Hawtrey, Austerity, And The €Œtreasury View,€ 1918 To 1925

Ralph G. Hawtrey was not a man of the backwaters. Through the parallel study of Treasury files and Hawtrey’s scholarly publications, this work reveals his direct influence upon the most commanding minds of the Treasury and the Bank of England, the two institutions that, after WWI, shared primary responsibility over the British austerity agenda. After the war, Hawtrey advocated drastic budgetary and monetary rigor in the name of price stabilization. From 1922, Hawtrey admitted the need to decrease the bank rate; yet he remained an adamant supporter of the gold standard, insisting on its maintenance even if it required further monetary revaluation. Hawtrey’s policy prescriptions stemmed directly from his economic model. The “crowding-out argument,†the centrality of credit and of savings, together with the operational priority of technocratic institutions, were essential theoretical underpinnings of Hawtrey’s agenda: implementing the so-called Treasury view.