Coming of Age
by Desmond MacRae
Reprinted by permission from
Global Guardian, June 1990
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At the time, the world was adrift on stormy seas of foreign exchange. Rather than stabilizing the situation, the floating exchange rate system was, in fact, destabilizing it. The Bellagio Group of the 1960s and '70s was bipartite, composed of officials and academics. It could almost ignore what the banks were doing because the capital markets under the fixed rate Bretton Words system exercised so little influence." But now, I argued for an interface between officialdom and the practitioners of the international world of finance," says Bell. "We also needed academics to make sure people understood what each other were saying. It had to be a tripartite group."
Bell wanted a group of 29 as a central core "because we needed more . . . and I like prime numbers." Also, 29 people could fit in a room and still have a serious discussion. Bell believed one could then use these 29 to "breed" smaller groups who would do both academic and practical studies.
Bell and Deagle then traveled the world to talk to people, both to test the idea and to identify potential members for the core group. "It was a delicate thing," says Bell. "If someone thought the Group a good idea, he would naturally volunteer himself."
Kit McMahon, international director of the Bank of England, was one they approached who became a member. Otrnar Emminger, the German economist and central banker, an old friend of Bell's, was another. "Bit by bit, we found eminent people who were very, very interested, and who fit the tripartite schema we were developing." With the idea for the Group validated, the two then began to think hard about who could lead it. With a strong leader, the Group could begin, and as Benjamin Franklin often said, "Well begun is half done."
Perhaps the most important of those early visits was to Witteveen, who had just retired as head of the International Monetary Fund. "It was Ed Deagle's idea," says Bell. "And it so happened we hit it off together." Deagle recalls that Witteveen had announced his departure from the IMF but not what he was going to do next. "I didn't think it was appropriate for Bob Roosa to be the chairman of the Group because of his role in the foundation. There might have also been political suspicions from certain quarters at the time if an American were made chairman." After meeting with Witteveen, they agreed he would make an ideal chairman, so they asked him. "He accepted," says Bell, "And away we went."
Witteveen's acceptance turned out to be critical in jelling the group. The new chairman was intimately familiar with a broad international agenda from his work at the IMF. He had a reputation as a good administrator who could inspire performance. Witteveen's stature caused what Bell remembers as "an awful lot of people" to volunteer. Bell gave up his prime number concept, and they ended up with 30.
Witteveen's experience in managing groups had taught him that 30 was about the maximum for fostering useful group discussions. "I always felt that we should be limited to 30," he says. In fact, Witteveen knew that incorporating the number of members into the name would offer some protection against an ever present tendency to expand a group of this kind. So, at an organizational meeting held in the fall of 1978, they named themselves the Group of Thirty.
The organization of the group is simple: a chairman; a steering committee; a secretary; a treasurer - all unpaid, and an executive director who manages the meetings and the two tiny offices in London and New York. The Group publishes reports on all sorts of subjects approved by the steering committee. These come from study groups, working committees, and sometimes individuals. "From the very early stages, we used small study groups to whom we assigned specific subjects," says Matsukawa. This technique fulfilled Be115 plan for participation wider than 30. It permitted the Group to bring in experts when dealing with what it deemed to be critical topics, like clearance and settlements, for which the Group has no collective expertise. The Group also publishes what it calls "occasional papers." "These are studies to which some members may be opposed," says Matsukawa.
The evolution of the publishing program is a mini-saga featuring the constant tug and pull from different views of what the Group should be doing. Deagle made the Group aware that the Rockefeller Foundation could support it only if it made its information public. Some Group members, particularly central bankers, demurred. "They thought that, instead, the Group should do consultations and function as a sort of back room channel of conversations which would eventually provide public value by influencing policy makers quietly," says Deagle. "I said that if you are going to maintain support from the Foundation, and eventually from others, you are going have to develop a publications program and put the Group to the test of public comment on the papers that are done."
While the plenary sessions are private, the reports and papers are published. The advantage of public exposure of ideas raises the Group above whatever political considerations are current. This has helped the Group attain its most extraordinary accomplishment by becoming the most widely accepted, international public forum in economics.
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