In taking for this paper the title “Sociology, History, and the Problem of Social Change,” I am made highly conscious of the fact that, although today I go by the title of sociologist, it was as a student of history twenty-nine years ago that I graduated from this University. It would be scarcely fair to my old history teachers of Saskatchewan to suggest that this evening my past has risen to haunt me. But certainly I learnt too much from George Simpson, Hilda Neatby, and the late Arthur S. Morton for it not to influence what I have to say this evening. Indeed, it was a simple saying of Professor Morton's, made here to apply to sociology, which perhaps best expresses the theme of this paper. The eyes of history, it was his saying, are geography and chronology. Tonight I want to argue that geography and chronology are the eyes of sociology as well as of history and that only by the use of both these eyes can an adequate theory of social change be developed. If, in the course of arguing this, I am led to the conclusion that there cannot continue to exist the kind of distinction now made between history and sociology, I feel confident that my old history teachers of the University of Saskatchewan will not consider that I have been an unfaithful pupil.

When Carl A. Dawson, a Canadian of American sociological training, went to McGill University in 1922, he went as a pioneer. He succeeded to the directorship of a school of social work, but the sociological point of view he brought was novel in Canada. Robert M. Maclver had taught at Toronto in the twenties. After he left to continue his work with great distinction in the Graduate Faculty of Political Science at Columbia University, the late Professor E. J. Urwick carried on in somewhat the same mood. It was the mood of the British scholarly liberals in which interest in welfare politics joined with social philosophy. Courses called sociology had certainly been offered in other Canadian universities, usually as a sort of sideline.

I do not believe that there had been any formal courses in sociology in the French universities of Canada, but Léon Gérin, Edouard Montpetit, and other French-Canadian scholars had long since studied, and in some measure emulated, the work of Frédéric LePlay, that same LePlay whose name lived on more among British sociologists than among those of his own France. I have no doubt Montpetit was familiar with Durkheim, whose work had so great an influence first on American sociologists and, later, on British and American social anthropologists. One should add that during all of this time Marius Barbeau, an anthropologist of British training, was rummaging around for evidence of the nearly lost arts of early French Canada. He had no fixed place in a university. Edward Sapir, also an anthropologist and one who had a great influence on American sociologists and social psychologists, had spent some time in Canada under the same auspices as other Canadian ethnologists–the Bureau of Mines. The sociological mood was not completely wanting in Canada, but sociologists were, to put it mildly, not a group with strong vested interests. In fact, the students of that time were inclined to complain that sociologists assigned them far too many books and articles concerning the States. Professor Dawson warned me, when I joined him in 1927, that my predecessor, also an American, had been given quite a runaround on this point. When it came up in one of my classes, I countered by assigning large doses from English social and housing surveys. When the students complained of that, too, I suggested that we might all get together and create our own research on Canada.

This paper is limited to a narrow portion of the field of economic growth. Its purpose is to discover how growth in the labour force, capital accumulation, and technological change have affected the movements of factor prices (particularly the return to capital) in a private enterprise economy. The question of what may happen to the return on capital, and indeed to all factor prices, is an old one. There is now material to provide some evidence of what has happened.

The first part of the paper deals briefly with the theory of the matter and provides a rough model. The second part explores the dimensions which quantitative data for the United States for a period of 100 years put on the variables and parameters of the model. Finally there are some comments related to the possible bearing of the results on future changes in the economic variables dealt with. The analysis is entirely for the long period.

It is evident from the discussion that I assume that factor prices are determined by the factors' marginal productivities.

In what follows I take much that is commonly accepted for granted and use many obiter dicta, some of which are justified in footnotes.

Under what conditions can depreciation of the currency be relied on to correct a passive balance of payments? The question has interested theorists at least since Bickerdike's pioneering article of 1920 and in the post-war years has been the subject of an intensive and.long-drawn-out polemic. There is now on file a formula for each of umpteen different situations and one might feel tolerantly towards anyone who cried “Enough.” Yet, as I hope to show, important work remains to be done.

Almost without exception, existing solutions to the exchange stability problem have been derived by analysis of the “comparative equilibria” variety. It is assumed that, before and after depreciation, all commodity markets, international as well as purely domestic, are in equilibrium, in the sense that ex ante demand is equal to ex ante supply at the going price. Analysis of the problem consists in the location and, with an eye on the balance of payments, the comparison of the two equilibria.

I suspect, however, that depreciation often is mooted in a context of widespread disequilibrium in commodity markets. For, granted only that at some previous point in time the balance of payments was in equilibrium, present difficulties must be the aftermath of a “disturbance,” and it is difficult to conceive of a disturbance which impinges on the market for foreign exchange but not on the markets for individual commodities. In a context of market disequilibrium, then, what are the minimal conditions of exchange stability?

This year farmers in western Canada planted about 23 million acres to spring wheat. It was mainly Triticum vulgare (common bread wheat) with a small acreage of Triticum durum (macaroni wheat), but within each of these species any one of five or six varieties might have been used depending on location. Wheat is grown throughout the entire length and breadth of the crop land of western Canada, on soils of widely different types and under a considerable range of weather conditions. During the growing season and at harvest time, the wheat is subjected to numerous hazards, but eventually some 300 to 550 million bushels are harvested. In addition, there will be a carryover from the last crop or two representing wheat grown under other seasonal conditions. This large quantity of wheat will be far from uniform; it will vary in appearance from near perfect to mere chicken feed, in weight per bushel from 45 to 70 pounds, in protein content from 9 to 18 per cent, and in many other physical and chemical characteristics.

This wheat must be classified into grades of dependable and uniform quality, for Canada exports wheat to countries all over the world; and when a food product moves in bulk, in large volume, over great distances, a major factor in maintaining stable markets is the buyer's confidence in what he will receive from the seller. This is especially true when the sales are made on the basis of “certificate final.” In effect, the certificate issued by the Board of Grain Commissioners for Canada when a boat is loaded guarantees that the parcel represents the specified weight, that it is of the specified grade, and that it is equal to the current Standard Export Sample of that grade. Should the buyer be dissatisfied he has no legal recourse, though he may, of course, refer the matter back to the Board. Obviously, under such a system of marketing, the seller must establish a world-wide reputation for unimpeachable integrity and an almost infallible expertness and efficiency, both to attract new customers and to retain old ones.

It has been the custom of economists since the Mercantilists to assume the existence of a capitalistic labour market. It appears that this abstraction was adopted, not from ignorance of labour conditions–Malthus, who sponsored the bleakest model of a labour market, after all possessed exceptional knowledge of contemporary social conditions–but because it simplified the economists' main task, as they conceived it, of expounding how a capitalist economy works. The abstraction had the disadvantage, however, of diverting attention from how a capitalistic labour market might develop. This question, besides its historical and sociological interest, is relevant to the study of labour markets, and of “economic development.” Yet, in Canada, it has received only brief attention. This paper proposes a more detailed view of how our capitalistic labour market arose.

By a capitalistic market is meant one in which the actions of workers and employers are governed and linked by impersonal considerations of immediate pecuniary advantage. In this market, the employer is confident that workers will be available whenever he wants them; so he feels free to hire them on a short-term basis, and to dismiss them whenever there is a monetary advantage in doing so. Hence, the employer takes no responsibility for the workers' overhead costs: labour, to the employer, is a variable cost. From a broader viewpoint, the capitalistic labour market represents a pooling of the labour supplies and labour needs of many employers, so that all of them may benefit by economizing on labour reserves. Economy is possible because the labour requirements of employers collectively are less than those of employers individually, to the extent that short-term needs for labour dovetail, and to the extent that a worker can stand as a reserve to many employers. When the demand and supply conditions of labour are dependable enough to permit this pooling, the overhead costs of labour can be transferred from individual employers to the market, that is, to the workers themselves and to the community at large. The essential historical aspect of the capitalistic labour market, then, is the development of the supply and demand conditions that will support it. Two questions are especially critical: How are workers induced to flow into the labour market pool? And how are they prevented from flowing out again?

Practically the only public acknowledgment of the vast powers of the House and the protection which is afforded the House and its members by the tradition of centuries is contained in the statement of the Speaker at the beginning of every new Parliament. When the Speaker leads the members of a new House of Commons to the Senate he claims from the governor general on their behalf “all their undoubted rights and privileges, especially that they may have freedom of speech in their debates, access to your Excellency's person at all reasonable times, and that their proceedings may receive from your Excellency the most favourable consideration.” These are, of course, immediately granted by the governor general.

The privileges of Parliament so briefly referred to and so perfunctorily granted are of two types. Some, are personal to every member of the House and enable him to carry out his parliamentary responsibilities without interference; others are the additional privileges of the House as a body, breach of which is considered in law to be analogous to contempt of court.

The former enable a member to speak on any subject free of any fear of legal responsibility for anything he may say. He is free from arrest under civil process while the House is in session and for a reasonable time before and after the session. He is also exempt during the session from duty as a witness or as a juror. Threats against a member and attempts to bribe him are likewise considered as breaches of privilege.

It is increasingly clear that inflation cannot be explained simply by reference to changes in aggregate demand. Some economists have tried to distinguish between different “types of inflation” and to conceive of variations in the price level as the consequence of a multifunctional process. Dean Edward Mason, going deeper than most, explains changes in the general price level by the interaction of the highly diverse market structures of which the modern economy is composed. This paper, building on Mason's foundation, will relate the movements of the price level (including the so-called cost-push and demand-pull types of inflation) to the general process of allocating resources in the context of an economy composed of very diverse forms of market organization.

It will be assumed that the economy consists of an oligopolistic sector and a competitive sector. Each market of the oligopolistic sector is served by large firms, each with a sufficient share of the given market to permit it to exercise, both as buyer and as seller, a significant influence on price and output. Price and the terms of sale are controlled as a matter of company policy, that is, are “administered.” It follows that, since price is administered, output and hence the influx of resources into the industry are similarly controlled.

To the observer who has experienced the transformation of Germany from imperial to republican regimes and the struggles for and against the establishment of democracy after the First World War, the most striking feature of the political scene in present-day West Germany–the Bundesrepublik–is the nearly complete absence of social or political mass movements. Whereas German society from 1918 to 1933 was virtually seething with political and social schemes, creeds, sects, and parties, post-Nazi Germany seems quiet and sober. The labour unions have become even less concerned with fundamental changes in the social order than they were in the days of the Weimar Republic. The youth movement seems dead. There is no mass movement of former Nazis or of neo-Fascists. Even the Communists are no longer a strong force.

Voting in all kinds of elections is very heavy, but organized membership in political parties is low. There seems to be a widespread reluctance among the older people to join any kind of organized political group or to commit themselves to any kind of “cause.” Most Germans, having burnt their fingers once or twice, seem to refrain from active participation in public life as much as possible. This does not mean that the channels through which a common will, a political consensus, is formed have ceased to function. Political parties, though fewer in number than in the Weimar era, do exist; trade unions and organizations of farmers, artisans, business men, and industrialists exert their influence along with numerous and varied “lobby” organizations (refugees and expellees, victims of nazism, veterans' organizations, war invalids' associations, and so on); and last though not least the Roman Catholic Church and the Evangelical (Protestant) churches raise their voices and take a stand on all important issues of public life. But none of these influential groups seems to aim at radical changes in the political or economic order. Nor is any large and powerful group opposed to the democratic system of government which was formed under the authority of the American, British, and French occupation regimes.