Edward Filene

Is the value of an idea in its creation or implementation?

Perhaps this conundrum is too nuanced to parse out in the world of policy. But the concept of value in ideas prior to their implementation—their untapped potential—is precisely what makes think tanks tick.

Digging through The Century Foundation archives at the New York Public Library, I came across an idea that was implemented fifty years too late.

The “intellectualization of American politics,” as articulated by the late U.S. adviser to the Kennedy administration and former TCF chairman, Adolf A. Berle, can be seen in the late 1920s and early 1930s. During this time, ideas that influenced politics as they circulated throughout the White House and on Capitol Hill often originated from within intellectual conglomerates, i.e. think tanks.

Adolf A. Berle

Though think tanks were a relatively new phenomenon, their representative “intellectuals”—or veterans in their respective fields of research—were able to assert their influence in the political arena. As think tank associates came to communicate directly with politicians, the two worlds realized the intellectual analysis of (inter)national problems could be useful in governmental life.

Yet hand-holding between think tanks and government officials was (and continues to be) a tricky business. Shortsighted regime or party incentives have a tendency to distort societal needs and the urgency required to address mounting economic and social pressure.

The Proposal: Institute for International Economics

One case of missed opportunity to enact policy can be seen in 1929, when Edward Filene, founder of The Century Foundation (TCF), pushed to create an Institute for International Economics.

In 1929, Filene and his TCF cohorts recognized the growing need for a neutral, international body to conduct macroeconomic research on state economies that were increasingly intertwined and mutually dependent on one another’s solvency.

Though there were a host of international organizations in existence (League of Nations, International Chamber of Commerce, Foreign Policy Association, Council on Foreign Relations, and Institute of Economics), none—according to Mr. Filene—adequately addressed the economic dilemmas that shaped international interaction.

“In proportion to the importance of the economic factors in international affairs, the ignorance [surrounding] of each of them, and the lack of concerted action to comprehend and deal with them, is almost sensational.”

The planned scope for the Institute for International Economics was to conduct objective, scholarly study on the way economic shifts impacted the social and political lives of nation-state societies, and how these developments influenced global affairs.

It was Mr. Filene’s belief that in the absence of research on up-to-date monetary booms and busts, political infrastructures would crumble.

The Correspondence

Dr. Edvard Beneš

In a letter toDr. Edvard Beneš, the minister of foreign affairs (and later president) of Czechoslovakia in April 1929, Filene wrote that in order to secure and retain employment of citizens to avoid the radical upheaval that arises from marginalization, a multinational body was required to advise advancing and stagnant economies.

Failure to understand how individual nations influenced the global monetary system, and the way international decisions impact internal political structures, would be to compromise world peace and the stability of governments.

Unlike the politically correct, tempered policy recommendations of today, Filene was passionate in the language of his declaration to the Eastern European leader:

“This proposal is based on the conviction that ignorance of the [economic] facts is a major cause of international friction.”

Whether perceived as brash or eloquent, Mr. Filene and his team at TCF were highly progressive in their understanding of the global economy—and the danger in economic marginalization.

The “What If?” Factor

History reminds us that it was not until after World War II that international, regulatory financial bodies, the International Monetary Fund and the International Bank for Reconstruction and Development (today, the World Bank), were created.

And it was not until 1981 (over fifty years after Filene’s original proposal) that the privately run Institute for International Economics was founded to conduct research on macroeconomic dilemmas that plague diplomacy and development.

It is easy to see a somber story in the failure of the U.S. government and its global allies to enact such an integrative institution.

What if there had been an organized, international body with the tools and leverage to conduct research on enlightening the global community on the danger of Germany’s economic devastation?

Could a world war—its human rights atrocities and millions of victims that continue to haunt us today—have been spared? The idea, after all, was there.

This hypothetical question is both disheartening and impossible to answer.

But perhaps the silver lining is despite its uptake as an institution, the ideas that spawned the proposal for the Institute for International Economics infused other economic reform policies that would combat unemployment, provide social safety nets, and address socioeconomic inequalities.

The Productivity of Policy Wonks

TCF’s work with FDR would influence pivotal New Deal legislation, as seen in the Securities Exchange Act of 1934.

Born within a knowledge-based institution, the conviction that the study of macroeconomics relates to political health of a democracy (and actual well-being of its citizens) has continued to live on and infiltrate domestic and foreign policy.

Think tanks, as elusive as they may seem to non-policy wonks, have the power to develop and reinvent ideas that do not conform as easily as those based on a partisan whim. They have the potential to influence revolutionary policy.

And they may even, if we are being generous, be able to prevent devastating global warfare.