For most of the first half of this century the dominant figure in Canadian statistics was Robert Coats. The principal facts of his life and career are given in an obituary written for this Journal (August, 1960, pp. 482–3) by Mr. Herbert Marshall. It now seems appropriate to make a first attempt to sum up his effort and achievement. We hope that this brief article will encourage a more detailed account of Coats's work and a more penetrating statement of its enduring effects.

For twenty-five years Coats was Dominion Statistician, a post created for him, whose potential importance he perceived early and whose strategic role he firmly established. He not only shaped Canadian statistical organization; he shaped it in a characteristically self-conscious way, adding to the effectiveness of a practical administrator a sense of the long-range implications of his actions. He has left a number of papers in which some of his philosophy is made explicit in the phrases of a master of essay writing. He had a clear notion of the kind of theory that would help to collect and interpret practical data, in contrast to the many curiosities that were then included in statistical courses. In his presidential address to the American Statistical Association in 1938, he asked for a book that would elucidate statistical theory for the practising statistician, a call that has since been answered in several volumes.

Ricardo offers us the supreme intellectual achievement, unattainable by weaker spirits, of adopting a hypothetical world remote from experience as though it were the world of experience and then living in it consistently. With most of his successors common sense cannot help breaking in—with injury to their logical consistency. (J. M. Keynes, The General Theory, p. 192.)

What was the contribution of Lord Keynes to the development of general equilibrium theory? It is becoming possible now, with the passage of a quarter-century, to view Keynes's General Theory as an (important) episode in the continuous development of general neo-classical systems. From one vantage point, it is paradoxical that his work should have been accepted as the Grand Departure from its neo-classical progenitors—even though Keynes presented it in that light—since his interpretations of these systems are almost always kept visible for purposes of comparison. On the other hand, Keynes's impact on economic policy, on the methodology and analytics of quantitative economics, and on the working economist's “vision” of reality, may be seen even today to be of that order of power rightfully termed “revolutionary.”

I propose in this paper to examine majority voting with the tools of elementary game theory. This, in itself, represents nothing new. The “majority game” has been analysed by numerous game theorists. I propose, however, to derive certain implications from the analysis for the utilization of resources in the public or collective sector of the economy.

The models of collective decision-making that must be employed are necessarily abstract; so much so that the analyses may seem to appear to some observers as caricatures of actual political processes. Analysis must start somewhere, however, and even the most abstract of models, by isolating specific features of real-world institutions, may prove helpful to our over-all understanding. I shall introduce a model of pure democracy. That is to say, I shall assume that all collective decisions are to be made by a simple majority voting process in which all citizens participate. All problems of representation, leadership, parties, and coalitions shall be left out of account. Furthermore, I shall assume that the individual citizens in the model are motivated by utility-maximizing considerations; that is, each individual is assumed to vote in such a manner as to maximize his own utility. This assumption allows numerical values to be placed in the expected pay-offs that individuals receive through political processes. If the expected pay-offs can be numerically correlated with observable economic quantities or magnitudes, some provisional and tentative implications may be drawn concerning the tendency of majority voting rules to “over-extend” or to “starve” the public sector of the economy relative to the private sector.

Since Professor Leontief published his study of American foreign trade factor requirements in 1953, much has been written about the problem. This paper reviews the discussion briefly, and provides some data indicating the factor requirements for Canada's foreign trade.

This paper uses conventional input-output methods; one may criticise input-output results in a number of ways, the most obvious of which is to say that the algebraic solution does not represent the total picture. Professor Leontief, in a reply to Professor Granick and others, willingly admitted that the total picture includes resource endowments in each trading country, primary factors of production, shapes of production functions, input-output relations which govern the transformation of resources into goods and services, and consumer preferences for different bundles of production which can be supplied with alternative combinations of factor inputs. But in addition to this general limitation of the approach there are several specific criticisms.

In an earlier paper, I presented an analysis of the intermediate-run effects of instalment credit control, that is, the effects prevailing after the new credit terms have fully replaced the old ones. Although brief reference was made there to the effects of control in the short run, that is, in the time periods immediately following the change in credit terms, yet several interesting questions regarding the short run had to be ignored because of the scope of that paper. One may ask, for example: Does the down-payment effect tend to grow or diminish in strength from one period to the next during the transition from old credit terms to new ones? What about the maturity effect? Do these effects change with time, if at all, at a steady rate? In one direction only, or with reversals)? And how will different types of consumer reaction to new credit terms, as reflected in the amount of credit purchases, modify the down-payment and maturity effects, especially when there is perversity? These questions are important because for purposes of credit control policy, the short-run effects are in many cases more relevant than the intermediate-run effects. The present paper seeks to answer these questions.

As the questions themselves suggest, the following discussion will be principally concerned with the delineation of the time paths of effects of credit term changes. In this sense, then, the paper pertains to the realm of “dynamics,” in contrast to the comparative-statics orientation of the earlier article. As in the earlier paper, I shall assume (a) a constant rate of growth of credit purchases before control, (b) uniform down-payment and maturity terms on all credit purchases, (c) straight-line amortization of all instalment debts, and (d) the absence of secondary effects. But instead of assuming that new credit terms will always result in a new (fixed) rate of growth of instalment purchases, I shall also consider several other types of consumer reaction. Finally, to make the analysis more general, the concept “marginal propensity to cut outlays for down payments” will be introduced, to supplement the “marginal propensity to cut outlays for instalments” used in the other paper.