Peacock, Alan T. (1922–2014)

From The New Palgrave Dictionary of Economics, Online Edition, 2015
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The central concern of Alan Peacock’s work was in public finance. He defended the traditions of classical liberal political economy against the claims of ‘The New Welfare Economics’ to represent the only theoretically rigorous approach to public policy. His contribution was not focused on either positive or normative economics, but on what John Neville Keynes (1891) called the ‘art of economics’ – the translation of normative principles into policy action given the constraints presented by practically feasible institutions governing both private and public choice. His policy interests were wide and ranged from the big questions of the size and scope of government to more specific issues such as the structure of the social security system, the finance of education, the public support of the arts generally and the finance of the BBC in particular.
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Born in Ryton on Tyne, Alan Peacock was educated in Dundee after his father moved from Armstrong College in Newcastle to become Professor of Zoology at the University of St Andrews. Alexander Peacock was an entomologist who had studied mosquitoes in West Africa and the lice that were the cause of trench fever while he served as a soldier on the Western Front during the First World War. Alan Peacock grew up, therefore, in an environment that heavily emphasised the social responsibilities attached to receiving a higher education and, as he wrote in a ‘quasi-autobiographical’ book Anxious to do Good (2010, p. 10), his father ‘was a particularly hard act to follow so far as “doing good” is concerned’. His parents’ desire for reconciliation with the Germans after the horrors of the First World War led to holidays in Germany and to his studying German at school – a fact that played a significant role in Peacock’s later career.
Peacock’s studies at the University of St Andrews (1939–42) were interrupted by the Second World War. His knowledge of German led to the role of a sea-going Intelligence Officer of the ‘Y’ service in the Royal Navy, decoding enemy communications, an account of which appeared as The Enigmatic Sailor (2003). In this capacity he took part in Operation Tunnel, in which his ship, HMS Limbourne, was torpedoed and sunk along with HMS Charybdis. The likelihood of available information being overlooked or misinterpreted had a significant effect on the young Peacock (the captain of Charybdis, for example, had not fully appreciated the source of information from Limbourne and mistook ‘Y’ information for the less technically specific ‘my’ information [Peacock (2003, p. 41)]. Peacock went on to serve on operations protecting the Arctic Convoys taking assistance to Russia via Murmansk and was awarded the Distinguished Service Cross in 1945.
After the war he completed his degree in Economics and Political Science at St Andrews and, following a brief spell as a lecturer there, moved to the London School of Economics in 1948 where he was influenced by Lionel Robbins and Friedrich Hayek. In later years he was to become Reader in Public Finance at the LSE (1951) and to hold Professorships at Edinburgh (1956–62), York (1962–78) and Buckingham (1978–84). He remained Professor Emeritus at Buckingham until his death. He also played a large part in establishing the David Hume Institute at Edinburgh.

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The growth of government

Peacock’s early work was on National Insurance and the analysis of the Beveridge Report (1942) that formed the basis for the growth of the post-war Welfare State in the UK. Beveridge was a Liberal academic at the London School of Economics from a tradition that emphasised personal independence and responsibility, but his reforms were implemented by a Labour administration in difficult economic circumstances and in a world that had become increasingly used to high levels of state intervention and planning. Coming from Scottish Liberal political circles, Peacock was concerned with the problem of reconciling the aims of social security provision with the maintenance of a liberal economic order in the classical sense.
In the post-war environment of the UK, critical analysis of social policy did not rank highly in academic circles. Peacock (2010, p. 45) records that in the period 1925–1955, of one thousand articles in the Economic Journal, only ten concerned the social services. He therefore began researching the institutional background and financing of pensions, unemployment insurance, ‘national assistance’ (as transfers to those in poverty were then termed), and provision for sickness and disability. Beveridge had recommended an ‘insurance’ based system of social support with premiums payable by all (if necessary supported by the taxpayer). By the 1950s it was clear, however, that the state, whether controlled by Labour or Conservative governments, was to play a dominant role on the supply side and that the system as a whole was becoming highly centralised and collectivised. It was also becoming clear that the National Insurance Scheme was not simply about creating ‘insurance’ markets that might not evolve without state encouragement, but was part of a broader policy towards the redistribution of income.
Criticism of both these trends provides the two main leitmotifs of Peacock’s professional writing. His Scottish Liberalism as well as his classical liberalism led to profound suspicion of state monopoly provision as well as a preference for redistributional instruments that gave the recipients a degree of freedom of choice and the chance to avoid dependency. Much of his early work involved mastering the national accounts (still a relatively new framework for the collection and organisation of economic data at the time) and considering how these would be affected over time by demographic trends, changes in the rules of entitlement to benefits and trends in economic growth. This resulted in an early paper on the National Insurance Funds (1949) in which he proposed integrating National Insurance with the accounts of the public sector and giving up ‘the pretence that the scheme is based on insurance principles’. This was followed by a more extensive study questioning the National Insurance system (1952), an article projecting the likely strain on the state’s budget up to the 1980s of existing policies (1954a, with Frank Paish) and a book specifically on the techniques of national income accounting (1954b, with Harold Edey).
During this early period Peacock had also been involved as a Liberal party advisor. He was a member of the ‘Unservile State Group’ of academics and others sympathetic to the Liberal Party, which was set up in 1953 and produced a report entitled The Unservile State: Essays in Liberty and Welfare in 1957. He also provided research assistance for a report (1950) on the Reform of Income Tax and Social Security Payments. This was based around the work of Lady Juliet Rhys Williams and proposed a ‘negative income tax’ (later associated with Milton and Rose Friedman (1962)) by which minimum levels of income might be guaranteed to families through the normal operation of the fiscal system. An allowance would be paid to families (whether in or out of work) financed out of the taxation of income in excess of this level. It drew stark attention to the implied trade-offs between higher minimum standards and the possible adverse effects on work incentives and growth of the tax rates required to achieve them. Peacock was involved in providing estimates of the tax rates required to finance the scheme – though estimates of the incentive consequences were highly conjectural. The Liberal Party report proved to be at odds with the temper of the times and was considered but rejected by the Royal Commission on the Taxation of Profits and Income that received evidence in 1951. The old radical and individualist traditions going back to John Stuart Mill were increasingly supplanted by a more interventionist and paternalist philosophy, both within the Liberal Party and more generally.
Peacock’s interest in social policy and involvement in Liberal politics had brought him to consider a major component of the growth of public expenditure. As an academic public finance economist he was also interested in placing these developments in redistributional finance in the context of normative and positive theories of government growth more generally. With Richard Musgrave (1958) he edited a collection of Classics in the Theory of Public Finance. This included contributions from Adolf Wagner (1883), Knut Wicksell (1896) (translated by the later Nobel prize-winning economist James Buchanan), Erik Lindahl (1919) and other articles translated from German, Italian and French. Samuelson (1954) had clarified the technical conditions for the efficient provision of ‘public goods’, but the older literature, with its emphasis on consensus (Wicksell) or bargaining over cost shares (Lindahl), draws greater attention to the institutional problems of collective choice and the possibility that actual results will depart substantially from the ideal.
Peacock wrote with Jack Wiseman (1961) a study of the Growth of Public Expenditure in the United Kingdom which charts the historical trends and considers the various possible explanations for them. In particular, this study is celebrated for its critique of Wagner’s ‘law’ of increasing state activity (pp. 16–24) and the investigation of two hypotheses – the ‘displacement effect’ and the ‘concentration process’ (pp. 24–30). Peacock and Wiseman were critical of some of Wagner’s arguments for a rising share of public in total expenditure – such as the inherent superiority of public over private corporations in producing economic stability. But they advanced alternative explanations of their own for particular periods of public sector growth in the UK. Public expenditure was ‘displaced’ upwards after periods of social stress, such as wars or severe social disturbance. Higher levels of taxation were tolerated under extreme conditions ‘and this acceptance remains when the disturbance itself has disappeared’ (p. 27). The concentration process referred to a tendency for larger and more centralised delivery mechanisms to evolve partly in response to economies of scale, but also to political demands for uniformity of standards.
These two hypotheses seemed descriptively to fit the story of 20th century developments in the UK. But, as Peacock and Wiseman themselves emphasised, they did not constitute a fully developed theory of government growth. The main influence on Peacock’s work during and after the 1960s was the advance of public choice theory associated with Downs (1957), Buchanan and Tullock (1965), Breton (1974), Olson (1974) and Niskanen (1971). These offered a much more systematic analysis of collective choice by looking at the individual incentives faced by economic agents within a range of constitutional or organisational settings.
Two factors were paramount in Peacock’s later writing about the growth of government. The first was the tendency within democracies for particular interests and pressure groups to divert resources in their favour through the regulatory as well as the fiscal system. On the demand side, this was partly the result of the ability of relatively poor voters in a democracy to load the tax costs of public activities onto richer voters through progressive tax systems. But it was also related to the ability of smaller cohesive interest groups, facing relatively low costs of collective action, to exert pressure on politicians and legislators in representative democracies. The second important factor concerned the ‘supply’ side of the political market. Legislators and bureaucrats were themselves operating within an institutional and organisational context that would be expected to lead to expanding public spending.
Peacock’s work in Public Choice provides an interpretative commentary rather than theoretical novelty. As a classical liberal he was always interested in the historical origins of ideas about the role and growth of the state. He wrote a set of lectures (1992a) on Public Choice in Historical Perspective in which he pointed to de Tocqueville’s (1965) work (also in Peacock (1978a)) as a prologue to much modern theory (pp. 42–53). In the same lectures he returned to the Italian tradition in public finance, which he much admired, and in particular the contribution of Amilcare Puviani (1903) on fiscal illusion (pp. 96–102).
Although he would occasionally specify a theoretical model in formal mathematical terms, his efforts were usually directed at discussing the problems of interpretation, the difficulties of defining and measuring the arguments of the utility or production functions used, the possibility that important elements of the problem had been omitted and so forth. The Economics of Bureaucracy, for example, might find it convenient to summarise the objective of senior administrators as maximising their budgets. Peacock (1978b) accepted that this might be a useful first approximation (although still probably culturally specific), but matters such as reputation with colleagues, professional pride, the desire for a quiet life, pure laziness, personal ambition or an idealistic wish to serve the public needed to be borne in mind when applying the theory in particular cases.
It would be a mistake to regard Peacock’s commentary on Public Choice as representing an attack on formal theory by the easy paths of questioning assumptions, complaining about lack of completeness or lack of descriptive realism. He admired many of the theorists, quoted their work extensively and was well aware of methodological defences to quite abstract and ‘unrealistic’ theory. His contribution, however, was not in positive theory itself, but in using the theory to cast light on the whole process of policy formulation and execution. This ‘art of economics’ requires a more classical approach to the subject. Peacock’s economic agents whether business people, voters, politicians, bureaucrats, lobbyists or indeed academics were those of Adam Smith – broadly self-interested, but hard to sum up in a simple utility function – and ‘the situation in which they are placed’, as Smith put it, was more complex than could be summarised in a set of known resource constraints.
Lack of information or the possibility that it might be systematically distorted also played a large part in Peacock’s view of policy leading to an awareness, more normally associated with ‘Austrian’ economists, of the unintended consequences of intervention. He was also wary of theoretical approaches that viewed people as ‘passive adjusters’ to policy instruments instead of active bargainers. This can be seen in the titles of articles and books – The Regulation Game (1984), The Heritage Game (2008), ‘Bargaining and the regulatory system’ (1986) – and in papers (1981) emphasising that taxpayers can respond not merely by avoidance or evasion, but with various forms of political action.
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The critique of welfare economics

Peacock’s classical liberal approach to public policy had a direct bearing on his suspicion of Welfare Economics. By the 1950s the New Welfare Economics deriving from Vilfredo Pareto, based upon the inadmissibility of interpersonal comparisons of utility and the concept of ‘Pareto efficiency’, had become the established paradigm in normative theory. It had been saved from its seemingly highly restrictive applicability (most policy changes would make some people worse off and others better off, thus requiring the forbidden interpersonal comparisons of utility in any final assessment) by the development of the Hicks (1939)Kaldor (1939) compensation tests. Where the gainers from a change from one social state to another could compensate the losers there was a ‘potential Pareto improvement’ in social welfare, and it increasingly became accepted (in practical policy discussion if not in purely philosophical discussion) that changes of this nature were desirable (even if compensation were not actually paid). In essence, the pursuit of ‘economic efficiency’ came to be treated as a dominant aim of public policy, while the ability to characterise these Pareto efficient states in mathematical terms lent a spurious ‘scientific’ credibility to the resulting policy proposals.
The value judgements underlying Paretian welfare economics were widely considered very weak and indeed perfectly consistent with liberal principles. However, the pursuit of ‘efficiency’ through public policy was not always consistent with the tenets of classical liberalism conceived of as the defence of negative freedom. Much of Peacock’s writing is based on this essential point. In Peacock and Rowley (1975) the theme was set out at length. ‘It is an illusion to infer that Paretian welfare judgements lead to non-authoritarian solutions in matters of economic policy simply because they are derived from individual preferences’ (p. 2). The whole book is an attempt to re-establish a ‘classical political economy with modern trappings’ (p. 3) against the claims of Paretian welfare economics that had established a ‘dangerous hegemony in the economic theory of public policy’.
Ultimately the critique is founded on a rejection of ‘welfarism’ – the idea that social welfare should be derived entirely from the self-assessed utility of individuals. In Peacock (1992a, p. 104), for example, he explicitly remarks that ‘it is amazing to me how often it is taken for granted that if by some miraculous device, all preferences for social goods could be known … an imposed solution is then considered justified’. The actual taking part in a process of political decision-making is important – just as the exercise of judgement in matters of private exchange is important in developing people with qualities that permit the exercise of personal responsibility. The use of non-utility information to assess policy involves value judgements quite distinct from the idea that ‘individuals are the best judges of their own welfare’. Outcomes alone (and their consequences for the utility of individuals) are not all that count from a liberal perspective or indeed from the perspective of other radical and ‘New Left’ critiques of static welfare theory (see Peacock and Rowley, 1975, pp. 69–76).Sen’s (1970) celebrated proof of the impossibility of a Paretian liberal, while clearly drawing attention to potential conflicts between formal social choice theory and liberalism, is nevertheless criticised by Peacock and Rowley (pp. 80–3) for advancing an inadequate condition of ‘minimal liberalism’.
Although Peacock saw the classical liberal approach to both private and public choice as supporting the claims of negative liberty, he was not a fully fledged ‘process liberal’, such as Ludwig von Mises. Mises and others of the ‘Austrian School’ conceived economic life as entirely about change and dynamic market processes. These processes would never come to rest and the time path could not be determined in advance. Normative assessment could therefore not be in terms of the achievement of particular end states, but had to rely on the compatibility of the process itself with desirable features – such as the maintenance of an open society and individual liberty.
Peacock had greater affinity with the German neo-liberals, whom he categorised as ‘end state’ liberals (Peacock and Willgerodt 1989b, p. 3). His knowledge of German and his acquaintance after the war with Herbert Giersch at the LSE introduced him to the work of Walter Eucken and other ‘ordo-liberals’. Ludwig Erhard, one of the main architects of West German post-war reform, was associated with the neo-liberals and is widely credited with the implementation of the Soziale Marktwirtschaft (a term coined by Alfred Müller-Armack). Peacock and Willgerodt (1989a) edited a set of translations of some of the major contributors to this German neo-liberal tradition including Walter Eucken, Franz Böhm, Wilhelm Röpke, Alfred Müller-Armack and others.
The distinguishing feature of the ordo-liberals compared with the more libertarian followers of Mises and Hayek was their conviction that the state had a crucial role to play in ensuring that various undesirable outcomes were avoided. A central task, for example, was to ensure that market processes did not lead to excessive accumulations of private monopoly power. Such power was dangerous because it could be used to establish political privilege and undermine the competitive liberal order. Mises and others might argue that no position was immune from new entry and technical change in the very long run, but this would not be true if the state itself began to fall under the influence of powerful private interests. Similarly, intervention to try to place some limits on income inequality was accepted as a necessary part of maintaining political support for an essentially liberal economic system. This went further than measures to relieve abject destitution, but not as far as a comprehensive ‘social welfare state’ – which itself would be a threat to liberalism (Peacock and Willgerodt (1989b, p. 12). Maintaining a reliable and non-inflationary currency was also a matter of central importance to the neo-liberals, as the disastrous consequences for liberalism of the Weimar inflation were still a matter of recent experience.
Where, or within what limits, in the interventionist spectrum the liberal order might find a sustainable location was a matter for continuing investigation and argument. But the desire, for example, to maintain competition by preventing mergers above a certain size or by forbidding particular restrictive agreements (even if these were entirely voluntary in nature) implies that certain types of social ‘outcomes’ matter. In this sense classical liberals such as Adam Smith and John Stuart Mill were ‘end state’ liberals even if their ultimate interest was to defend a system of ‘natural liberty’ that gave maximum scope for market processes and the exercise of individual choice.
Peacock fitted into this ‘classical’ historical tradition. It was a tradition deeply suspicious of Welfare Economics. His support for competition, for example, did not derive from the First Theorem of Welfare Economics that a perfectly competitive equilibrium (in the absence of externalities) was Pareto efficient. Nor did he think that it made any sense for policy to aim at approximating perfectly competitive conditions – which would have the effect of expunging conscious rivalry from the economic system. The case for competition in classical liberalism was based on a suspicion of concentrated private power and a desire to see these subject to new entry in the interests of economic progress. It was not concerned with the pursuit of limiting cases where universal price taking (the absence of all economic power) became the aim of policy.
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Policy areas

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The ‘big questions’ of government growth and the role of the state may have formed the thematic material that permeates Peacock’s work, but it was his interest in particular areas of policy for which he is best known. He had a lifelong interest in education, perhaps because, as a liberal, he saw it as a means of enabling the population to live independently, supporting human capital accumulation, and resisting the rise of dependency and the purely redistributional state. He also accepted that there were particular problems in education markets related to the public benefits associated with a well-educated population and the transactional hazards encountered in educational finance.
His paper with Jack Wiseman (1964), ‘Education for democrats’ advocated the development of a voucher scheme that would give parents the financial resources to purchase educational services from competing suppliers. On the demand side it was opposed by those who thought that parents could not be trusted to make such important decisions on behalf of their children, and on the supply side it was challenged by an educational establishment that, like all producer interests, preferred its customers not to have access to possible alternatives. State paternalism and state supply were to win the day for many years to come and Peacock moved away from any advisory capacity in Liberal party circles.
He did not withdraw from the debate however, and in 1978 took up a post at the University College at Buckingham, an institution that rejected direct government finance and relied upon student fees. He was Principal of the College (1980–83) and upon achieving a Royal Charter became the first Vice-Chancellor of the University. At some professional risk to himself, Peacock signalled his view that financial support for human capital accumulation in higher education should be directed through the students and not be assigned by bureaucratic and centralised formulae direct to the institutions themselves. Given the introduction of student loans in recent years he could at least reflect on the advance of this principle in higher, if not in primary or secondary, education.
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Peacock’s liberalism showed itself consistently in his continuing defence of devolved decision making – if possible to the level of the individual. He was a member of the Royal Commission on the Constitution (the Kilbrandon Commission) that reported in 1973. Essentially, the majority report recommended directly elected Scottish and Welsh assemblies with specified devolved powers – a model that was eventually adopted in the Scotland Act 1998 and the Government of Wales Act 1998. With Lord Crowther-Hunt, Peacock wrote a Memorandum of Dissent to the 1973 report advocating greater decentralisation using a federal model closer to the German system. In addition to assemblies for Scotland and Wales there would be five further assemblies for regions in England – all with more substantial powers than those recommended by the majority report.
Amongst the arguments motivating the note of dissent Peacock particularly emphasised two. As he put the case 25 years later (1997a, p. 267) ‘I still hold that partial devolution is an essentially unstable position’. The English regions would not long tolerate the greater influence exerted by devolved Scottish or Welsh governments. Of even greater importance, however, was his view that devolving the existing (and over-extended) functions of government would do little to empower individuals. Another political and bureaucratic layer of government controlling expenditure flows might simply empower the new representatives and officials and embolden local rent-seeking behaviour. ‘The possibility was not considered that some of these functions might be carried out in different ways … or might be returned to the private sector’ (Peacock, 1976, p. 217).
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The same theme of encouraging personal responsibility and choice is revealed in Peacock’s role as a member of the Inquiry into Provision for Retirement in 1984. Although he accepted that the economist as a technician should not have a privileged role in setting policy objectives, he also took the view that the clear articulation of the normative principles underlying policy was essential to any rational consideration of alternatives (1992b). When committee members were invited to list their own preferred criteria for pensions policy, Peacock (1997a, p. 320; 1997b) specified a system compatible with consumer sovereignty, based upon a minimum required standard for pensions, permitting personal saving to meet the standard, encouraging low transactions costs and, finally, conducive to the mobility of capital and labour.
Once more, Peacock’s willingness to extend choice in this area by encouraging personal and portable pensions above a minimum standard met with resistance, although the committee agreed on a proposal to abolish the State Earnings Related Pension Scheme (SERPS). This was opposed by the Treasury at the time, although a highly complex system of ‘contracting out’ was devised. SERPS was eventually abolished in 2002 and greater flexibility and consumer choice have characterised the reform of retirement provision in the second decade of the 21st century.
It is pertinent to note that personal payments by the relatively poor into pensions or education would be assisted by the state, and Peacock was attracted by the use of finance raised at death. Here he followed J. S. Mill in favouring a tax structure that encouraged wide dissemination of estates and taxation according to the circumstances of the beneficiary rather than the donor. Peacock and Rizzo (2002) also discussed the proposal of the Italian writer Rignano to tax inherited property at progressively higher rates on successive transfers at death. Many of these ideas Peacock considered impractical, but the aim was clear – ‘to produce greater equality in the distribution of wealth for the purpose of giving individuals the means to investment according to their own assessment of their welfare’ (Peacock, 2010, p. 137).
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Broadcasting and the arts
In 1986 Peacock was appointed Chairman of the Committee on the Financing of the BBC. It was widely assumed that, as a noted economic liberal, he had been appointed to recommend the abolition of the licence fee and its replacement by advertising revenue. In fact the report (Home Office, 1986) concentrated more on the development of competition in the production of public service content and the facilitation of subscription and pay per view services that rapid technological change was making possible. Important recommendations for example were that the more popular BBC Radio 1 and Radio 2 stations should be privatised and that both ITV and the BBC should source at least 40 per cent of their output from independent producers. The licence fee was to be retained for a further period of time, but capped and indexed to inflation.
In his later writing (1997a, 2004) Peacock’s suspicion of state-sponsored monopoly and his support of the normative principle of consumer sovereignty led him to oppose the channelling of licence fee revenue exclusively through the BBC. This in no way implied that he rejected out of hand the case for public service broadcasting. Various educational and other cultural objectives might lead to a case for assistance to certain types of output. He therefore recommended (2004, p. 45) that public service broadcasting should be financed through a hypothecated ‘licence fee’ replacement. The allocation of the available budget would then be overseen by a new council with representatives of viewers and listeners making up half of its membership. Crucially, bids for resources could be made not merely from the main terrestrial channels, but also from cable and satellite channels and for a range of purposes – including making marginal changes to the quality or accessibility of particular projects. Peacock argued that such a system would be more conducive to new entry, technical progress and ‘workable competition’. The system by which the BBC received licence fee revenue and a few other broadcasters with public service requirements were regulated separately harked back to an era when spectrum scarcity severely curtailed the number of suppliers and technical non-excludability made it hard to charge for services in the market.
This liberalisation of public service broadcasting did not imply privatisation of the BBC and its transformation into a public limited company. Apart from any other consideration, property rights in past programmes financed by generations of licence fee payers would give a powerful competitive advantage to the BBC. The international reputation of the BBC in areas such as news and current affairs was also an asset that required protection. Peacock suggested that a preferable route would be to transform the BBC into a non-profit-making corporation similar to the National Trust.
To understand Peacock’s approach to broadcasting it is necessary to bear in mind that he saw ‘public service’ elements as inextricably linked to related issues such as education, the preservation of the cultural heritage and the encouragement of the arts more generally. As noted above, he supported the idea of vouchers in education and extended this idea to consider the possibility of vouchers for museums, art galleries, concerts, libraries and a whole range of other ‘cultural’ activities (1993, pp. 122–8). He speculated that technical advance might even permit consumers to access a certain quantity of public service programming within a competitive environment in which pay per view television became the norm.
In general Peacock preferred subsidies to go to people rather than organisations, and this led him into continual conflict with vested interests in the world of the arts, culture and the media. In a chapter entitled ‘How to lose friends and alienate people’, Peacock (1993) describes his membership of the Arts Council of Great Britain and Chairmanship of the Scottish Arts Council 1986–92. He entirely endorsed John Maynard Keynes’s view that the education (and hence preference formation) of the public was the main objective, and that subsidies to single companies ‘were only temporary devices, rather like research and development expenditure, to give them a start in life’ (1993, p. 118). Giving people the ability to access cultural events at subsidised prices would help, as experience accrued, to change preferences and lead to expenditure on the arts becoming self-sustaining.
This view of arts subsidies simply reflected his approach to the welfare state as a whole. ‘The true function of the welfare state is to create the circumstances which render it unnecessary’ (2010, p. 140). Hard to identify in particular policy areas and, in the eyes of many, doomed to fail in the face of the realities of democratic politics and public choice, this youthful statement of the classical liberal ideal nevertheless provides the key to Peacock’s entire corpus of work in the economics of public policy.
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Selected works

1949. The National Insurance Funds. Economica, New Series, 16(63), 228–42.

1950. Reform of Income Tax and Social Security Payments, Liberal Party Yellow Book.

1952. The Economics of National Insurance. William Hodge and Co.

1954a (with F. W. Paish). Economics of dependence (1952–82). Economica, New Series, 21(84), 279–99.

1954b (with H. C. Edey). National Income and Social Accounting. Hutchinson University Library, London.

1958 (with R. A. Musgrave). Classics in the Theory of Public Finance. Macmillan, London.

1961 (with J. Wiseman). The Growth of Public Expenditure in the United Kingdom. Princeton University Press, Princeton.

1964 (with J. Wiseman) Education for democrats. Hobart Paper 25, London, Institute of Economic Affairs.

1972a (with C. K. Rowley). Pareto optimality and the political economy of liberalism. Journal of Political Economy, 80(3), 476–90.

1972b (with C. K. Rowley) Welfare economics and the public regulation of natural monopoly. Journal of Public Economics, 1(2), 227–44.

1975 (with C. K. Rowley) Welfare Economics: A Liberal Restatement. York Studies in Economics, Martin Robertson.

1976. The political economy of the dispersive revolution. Scottish Journal of Political Economy, 23(3), 205–19.

1978a. The problem of public expenditure growth in post-industrial society. In: Post-Industrial Society (ed. B. Gustafsson). Croom Helm, London. Reprinted in Peacock (1979), pp. 105–17.

1978b. The economics of bureaucracy: an inside view. In: The Economics of Politics, Readings 18. Institute of Economic Affairs, London.

1981 (with F. Forte) eds. The Political Economy of Taxation. Basil Blackwell, Oxford.

1984. (ed.) The Regulation Game: How British and West German Companies Bargain with Government. Basil Blackwell, Oxford.

1985 (with F. Forte) eds. Public Expenditure and Government Growth. Basil Blackwell, Oxford.

1986 (with M. Ricketts). Bargaining and the regulatory system. International Review of Law and Economics, 6, 3–16.

1989a (with H. Willgerodt) eds. Germany’s Social Market Economy: Origins and Evolution. Macmillan, London.

1989b (with H. Willgerodt) eds. German Neo-Liberals and the Social Market Economy. Macmillan Press, London.

1992a. Public Choice Analysis in Historical Perspective. Raffaele Mattioli Foundation, Cambridge University Press.

1992b. The credibility of economic advice to government. Economic Journal, 102, 1213–22. Reprinted in Peacock (1997a).

1993. Paying the Piper: Culture, Music and Money. Edinburgh University Press.

1997a. The Political Economy of Economic Freedom. Edward Elgar, Cheltenham.

1997b. The future scope for self reliance and private insurance. In: Reforming the Welfare State (ed. H. Giersch). Springer, Berlin.

2002 (with I. Rizzo). The diffusion of economic ideas: the Rignano example. Revista di Diritto Finanziario e Sciencza delle Finanze, 4, 547–74.

2003. The Enigmatic Sailor. Whittles Publishing, Caithness.

2004. Public Service Broadcasting Without the BBC? Occasional Paper 133, Institute of Economic Affairs, London.

2008 (with I. Rizzo). The Heritage Game: Economics, Policy, and Practice. Oxford University Press, Oxford.

2010. Anxious to do Good: Learning to be an Economist the Hard Way. Imprint Academic, Exeter.

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Beveridge, W. H. 1942. Social Insurance and Allied Services. Cmd.6404, HMSO, London.

Breton, A. 1974. The Economic Theory of Representative Government. Macmillan, London.

Buchanan, J. M. and Tullock, G. 1965. The Calculus of Consent. University of Michigan Press, Ann Arbor.

Command Paper 5460-1. 1973. Royal Commission on the Constitution 1969-73; v.2. HMSO, London.

Downs, A. 1957. An Economic Theory of Democracy. Harper and Row, New York.

Friedman, M. and Friedman, R. D. 1962. Capitalism and Freedom. University of Chicago Press, Chicago.

Hicks, J. R. 1939. The foundations of welfare economics. Economic Journal, 49(196), 696–712.

Home Office. 1986. Report of the Committee on the Financing of the BBC, Cmnd.9824, HMSO, London. (The Peacock Report)

Kaldor, N. 1939. Welfare propositions of economics and interpersonal comparisons of utility. Economic Journal, 49(195), 549–52.

Keynes, J. N. 1891. The Scope and Method of Political Economy, 1st edn. Macmillan, London.

Lindahl, E. 1919. Just taxation – a positive solution. Translated by E. Henderson. Reprinted in Musgrave and Peacock (1958), pp. 168–76.

Niskanen, W. A. 1971. Bureaucracy and Representative Government. Aldine, Chicago.

Olson, M. 1974. The Logic of Collective Action: Public Goods and the Theory of Groups. Harvard University Press, Harvard.

Puviani, A. 1903. Teoria della Illusione Finanziaria. Sanaron, Palermo.

Samuelson, P. A. 1954. The pure theory of public expenditure. Review of Economics and Statistics, 36(4), 387–9.

Sen, A. 1970. The impossibility of a Paretian liberal. Journal of Political Economy, 78(1), 152–7.

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How to cite this article

Ricketts, Martin. "Peacock, Alan T. (1922–2014)." The New Palgrave Dictionary of Economics. Online Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2015. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 11 February 2016 <> doi:10.1057/9780230226203.3949

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