Lionel Robbins is most remembered for his definition of Economics which he gave in his classic work Essay on The Nature and Significance of Economic Science.
“Economics is the science which studies human behaviour as a relationship between ends and means which have alternative uses.”
This definition given in 1932 determined for ever that Economics was a study of behaviour where the issue was limited means which had to be allocated among alternative ends. This need not necessarily involve money or material resources. Allocation of time would qualify as economic activity.
The Chicago Nobel Laureate Professor Gary Becker got his prize for extending Economics into the study of questions such Marriage and Divorce, How Many children people Chris to have as well as the Drug habit.Robbins released Economics from its narrow monetary and commercial roots to make it a universal social science
He himself was more policy oriented but he helped make Economic theory the fulcrum on which policies should be decided.
I met Lionel Robbins as a newly appointed Lecturer at the LSE. He was the one person who had established the worldwide reputation of LSE Economics Department. But I knew even way back when I was a student in Bombay that LSE had lost out to Cambridge during the 1930’s Depression because Robbins failed to see the virtue of Keynes’s theory. Robbins made his peace with Keynes and worked under him in the Treasury during the Second World War. He had been the Head of the Economics Department at LSE for all the years from 1929 when he became Professor till he retired in the early Sixties. He wrote the Robbins Report which expanded higher education in the UK. He was involved in Opera and the arts.
He was a tall and large man, somewhat leonine in his appearance as his name signified. He would be elegantly dressed and was a wonderful raconteur with a large fund of stories.My attitude towards him was mixed. I knew him as a free market advocate and I was then a left leaning young econometrician. He was retired but came to LSE but continued to teach a course in the History of Economic Thought. We saw him at lunch in the Senior Common Room. He would join the table where economists gathered and was most entertaining in his conversation.
One story he told us concerned Einstein. In the early 1930’s many Jews had to leave Germany . Some migrated to US. Among them was a young economist who needed to find a job. At Princeton where he went, they asked him to go and see Einstein ( as someone who could speak German). This young man rather nervous saw Einstein and Einstein asked him to write him an essay on the German economy. In those days of Depression, it was Germany and Soviet Union which were following unorthodox policies while the USA was in deep trouble. The young man wrote his critique of German economic policy and gave it to Einstein. Einstein read it and then said, ” I will recommend that they give you a job.” The young man was very pleased. Then Einstein added ,” But you know they are right and you are wrong!”
Robbins had invited Frederich Hayek to come to London from Vienna in the early 1930’s. They were a formidable team to argue for free markets, with Hayek’s early work Prices and Production rivalling Keynes’s Treatise on Money published around that time. I had read Hayek while in Bombay and written one of my two long essays ( as required) on his work. So it was very thrilling for me to hear Hayek speaking at the LSE in 1966 soon after I had got there. Robbins chaired that lecture and I could see the rapport between the two who had known each other for thirty five years by then. Hayek also came a second time in 1981for the fiftieth anniversary of his lectures which became Prices and Production. Again Robbins presided . It was as if Keynes had never happened and the LSE was still the best place for finding solutions for the world’s problems. Of course by 1981, Keynes’s reputation was being challenged and Hayek’s star was rising. He had won his Nobel Prize in 1974.
My differences with his political and economic views were well known to Lionel Robbins. At the LSE the seniors never pulled rank over juniors or make them toe the line. I was perhaps then at 28 the farthest away from him. But luckily we could collaborate for the sake of LSE. There were many student demonstrations in those days. Vietnam war as well the civil war in Nigeria and other political questions agitated the students. On Oration Day in 1969, the School had invited the Oxford historian Hugh Trevor- Roper (later Lord Dacre) to address the students. But there had been a military coup in agreement and the democratic government had been thrown out. Trevor Roper had praised the colonels.
Students were outraged. ‘Cancel the invitation’, they said. No, said the School. We have invited him long ago. ‘ Make him answer our questions’ . ‘No ‘ said the School,’ that is not part of the Oration’ . ‘ we will blockade his coming by mass rally ‘ said the students. Negotiations followed. I proposed that the School should separate the two events. Oration first and answering questions second after a decent interval. ‘ Not in the same room and not under the School’s auspices’ came the answer. ‘ how about the Student Union sponsor the second bit in the same room – (the Old Theatre at LSE) ‘ . The answer was ‘ no.’ Then the solution was that the event move to the New Theatre across the road into the EastBuilding . Trevor Roper would answer questions .’ ‘Who will sponsor it ? ‘ I asked .( All these was being done indirectly via messengers) .the answer came ‘ It will be under your personal auspices’ .
I was staggered. There was no time to think. If Trevor Roper had been attacked by a student and hurt, it would be my personal responsibility. But I took the risk.the event went off well. I picked some large students around the New Theatre as informal guards.all went well .
Later that evening.Lionel Robbins who as Chairman of the Court of Governors had presided over the official oration, came to my office and paid me handsome compliments forgiving saved the LSE’s name. I said it was a collaboration.