Sydney Caine was born in 1902 in Hendon, London. He was educated at Harrow County School and the London School of Economics, from where he attained a first class degree in economics. He started his career as an assistant inspector of taxes. In 1926 Caine passed the Civil Service exam and joined the Colonial Office, serving in roles including secretary to the West Indian Sugar Commission, secretary to the United Kingdom Sugar Industry Inquiry Committee and Financial Secretary of Hong Kong. In 1952 he moved into university administration, being appointed vice-chancellor of the University of Malaya, and from 1957 to 1967 he was director of the London School of Economics. Caine retired in 1967, devoting himself to writing papers on financial matters and a book on the foundation of the London School of Economics.

Caine married three times and had one son, Michael Harris Caine, two stepsons and two stepdaughters. He died in 1991.