Childhood & Early Life
John Richard Nicholas Stone was born on 30 August 1913, in London, United Kingdom. His father, Gilbert Stone, was a distinguished barrister, who later became the judge at the High Court of Madras, India. His mother’s name was Elsie. He was their only child and was lovingly called Dick.
Brought up in a happy family, Richard grew up to be a kind, loving and considerate child, having great affection for his parents. He hated personal clashes; yet, it was very difficult to divert him from his chosen path.
After beginning his education at Cliveden Place Preparatory School, Richard moved to Westminster School in 1926. His father, who wanted him to become a lawyer, believed that an in-depth knowledge of classics was essential for a legal career and therefore, Richard studied mainly classics, learning very little mathematics and science.
Having very little interest in classics, Richard did poorly in class. He later said that had he studied in the science section, he might have done better. Nonetheless, he passed his school certificate examination in early 1930, excelling in Greek New Testament.
In the summer of 1930, his parents moved to Madras, where his father was appointed a judge at the high court. Richard accompanied them at the advice of his headmaster, leaving school before he took his higher certificate examination, having a good time there.
In 1931, Richard Stone returned to London, subsequently being enrolled at Gonville and Caius College, Cambridge, to study law. But very soon, he lost interest in the subject, never opening his law books after the Christmas of 1932. Instead, he spent his time reading Irving, Fisher, Marx, Freud, and Lenin.
As the Great Depression set in, he began to believe that the world needed more economists. Therefore in 1933, after doing badly at the Law Tripos, he switched to economics, studying first with Richard Kahn of King’s College and then with J.W.F. Rowe of Pembroke and finally with Gerald Shove.
The person to influence him the most during his college years was Colin Clark, Professor of Statistics. Clark was then working on national income and outlay. For this, he was gathering estimates of income, output, consumers’ expenditure, government revenue etc. Stone found the work highly fascinating and the two became friends.
During his undergraduate studies, he also met John Maynard Keynes. He invited Stone to become a member of his Political Economy Club which met in his room every Monday. At Keynes’ invitation, he also gave a talk at this meet.
In his last year as an undergraduate student, he took up a new project, estimating the parameters of the Cobb–Douglas production function. However, his work failed to interest his professor, Arthur Cecil Pigou.
In 1935, he received his degree in economics, getting high marks. Thereafter, he was offered a research scholarship by the college; but since he had studied economics only for two years, he thought himself unworthy of it. Moreover, his father was anxious to see him suitably employed and found him a job.
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In 1935, Richard Stone joined Lloyd’s broking firm as an underwriter at a salary of fifty pounds. His father had hoped that if he worked at this position for five years, he would gain membership of one of Lloyd’s underwriting syndicate at a lower rate.
In June 1937, while still employed at Lloyds, he was asked by Colin Clark to take over ‘Trends’, his feature at the periodical, ‘Industrial Illustrated’. As there was very little work pressure at Lloyds, he happily took it up, running it till May 1939 for five pounds a month.
Every month, he and his first wife, also an economist, produced a graph of British economic data time-series, adding commentary on their latest movement, also writing articles on topical subjects. Although their work was minor, it soon began to attract attention.
Early in 1939, he was asked by Noel Fredrick Hall if he was willing to join the Ministry of Economic Warfare in the event of a war and he had agreed. When the Second World War started on 2 September, he reported for duty. By then, he had left ‘Trends’.
Stone remained at the Ministry of Economic Warfare for nine months, where his chief job was to keep records of imports undertaken by neutral countries. While doing so, his team discovered that Italian oil tankers, which until then were moving in a predictable way, had suddenly begun to behave differently.
After studying their courses, he came to the conclusion that the ships would reach their destinations on 10 May 1940, and assumed that Italy would declare war on that very day. His seniors refused to believe him, reprimanding him for making such wild guesses. However, he was later proved right.
In June 1940, Stone was transferred to Central Economic Information Service of the Offices of the War Cabinet, where he worked with James Meade on a survey of the economic and financial situation of the country. By the end of the year, they had developed a system of national accounts.
In 1941, their report was published as the second part of a white paper titled, ‘An Analysis of the Sources of War Finance and an Estimate of the National Income and Expenditure in 1938 and 1940’. The work is now deemed to be a forerunner of his work ‘National Income and Expenditure.’
From 1941, Stone started working independently, being put in charge of the national income section. Here, he continued to work on national accounts, producing a white paper with current figures every year at the budget time. Meanwhile in 1942, he published a complete set of national accounts for the United States.
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In 1944, he was sent to Ottawa to try and reach an agreement with his American and Canadian counterparts on national accounting taxonomy. Their meeting was very productive, making him internationally known.
Director of Applied Economics
In 1945, as the Second World War came to an end, Richard Stone was appointed director of the newly founded Department of Applied Economics (DAE) at Cambridge, a position he held until 1955. Also from 1945, he began to be associated with various international bodies on the development of national accounts.
In September 1945, before joining the Department of Applied Economics, he traveled to USA, visiting the Institute of Advanced Study at Princeton for three months. Here, he met Alexander Loveday, the head of the Intelligence Department at the League of Nations.
At the request of Loveday, he started working for the Committee of Statistical Experts at the League of Nations, preparing his report on national income statistics. His report was published by United Nations, Geneva, in 1947, under the title of ‘Measurement of National Income and the Construction of Social Accounts’.
On joining DAE possibly towards the end of 1945, he started research programs on economic theory and statistical methodology. His work attracted the attention of many well-known economists, including Richard and Nancy D. Ruggles. At their insistence, Stone set up National Account Research Unit under his directorship at the department.
The unit functioned at Cambridge from 1949 to 1951, formulating ‘A Simplified System of National Accounts’ (SSNA), which was published by Organization for European Economic Cooperation in 1950. Later, they also developed ‘A Standardized System of National Accounts’, which was published by the same organization in 1952.
In addition to formulating the simplified systems on national accounts, they also helped individual countries in preparing their national accounts, training statisticians from member countries. Consequently, economists from various European countries began to gather at Cambridge.
Concurrently with working on national accounts, Stone also began working on other aspects of applied economics, especially focusing on consumer behavior analysis, publishing number of papers on it. Under his guidance, the DAE became one of the best institutes in applied economics, producing an astounding amount of work.
In 1955, Stone was appointed P.D. Leake Professor of Finance and Accounting at the Cambridge University. In the late 1950s, he began a new project with Alan Brown, bringing together various ongoing studies at the department in order to build an econometric model of the British economy, thus beginning Cambridge Growth Project.
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Concurrently with working with Alan Brown, he continued to work independently, publishing ‘Social Accounting and Economic Models’ in 1959 and ‘National Income and Expenditure’ in 1961. Both these works were co-authored with his third wife, Giovanna Croft-Murray.
In 1962, Stone and Brown published their idea in ‘A Computable Model of Economic Growth’. It was the opening volume of their twelve-volume series, ‘A Programme for Growth’. Also in the same year, they developed the first Social Accounting Matrix (SAM).
From 1965, Stone started working on social demography and demographic accounting with the intention of introducing education and training into the “Growth Model.” Subsequently, he was asked by the Organization for Economic Cooperation and Development to prepare a report on the subject, which was published as ‘Demographic Accounting and Model-Building’ in 1971.
In 1970, Stone was appointed chairman of the Faculty Board of Economics and Politics and also a consultant at the UN Statistical Office. In the latter capacity, he prepared several reports, which in 1975 were published collectively by UN as ‘Towards a System of Social and Demographic Statistics’ (SSDS).
All through the 1970s, Stone continued to produce many seminal works, publishing ‘Keynes Political Arithmetic and Econometrics’ in 1980. In the same year, he retired from his position at the Cambridge University, but continued to serve the institution as professor emirates until his death.
In 1983, because of declining health, he gave up his position as the director of Cambridge Growth Plan. But as soon as he regained his health, he resumed his work, publishing ‘Development and Planning Economy: Environmental and Resource Issues’ in 1988.
Personal Life & Legacy
In 1936, Richard Stone married Winifred Mary Jenkins, who had also been a student of economics at Cambridge, having a daughter named Caroline with her. In 1940, their marriage was dissolved.
In 1941, Stone married Feodora Leontinoff, a very energetic and talented secretary at the National Institute of Economic and Social Research. She died in 1956 after a prolonged illness.
In 1960, he married Giovanna Croft-Murray née Saffi. Although she did not have formal training in economics, she was an enthusiastic partner in his works, coauthoring a number of books with him. She also played an important role in editing ‘A Programme for Growth’ (1962-1974).
In his last years, Stone was plagued by ill health. He died in Cambridge on 6 December 1991, at the age of seventy-eight. He was survived by his third wife, Giovanna, and daughter, Caroline.