The Birmingham School was a

school of economic thought In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a common perspective on the way economies work. While economists do not always fit into particular schools, particularly in moder ...

that emerged in

Birmingham Birmingham ( ) is a city and metropolitan borough in the metropolitan county of West Midlands in England. It is the second-largest city in the United Kingdom with a population of 1.145 million in the city proper, 2.92 million in the West ...

England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...

during the post-Napoleonic depression that affected England following the end of the

Napoleonic wars The Napoleonic Wars (1803–1815) were a series of major global conflicts pitting the French Empire and its allies, led by Napoleon I, against a fluctuating array of European states formed into various coalitions. It produced a period of Fren ...

in 1815.

Overview

Arguing an

underconsumption Underconsumption is a theory in economics that recessions and stagnation arise from an inadequate consumer demand, relative to the amount produced. In other words, there is a problem of overproduction and overinvestment during a demand crisis. The ...

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 A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...

and advocated the use of an

expansionary monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

to achieve

full employment Full employment is a situation in which there is no cyclical or unemployment#Cyclical unemployment, deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely Structu ...

. The leading thinker and spokesman for the Birmingham School was the banker Thomas Attwood. Other notable figures included

George Frederick Muntz George Frederick Muntz (26 November 1794 – 30 July 1857) was an industrialist from Birmingham, England and a Liberal Party Member of Parliament (MP) for the Birmingham constituency from 1840 until his death. His father Philip Frederic Mun ...

and Thomas Attwood's brother

Matthias Attwood Matthias Attwood (24 November 1779 – 11 November 1851) was a British Conservative and Tory politician, and banker. Attwood was the second son of ironmaster Matthias Attwood of Hawne House, Halesowen, Worcestershire and Ann née Adams, and the ...

. Economists who lent the Birmingham School some support included Arthur Young,

Patrick Colquhoun Patrick Colquhoun ( ; 14 March 1745 – 25 April 1820) was a Scotland, Scottish merchant, statistician, magistrate, and founder of the first regular preventive police force in England, the Thames River Police. He also served as Lord Provost of ...

and

Sir John Sinclair Sir John Sinclair of Ulbster, 1st Baronet, (10 May 1754 – 21 December 1835), was a British politician, a writer on both finance and agriculture, and was one of the first people to use the word ''statistics'' in the English language, in h ...

. 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 ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...

of the 1930s. Some of Attwood's writings contain formulations of the

multiplier effect In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable ''x'' changes by ''k'' units, which causes ano ...

and an income-expenditure model. In his 1954 ''History of Economic Analysis'',

Joseph Schumpeter Joseph Alois Schumpeter (; February 8, 1883 – January 8, 1950) was an Austrian-born political economist. He served briefly as Finance Minister of German-Austria in 1919. In 1932, he emigrated to the United States to become a professor at Ha ...

wrote that "it is from these writings that any study of modern ideas on monetary management ought to start".

References

Bibliography

* * * Miller, Henry. "Radicals, Tories or Monomaniacs? The Birmingham Currency Reformers in the House of Commons, 1832-67," ''Parliamentary History'' (2012) 31#3 pp 354–377. * * Schools of economic thought Keynesian economics History of Birmingham, West Midlands Full employment {{Econ-theory-stub

Overview

See also

References

Bibliography