Eugen von Böhm-Bawerk was a central figure in the windy discussions of the theory of capital and interest which occupied a prominent place in economic literature in the 1890's. The two volumes of his Kapital und Kapitalzins were translated into English in 1890 and 1891, which meant that his views were generally known to English-speaking economists. An American student of economics, Charles Whitney Mixter, who was aware both of Böhm-Bawerk's writings and of his high prestige, was therefore elated to find that an earlier and obscure Scotch-Canadian writer named John Rae appeared to have foreshadowed Böhm-Bawerk's theory of capital in some important respects. Mixter somewhat hastily announced his discovery of “A Forerunner of Böhm-Bawerk” in an article with this title in the Quarterly Journal of Economics for January, 1897. Today this label would perhaps be regarded as faint praise and happily it was quite wrong. Mixter's error had arisen out of a misunderstanding of Rae's ideas and it was soon corrected, although not before it was repeated by Irving Fisher.

Mixter's find was enthusiastically acclaimed by Fisher who wrote in February, 1897:

No economist who is interested in the theory of capital in any of its aspects can afford longer to let Mr. Rae's investigations go unread. His work is a magnificent specimen of true scientific method and a rare example of orderly and convincing exposition. His style too is easy, forceful and captivating and his fund of ready illustrations commands instant admiration. Not the least remarkable feature of this many-sided work is the clear conception of sociology, or “Natural History of Men,” which it contains. It is difficult to realize that Mr. Rae wrote before that science was definitely founded. In short, the “New principles of political economy” is truly a masterpiece, a book of a generation or a century. It was written before the world was ready for such painstaking analysis. Now that its merits have been pointed out by Mr. Mixter, it is sure to be accorded a high place among the classics of economic science.

In Britain the public corporation has for some time been almost universally regarded as the appropriate form of organization for publicly-owned commercial undertakings, but the only common article of faith underlying this agreement is the negative proposition that such undertakings cannot be run efficiently by organizations on the lines of government departments, staffed by civil servants. Beyond that there is nothing approaching unanimity, either between or within the political parties. And now that the nationalization programme of the Labour party is substantially completed (and, with the important exceptions of road transport and steel, substantially accepted by the Opposition) attention centres increasingly on those questions which remain in dispute.

Foremost among these is the question of public control: how much control? and by whom? The scheme adopted by the Labour Government rests on two premises: first, that by eliminating the motive of maximizing profits, nationalization eliminates much of the need for external controls, since the industries may now be expected to devote themselves wholeheartedly to public service; and, second, that the equity interest which passes from the shareholders to the general public can only be exercised by a minister of the Crown, answerable for his actions to the public's representatives in Parliament. Thus, while the various nationalized industries differ from each other in a number of respects, all may be classified together under the general description: “public corporations, strong minister type.”

Seldom read today, Bentham's Constitutional Code (1820-1832) nevertheless ranks among the most significant political treatises of the last century. It contains an extended statement of the ideas of Philosophic Radicalism on the eve of their partial victory in the Reform Bill of 1832. It must be nearly, it may be actually, the last work of any important figure of the eighteenth-century Enlightenment. At the same time it is one of the first works in which through the fog of doctrinaire radicalism there can be seen fairly clearly the characteristic features of the contemporary state with its extreme centralization, its myrmidonian corps of bureaucrats, its elaborate administrative apparatus, and its miscellaneous services to the public. There are few books of a century ago in which the contemporary political scientist, provided he can overcome initial hurdles of style and manner, ought to feel more at home, if only because he will find there the twentieth-century student's interest in institutions and the emphasis on administration that plays so large a part in the study of government today.

The Constitutional Code may be regarded as Bentham's view of the best possible commonwealth—a Utilitarian Utopia. Like all Utopias it was the product of disappointment with the here and now. It is well known that Bentham turned to systematic consideration of constitutional questions only after repeated failure to persuade the rulers of England to accept his legal reforms and especially his Panopticon scheme for a model prison.

The limitations imposed upon the central and provincial governments by the Canadian federal system have been discussed elsewhere in some detail. But almost no attention has been paid to those difficulties of maintaining an efficient structure of local government which arise from the prior existence of two superior tiers of administration. This does not imply that there has been no interest in local government, but that interest has been partial and spasmodic. Many theories have been formed concerning the role of the provinces, but few have examined the proper role of municipalities. There could be no constitutional argument to focus opinion: local government lies unequivocally within the realm of provincial power, and in an age and a country where legal dispute and politics have gone hand in hand, the affairs of roads and sewers, dog-catchers and relieving officers have seemed prosaic and uninteresting. Education is in a class of its own, for it has been elevated to the arena of constitutional conflict. Outside that arena educational administration has been the concern of only a few interested groups.

Local government has no deep historical roots in Canada. It was discouraged by the French administration, and no counterpart to the New England town meeting appeared. After the Revolution, British policy was hostile to any local demonstrations of independent action. Lord Durham regarded this as a major weakness, and Lord Sydenham set about remedying the deficiency.