# The London School of Economics: Fabians, the economics wars, and the making of an elite One institution tying together modern history: founded by Fabian socialists to train a governing class, arena of the Hayek-Keynes wars, home to Malinowski's anthropology, and a seedbed of world leaders. *This story parallel: The Chicago School and the rise of neoliberalism* *This story parallel: Freedom movements: how the colonized won their independence* *This story parallel: Jomo Kenyatta: from Johnstone Kamau to the verdict on independence* *This story parallel: Kenyatta in Britain: the fifteen years that made a leader* *This story parallel: Pan-Africanism: from the color line to independence* *This story parallel: Co-opt the moderate, bury the militant: the pattern of managed decolonization* *This story part of: Money and finance* *Nkrumah and Ghana: the first colony to fall parallel this story* *Hastings Banda: the Anglicized doctor who ruled Malawi parallel this story* *Keynesian economics: demand, depression, and the fight over full employment parallel this story* ## 1895 — A Fabian bequest pays for the new school The School was funded in large part by a bequest from Henry Hunt Hutchinson, a Fabian who left much of his estate to the Society on his death in 1894. As a trustee of the fund, Sidney Webb chose to use the money to set up the LSE rather than on propaganda. The Fabian source of the founding money is a documented fact of the School's origins. ## 1895 — Fabian socialists found the London School of Economics Sidney and Beatrice Webb founded the London School of Economics and Political Science, together with the Fabians George Bernard Shaw and Graham Wallas. Their stated aim was the scientific study of society and the training of people who could carry out practical social reform. The Webbs were leading members of the Fabian Society, which argued for gradual, evolutionary socialism rather than revolution. ## October 1895 — The School opens its first classes The LSE began teaching in October 1895 in rented rooms off the Strand, with a small number of lecturers and evening students. Early courses covered economics, statistics, political science and commerce, aimed partly at working people and public servants. William Hewins was the first director. ## c. 1895 — The founders aim to train a governing class The Webbs designed the School to supply Britain with a trained administrative and governing class grounded in the study of society. This fit the Fabian strategy of permeation, working from inside institutions to bring gradual reform rather than seeking sudden change. The founders stated this aim openly, and later historians such as Ralf Dahrendorf treat it as central to understanding the School. ## 1900 — The LSE joins the University of London In 1900 the School became part of a reformed University of London and the core of its new Faculty of Economics. This gave the LSE the power to award degrees and set it on the path to becoming a full university institution. The move turned a small Fabian venture into a recognised centre of higher learning. ## 1902 — A permanent home on Houghton Street The School moved into its own new building on Houghton Street, near Clare Market in central London, paid for with help from the philanthropist John Passmore Edwards. Houghton Street has been the heart of the LSE ever since. The permanent site marked the School's rapid growth in its first decade. ## c. 1916 — B. R. Ambedkar studies economics at the LSE Bhimrao Ambedkar, later the chief architect of the Indian constitution and a leader of India's Dalits, studied at the LSE and earned higher degrees in economics there. His time in London shaped his thinking on economics and rights. He is one of the School's most influential alumni in world politics. ## 1922 — Malinowski publishes Argonauts of the Western Pacific Bronislaw Malinowski, based at the LSE, published Argonauts of the Western Pacific, drawn from his long fieldwork in the Trobriand Islands. The book argued for close firsthand study of a living society and helped establish modern social anthropology. It set the method that the School would teach for a generation. ## 1927 — Malinowski takes the first chair of social anthropology Malinowski was appointed to the first Chair of Social Anthropology in the University of London, based at the LSE. From this post he led the School's rise as the leading centre of the subject in Britain. His functionalist approach studied how the customs of a society worked together to meet human needs. ## 1929 — Lionel Robbins takes the chair of economics Lionel Robbins became professor of economics at the LSE in 1929, at the age of thirty. He built the department into a leading centre of economic theory and gathered around him a strong group of scholars. Robbins favoured free markets and became a key figure in the School's economics wars of the following decade. ## c. 1930 — Anthropology and the colonial state Much LSE anthropology was carried out in territories under British rule, and some of it was funded by bodies tied to colonial administration. Scholars such as Talal Asad have argued that the discipline was entangled with empire, producing knowledge that could help govern colonised peoples even when researchers did not intend it. This link is a matter of ongoing scholarly debate rather than settled fact. ## c. 1930 — Malinowski's seminar trains a generation Malinowski's weekly seminar at the LSE drew students from Britain, the colonies and abroad, and trained many of the anthropologists who would lead the field. Figures such as Raymond Firth and Edmund Leach passed through it. The seminar spread the School's fieldwork method across the world. ## 1931 to 1932 — Hayek and Keynes clash across London In the pages of the LSE journal Economica, Hayek published a sharp critical review of John Maynard Keynes's Treatise on Money, and Keynes and his Cambridge allies hit back. The exchange became the public face of a wider LSE against Cambridge dispute over how to fight the Great Depression. It set free-market theory against Keynes's case for government action, a divide that still shapes economics. ## 1931 — Robbins recruits Friedrich Hayek On Robbins's initiative the Austrian economist Friedrich Hayek came to the LSE in 1931, first to lecture and then to hold the Tooke Chair. His lectures, published as Prices and Production, set out an Austrian theory of the business cycle. Hayek's arrival gave the School a powerful voice for free markets against the growing influence of state planning. ## 1932 — Robbins defines the science of economics Lionel Robbins published An Essay on the Nature and Significance of Economic Science, which defined economics as the study of how people use scarce means to meet competing ends. The book shaped how economics was taught and understood for decades. It was a product of the LSE's confident, theory-first approach in the 1930s. ## 1935 — John F. Kennedy enrols at the LSE The young John F. Kennedy, future president of the United States, enrolled at the LSE in 1935 to study under the political theorist Harold Laski. He fell ill soon after and returned home before he could take up his studies in full. The brief episode is often cited as a mark of the School's global draw. ## 1938 — Kenyatta writes Facing Mount Kenya from the seminar Jomo Kenyatta, later the first leader of independent Kenya, studied social anthropology under Malinowski at the LSE and produced the ethnography Facing Mount Kenya, published in 1938 with an introduction by Malinowski. The book described Kikuyu society from the inside and defended it against colonial contempt. It shows how the School's anthropology could serve an African nationalist cause. ## 1940 — Fabian Imperialism and the Colonial Bureau The Fabians who founded the LSE were, in the early twentieth century, socialist imperialists: their 1900 manifesto Fabianism and the Empire rejected abrupt decolonization in favour of a reformed, efficient empire. In 1940 the Fabian Society set up the Fabian Colonial Bureau, led substantially by Rita Hinden, which strongly shaped the Attlee government's colonial policy and the gradualist, managed path to independence that favoured moderate, constitutional successors over radicals. Historians cite this Fabian tradition of permeation and managed decolonization as a documented mechanism by which the metropole helped shape a compatible post-colonial elite. ## 1944 — Hayek writes The Road to Serfdom While at the LSE, Hayek published The Road to Serfdom, arguing that central economic planning tends to lead to loss of freedom. The book became widely read and made him a leading voice of free-market thought. Scholars trace a line from this LSE work to the later revival of market liberalism. ## 1944 — Raymond Firth succeeds to the chair After Malinowski's death in 1942, his student Raymond Firth took over leadership of anthropology at the LSE. Firth continued the fieldwork tradition and kept the School at the centre of the discipline. Under him the department trained scholars who worked across Africa, Asia and the Pacific. ## c. 1945 — Few Gates: Colonial Education and the Metropole Until the 1940s and 1950s the colonies had almost no universities of their own, so a colonized person seeking an elite or professional education had to go to the metropole, London above all, or to a few American colleges such as Lincoln University. This narrow funnel helps explain why so many independence leaders passed through the same handful of institutions and met at the same gatherings, like the 1945 Manchester congress: Jomo Kenyatta, Kwame Nkrumah, and Hastings Banda among them. Historians read the concentration less as coincidence or a grooming plot than as the structural result of an empire that monopolized the gates to elite education. ## 1946 — Karl Popper joins the School The philosopher Karl Popper joined the LSE in 1946 and later held a chair in logic and scientific method. His books The Open Society and Its Enemies and The Logic of Scientific Discovery argued against grand historical theories and closed political systems. Popper and Hayek were allies, and together they strengthened the School's reputation as a centre of anti-collectivist thought. ## 1947 — Hayek helps found the Mont Pelerin Society Hayek gathered a group of liberal economists and thinkers in Switzerland to form the Mont Pelerin Society, dedicated to the defence of free markets and individual liberty. Several had ties to the LSE. Historians treat the society as a key link between the School's 1930s free-market economics and the neoliberal ideas that gained power decades later. ## c. 1960 — Dozens of world leaders among the alumni By the later twentieth century the LSE could count a striking number of former students and staff among the world's heads of state and government. The School's own records list dozens of past presidents and prime ministers among its alumni. This global political reach is often cited as evidence of the founders' aim to shape a governing elite. ## 1963 — Kenyatta leads Kenya to independence Jomo Kenyatta, once a student in Malinowski's LSE seminar, became prime minister of Kenya at independence in 1963 and its first president the next year. He was one of many independence-era nationalists who had passed through the School. His path shows the LSE feeding leaders into the new states of the twentieth century. ## c. 1974 — Nobel laureates among staff and alumni People connected to the LSE have won a large share of Nobel Prizes, especially in economics and peace. Friedrich Hayek shared the economics prize in 1974, and the LSE-trained economist Arthur Lewis won it in 1979. The School counts more than a dozen Nobel laureates among its staff and former students. ## 1995 — The founders' aim, judged across a century Marking the School's centenary, its then director Ralf Dahrendorf wrote a full history of the LSE from 1895 to 1995. He read the record as showing that the Webbs' plan to train an influential class grounded in social science had largely come true. This is an interpretive judgement by a scholar, drawn from the documented reach of the School's alumni.