Economic theory has been powerfully advanced within the past decade by its new interest in national income and effective demand, and by its attention to the bearing of such magnitudes as savings, investment, consumption, and money holdings upon the aggregate employment of resources. After the first impact of a revolution, however, the signs of continuity with the past are bound to re-appear. In the field of economic doctrine it may be confidently expected that continuity will be established by exploration as to how particular equilibrium conditions—under the diverse situations of competition, monopoly, oligopoly, and the like—help to account for the behaviour of those large aggregates with which the “modern” theory has too exclusively dealt. With equal confidence one may expect that this synthesis of Marshallian and Keynesian theory will cast new light upon the problems of economic policy.

Fortunately, however, it is not necessary to await the full fruition of this cross-fertilization of ideas: its main features are already indicated in a very substantial field of agreement as to policy in all but the most extreme wings of economic thought. The language of popular discussion in America epitomizes this field in two cardinal ideas—the necessity of government action to secure full employment and the desire nevertheless to preserve a private enterprise system. To extremists on either side these ideas represent incompatibilities. But the effectiveness of economics and of economists in the current scene is primarily conditioned upon the elaboration of policies compatible with both of these cardinal requirements.