LAYTON, Walter Thomas

Type

Person

15th March 1884 to 14th February 1966

Occupation

Biographical Text

Layton was best known as the editor who modernised The Economist and turned it once again into a serious intellectual force. He had previously been an academic economist, and worked with the Ministry of Munitions during the First World War. 

Layton was born in London on 15 March 1884. His parents were both professional musicians, and he himself was a boy chorister who sang at the diamond jubilee of Queen Victoria and the funeral of William Gladstone. He was educated at the St George’s Chapel choir school in Windsor, and then at the King’s School in London and Westminster City School before attending University College London. He graduated with a third-class degree in history in 1903, his academic work having been interrupted by professional duties with the Board of Trade, for whom he was compiling statistics.  

Layton then went to Trinity College, Cambridge, where he took first-class honours in the economics tripos of 1907. Along with John Maynard Keynes, he was appointed a university lecturer in economics in 1908, and from 1909-14 he was a fellow of Gonville and Caius College. He also gave lecturers for the Workers’ Educational Association and became an assistant editor at The Economist. Layton married Dorothea Osmaston, a Cambridge student and supporter of women’s suffrage, in 1910. 

When the First World War broke out, Layton resigned from The Economist (which had taken an anti-war stance) and joined the civil service. He served briefly on the Local Government Board – along with Benjamin Seebohm Rowntree – and then with the Board of Trade before joining the newly established Ministry of Munitions in 1915. He served most of the rest of the war with the Ministry as director of requirements and programmes.  

Layton accompanied the Milner mission to Russia in January 1917, which reported on ways of supporting the Tsarist government and keeping Russia in the war. He reported to the prime minister, David Lloyd George, that Russia was on the verge of a revolution (the first Russian revolution broke out only a few weeks after the mission left for home). In April, Layton accompanied Foreign Secretary Arthur Balfour to the USA in an attempt to negotiate American support for the war effort. For his wartime work, Layton was awarded the CBE in 1917, and he became a Companion of Honour in 1919. 

After the war Layton decided not to return to academia, preferring a more active role. He served briefly as director of the Iron and Steel Federation, but fell out with his colleagues over their attitude to trades unions; Layton believed that unions should have a larger say in the running of industry. He then spent a year as director of the economic and financial section of the newly formed League of Nations. Layton was a strong supporter of the League throughout its existence, but in 1922 he moved back into journalism, taking up a post as editor of The Economist. 

During his sixteen years as editor, Layton transformed The Economist. He managed the buy-out of the journal from its previous owners, the Bagehot family, and ensured its financial and editorial independence. As Ruth Dudley Edwards describes in her history of The Economist (1993), Layton set very high journalistic standards and made The Economist into an ideological force. The journal supported liberal political and social ideas, free trade and the League of Nations, and was firmly opposed to German rearmament and appeasement. 

Layton resigned as editor of The Economist in 1938, and was succeeded by Geoffrey Crowther. He was chairman of The Economist Group from 1944 until his death. He also served as chairman of the News Chronicle (1930-40) and The Star (1944-50). Layton was created a knight bachelor in 1930. 

During the 1920s Layton had stood three times for parliament representing the Liberal Party, without success. Nevertheless, from the late 1920s onward he became an increasingly authoritative voice on economics and international politics, and various times advised all three main political parties. He warned repeatedly against the rise of Germany, notably in his 1937 work Germany, the Last Four Years, co-authored with the anti-Nazi Austrian refugee Peter Drucker (the latter writing anonymously under the name ‘Germanicus’). 

During the Second World War, despite ill health, Layton served with the Ministry of Supply and Ministry of Production, and from 1942-3 was head of the Joint War Production Staff. As the war drew to an end, Layton revived his old ideas on international cooperation, and worked actively in support of both the United Nations and greater European cooperation. From 1949-57 he was vice-president of the Council of Europe Consultative Assembly. Layton received a peerage as Baron Layton in 1947, and thereafter served as the Liberal economic spokesman in the House of Lords. He also received the French Légion d’honneur. Layton died on 14 February 1966 at Putney Hospital in London. 

An Introduction to the Study of Prices, his first book, is a fairly standard account of the determinants of price, price cycles and fluctuations. The book is mainly notable for Layton’s rejection of the assertion that lower prices are good for the economy. Statistical analysis, says Layton, shows that lower prices are nearly always accompanied by lower wages as well, leading to an increase in poverty. Layton argues that economic factors are interdependent, to a greater degree that had hitherto been assumed. In the third edition of the book, written with Geoffrey Crowther, Layton and his co-author wonder if price stability is actually possible, or even desirable; it may be that a certain amount of flux is healthy in the economy. 

In The Relations of Capital and Labour, written in the aftermath of a period of prolonged industrial unrest from 1911-13, Layton argued that the relationship between capital and labour was fundamentally unfair, particularly when it came to the distribution of profits. Layton had no difficulty with the idea of profit in and of itself, but he made a distinction between ‘fair and reasonable profit’ and ‘the excesses of the competitive system’. He called for labour to have a greater voice in industry, and believed workers should receive a greater reward for their labour.  

Layton’s first Rowntree lecture was given in 1922, the year he took over as editor of The Economist. Britain was still in the grip of the post-First World War economic downturn, and Layton points out to his audience that the key to revival must come in the form of a renewal of international trade, particularly exports. Britain is dependent on food imports to feed its people, he says, and therefore exports must increase to balance the strong flow of imports. ‘We, more than any other nation, live by trade, and unless we are going to sink back into the level of a self-sufficing community, dependent upon our own produce, it is our primary interest to promote the greatest possible revival of international trade.’ 

The problems of international trade, he says, are political as well as economic. The collapse of some states like Austria, and the appearance of new, often strongly nationalistic entities in the place of the old Austro-Hungarian empire has led to significant disruption of European trade. But the war has also disrupted many of the old patterns of trade, both within the empire and outside it. New producers, new competitors have emerged. He describes trade as a ‘politico-economic’ issue and urges industrialists to get involved, rather than waiting for the politicians to solve the problem for them: ‘It is absolutely imperative for industrialists to think about world problems and the factors involved in the position of Europe to-day.’ Further, this is not a matter for capitalists alone: ‘there [must be] no thought of antagonism between the interests of Capital and Labour – both are in the same boat.’ 

To ensure that everyone in every industry, workers and employers alike, pulls together to solve the problems of reviving trade and facing down international competition, Layton calls for the formation of an industrial parliament, or national industrial council. He refers to a previous unsuccessful attempt to negotiate greater cooperation, the Industrial Conference of 1919, and urges that this body be revived. 

Successful international competition requires that costs come down, but that does not, says Layton, mean that wages must come down. As he had done in The Relations of Capital and Labour, Layton points out the fundamental inequalities in the distribution of wealth. One solution, he says, is to adopt wage schemes based on payment by results, which would encourage workers to work harder and therefore earn a greater share of the profit, but whatever solution is adopted, workers’ wages must be fair and equitable. Layton also criticises the unevenness of pay scales across the whole of industry, with some sectors paying much less than others for comparable work. He concludes by reiterating his call for a parliament of industry which would be tasked with developing an integrated national industrial policy. 

Layton’s second lecture, in 1926, to some extent picked up where the first left off. The economy as a whole is now performing well, he says, but there is no secret that exporting industries are lagging behind. He speaks once again of the need to boost exports, and offers his audience some hope; it is his belief that the overall volume of international trade will grow rapidly in the twentieth century. The only question is, can British industry take advantage of this growth to revive its own fortunes? 

That, in Layton’s view, is very much a moot point. The old patterns of international trade have changed and new competitive players are emerging. Layton describes how the USA is challenging Europe, and especially Britain, for dominance. Already, he says, America is becoming the lender of first resort for nations wishing to borrow. Further, the Americans are ‘developing new methods of production and of organisation – new relationships between Capital and Labour, and new standards of advertising. They are really creating something like a new structure of industry, and this may lead to extraordinarily economical and cheap production.’ 

With considerable prescience, Layton also predicts the eventual rise of Asia: 

There is the consideration – perhaps in the long run the most important of all – of what will happen to the nations of the world and to their trade when the great densely peopled nations of Asia begin to raise their level of production, and therefore of consumption, and approach more nearly to what we should call the Western standard of economic activity. 

This will doubtless lead to a great increase in trade, says Layton, but he sees the international centre of gravity shifting in time to the Pacific.  

What can British industry do to keep pace with change? Layton asserts that British industry still has its strengths. Despite the country being poor in natural resources, he states with misplaced confidence that Britain will remain pre-eminent in steel and shipbuilding for a long time yet. But there is no doubt that British industry needs to become more efficient, and he repeats his call for more cooperation between labour and capital. He argues too for higher wages, believing that these will stimulate productivity and, in the end, drive down costs through greater efficiencies elsewhere. Britain can continue to be competitive, Layton concludes, but success depends upon ‘the attitude of business leaders – their openness to new ideas, their willingness to learn, and to change and develop constantly in their attitude to the organisation of business.’ 

Major works 

An Introduction to the Study of Prices: With Special Reference to the History of the Nineteenth Century, 1912. 

(with G. Crowther) An Introduction to the Study of Prices, 3rd edn, 1937. 

The Relations of Capital and Labour, 1914. 

Is Unemployment Inevitable? An Analysis and Forecast, 1924. 

The Economic Situation of Great Britain, 1931. 

(with P.F. Drucker) Germany, the Last Four Years: An Independent Examination of the Results of National Socialism, 1937. 

How to Deal With Germany, 1944.

Bibliography

Edwards, R.D., The Pursuit of Reason: The Economist, 1843-1993, London: Hamish Hamilton, 1993. 

Groenewegen, P. ‘Walter Layton on The Relations of Capital and Labour (1914): A Marshallian Text Pur Sang?’, History of Economics Review 46, Summer, 2007. 

Grayson, R.S., ‘Layton, Walter Thomas’, in Oxford Dictionary of National Biography, Oxford: Oxford University Press, 2004. 

Hubback, D.F., No Ordinary Press Baron: A Life of Walter Layton, London: Weidenfeld and Nicolson, 1985. 

Witzel, M., ‘Layton, Walter Thomas’, in D. Rutherford (ed.) Biographical Dictionary of British Economists, Bristol: Thoemmes Press, 2004. 

Original Source

Lecture: ‘What can British manufacturers and workmen do to hasten the trade revival?’ 25 February 1922, York

Citation

“LAYTON, Walter Thomas,” The Rowntree Business Lectures and the Interwar British Management Movement, accessed March 29, 2024, https://rowntree.exeter.ac.uk/items/show/84.