Obituary: Sir Alec Cairncross

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The Independent Culture
ALEC CAIRNCROSS was an outstanding member of the generation of economists who worked as civil servants during the Second World War and then went on to pursue careers moving between Whitehall and the universities. He brought to both worlds his personal qualities of intellectual integrity, energy and affability.

He will be most widely remembered by the many thousands of economics students who used An Introduction to Economics (1944) as a standard university text in the 1950s and 1960s; but perhaps the most important and challenging part of his career was his period at the Treasury from 1961 to 1969, particularly after the election of a Labour Government in 1964.

Alec Cairncross was born in 1911, the seventh of eight children. His father was an ironmonger (as was his grandfather). It seems to have been a respectable, if emotionally somewhat austere, household; but it was marked by a typically Scottish belief that you made your own way in life and progressed through hard work and education. Of the eight children, five gained university degrees and three become professors.

He attended Hamilton Academy from 1925 to 1928 and gained a scholarship to Glasgow University. At that stage, he was planning to become an accountant. However, he became captivated by economics and moved on to Trinity College, Cambridge, in 1932 as a post-graduate student, the first graduate from Glasgow to have made such a move. In Cambridge he met, for the first time, the English grandees, those self-confident, born leaders of men who were convinced of the superiority of the English in general and themselves in particular.

Many responded to this experience with life-long hostility; Cairncross believed that this was a hill worth climbing. He was particularly enthralled by Maynard Keynes, the epitome of the English style, and shared the excitement of the revolution in economics that was emerging from Cambridge at that time. His PhD dissertation was "British Home and Foreign Investment 1870- 1913". (It was published as a book, under a slightly different title, in 1953 and contains much that is relevant to the current turmoil in world capital markets.)

In 1935 he moved to Glasgow as a lecturer in economics. In 1938 he started to write his textbook, based on his lectures. It was published in 1944 and ran to six editions. Perhaps most important of all, in 1939 he met Mary Glynn, whom he married in 1943. In January 1940, he was invited by Austin Robinson to work in the Economic Section of the Cabinet Office. He joined the remarkable group that included Lionel Robbins, Ely Devons and James Meade. They were free to choose their own policy issues. Cairncross worked on the preparation of a programme for imports.

He moved to the Board of Trade for about six months in 1941 and then to the Ministry of Aircraft Production, where he spent the rest of the war. This may have been the period of his professional life which most excited him. On his own admission he knew nothing at all about aircraft or aircraft production. He discovered soon after his arrival that there were 300 Wellington bombers on a beach in Blackpool which could not be used because they had no propellers. Thus for every two propellers he could add to output, the Royal Air Force would acquire an additional aircraft. He then learned that there were American propellers available which had the wrong size of blade. His solution was to fit British blades to the American hubs. (This from a man who made no claim to practical skills.)

In 1945-46, he spent time in Berlin as a Treasury expert in the negotiations between economists from Britain, the United States, France and the Soviet Union on German reparations. After Keynes's condemnation of the penal reparations imposed on Germany after the First World War he was determined to leave Germany sufficient resources to sustain a reasonable standard of living and argued vigorously against the other national representatives. He described these events in The Price of War, published in 1986.

Cairncross worked briefly for The Economist in 1946 but found that he was spending much of this time advising the Government. He moved to the Board of Trade as Economic Adviser in 1946 and spent three years there including the period of the "bonfire of controls", when Harold Wilson presided over the dismantling of many of the wartime controls on trade and industry.

In 1950 he moved to Paris as Director of the Economics division of the Organisation for European Economic Co-operation (now the Organisation for Economic Co-operation and Development). He also worked in 1950 with Per Jacobsson, of the Bank of International Settlements, on a plan to deal with Germany's acute balance of payments problem.

He returned to Glasgow in 1951 as Professor of Applied Economics and founded Britain's first research department of applied economics. This spell in academic life was interrupted by a period in Washington when he launched the Economic Development Institute to train senior officials from developing countries on how to manage economic problems. He also served on a number of committees, most notably the Radcliffe Committee on the Working of the Monetary System. He was responsible for much of the drafting of the written report.

In 1961, he moved to the Treasury as Economic Adviser to Her Majesty's Government. Under the Conservative administration he observed (without approval) Reginald Maudling's "dash for growth". The greatest challenge was the election of a Labour Government in 1964. Harold Wilson established the Department of Economic Affairs (under George Brown) in order to achieve a "creative tension" in economic policy-making. In the event the allocation of tasks between the two departments was never coherent or logical.

Cairncross was in a particularly difficult position. The title of Economic Adviser to the Government was abolished (without his being told). The Treasury planned to send him to Washington to succeed Eric Roll as Economic Minister. The feeling was that he was tainted by his years as adviser to a Conservative Government. This was quite wrong, since he was an established civil servant and had been appointed entirely on the basis of his academic skills and policy experience. He recounts how he met James Callaghan, who was Chancellor of the Exchequer, in the corridor and complained about his treatment. Callaghan said that it was the first he had heard of it and that he very much hoped that Cairncross would stay.

He retained the title of Director of the Economic Section and was made Head of the Government Economic Service (the first to hold that post). But he had to compete for attention with the four advisers brought in by the Labour Government, Thomas Balogh, Nicholas Kaldor, Donald Macdougall and Robert Neild (who was given the title of Economic Adviser to the Treasury).

The dominant theme of those years was the attempt to avoid devaluation. Alec Cairncross fully supported that objective but insisted that devaluation could only be avoided if measures were taken to deflate demand and/or to control imports directly. He became increasingly frustrated at the failure to adopt the necessary measures.

Finally, in November 1967, he became convinced that a devaluation was inevitable and he reported his views to Callaghan (whom he liked and admired). The actual devaluation occurred a costly two weeks later.

In 1969 he became Master of St Peter's College, Oxford. (He was close to accepting an invitation to became Master of Keynes College at the University of Kent.) This was another success and he was greatly helped by Mary, who provided her noted breakfasts. He had been elected as Chancellor of Glasgow University in 1972 and made that his main task when he left Oxford in 1978. This was also a job he much enjoyed and his role in it was greatly appreciated. From 1980 onwards he moved to an active life of editing and publishing and produced a book each year, including accounts of his Whitehall career and more general accounts of the role of economists in the Government. His autobiography is due to be published later this year.

At the heart of his life was his marriage to Mary and he never ceased to wonder at the good fortune that brought them together. Because of his frequent absences and heavy burden of work, the task of bringing up the children fell largely on her. (One of his daughters has commented that her main memory of him during her childhood years was of his back as he worked away at his papers.) They had five children, all of whom bear an uncanny resemblance to their father. Mary's death earlier this year was a great blow to him.

Alec Cairncross never ceased to display the qualities of his generation and place of birth. He was prepared to forgo personal comforts. He would always insist on travelling by bus rather than by taxi. The fact that his final illness started with a fall from a bicycle is typical of him.

He was offered, as he has said, almost every job or appointment an economist could wish for. He only twice actually applied for a job and was unsuccessful each time. All his appointments were the result of invitations. His own explanation for this success was typically modest. He was not ambitious and admitted that he was always apprehensive about moving to a new job. But he found that one job was much like another and that success in one post increased his self-confidence in the next. To that may be added the great respect in which he was held for his profound commonsense, his hatred of dogma and his complete intellectual honesty.

Alan Budd

Alexander Kirkland Cairncross, economist: born Lesmahagow, Lanarkshire 11 February 1911; Director of Programmes, Ministry of Aircraft Production 1945; Economic Advisory Panel, Berlin 1945-46; CMG 1950, KCMG 1967; Professor of Applied Economics, Glasgow University 1951-61; Director, Economic Development Institute, Washington DC 1955-56; Economic Adviser to HM Government 1961-64; Head of Government Economic Service 1964-69; Master, St Peter's College, Oxford 1969-78; Chancellor, Glasgow University 1972-96; married 1943 Mary Glynn (died 1998; three sons, two daughters); died Oxford 21 October 1998.