James Edward Meade
James Meade, an Englishman, was corecipient of the Nobel Prize in 1977, along with Bertil Ohlin, for their “pathbreaking contribution to the theory of international trade and international capital movements.” Much of Meade’s work on international trade is in the two volumes of his Theory of International Economic Policy, which, writes Mark Blaug, “have become the bible of every trade economist.” The book’s first volume, The Balance of Payments, makes the point that for each of its policy objectives, the government requires a policy tool, a principle developed by Dutch economist Jan Tinbergen. Meade advocated using fiscal policy to achieve full employment and monetary policy to achieve the government’s target on balance of payments.
The second volume, Trade and Welfare, examines conditions under which free trade makes a country better off and conditions under which it does not. Meade concluded that, contrary to previous beliefs, if a country was already protecting one of its markets from international competition, further protection of another market could be “second best.” That is, although the ideal would be to eliminate all trade barriers, if for some reason this was not feasible, then adding a carefully chosen dose of protectionism could improve the nation’s economic well-being.
Like Milton Friedman in the United States, Meade wanted to use economics to help make the world a better place and believed that government regulation often harmed an economy. He also believed that government should take strong measures to promote equality of income. “I have my heart to the left and my brain to the right,” Meade said.
Meade also helped prepare the British government’s set of national income accounts during World War II. Meade was a professor of commerce at the London School of Economics from 1947 to 1957 and then moved to Cambridge University, where he taught until he retired in 1974.