HENDERSON, Hubert Douglas

Henderson was an economist and journalist, a close associate of John Maynard Keynes. He served as editor of The Nation and later as a member of the Economic Advisory Council and the Oxford Economists’ Research Group.  

Henderson was both in Beckenham, Kent on 20 October 1890, the son of a bank manger. The family moved to Scotland when Henderson was a boy, and he was educated at Aberdeen grammar school and then at Rugby School before going up to Emmanuel College, Cambridge in 1909. He originally intended to study mathematics, but after disappointing early results, switched instead to economics, attending lectures by John Maynard Keynes among others, and achieved first-class honours in the economics tripos in 1912. That same year he was also president of the Cambridge Union. 

After graduation Henderson studied for the bar, while teaching economics at Cambridge and for the Workers’ Educational Association. After the outbreak of the First World War he volunteered for the army, but was rejected on grounds of ill health. He then joined the Board of Trade, where he took a post in the statistical section under the direction of Walter Layton. In 1917 he became secretary of the Cotton Control Board. Earlier, in 1915 he had married Faith Bagenal, daughter of an Irish barrister. 

After the war Henderson returned to Cambridge, where he lectured on economics and was a fellow, first at Clare College and then at King’s College. During this period he renewed his acquaintance with John Maynard Keynes, who became a lifelong friend and supporter. Keynes commissioned Henderson’s best-known book, Supply and Demand, for a series of economics handbooks which he was editing, and in 1923 offered Henderson the editorship of the weekly magazine The Nation and Athenaeum (more generally known as The Nation) which Keynes had just purchased. During the 1920s they collaborated frequently, and Henderson published many articles by Keynes and members of his circle. 

In 1927, Walter Layton invited Henderson and Keynes to join the Liberal Industrial Inquiry Group, an economic think-tank established by the prime minister, David Lloyd George. The result of the Group’s work was a report entitled Britain’s Industrial Future, which became standard Liberal economic policy. Henderson stood, unsuccessfully, for parliament in 1930 as the Liberal candidate for Cambridge University; this was his sole foray into politics. In 1930, with Ramsay MacDonald’s Labour Party in power, Henderson resigned his post as editor of The Nation and joined the Economic Advisory Council established by MacDonald, with a brief to chart a way forward out of the deepening economic depression. 

In 1934 Henderson left the Council and went to Oxford, where he became a fellow of All Souls College. In 1936 he, Roy Harrod and James Meade founded the Oxford Economists’ Research Group, with Henderson serving as chair from 1936-8. Among other activities he helped to found the journal Oxford Economic Papers. From 1939-44 Henderson served as an economic advisor to the Treasury, carrying on despite suffering a stroke in 1942. In 1944 he joined the Royal Commission on Population, serving as its chair from 1946-9, and was also chairman of the Statutory Committee on Unemployment Insurance from 1945-8. He was appointed Drummond Professor of Political Economy at Oxford in 1945. 

Henderson was knighted as knight bachelor in 1942. He was made a fellow of the British Academy in 1948 and elected president of the Royal Economic Society in 1950. He was elected warden of All Souls in 1951, but fell ill and was forced to retire before he could take up the appointment. He died in Oxford on 22 February 1952. 

Henderson wrote a large number of papers on economics, many of which are collected in Clay (1955). They show the development of his economic thought over time, from fairly ‘pure’ abstract Keynesianism in the 1920s to an interest in applied economics from the mid-1930s onward. Supply and Demand, his most popular work, reprinted a number of times, is a standard Keynesian approach to the subject, emphasising as it does the levers for controlling and regulating demand. Perhaps his most interesting work is Can Lloyd George Do It?, co-written with Keynes; this is a collection of their work from The Nation, and argues the case for increased public expenditure in times of economic downturn. This is considered one of the first works to discuss the multiplier effect of government spending, though it does not do in any detail. 

Henderson’s Rowntree paper on trade cycles contains nothing that will surprise any student of Keynes. His brief was to provide a simple explanation of trade cycles along with some idea of when the post-war trade slump – exacerbated, as he says, by ongoing political events such as the French occupation of the Ruhr – might come to an end. Henderson begins by offering a number of caveats. First, it is not possible to provide entirely accurate predictions about trade because there are too many imponderables and unforeseen infuences. Second, the science of economic prediction was still very much in its infancy; plenty of statistics were being collected, but the techniques for bringing them together and analysing them were still lacking. 

That said, Henderson then goes on to offer a number of observations. He describes economic cycles, and shows how booms and busts each have their own momentum. Until that momemtum expires, neither expansions nor contractions in trade can be easily reversed; one must simply wait until the pendulum begins to swing back the other way. Henderson attempts to reassure his audience that the trade downturn they are currently experiencing is part of the natural order of things; the downturn would have happened anyway, regardless of the First World War and subsequent upheavals. He also notes how some industries such as shipbuilding and engineering tend to suffer more heavily, while others such as consumer goods ‘do not undergo variations of so wide a character.’ 

Returning to the science of prediction, Henderson hopes that in future, better prediction will make it possible to smooth cycles out so that the impacts of boom and bust are not so severe. Meanwhile, he says, there are some things that could be done to reduce the impact of the downturn and bring about revival more quickly: he advocates more central bank cooperation, particularly between the Bank of England and the Federal Reserve, to regulate money supply, and for more money to be pumped into the economy to stimulate consumption.  

Major works 

Supply and Demand, 1922. 

The Cotton Control Board, 1922. 

(with J.M. Keynes) Can Lloyd George Do It?, 1929. 

The International Economic Problem, 1946. 

Clay, H. (ed.) The Inter-War Years and Other Papers:A Selection from the Writings of Hubert Douglas Henderson, Oxford: Clarendon, 1955. 

Haworth, B., ‘Henderson, Hubert Douglas’, in in D. Rutherford (ed.) Biographical Dictionary of British Economists, Bristol: Thoemmes Press, 2004. 

Howson, S., ‘Henderson, Sir Hubert Douglas’, in Oxford Dictionary of National Biography, Oxford: Oxford University Press, 2004. 

Howson, S. and Winch, D., The Economic Advisory Council, 1930-1939: A Study in Economic Advice During Depression and Recovery, Cambridge: Cambridge University Press, 1977. 

Wilson, T. (ed.), Sir Hubert Henderson, 1890-1952, Oxford: Oxford University Press, 1953.