law * Rist and Rueff and the Keynesian Revolution in the Making, 1919-1931. Alain Alcouffe, Université des Sciences Sociales of Toulouse Lirhe/Cnrs; place A. France; 31042 Toulouse cedex French economic policies and more generally French economic evolution played an important part in the evolution of Keynes' ideas after 1918. On the French scene, two economists, C. Rist (1874 -1955) and J. Rueff, (1896-1978) played an important part in this inter-war period. The initial position of the former seems to have been fairly close to that of Keynes and one could even talk of a dialogue at the beginning of the Twenties. But these positions , perhaps under the influence of the latter, were to progressively diverge and from the Treatise On Money one can see a veritable rupture between them whilst the latter was to develop, in parallel with Hayek, a real antiKeynesianism which preceded the General Theory. This article will follow these developments by placing them within the French context. 1 Rist and Keynes on the question of Reparations:

Charles Rist was born of a family in the Alsatian Protestant bourgeoisie which had retreated from Strasbourg to Lausanne and then to the Paris area after the defeat of 1871. A journey to England at the age of 18 had allowed him to discover the terrible misery of the slum areas of London. Influenced by saint- simonism, he was always to consider the Doctrine de Saint Simon, edited by Bazard and Enfantin as a great book, a classic of French language and thinking. Passing the " Concours d' agregation" in 1899, he is appointed to Montpellier. His spouse is the daughter of Gabriel Monod, founder of the Revue Historique, one of the group leaders of the defenders of the Dreyfus investigation review and the granddaughter of Alexandre Herzen, the Russian socialist. He is to contribute to the Revue d'économie politique1 , the chronicles devoted to the evolution of trade unionism. Then he devotes himself to the editing of the great Histoire des doctrines économiques2 *

This paper is a part of a research program devoted to interwar period. Another part of it will devoted to the international economic theories and practices. Consequently we did not take into account the very interesting debates between J. Rueff and J.M. Keynes on this topic here. 1 founded in 1888 by Charles Gide ( 1847 - 1932 ) to fight against the hold the Journal des economistes of liberal inspiration had over economists particularly in French universities. 2 It is apparently in this work that we see the first use of the expression neoclassical economy to describe more particularly the mathematical school of which "Leon Walras is the doyen". Gide and Rist 1947, 583. This epithet is more than justified in various passages of a chapter dedicated to the " hedonistic" school (cf Hutchinson, p. 236 n.). We know that the two authors prefered to indicate clearly which of

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Keynes and the French Guardians of the Say's Law

together with Charles Gide. In 1913, he is elected to the Law faculty in Paris. During the war, he turns his attention towards monetary questions of which he is to become one of the leading French specialists. The 14/18 war largely took place on French territory and more specifically in those regions of France which were the most industrialised at the turn of the century which meant that by the time of the armistice a large part of the French industrial machine was destroyed. In addition to these material damages, the quantification of which was to lead to interminable discussions, one must also add the loss of the majority of French investments abroad which had either been conceded in dubious circumstances or had disappeared such as the 10 billion gold Francs from 1914 which the Bolsheviks refused to return. Eventually the loans and capital granted by the United States and Britain was fixed at 875 million Pounds sterling. The idea that the winner should demand reparations was largely partaken at the time. France has not forgotten that Britain has demanded a levy after the Napoleonic wars in 1816 and more recently Germany had collected 5,000 millions marks after a very short war between France and the Prussian Kingdom that has taken mostly place in French territories. Alfred Sauvy (1965) reported that France had not supported this with too much difficulties and in a contemporaneous dialogue between a German and a French diplomat the former said "It does not seem that we received those billions" to which the latter replied "Nor that we paid them". This payment caused inflation in Germany so that Bismarck is reported to have said : "The next time we win a war against France, we'll demand that we pay an indemnity" (Sauvy, 1965, 131-2.). This humorous comment did not prevent Germany to plan during World War I new demands if she was to win the war as C. Rist could establish by scrutinising German newspapers that he was supplied by an economic intelligence unit.3 The problem to be addressed therefore was how to determine the amount and the structure of these reparations. Discussions about the amount of reparations are difficult to follow in contemporary publications as it is never clear what money is used. Obviously, after war, it was generally expected that the prices would fall at their previous level and the parity between currencies and gold would be restored. Unfortunately, it was impossible and it makes not slight differences : the French wholesale prices for example were six times higher in 1920 than in 1913, then they fell them each chapter was attributable to: the chapter curiously titled " the hedonists" in which the label "neo classic" is found is down to Charles Gide, but the largest proportion of the developments on Walras are in the chapter on unearned income written by Charles Rist. 3 After war, Rist analysed at length German finances (Rist, 1921) and devoted a chapter to the damand Germany has prepared if she has been to win. Thirty years later, he came back on this topic in his Notice : "I shall also analyse the ideas the German writers had about the war indemnities, which they loudly proclaimed Germany would demand with relentless severity. (Notice, 987)."

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between three and four times the 1913 level but they increased after a time and in 1926 they reached a level eight times higher than in 1913. The discussion was so clouded by the novelty of inflation that it occurred often that estimations were made without references to currency value. For example, (E. Mantoux 1942 & 1952) pointed, twenty years later in his reassessment of this question, that Keynes has criticised Mr Pupin's estimation without taking into account the depreciation of francs. Keynes seems to believe that French estimations used the 1914 value of franc and/or the old 1914 parity between franc and Pound, whereas Mr Pupin for example explicitly indicated that French prices were more than twice higher in 1916 than in 1913 (and they were still higher in 1919). Once these discrepancies are taken into account, French estimations are not so far from Keynes's ones. If this mistake or this lack of precision are understandable from politicians, they shed a curious light on Keynes intentions with his pamphlet. French politicians were indeed pursuing a much broader objective, that of permanently weakening Germany and thereby her Austrian allies in order to redress the balance of power in France's favour. England had experienced the conflict in different conditions to those of France and her losses essentially consisted of the loss of her fleet, but she no doubt did not view this weakening of the German rival on foreign markets too critically. This opinion of C. Rist is partaken by C. Kindleberger who wrote :" In Britain, the boom was fed by the prospect of the destruction of German competition in coal, steel shipping, textiles. (1973, p33) The treaty of Versailles was signed on the 28 June 1919, but it has not been possible to fix an amount for German Reparations. The treaty has only established general principles for payments and set up a Reparation Commission to work out detailed sums. As this body had no autonomy, it was not difficult to foresee that the difficulties governments had not been able to tackle off previously would still be alive. Keynes had been a member of the British delegation before conspicuously resigning and he painted an impressive picture of the atmosphere at the meetings (Keynes, 1919). The discussions on the amount and the mechanics' of the reparations had already begun by the end of 1918. More than one voice amongst the French economists was raised warning of the illusion of the slogan " Germany will pay". Keynes 1919 writes (note 2, p. 108) : "This was clearly and courageously indicated by Mr. Charles Gide in l'Emancipation of February 1919". C. Rist was also to take his turn at expressing his opinion on this point in April 1919 (l'Action Nationale) " Indemnités de guerre et commerce extérieur" (453-75). This was the opportunity for him to criticise the economic error of linking French damages to the German pre-war income or even

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worse to German wealth and to insist on the limits naturally imposed by Germany's capacity to pay and her foreign markets. C. Rist will come back to this point on the 15th January 1922 when he particularly noted "On upholding the Treaty before Parliament, Mr Klotz, Minister finances affirmed that Germany could pay 10 billion (gold) marks per annum. What however was the amount of total revenue of Germany at that time. At best 45 billions gold marks (this is the approximate level of German revenue before the war). It was therefore ruthlessly agreed that Germany (without taking her domestic expenses into account could deduct a quarter or a fifth of her revenue to transfer abroad. (Rist, 1922, p.467) In the mean time, Keynes had published in december 1919 his famous work in which he likewise affirmed that " In any event, it is only by the export of specific commodities that Germany can pay(...)" (p118 FT.153), a belief which made him bitterly regret the position taken by the President of the French Council. Viewed by Keynes, "Clemenceau's aim was to weaken and destroy Germany in every possible way", a policy which had had as a consequence" (...) thus a scientific consideration of Germany's capacity to pay was from the outset out of court" (p. 94 (FTp.125) In his preface to the French edition, Keynes wrote in March 1920 : I appeal therefore, beyond her politicians to the intelligence of France (..). As in England, so in France the better minds of the nation have stood aside and have neither read the treaty nor have understood it. Let them now gather strength to avert the misfortunes which impend otherwise (p. xxii & FT p.10). This appeal must have been heard by Charles Rist who wrote a eulogistic review 4 of the book for the issue of Revue d'Economie Politique published in 1920 "One cannot deny that this system was infinitely superior to a system of quasiperpetual payments, which by virtue of their enormous proportions are irrecoverable and which leave the victims and the aggressors face to face with no international guarantee". (REP, 1920, 93-4). The conclusion of this review in which Rist addresses himself directly to Keynes leads one to believe that direct a exchange between Rist and Keynes could have already been established by this time5, Rist's last sentence seems in every way to answer to the appeal made by Keynes. Let us reassure Mr Keynes on one point. He is amazed that the fantastically colossal figures quoted (..) as represented by the probable German payments met with no resistance from us. He has misunderstood our silence. It was not, as he thought, a silence of acquiescence but it was a silence of disdain. (p.94) 4

"The book by Keynes - at its introduction, and I then wrote a eulogistic review of it in the Revue d'économie politique - appeared as a real revelation for those who would find the truth" (ibid. 991). 5 This hypothesis seems not absurd if we take into account that Keynes stayed long in Paris for the Peace Conference and that Rist was one of the few French economists that were fluent in English.

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In his " Notice", he refers back to the position he adopted at the end of the first world war in order to introduce some subtleties 6: . Thus he wrote: " The fundamental points of my thinking are based upon the same economic data as that of Keynes. I could not however completely agree with his point of view which was, apart form his economic position, clearly motivated by a political hostility towards France and by ideas of European pacifism which seem to me out of touch with reality. " (p.990). The position adopted by Rist in the debate about reparations showed no lack of courage in so far as the evaluation of the damages and of the French demands was considerable higher than that proposed by Keynes. So where as the minister of Finance Klotz put forward a figure of 132 billion Francs7, Keynes valued the French losses at 800 million Pounds. Using pre-war rates, Keynes's figures are slightly less than 32 billion Francs, an assessment that can be compared with the schedule as prepared by A. Sauvy: Damages sustained 34 Erosion of National Heritage 10 Foreign debts 8 Reduction of Gold stocks 3 Total 55 Inter-ally 35 Debts to the allies 17 (unit: billion Francs 1913; sources: Sauvy, 1965, p.31) The subtleties introduced by Rist in his Notice are however far from being the reassessment which was the object of Keynes' book and Rist can be credited with replacing it in its context ("the cloth of lies and hypocrisy in which the Reparation question was wrapped." (Notice, 991) whereas Mantoux or Salter have an exclusively retrospective viewpoint and only just stop short of attributing to Keynes the responsibility for the rise of Nazism and for the second world war. The conclusion of C. P. Kindleberger seems to us to be a fairly good reflection of the subtly altered position taken by C. Rist : Keynes's brilliant polemic may have been distorting in many respects; selfconfirming in its contention that if the Germans heard a reasonable argument to the effect that they could not pay, they would not, (...) but it was surely right in thinking it useful to cancel war debts, set a small figure for reparations (..) and clear the issue off the international agenda. (Kindleberger, p. 39) 2) Saving and the social classes

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Rist attributed his reservations in part to reading the biography of Keynes by Harrod. As explained supra, the level of prices taken into account here is not clear.

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The determination of the amount of the reparations is not the only reason for which Rist had been able to appreciate the work of Keynes. It is more interesting to quote the reference to Keynes in his " Théorie de l'épargne" (Rist, 1922) which begins thus: The complex phenomena of the monetary and financial markets presuppose a theory of saving. This increasing importance thereof during the course of the 19th century is one of the salient points of the economic evolution. Mr Keynes recently pull it into perspectives with remarkable clarity in the illustration of pre-war Europe which precedes his famous work " The economic consequences of peace" (p.177). Rist was alluding to two paragraphs of the chapter "Europe before the war" under the title "The psychology of the society" and " The relation of the old world to the new".(Keynes 1919). In the first, Keynes wrote an astonishing description of the workings of capitalist accumulation of the XIX century, where saving is attributed a major importance. This panegyric of saving is surprising to be issued from the pen of Keynes even if trimmed with a certain irony and tempered with a certain pessimism ("this principle of accumulation depended upon unstable psychological conditions which it may be impossible to recreate" (p.13). He even concluded: The accumulative habits of Europe before the war were the necessary condition of the greatest of the external factors which maintained the European equipoise. (ibid. p.29 trad. franç.) It is far from certain that Rist had been able to see through all the ambiguity in the development in this theory of saving, it is certain however that, in his own theory he uses the Keynesian analysis and he introduces certain elements which were to appear a few months later in Keynes's work.. In this fashion he dismisses as ' phantasmagoria" the theory which sees interest as the recompense for abstinence (p.214). He rejects the idea that saving arises from the choice made by the saver (society does not distinguish between the saver who stints himself and he who does not know what to do with his money(p. 214)). On the contrary, writes Rist, the sums deposited with the business class arise from previous production (Rist's italics) and it is the business that can use them in a creative fashion.(ibid.) It is clear from these passages that Rist considers saving to be secondary to investment and he comes to some "Keynesian " political economy conclusions. Seeing that the essentially synthetical act of creative saving more often that not divides it into two different steps on the exchange markets - since it necessarily involves different actors, which of these actors should be encouraged by the State? There can be no doubt about the answer. With no possibility of new revenue, saving loses its raison d'être. The choice, which is the very essence of creative saving, will cease to exist the day an absence of inventiveness and initiative no longer provides an alternative to consumer spending. Saying that to save is to 6

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spend creatively , so we are stating a self evident fact in affirming that saving will cease the day the possibility of creating new revenue also ceases. (..) Having stressed as much as we have the close links between saving and the creation of a new source of revenue (...) we can more easily accept our misgivings over the bias shown by the greater part of French doctrine in extolling the spirit of saving at the expense of two basic factors of progress: the spirit of invention and the spirit of initiative. (..) A society who wants to prosper should extol initiative and inventiveness first of all, then labour, and finally saving. (..) We have seen here the State granting favourable rates to certain investors in order to encourage saving. We would rather see it assume part of the risk involved in all new initiatives and inventions. A greater participation of the State in the costs incurred in all systematic application of new methods or of scientific research in industry and in agriculture world will the most useful form of protectionism and the most effective way of indirectly encouraging saving Rist (1922, pp. 218-98). The article by Rist appeared in the April June edition (second quarter) 1922 one can not help but notice the similarity in the division of society into three classes as developed by Rist and that which appears in Keynes's article on the 23 July 19229. (reproduced in Keynes 1923). Business men, workers and rentiers, this is the order in which Rist ranks the social classes which any well informed political economy should promote. It is along the same lines that Keynes wrote under the title " Changes in the value of money as affecting distribution": For the purpose of this inquiry a triple classification of society is convenient into investing class10, the business class, and the earning class. These classes overlap and the same individual may earn, deal and invest, but in the present organisation of society such a division corresponds to a social cleavage and an actual divergence of interests. (p.4) Studying the consequence of variations in the value of money for the social classes he notes that " The fact of falling prices injures entrepreneurs".....(p.34 and p54 French trans.). and he continues further : "Thus inflation is unjust and deflation is inexpedient. of the two perhaps deflation is, if we rule out exaggerated inflation such as that of Germany, the worse; because it is worse in an impoverished world to provoke unemployment than to disappoint the rentier" (p. 57).

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The passage is sufficiently outstanding to have affected Divisia 1928 which extensively reproduces these developments (p. 148) 9 The first publiction was done in the Manchester Guardian Commercial Supplement, (title: Reconstruction in Europe), No V, 27 July 1922. It was reprinted in Keynes 1923 and in a shortened version. with a brief comment by Keynes with the title "Social Consequences of changes in the value of money", in Keynes 1931, pp. 59-75 10 As it is well know, "to invest" has a very opposite meaning to the French "investir" and by the "business class", Keynes means the same persons as Rist by "the entrepreneurs" as their developments made it clear.

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Keynes proceeds thus with the same classification as that extolled by Rist. In the situation as experienced by Great Britain, the preoccupation of the former lay with the businessmen whose confidence is to be rebuilt. The origin of the hostility Keynes shows towards deflation lies in the wariness that it produces in businessmen. (..) a general fear of falling prices may inhibit the productive process altogether. for if prices are expected to fall , not enough risk-takers11 can be found who are willing to carry a speculative "bull" position, and this means that entrepreneurs will be reluctant to embark on lengthy productive processes involving a money outlay long in advance of money recoupment - whence unemployment. The fact of falling prices injures entrepreneurs; consequently the fear of falling prices cause them to protect themselves by curtailing their operations; yet it is upon the aggregate of their individual estimations of the risk, and their willingness to run the risk that the activity of production and of employment mainly depends (p.34) Thus does Keynes see right from the days of Tract the start of the scaling down of production and therefore the origin of unemployment in the wariness of entrepreneurs. His position is close to that of Rist who is also concerned withentrerpeneurs too, but there is a subtle difference : Rist is in a country whose industrial machine has been devastated and it is towards the businessman as innovator that he turns to in order to improve the productivity of equipment and thereby to restore the competitive position of France. Keynes's preoccupation do not include this long term view as he is already convinced that the economic machine is slow to put into motion. 3) J. Rueff and the cause of unemployment In Keynes 1923 the hostility shown towards deflation has its origins in the direct consequences for the wariness of businessmen and indirect consequences for employment. But in 1925, a young French economist attracts attention with an article which excited universal interest on the origins of unemployment in Great Britain. (Rueff, 1925). J. Rueff was born in 1896. His family, like that of Rist, was of Alsatian origin and had also opted for France after the 1870 war. Mobilised at the beginning of 1915 he became liaison officer with the American troops after July 1918 due to his linguistic proficiency. At the end of the war, he studied at the Ecole Polytechnique from 1919 to 1920. It is there that he had his first contact with political economy through the teaching of Clement Colson. It is incidentally also through Colson that J. Rueff was to discover the Eléments d'économie pure of Walras. This meeting was to confirm to Rueff his instinctive feeling that " the law defined in French education as the loi de

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In the French translation, P. Franck wrote "entrepreneurs" for "risk takers". (p.54)

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Van't Hoff Le Chatelier12 could equally well be applied to physical and moral sciences ". According to J. Rueff this law states that "if one factor of equilibrium for a system tends be modified, it happens a system modification, which, if it occured alone, would lead to an inverse change in the factor under examination." (p.36) In the economic sphere, J. Rueff sees in the price mechanism "the law of equilibrium change that rules society as well as physical nature."(p.37) Armed from 1922 with this method of analysis, the young inspector of finance was to attack a whole series of problems, foreign exchange, inflation, monetary phenomena but for our purposes we shall address ourselves particularly to his study of unemployment in England. (Rueff, 1925). In this study Rueff uses a quarterly series on wages set up by A. L. Bowley and three quarterly series published by the London and Cambridge Economic Service (the wholesale prices, the wage index divided by the price index, the percentage of unemployed as applied to the union membership) The period studied extends from the first quarter of 1919 to the third quarter of 1925. Later Rueff developed his analysis to include the period 1926 - 1931 (Rueff 1931).

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Le Chatelier Henry (1850-1936) French chemist and engineer (École Polytechnique), professor at École des Mines enunciated in 1884 the Principle that bears his name. It states that if a system (a substance or a collection of substances) in a balanced or equilibrium state is disturbed. The system will readjust in such a way as to tend to neutralise the disturbance and restore equilibrium. Van't Hoff, Jacobus Henricus (1852-1911), a Dutch chemist established in 1884 the theoretical foundations of chemical cinetics in his book Études de la dynamique chimique. He was awarded Nobel prize in 1901. P. A. Samuelson used extensively the Le Chatelier principles in his Foundations (Samuelson 1941).

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The fact of the matter is that Rueff's article excited considerable interest in England. A large part of it had been presented and translated in the Times on 11 and 12 June 1931 by " the illustrious economist that was Sir Josiah Stamp".13 In the treatment by Rueff,

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References supplied by Rueff 1977. 1 are not quite accurate: He spoke about two papers published by the Times. 11 juin 1931, "Fettered by the Dole" and 12 juin 1931 "Work, Wages and the Dole". Sir Josiah Stamp signed actually two papers at these dates under a header "Work and Wages" the first one 11/06/1931 is intitled "Fettered by the Dole" and bears the subtitle "A French Theory" whereas the second one is intitled 12/06/1931 "The ban upon employment" (subtitled : "A system out of gear"). The two articles were published on the same page 17. "Work, wages and the dole" was published on Friday, June 12, 1931 but on a following page and looks like an anonymous comment. We did not exclude that this comment was written by Sir Josiah Stamp as he finished his signed articles by : ""In the foregoing summary, I have refrained from comment and criticism of my own, in order not to confuse and interrupt the writer's argument". Sir Josiah is refered to by J. M. Keynes on p. 121, in " Can Lloyd George do it ? " ( 1929 reproduced in Keynes, 1931, 86 - 125) as one of the experts who support the election manifesto of the Liberal Party who hope to combat unemployment with public works and it is presented in Keynes 1931, by Keynes 1930 as " one of the progenitors of the Bank of International Settlements",p. 402 (ii)

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the "real wage" has a special meaning. Whereas usually the real wage is the money wage deflated by the cost of living index or some retail prices index, Rueff uses the whole sale price index as deflator in order to get "what the wage payer is paying away measured in its equivalent of the products he is purchasing and selling" as Stamp described it. From 1919 to 1925, the "sympathy between the lines was so striking" that J. Stamp worked out the relationship and found that the correlation between real wage and unemployment movements was "no less than 95%"14. The correlation was "perfect or closer to complete correlation than any other two series of data". He let calculated the coefficient from 1927 to 1931 by the Industrial Institute that found it was "very high +0,89 when the wage change is put before the unemployment change by three months". We have not been able to find the division of periods and results of the Industrial Institute. Nevertheless the results from an econometric study of this data are excellent and Rueff was certainly justified to be proud of them. Unemployment and Real Wages in Britain (1919/1930)

Unemployment

25,0 20,0 15,0 10,0 5,0 0,0 0,6

0,7

0,8

0,9

1

1,1 1,2 Real Wages

1,3

1,4

1,5

1,6

The function can be written : Unemployment = a Real Wages + b. As J. Rueff insisted on the special character of 1926 because of a long strike, we checked the correlation for the first period (1919-25) and for the entire period (191930). period a b r2 t 1919-25 28.139 -20.873 0.875 14.07 1927-30 29.261 -27.275 0.913 12.13 1919-30 20.684 -13.768 0.730 15.76

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It is not clear if he means r or rsquared.

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The elimination of "classical" unemployment should have been obtained for a real wage equals to 71% of the 1913 level for the first period, 92% for the last one and 68% if the entire period is simultaneously taken into account. Fifty years later J. Rueff was amazed at the correlation between the two evolutions and saw the unemployment benefit (the dole) as the cause of unemployment. In fact, from 1923, one can see that wages stopped decreasing and were maintained at a considerably higher level than prices. It is no doubt difficult to appreciate today the accomplishment this article represents which Rueff himself sees as one of the first econometric studies. In the course of this debate , the technique adopted by Rueff was contested. In fact the anonymous commentator in the Times (probably J. Stamp) pointed out that after 1923 the money wage indicator remained constant so that the evolution of "real" wages was nothing more than the inverse evolution of prices. A.Sauvy 1985 took up this argument again and added that the same correlation could be achieved by replacing the nominal salary with any other variable which had remained constant since 1923. The argument seems all the more unusual for two reasons 1-during the period 1924-1930 the nominal salary had known fluctuations between a minimum of 173 and a maximum of 181 so that a stationary variable would not show the same correlations. 2 - after 1926, the series studied still shows a particular relation between the level of real salary and unemployment. In fact, the only proven method is found in the correlation between the two evolutions of real salary and of unemployment for different sub-periods from 1919 to 1931. Looking at this debate, in the nineties, it is very tempting to compare Rueff's paper with the Phillips curve that has become, since A.W. Phillips published his seminal paper in 1958, an important part of "keynesianism". This comparison seems very relevant as both authors based their argument on English data. By closer examination, it appears that Phillips used annual data when Rueff had used term data. Nevertheless we fitted Rueff's data to Phillips's relationship. The results are very deceptive even more if we are to compare them with those of Rueff.

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J. Rueff's Chart and Data (1919/1930) Wages, Wholesale Prices and Unemployment in Britain (1919-1930) Terms Wages Prices Unemp. Terms Wages Prices Unemp. 1919 1 207 249 2,7 1926 1 180 147 10,4 2 209 242 2,2 2 180 145 12,0 3 216 258 1,9 3 180 150 13,4 4 221 288 2,9 4 180 150 13,0 1920 1 231 309 1,9 1927 1 181 143 11,0 2 250 324 1,1 2 181 141 9,0 3 267 314 1,7 3 180 141 9,3 4 273 284 5,0 4 180 141 9,8 1921 1 276 227 8,5 1928 1 180 141 10,2 2 268 201 20,9 2 180 143 10,1 3 244 190 16,0 3 179 139 11,6 4 228 174 16,0 4 179 138 11,7 1922 1 215 162 16,5 New series 2 202 160 16,4 1928 4 99,5 83,1 11,7 3 189 157 14,5 1929 1 99,5 83,6 11,5 4 178 156 14,1 2 99,5 82,2 9,9 1923 1 177 158 13,0 3 99,5 82,1 10,0 2 177 160 11,2 4 99,0 80,7 10,8 3 174 156 11,3 1930 1 98,7 76,9 13,2 4 173 161 10,4 2 98,3 73,4 15,3 1924 1 174 166 8,3 3 98,2 70,7 17,1 2 177 164 7,2 4 98,2 67,0 19,3 3 179 165 8,0 Adjusted series 4 179 170 8,8 1929 1 179,0 138,8 11,5 1925 1 181 169 9,1 2 179,0 136,5 9,9 2 181 160 10,6 3 179,0 136,3 10,0 3 180 157 11,3 4 178,1 134,0 10,8 4 180 153 11,1 1930 1 177,6 127,7 13,2 1926 1 180 147 10,4 2 176,8 121,9 15,3 2 180 145 12,0 3 176,7 117,4 17,1 3 180 150 13,4 4 176,7 111,3 19,3 4 180 150 13,0

Movements of wages, real wages and unemployment in Britain (Rueff, 1931)

Wages : Professor Bowley's Index (100 = 1913); Wholesale prices : Index of Board of Trade (1913=100); Unemployment : % of unemployed relatively to trade union members. After 1928, the wage and price indexes referred to the 1924 level. , we have adjusted the new series to the old ones.

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Money Wage Index and Unemployment (1919-1930)

Unemployment

25,0 20,0 15,0 10,0 5,0 0,0 160

180

200

220

240

260

280

Money Wages (100=1913)

Unemployment and Wages in Britain (1919/1930) The Phillips Curve

Unemployment

25,0 20,0 15,0 10,0 5,0 0,0 100

1000 Log Wages

No correlation could be found between wages and unemployment vindicating the position of Rueff. 1977.1 that the Phillips relationship does not hold (at least for the period under examination). 4) Relations between Rueff and Keynes If one is to believe Rueff's autobiography he had sent his work to Keynes " who had thanked him for it". (Rueff, 1977-1, p.98) This is the first explicit contact between Keynes and Rueff. The latter mentioning it in his chapter X (titled : Keynes et le spectre du chomage"). The thematic presentation of his work and his activities leaves some doubt as to when this first contact took place. In fact, the polemic between Rueff and Keynes on the question of German reparations widely published in the pages of The Economic Journal is mentioned in the preceding chapters along with a very interesting exchange of letters. As Rueff was to publish a second extended version of his study of unemployment in England in 1931, in the form of a pamphlet, one may wonder whether 14

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Rueff sent Keynes the first 1925 version of his study or the second. Whatever that may be, it remains that in 1977 Rueff was still amazed at the direction that Keynes' thoughts had taken comsidering that he had been informed of Rueff's work: I am convinced that Keynes was far too good an economist not to have seen in my diagram proof that the under employment which was ravaging Britain was a result of a lack of adjustment between wages and prices in a period of decreasing prices. Rueff 1977.1 (p.98) As Rueff shows that it formed the basis of a debate in the Commons it is unlikely that Keynes was unaware of it. Are we to conclude as we are invited to by Rueff that Keynes should have been convinced by his chart and have rejoined the former position if only scientific minded? Variations of prices and wages (1919 to 1930) 350 Wages Lagged Prices

Unemployement

300 250 200 150 100 1

3

5

7

9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 1: 1919, 3rd quarter, 45: 1930 4th quarter

Money Wages and Lagged Prices 370

Money Wages

320 270 220 170 120 150

170

190

210

230

250

270

290

Lagged Prices (delay= 3 quarters)

We think that this conclusion did not follow automatically from the debate and the data and we can rescue Keynes's position and subsequent developments. Thus, charts and 15

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data exhibit other surprising regularities, especially between wages and wholesale prices. We test a relationship between wages observed during term (t) and prices observed during term (t-3). The coefficient of correlation was still higher than the one between unemployment and real wages so that we can conclude that the stickiness of wages reflected for a part stickiness of prices minimising the influence of the dole. We find that a lag with a delay of three quarters provides a relation that fits surprinsgly well prices and wages. Wages t = a Prices t-3 + b period 1919-26 1919-30

a 0.617 0.950

b 79.551 96.041

r2 0.974 0.95

t 30.736 28.42

More generally, we can deal this situation by analogy with astronomy. It is well known that Ptolemaic astronomers could supply predictions very accurate concerning the position of planets; nevertheless it did not prevent Copernicus and Galilee to prove at the end that the earth was turning around the sun and not the reverse. In this case, the dole could have been the cause of unemployment, it did not follow at Keynes's eyes that the only sane remedy was to cut wages and cancel this "insurance". The debate is still opened. We would only emphasise that in the General Theory Keynes did hold firmly to the idea that demand for labour from firms is determined by marginal productivity of labour what is the economic foundation of the relationship postulated by Rueff and may be proves that Keynes was not so blind to his arguments. 5) The stabilisation of currencies As a result of the increase in prices during the 4 years of the first World War the old parities between national currencies ware difficult to re-establish and the choices were clearly laid out by Keynes in 1923 : The policy of reducing the ratio between the volume of a country's currency and its requirements of purchasing power in the form of money, so as to increase the exchange value of the currency in terms of gold or of commodities, is conveniently called deflation. The alternative policy of stabilising the value of the currency somewhere near its present value, without regard to its pre-war value, is called devaluation. (Tract, 117) As we have seen the choice of parities was not neutral from the point of view of the interest of the different social classes depending on whether they were debtors or

16

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creditors, it also entailed similar consequences on the international exchange rates. Taking these different elements into consideration, Keynes concluded : "(..) when stability of the internal price level and stability of the external exchanges are incompatible, the former is generally preferable; and that on occasions when the dilemma is acute, the preservation of the former at the expense of the latter is, fortunately perhaps the line of least resistance.(132)15. We know that England however, chose to reinstate the old parity between the pound and gold. The debate was also opened in France in great confusion : between the inception of the Dawes Plan in September 1924 and July 1926 there were ten different Ministers of Finance in almost as many governments16. During the succession of governments, the franc continuously depreciated from 18 to dollar and 90 to pound during 1925 and the first semester of 1926 so that when on July 17 the Briand government gave way to that of Herriot (last government stemming from Cartel des Gauches for whom Rist had campaigned) the franc went to 220. But on July 21, the Mur d'Argent (Silver Wall) has broken the left coalition and Poincaré returned in Herriot's place when the franc reached a low of 243 to the pound. C. Rist was to play an important role in the final decisions. In 1924, he had published La déflation en pratique in which he criticised the post-war financial policies and he had edited the economic section in the Politique republicaine which appeared as a radical election programme for the Cartels des Gauches. In the spring of 1926, he was part of a committee of experts who proposed that the de facto devaluation of the Franc be officially considered as irreversible. That same year, he was named assistant governor of the Banque de France as a result of this point of view. He participated therefore in the development which culminated in the Poincaré Franc on 25th June 1928. During this period he attended the first meeting of the governors of the central banks of Great Britain, the United States, Germany and France in New York in 1927. It is probable that he kept himself informed on the evolution of Keynes' thinking , who frequently wrote on the questions of international economy and those which affected France17..He does not however make any reference to this work any more than he mentions the role of Jacques Rueff in the policy of stabilisation. Rueff had been given the task of establishing the level at which the Franc could be stabilised. In fact, the adoption by the Poincaré government of a policy intended to reinstate the Francs

15

Here we note a marked difference between the English and the French text, the devaluation which is "fortunately perhaps the line of least resistance" becomes in Franks translation" the least dangerous policy" ("la conduite la moins dangereuse") (p. 189) 16 The title of Keynes's article mocks this turmoil. 17 Already in the Tract, Keynes concluded his recommendations thus "In France and Italy it is only necessary that the franc and the lira should be devaluated at a level at which the service of the internal debt is within the capacity of the tax payer". (p.159)

17

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convertibility with gold provoked a wave of speculation which pushed it higher. It is striking to note that in order to ascertain the optimum rate of exchange, J. Rueff had conducted an enquiry amongst French industrialists asking them which level of labour costs would enable them to continue to export taking into account the costs of production and of wages. It is on the basis of these calculations that Jacques Rueff proposed a range to the government within which the final rate would be set. We do not know whether he had read the Tract but it would appear that his suggestion is one solution to the dilemma faced by Keynes which allows for compatibility of the two factors and therefore does not entail upsetting the level of wages, the key stone of domestic prices. Amongst the articles which Keynes dedicated to the stabilisation of the Franc are two which feature in Keynes 1931. In the first (Keynes 1926), he considers that the main objective which should define French monetary policy is "to diminish proportionately the internal purchasing power of the rentier's money claims" (p. 78). In the second (Keynes 1928) he ascertains that his programme has been put into effect (by Rist and Rueff or at least with their blessing) and it only remains for him to despair that his advice had not been heeded closer to home. Indeed, there is a certain irony in the fact that here were two economists who had no doubt been horrified by Keynes' provocative theories on money 18 and yet who succeeded to achieve for France that which Keynes was unable to achieve for England with the following consequences, as described by Keynes : Great Britain has come out of the transitional period with the weight of her war debt aggravated (...) and deflationary finance still in the ascendant France, on the other hand, has written down her internal war debt by four-fifths (..) and is avoiding the sacrifices of deflation. Yet (..) the Bank of France emerges much stronger than the Bank of England. (..) Assuredly it does not pay to be good.. (p.85) The law of 25th June 1928 reinstates the gold standard. The Franc is defined as a weight in gold of 65.5 mg at 0.9000 pure gold (i.e. 58.95 mg of pure gold), which equates to one fifth of the Franc Germinal. The rate against sterling is set at 124.213 F for one Pound (as opposed to 25.22 in 1913) and 25.524 for one Dollar. The Poincaré stabilisation measures were followed by several triumphant years : the Banque de France gold reserves rose from 29 to 83 billion Francs i.e. from 1700 to 4900 tons. Altogether, France and the French were holding 5300 tons of gold, i.e. 2.4 times more than in 1913 and 27% of the world total, whereas the gold coverage reached 80 %. (Sedillot 1989 pp. 224-5) 18

We are thinking of the sentence Keynes added to the Tract :"(..) Money is simply that which the State declares from time to time to be a good legal discharge of money contracts" (p.8).

18

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In one way, Keynes could at least take comfort in the fact that Rist and Rueff had put a "Keynesian" policy into effect, even if they placed it within a different theoretical framework. In the final analysis, C. P. Kindleberger is not at all convinced by the result19 and particularly not by the role played by the Poincaré stabilisation policy in the 1929 crisis. He writes:: "Whether one argues that the fault lay in British overevaluation or French underevaluation, or in some division of the blame between the two, there is hardly a doubt that the relative overevaluation of the pound and underevaluation of the franc were dangerous for the system". (p.52.) Paradoxically the "success" of the operation must have reinforced Rueff's conviction that adjustments were not so difficult to achieve providing that market variations were not interfered with20. The gap between the two writers had certainly not been narrowed as Keynes clearly states in a letter addressed to Rueff within the context of the German transfers but also relevant to our discussion: The difference between us, if indeed one exists, is that I think you are waiting for the mechanisms to adjust themselves to the old organisation whereas I would like to adjust the structures to the new conditions, I think we should accept as a fact that the elasticities you are relying on are imaginary and that we should create a c machine which could function without depending upon them. Letter from Keynes to Rueff (reproduced in Rueff 1977. 1 pp. 104) We would however like to point out the possible influence of Rueff on Keynes in this exchange of ideas. The method adopted by Rueff to determine the optimum exchange rate may provide a key to the units as put forward by Keynes in his General Theory. We know that although this book did have a considerable influence, a number of the conditions he set to analyse economic activity hardly attracted any attention at all. We are thinking here of his references to a calculation in " wage units". Is this not precisely the method chosen by Rueff to propose a parity ? 6) The increasing hostility of Rist towards Keynes After 1928, the stability of the Franc having been achieved, Rist returned to his teaching post in Paris but he is in demand as an expert in Romania, Austria, Spain Turkey and in 1933 he leaves the law faculty to go into the world of business (Suez, Paribas then the presidency of the committee of Paris of the Ottoman Bank). He was to have very shortly another official function under the Front Populaire when, in March 1937, the government attempted to restore confidence in the business world and asked him to manage with, amongst others, Jacques Rueff, a "fund to level out exchange 19

According to Lacoue Labarthe, the Franc was undervalued in relation to the Pound, It becomes considerably overvalued from the time of the Pound's devaluation in 1931.Lacoue Labarthe p.1216. 20 Rist and Rueff returned several time to the stabilisation of the Franc, for example see Rueff 1959 or Rist 1953.

19

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rates". He resigns on the 14 June, precipitating the collapse of the government overthrown several days later by the Senate. It is important to note his development. After the first World War, he took sides against the right nationalists in favour of Franco -German reconciliation. He was therefore able to approve of the positions adopted by Keynes, particularly in his report published in the Revue d'économie politique. But he was to progressively distance himself from these positions which linked him to trade unionism before the first world war and to the left in favour of a Franco German reconciliation afterwards. This is how, in his biographical review he states from the introduction that "(he had been) considered over the last few years as a representative of what is known as orthodoxy in political economy"21 (Rist, 1955, 977). At the same time, he has become more and more hostile to Keynes, treating the Treatise with irony in Rist 1938 . harshly criticising the General Theory in Gide and Rist 1947 and dismissing in a single word as " nonsense" the plans for reconstruction of the world monetary system22. In one way, it seems as though Rist may have realised even before Keynes himself just what separates this orthodoxy from Keynes' thinking : the acceptance or the rejection of the law of Say as indicated in his analyses published in Rist 1938 and Gide and Rist 194723. In the last edition of this work he devotes a chapter to the ideas of Keynes, but his appraisal has clearly hardly changed since reading the Treatise which is at the centre of his criticism. In the end, Rist can not admit to such hostility as shown by Keynes towards saving. All his arguments show that he does not admit that the law of Say could be wrong as a result of insufficient real demand. For Rist, saving does not constitute a reduction in the final demand. It is the parable of the bananas (Treatise, i, p176) which particularly attracted his attention. In this illustration, Keynes imagines "a community owning banana plantations and labouring to cultivate and collect bananas and nothing else". As ripe bananas cannot be stored for long equilibrium in this case means that saving is exactly equal to the cost of production of new investment necessary to develop the production of bananas. Keynes supposes then that a thrift campaign convinces the population to increase savings whereas technical reasons prevent the extension of production. As the supply of

21

We find in the 1995 work by C. Gruson and F. Bloch - Lainé, who were amongst the first French economists to support Keynes's ideas, the following definition of this orthodoxy which was particularly prevalent at the Inspection Générale des Finances: "Amongst the men there, orthodoxy took the place of reflection; an orthodoxy whose fundamental beliefs hinged on the virtues of the gold standard, on the paramount need for transparent accounting and budgetary equilibrium". (p. 30 - 31). 22 Friday the 21 May 1943 he notes in his diary " Received and read two monetary projects from Keynes and from White. The first is utter nonsense from beginning to end. Aimed against the United States". (Rist 1983 p. 337) 23 Rist's first reaction to the Treatise already appears in his Doctorate classes in the years 1931 / 3.

20

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bananas is still at the former level and the demand has decreased, there is clearly an overproduction and the price of bananas must fall. The thrift campaign result not only to increase savings but also to cut the cost of living. Unfortunately as the wages have not yet fallen, the producers will suffer abnormal losses. Consequently the rise of saving "has not increased in the last the aggregate wealth of the community, it has simply caused a transfer from the pockets of the entrepreneurs into the pockets of the general public" (ibid. p. 177). Then the entrepreneurs could not but cut the wages or throw out of work employees. Keynes concludes that there are only three possible conclusions to this story: a) either all production ceases and the entire population starves to death b) the thrift campaign is called off (..) c) investment is stimulated by some means or another so that it costs no longer lags behind the rate of saving. (p. 178). For Rist, if Keynes has repudiated some thesis included in the Treatise, this analysis still provides a clue to understand the General Theory. At the end, Rist judges that "the analogy with Sismondi's doctrine24 concerning the insufficiency of demand is striking" (p.848 note). Clearly, he puts himself in the tradition of Ricardo and Say who saw in crisis temporary events due to mistaken previous or other unpredictable accidents that he opposed to the Malthus Sismondi one that charged savings for the apparition of crisis. In his "Notice", he came back to this point in a tentative to re-evaluate Keynes's theories in The Economic Consequences and after. He reiterates his "admiration" for Keynes 1919 and, on the contrary, his judgements are very hard against "Keynes's books on money and employment that are full of "sophism and imprecision"; (1035-6)". Rist and Rueff both invoked the influence of Walras on their economic ideas and, at the end, they fiercely rejected Keynes's ideas as they were contrary to the Say's law. The first one moved from an open minded position relative to Keynes, but he could not admit the Keynesian distinction between saving and investment. For the latter, markets are able to solve any problem including unemployment provided that their mechanism is not totally prevented to function and he never could take seriously into account sticky prices or other departure of actual markets from competitive one that obey Say's laws. Despite this opposition, it should be emphasised that both parties developed their ideas in a interwoven way and were influenced by their opponents.

24

On the parallelism between Sismondi and Keynes, see Alcouffe 1995.

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Annexes 1 Abstracts from the English translation of Rueff's 1931 article included in the articles of Sir Josiah Stamp published by The Times on Thursday 11 and Friday 12, June, 1931. The translation is due to H. H. Hennings who has previously translated A. Siegfried England's crisis. Although there have always been periods of temporally unemployment, permanent unemployment has never in history occurred before. The crisis which has now existed in England for ten years is a new and most disturbing characteristic of the post-war period. No previous visitation has ever been so intense or so lasting. All manner of hypotheses have been advanced to account for it. It had been variously attributed to monetary disorders, to outrageous tariffs, to Reparations, to the closing of the Russian and the Chinese markets, to political troubles in India, and more recently to the movement of gold in the central banks. Each of these ills has at one time or other been held responsible for unemployment. Yet the unemployment situation has not been improved by the various remedies with which these ills have been combated. It has, in fact, even remained impervious, to the complete disappearance, for example, of monetary disorders. Surely it may be assumed therefore that none of these factors is the cause and that it must be sought in some phenomenon which has remained unaltered throughout the whole period. The real cause can only be discovered by an objective analysis of facts such as those given in the above diagram. We believe that, as unemployment has been found to fluctuate in such complete conformity with the wages/ prices curve, the root cause of the evil must lie in a factor affecting this curve, namely the lack of adaptation of wages and prices. If we examine even more the chart for the years 1919 to 1923 we see that, when the wages/ prices curve went up unemployment went up also. Similarly, when the wages/ prices started to fall (i. e. to say, when the real value of wages started to fall) then, as would be expected, unemployment simultaneously began to decline. However, at the beginning of 1923 an entirely new factor appeared in the world. At that time there were 1,200,000 unemployed in England, in other words, the labour supply exceeded the demand by that number. Now, in spite of this, wages suddenly ceased to decline. They have remained at the 1923 level ever since. THE DOLE AT WORK Such a statement seems paradoxical, and yet it is understandable when we examine the system of unemployment insurance which has been in force in England since 1911. This system has no right to the name "insurance" since the Unemployment Fund is always deficit. The State keeps it going by making advances which are supposed to be repayable. Owing to the enormous volume of these advances...£36,000,000 in the year 1930 alone...it is obvious there is little chance of the Fund being able to reimburse these advances out of its own receipts. However that may be, the unemployment workman is certain of receiving the dole. During the period of falling wages, as soon as a certain level is reached he prefers

22

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to remain idle rather than work for a wage which would amount to little more than what he could get without working. At the beginning of 1923 this level was reached, as is shown by the diagram, which indicates that in that year the wages curve encountered some obstacle which stopped its fall. This obstacle was obviously unemployment insurance. In actual fact the wages level is the result of collective contracts, but these contracts would have never been observed by the workmen if they had not been sure of receiving an indemnity which differed little from their wages. It is the dole therefore that has made trade union discipline possible. From 1923 up to the present time, wages have scarcely fluctuated at all in England. The wages/prices curve, and with it unemployment, decreased when prices rose in 1923-24, and increased when they fell again recently. In other words, since wages are now immovable, the variations in unemployment have been caused by the variations in wholesale prices alone. There has been no opportunity for the unemployed to be reabsorbed as a result of an adaptation of wages to the new price level, as in countries where there is no unemployment insurance. Therefore we may assume that the dole is the underlying cause of the unemployment which has been so cruelly inflicted on England since 1920. In the English labour market, wages have been fixed not below the level which they would have reached spontaneously, but above it, and, therefore, instead of a shortage, the supply has exceeded the demand. The mechanism is the same and the same result invariously occurs. This is shown by the chart. Instead of allowing economic forces to operate freely, the tendency since the War, has everywhere been in the opposite direction. The dole policy, the activities of the trade unions and the employers' associations and the various hindrances to migration have all interfered with the freedom of the labour markets. At the same time, the activities of trusts, cartels, marketing schemes, and the various restriction and valorisation schemes have all retarded or suppressed the indispensable movement of prices. In a word the whole economic organism has been drugged and paralysed. Hence the present deplorable situation. The price of human labour, like any other price, cannot be fixed in advance. Permanent unemployment can only be avoided by allowing wages to adapt themselves as freely as possible to the economic conditions prevailing. The most effective cure is exactly the reverse of the measures applied in England and Germany, but which by an extraordinary aberration are generally considered as a step in social progress. There is only one way to reduce to a minimum the suffering caused by unemployment, and that is by giving complete freedom to wages. We believe that an improvement in the lot of the greatest number is worthy of every sacrifice, but we are convinced that the methods now being employed to attain this end are leading in exactly the opposite direction.

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Bibliography: Alcouffe A., "Sismondi und das Saysche Gesetz" (Sismondi and the Say's Law) pp.113160 Vademecum zu einem Klassiker der Nationalökonomie, Handelsblattverlag, Düsseldorf, 1995 Bloch-Lainé F. & C. Gruson, Hauts Fonctionnaires sous l'Occupation, Odile Jacob, Paris, 1996. Bousquet,G.H. Essai sur l'évolution de la Pensée Économique, Giard, Paris, 1927 (Keynes, 265) Cours d'économie pure, Marcel Rivière, Paris, 1928, Divisia, F. Économique Rationnelle, Doin, Paris, 1928 L'épargne et la richesse collective, Sirey, Paris, 1928 Gide, C. et Rist C., Histoire des doctrines économiques, 7e édition, Sirey, Paris, 1947 Harris,S. E. The New Economics, Keynes'influence on Theory and Public Policy A. A. Knopf, New York, 1948. Harrod, R. F., The life of John Maynard Keynes Hutchison, T. W., On Revolutions and progress in economic knowledge, Cambridge University Press, London, 1978. Keynes, J.M., The Economic Consequences of Peace, First edition december 1919, Vol. II of Collected Writings, French translation by P. Franck Les conséquences économiques de la paix, Éditions de la Nouvelle Revue Française, Paris, 1920. "The consequences to society of changes in the value of the money" first published 27/07/1922, reprinted as chapter 1 in Keynes 1923 and in Keynes 1931 A Tract on Monetary Reform, first edition, 11/12/1923, (vol. IV of Collected Wrintings, Macmillan, London, 1971, French translation by P. Franck with special foreword, La réforme monétaire, Sagittaire, Paris, 1924. "An Open Letter to the French Minister of Finance (Whoever he is or may be)", first published The Nation and the Athenaeum, 9 January 1926, French translation in Réflexions sur le Franc et quelques autres sujets, Paris, 1928 and reprinted in Keynes 1931, 76-82. "The stabilisation of the franc" The Nation and the Athenaeum, 30 june 1928, (reprinted in Keynes 1931, pp. 82-5) A Treatise on Money, First edition Mac Millan 1930, (Vol. VI and VII in Collected Writings. Essays in Persuasion first edition, 1931, vol. IX Collected Writings,1972 (French translation Essais sur la monnaie et l'économie, Payot, 1972) "The German Transfer Problem", Economic Journal No39, march 1929 pp.17 Kindleberger, C. P., The World Depression, 1929-1939, Allen Lane The Penguin Press, 1973. Lacoue Labarthe, D., Le franc", Encyclopédie Universalis, 1984, Paris Lacour-Gayet, J. et alii, Monnaie d'hier et de demain, Editions SPID, Paris 1952 Mantoux, E., The Carthaginian Peace or the Economic Consequences of Mr Keynes, Charles Scribner's Sons, Neuw York 1952. Marco, L. ed., Les revues d'économie en France, Genèse et Actualité 1751-1994, L'Harmattan, Paris, 1996. 24

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Pénin, M., La "Revue d'Economie Politique" ou l'essor d'une grande devancière", 157, 195, in Marco 1996. Phillip, A.W., "The Relation Between Unemployment and the Rate of Change of Money Wage Rate in the United Kingdom, 1861-1957", Economica, november 1958, 283-99. Rist, C., "Indemnités de guerre et commerce extérieur", l'Action Nationale, avril 1919 reproduit dans Rist 1933, (453-475). Les finances de guerre de l'Allemagne, Payot Paris, 1921 "Théorie de l'épargne", Revue de Métaphysique et de Morale, avril juin 1922, reproduit dans Rist 1933 Essais sur quelques problèmes économiques et monétaires, Sirey, Paris, 1933 Histoire des doctrines relatives au crédit et à la Monnaie depuis John Law jusqu'à nos jours, Sirey, Paris, 1938. Histoire des doctrines économiques (7e édition revue et augmentée, 1947). (chapitre Le conflit des théories des crises, §5 Théories de J.M. Keynes sur l'épargne, le chômage et les crises. La parabole des bananes.. t.1, p.276 "L'expérience de 1926 et le franc d'aujourd'hui" in Lacour-Gayet et alii 1952 Notice Biographique, Revue d'Economie Politique, 1955, 977-1045, T.LXX. Une Saison Gâtée. Journal de la Guerre et de l'Occupation 1939-1945. établi, présenté et annoté par J.N. Jeanneney, Fayard, Paris, 1983. Rueff, J. , Oeuvres complètes, Plon, tome 1, De l'Aube au Crépuscule, Autobiographie, 1977. Mr Keynes views on the transfer problem, Economic Journal, september 1929, pp. 392-8. Les variations du chômage en Angleterre, Revue politique et parlementaire, n°32, décembre 1925, pp. 425-37. L'assurance-chômage: cause du chômage permanent, Revue d'économie politique, n° 45, mars avril 1931, pp. 211-51 même titre, Sirey, Paris, 1931 avec une préface de C. Rist, pp. I-X. Préface au livre de L. Robbins, La Grande Dépression, 1929-1934, trad. française, Payot, Paris, 1935, pp.7-14. "Sur un point d'histoire: le niveau de la stabilisation Poincaré", Revue d'Economie Politique, 69 e année, (Mars avril 1959, pp. 169-78 Lacoue Labarthe, D., Le franc", Encyclopédie Universalis, 1984 Paris Samuelson, P. A., Foundations of Economic Analysis, Harvard, 1947, French Trans.. annotated by Gaudot, G. , Gauthier Villars, Paris, 1965. (cf chapitre III on maximisation). Sédillot, R., Histoire Morale et Immorale de la Monnaie, Bordas, Paris, 1989. Vertongen, L., "La loi de Rueff", Revue économique internationale, décembre 1932.

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