Embed Size (px)
Citation preview
The Key to Full Employment without Regimentation. A Practical Solution to a PressingProblem by Eugen Berkovits; George C. AtkinsReview by: B. H. HigginsThe Canadian Journal of Economics and Political Science / Revue canadienne d'Economique etde Science politique, Vol. 12, No. 4 (Nov., 1946), pp. 543-544Published by: Wiley on behalf of Canadian Economics AssociationStable URL: http://www.jstor.org/stable/137367 .
Accessed: 14/06/2014 20:58
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp
.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].
.
Wiley and Canadian Economics Association are collaborating with JSTOR to digitize, preserve and extendaccess to The Canadian Journal of Economics and Political Science / Revue canadienne d'Economique et deScience politique.
http://www.jstor.org
This content downloaded from 185.2.32.90 on Sat, 14 Jun 2014 20:58:53 PMAll use subject to JSTOR Terms and Conditions
Short Notices Short Notices
experience with government enterprise in certain spheres. He is not worried about financial considerations; the "myth of insufficient finance" has been "ex- ploded." He believes in the vigour and progressiveness of private enterprise and wants to sustain it, but he dislikes the monopolistic and anti-social practices of private enterprise and wants to eliminate them.
In setting forth the objectives of economic policy, he prefers "high and stable" employment to "full employment" in the Beveridge sense of more open jobs than people seeking work. He fears that pursuit of the latter goal would require wage and price controls too rigorous for a smooth working private enter- prise economy. A more equal distribution of real income, a rising standard of living, wide scope for private enterprise within a framework of social control, and a vigorous system of private enterprise, are other objectives laid down. The final chapter on "equilibrium in a controlled economy" follows White Paper lines very closely, with special emphasis on public investment as a counter- cyclical device. [B. H. HIGGINS]
The Key to Full Employment Without Regimentation. A Practical Solu- tion to a Pressing Problem, by EUGEN BERKOVITS in collaboration with GEORGE C. ATKINS (Canada: Longmans, Green, 1945, pp. 81). In this little book, two businessmen present a simplification of the Keynes-Hansen analysis of un- employment, its causes and cures, supported by figures that should be interesting and useful to Canadian and American readers. The authors begin by pointing to the unprecedented magnitude of the post-war employment problem, and to the inadequate employment policy of the past. To attain and maintain full employment, two steps are necessary: "A. Raise the total spending to a level which is sufficient to give employment to the whole available labour force; B. All income which has been received in the immediate preceding period must be respent in the production of goods and services" (p. 29). If private spend- ing is inadequate, government spending is necessary. In the thirties, gov- ernment spending was on too small a scale, because "the accumulation of interest-bearing debt resulted in well-merited apprehension" (p. 40). A growing debt service requires either growing taxes or still more borrowing. At some point, higher taxes will discourage private spending, and increased borrowing would impair government credit.
It is unfortunate that so excellent a presentation of the employment problem should be marred by inaccuracies in the presentation of the solution. The au- thors propose that no "depository" (institution receiving savings) shall pay interest on savings; that every depository invest exclusively in ways that will raise production and employment; that every depository shall remit to the Cen- tral Bank all savings deposited with it that cannot be so invested; and that gov- ernment should borrow these "idle savings" to finance "national welfare work" (useful public investment). It would have been better if the authors simply sug- gested that the government borrow from the banking system at low or zero interest rates, for "idle savings" are not something tangible that can be trans- ferred to the Central Bank and then borrowed. "Idle savings," in the sense of
experience with government enterprise in certain spheres. He is not worried about financial considerations; the "myth of insufficient finance" has been "ex- ploded." He believes in the vigour and progressiveness of private enterprise and wants to sustain it, but he dislikes the monopolistic and anti-social practices of private enterprise and wants to eliminate them.
In setting forth the objectives of economic policy, he prefers "high and stable" employment to "full employment" in the Beveridge sense of more open jobs than people seeking work. He fears that pursuit of the latter goal would require wage and price controls too rigorous for a smooth working private enter- prise economy. A more equal distribution of real income, a rising standard of living, wide scope for private enterprise within a framework of social control, and a vigorous system of private enterprise, are other objectives laid down. The final chapter on "equilibrium in a controlled economy" follows White Paper lines very closely, with special emphasis on public investment as a counter- cyclical device. [B. H. HIGGINS]
The Key to Full Employment Without Regimentation. A Practical Solu- tion to a Pressing Problem, by EUGEN BERKOVITS in collaboration with GEORGE C. ATKINS (Canada: Longmans, Green, 1945, pp. 81). In this little book, two businessmen present a simplification of the Keynes-Hansen analysis of un- employment, its causes and cures, supported by figures that should be interesting and useful to Canadian and American readers. The authors begin by pointing to the unprecedented magnitude of the post-war employment problem, and to the inadequate employment policy of the past. To attain and maintain full employment, two steps are necessary: "A. Raise the total spending to a level which is sufficient to give employment to the whole available labour force; B. All income which has been received in the immediate preceding period must be respent in the production of goods and services" (p. 29). If private spend- ing is inadequate, government spending is necessary. In the thirties, gov- ernment spending was on too small a scale, because "the accumulation of interest-bearing debt resulted in well-merited apprehension" (p. 40). A growing debt service requires either growing taxes or still more borrowing. At some point, higher taxes will discourage private spending, and increased borrowing would impair government credit.
It is unfortunate that so excellent a presentation of the employment problem should be marred by inaccuracies in the presentation of the solution. The au- thors propose that no "depository" (institution receiving savings) shall pay interest on savings; that every depository invest exclusively in ways that will raise production and employment; that every depository shall remit to the Cen- tral Bank all savings deposited with it that cannot be so invested; and that gov- ernment should borrow these "idle savings" to finance "national welfare work" (useful public investment). It would have been better if the authors simply sug- gested that the government borrow from the banking system at low or zero interest rates, for "idle savings" are not something tangible that can be trans- ferred to the Central Bank and then borrowed. "Idle savings," in the sense of
543 543
This content downloaded from 185.2.32.90 on Sat, 14 Jun 2014 20:58:53 PMAll use subject to JSTOR Terms and Conditions
The Canadian Journal of Economics and Political Science The Canadian Journal of Economics and Political Science
an excess of planned ("ex ante") savings over planned ("ex ante") investment- in which sense alone the concept has economic significance-show up, not as excess reserves of financial institutions, but as contracting credit, falling prices, income, and employment. If the banking system were provided with 100 per cent reserves against existing deposits, and 100 per cent reserves were acquired from then on, there would be a somewhat closer analogy between excess re- serves and "idle savings." But even then, "idle savings" might show up merely as a decline in velocity of circulation of existing deposits, and in this case there would be nothing that the depositories could transfer to the Central Bank to be borrowed by the government. New deposits would have to be created to the government's credit.
There are other minor defects in the authors' arguments. The revolution in practices of financial institutions that would be involved in requiring them to make only direct investments would be much more substantial than the au- thors seem to think. Two of the criteria for choice of "national welfare" pro- jects-that preference be given to self-supporting projects and that no project should compete with private enterprise-may well prove incompatible, for the more self-supporting a public investment programme is, the larger it must be to offset a given volume of "excess savings." On the whole, however, the book is one that should assist greatly in educating the general public in basic principles of contemporary economy theory and policy. [B. H. HIGGINS]
L'Epopee de la Fourrure, by REGINE HUBERT-ROBERT (Montreal: Editions
de l'Arbre, 1945, pp. 275). This book is well-named: the author with a flair for the romantic succeeds to an unusual degree in breathing life intosthe men of the fur trade whose lives and exploits take on an epic quality under her pen. Although the touch is light to the point of sketchiness there is a freshness and a human interest in the treatment that makes for pleasant reading, and since the writer covers a wide range in area and time, instructive reading as well for those unaccustomed to viewing the trade in the large. There are three parts to the work, the first covering the discovery of the north-west coast of America and the sea otter trade (1592-1792), the second the fur trade of New France
(1534-1763), and the third the fortunes of the North West and Hudson's Bay Companies, and the penetration of the continent (1763-1869). Most of the
leading figures and events in early Pacific history are mentioned in the first
section, from "les beaux voyages" of Juan de Fuca, de Fonte, and Maldonada, to the less apocryphal discoveries and voyages of Behring, La Perouse, and the
explorer-mariners of Spain and England. In the second section there is a more full-bodied treatment of personalities and events in the account of the various fur companies of New France and the achievements of French leaders in the
struggle against a harsh environment and the ubiquitous English. The author is at her best in these pages. The final section of the book describes in prose and verse the struggle for mastery of a continent, with Hearne, Simon Mc-
Tavish, Alexander MacKenzie, Astor, and Lord Selkirk playing leading roles.
an excess of planned ("ex ante") savings over planned ("ex ante") investment- in which sense alone the concept has economic significance-show up, not as excess reserves of financial institutions, but as contracting credit, falling prices, income, and employment. If the banking system were provided with 100 per cent reserves against existing deposits, and 100 per cent reserves were acquired from then on, there would be a somewhat closer analogy between excess re- serves and "idle savings." But even then, "idle savings" might show up merely as a decline in velocity of circulation of existing deposits, and in this case there would be nothing that the depositories could transfer to the Central Bank to be borrowed by the government. New deposits would have to be created to the government's credit.
There are other minor defects in the authors' arguments. The revolution in practices of financial institutions that would be involved in requiring them to make only direct investments would be much more substantial than the au- thors seem to think. Two of the criteria for choice of "national welfare" pro- jects-that preference be given to self-supporting projects and that no project should compete with private enterprise-may well prove incompatible, for the more self-supporting a public investment programme is, the larger it must be to offset a given volume of "excess savings." On the whole, however, the book is one that should assist greatly in educating the general public in basic principles of contemporary economy theory and policy. [B. H. HIGGINS]
L'Epopee de la Fourrure, by REGINE HUBERT-ROBERT (Montreal: Editions
de l'Arbre, 1945, pp. 275). This book is well-named: the author with a flair for the romantic succeeds to an unusual degree in breathing life intosthe men of the fur trade whose lives and exploits take on an epic quality under her pen. Although the touch is light to the point of sketchiness there is a freshness and a human interest in the treatment that makes for pleasant reading, and since the writer covers a wide range in area and time, instructive reading as well for those unaccustomed to viewing the trade in the large. There are three parts to the work, the first covering the discovery of the north-west coast of America and the sea otter trade (1592-1792), the second the fur trade of New France
(1534-1763), and the third the fortunes of the North West and Hudson's Bay Companies, and the penetration of the continent (1763-1869). Most of the
leading figures and events in early Pacific history are mentioned in the first
section, from "les beaux voyages" of Juan de Fuca, de Fonte, and Maldonada, to the less apocryphal discoveries and voyages of Behring, La Perouse, and the
explorer-mariners of Spain and England. In the second section there is a more full-bodied treatment of personalities and events in the account of the various fur companies of New France and the achievements of French leaders in the
struggle against a harsh environment and the ubiquitous English. The author is at her best in these pages. The final section of the book describes in prose and verse the struggle for mastery of a continent, with Hearne, Simon Mc-
Tavish, Alexander MacKenzie, Astor, and Lord Selkirk playing leading roles.
544 544
This content downloaded from 185.2.32.90 on Sat, 14 Jun 2014 20:58:53 PMAll use subject to JSTOR Terms and Conditions
