The Quest for Commodity Price Stability: Australian Economists and 'buffer stocks

The purpose of this paper is to explore the interaction of Australian economists with various ‘buffer stock ’ schemes propagated immediately before, during and after the Second World War. Though at heart the very simple and ancient idea of maintaining commodity prices by accumulating stocks when prices are falling, and selling stocks when prices are threatening to rise too high, the idea of buffer stocks was extended in the interwar period by a number of prominent economists into a device for achieving macroeconomic stability more generally. Australian economists were sympathetic to these broad interpretations, consistent as they were with their own emerging advocacy of Keynesian demand management in an international context. In the end these schemes never went anywhere much, however, cast aside in favour of institutions deemed by the major powers to be more important. Buffer stocks survived in various schemes for individual commodities, and the broader conception lived on in the advocacy of a core group of economists, but this paper offers an account of their impact during a time and in a place in which they seemed to promise much