‘Why Economists Disagree’: A Case Study in Consensus Building

Abstract

The title of this paper – “Why Economists Disagree” – takes its name from Fritz Machlup’s speech before the American Philosophical Society on November 12, 1964, five months after the fourth Bellagio Group conference of thirty-two non-governmental economists, convened by Machlup to rethink the international monetary system, and three months after the publication of the Group’s final report: International Monetary Arrangements: The Problem of Choice. Report on the Deliberations of an International Study Group of 32 Economists. In his speech, Machlup explained his decision to bring together economists from eleven countries, many of them chosen because they were well-known advocates for divergent, often feuding, schools of thought on the problems and solutions to problems facing the international monetary system in the 1960s, for an “inquiry into the sources of disagreement on international monetary prescriptions” (Machlup 1965, p.1).How did Fritz Machlup and the group of economists he assembled come to exert so much influence on exchange rates and adjustment issues? The current paper addresses this question, looking at Machlup’s own writing on the subject, his organization of the Bellagio Group conferences, the close working relationship Machlup built with the deputies of the Group of Ten, and the broad platform of joint conferences, papers and books that Machlup created to promote the work of the Bellagio Group.