The Shaping of Public Economic Discourse in Postwar America: The 1947 Meat Shortage and Franco Modigliani's Meat Plan

Research in the History of Economic Thought and Methodology, Vol. 33, n. 1, 2015

46 Pages Posted: 22 Feb 2017

See all articles by Michele Alacevich

Michele Alacevich

University of Bologna - Dipartimento di Scienze Politiche e Sociali; Institute for New Economic Thinking (INET)

Pier Francesco Asso

University of Palermo

Sebastiano Nerozzi

Catholic University of Milan

Date Written: July 3, 2014

Abstract

This paper discusses the American debate over price controls and economic stabilization after World War II, when the transition from a war economy to a peace economy was characterized by bottlenecks in the productive system and shortages of food and other basic consumer goods, directly affecting the living standard of the population, the public opinion, and political discourse. Specifically, we will focus on the economist Franco Modigliani’s proposal for a “Plan to meet the problem of rising meat and other food prices without bureaucratic controls”. The plan prepared by Modigliani in October 1947 was based on a system of taxes and subsidies to foster a proper distribution of disposable income and warrant a minimum meat consumption for each individual without encroaching market mechanisms and consumers’ freedom. We will discuss the contents of the plan and its further refinements, and the reactions it prompted from fellow economists, the public opinion, and the political world. Although the Plan was not eventually implemented, it was an important initiative for several reasons: first, it showed the increasing importance of fiscal policy among postwar government tools of intervention in the economic sphere; second, it showed a third way between direct government intervention and full-fledged laissez faire, in tune with the postwar political climate; third, it proposed a Keynesian macroeconomic approach to price and income stabilization, strongly based on econometric and microeconomic foundations. The Meat Plan was thus a fundamental step in Modigliani’s effort to build the “neoclassical synthesis” between Keynesian and Neoclassical economics, which would deeply influence his own career and the evolution of academic studies and government practices in the United States.

Keywords: Price Controls, Franco Modigliani, Postwar Reconstruction, Postwar Economic Policy

Suggested Citation

Alacevich, Michele and Asso, Pier Francesco and Nerozzi, Sebastiano, The Shaping of Public Economic Discourse in Postwar America: The 1947 Meat Shortage and Franco Modigliani's Meat Plan (July 3, 2014). Research in the History of Economic Thought and Methodology, Vol. 33, n. 1, 2015, Available at SSRN: https://ssrn.com/abstract=2919832

Michele Alacevich (Contact Author)

University of Bologna - Dipartimento di Scienze Politiche e Sociali ( email )

Strada Maggiore 45
Bologna, 40129
Italy

Institute for New Economic Thinking (INET) ( email )

300 Park Avenue South, 5th Floor
New York, NY 10010
United States

Pier Francesco Asso

University of Palermo ( email )

Viale delle Scienza
Palermo, Palermo 90128
Italy

Sebastiano Nerozzi

Catholic University of Milan

Largo Gemelli 1
Milan, MI Milano 20123
Italy

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