In all popular discussions of death rates or of the probable duration of human life one finds the phrase “according to the mortality table.” Sometimes it even appears that a writer is assuming that a definite law of mortality has been discovered from which deviations are not to be expected and which has been embodied in the mortality table. Every serious student of the subject knows that this is far from the truth and that there are many mortality tables, each representing the mortality which was experienced by a specified group of lives during a specified time.

To the actuary, any mortality table is simply a mathematical tool with which to study such problems as population growth or change, or to calculate the monetary values of benefits dependent on life contingencies. It is a tool in the same sense that a gauge is a tool for a machinist. In some parts of a machinist's work only the most accurate precision gauges are acceptable, and similarly in calculating premiums for non-participating insurance or rates for life annuities, the actuary must use the most accurate and up-to-date mortality table available. On the other hand, a machinist may use a less exact gauge for other types of work where conditions are suitable. For certain purposes such as calculating policy liabilities, the actuary has a corresponding choice, for, as will appear later in the paper, reserves by all mortality tables are remarkably similar.

The primary purpose of this paper is to set out in some detail the writer's recently revised estimates of Canada's balance of international payments during the years of the last war. This is done in Part I, where a brief account is also given of the methods which have been followed in arriving at these estimates. In Part II some observations are made as to the part played in the war-time expansion of the volume of money in Canada by the external factors revealed in the balance of payments and by the methods of war finance.

The information about a country's international economic transactions to which the term “balance of payments” is now usually applied, may be presented in a variety of forms and with much or little detail depending on the taste and particular purpose of the compiler. Official reports usually give at one place the credits, debits, and balance for each item, and group the items into a current and a capital “account.” They may or may not isolate monetary gold and short-term capital movements as a third group. As a basic form from which each user may rearrange the data as he wishes, this is satisfactory, provided ample details are given. In table I, however, the basic grouping is according to receipts, payments, and “balancing” items. Receipts and payments are then each grouped into current and capital “accounts.” From this information the reader may, if he wishes, make a table of the conventional form. Some of the group balances usually included in such a table are given in items 31-36.

The basic principle on which life insurance is founded is that of mutual co-operation. Many persons co-operate to assume and to share risks which the individual could not afford to bear alone. This cooperation takes the form of contributions to a common fund, from which claims are paid as they occur. In the modern form of life insurance the contributions are “level” and dependent chiefly on the age of the contributor at entry to the fund. Since the life insurance risk increases with increasing age it will be obvious that level contributions sufficient to meet all risks will more than suffice to meet the lighter risks of the early years and will be insufficient to meet the heavier risks of the later years. Accordingly, the early excess contributions must be accumulated in the fund to make good the later deficiencies. It is these excess contributions accumulated to meet the future risks that are invested and form the assets of the life companies. These assets are not the property of the companies in the commonly accepted sense of the word, but instead represent the accumulated savings of the individual policy-holders, to whom they are ultimately to be returned. The companies are simply acting as trustees or custodians of these savings, and, in common with other trustees, the assets in which these savings may be invested are prescribed and limited by law. There exists, of course, in most of our Canadian companies a shareholders' interest which, however, is small and of little account, while in the large American companies the shareholders' interest is entirely negligible or non-existent. Since the life insurance business is of a quasi-public nature there has developed a close government supervision over its affairs, with the result that the companies are subjected to regular extensive examinations and also are required to prepare and file periodically complete detailed reports of their business.

The automobile industry is an outstanding example of branch plant expansion in the international field. Proximity to the American centres of automobile production, the policy of tariff protection pursued in the Dominion, and the similarity of Canadian and American manufacturing methods made possible its rapid extension north of the American border.

Ford of Canada was incorporated with an Ontario charter in 1904 just fourteen months after the establishment of the parent concern in Detroit. (A Dominion charter was secured in 1911.) The initiative in the establishment of a Ford assembly plant in East Windsor seems to have come from a group of Canadian business men, and all the actual capital investment in 1904 came from Canadian sources. The Ford Motor Company of Michigan received 51 per cent of the original stock, in amount $63,500, in consideration for which it agreed to extend to the Canadian concern the privilege of using in perpetuity all patents, improvements, and devices used to produce Ford products in the United States. This privilege included the use of such rights in Canada, New Zealand, Australia, South Africa, and some minor British possessions. In the formation of General Motors of Canada the initiative again came from Canada. The McLaughlins of Oshawa, formerly carriage manufacturers, were instrumental in starting the manufacture of the Buick car in 1907. They contributed substantial properties to the enterprise and, for a time, appear to have retained a majority interest in the concern's stock; but the General Motors Corporation of Canada, which grew out of the McLaughlin Motor Car Company, is now a wholly-owned subsidiary of the American concern.

The story of the relation between political philosophy and economics records many curious twists and turns, anachronistic survivals, and striking anticipations. But nothing is more astonishing than the contrast between the current preoccupations of economists and their tacit methodological beliefs. During the last war and today economic enquiry has inevitably been harnessed to problems of government. But even during the two decades of armistice the bulk of the work of economists has been intimately related to policy. Not only has activity in the empirical and applied fields increased greatly, but purely theoretical analysis, too, has had a strong practical bias. Probably the three outstanding topics in theoretical discussion during the last few years have related to the problems of crises, monopoly, and planning. All three, even when debated in the most abstract terms, have an obvious “tendency to use,” in the sense that they envisage the application of measures of control by government or other social agencies.

Thus, judged by their choice of topics, economists seem to have given up any implicit unquestioning belief in the virtues of laissez-faire, and, to some extent, even in the capitalist system. Yet there seems still to be lurking in their minds an inherited regard, if not for the Smithian “hidden land,” at least for the so-called economic case for laissez-faire as expounded by such members of the first generation of modern economics as William Stanley Jevons, Philip Wicksteed, and J. B. Clark. There are left, it is true, only a few citadels which would put up a full-bodied defence of this case. But a great many of the less intransigent economists still appear to subscribe to it when they are asked explicitly to discuss it.

It is most unfortunate that a paper the main content of which in terms of bulk consists of sound and valuable insights to the extent that this is true of Professor Talcott Parsons's article on “The Motivation of Economic Activities” should be utterly misleading with respect to the main question at issue. Without quoting or mentioning any single author, or referring in any specific way to any group, school, or tendency among economists themselves, Professor Parsons tells us merely that: “On the economic side the impression has been wide-spread that a predominantly ‘self-interested’ or ‘egoistic’ theory of the motivation of economic activities was a logical necessity of economic theory” (p. 189, my italics). Throughout his own article, Professor Parsons certainly gives the “impression” that the position he has indicated is that which characterizes the typical writings of reputable economists extant and down to date.

In view of the author's standing as a sociological interpreter of economic concepts to both sociologists and economists, and also, as already observed, the great merit of his concrete observations on motivation in this particular article, this second impression should not be allowed to stand unchallenged. For the facts are definitely to the contrary. And the true position regarding the type of attitude which may be referred to as “self-interest” in the structure and methodology of modern economic theory should be stated. Still more desirable, if it were possible, would be some intelligible statement as to what this attitude is, or what the expression may be taken to mean. For Professor Parsons gives practically no positive indication of the content of the position he is arguing against. He affords an example more flagrant than that of the economists criticized of what is their real fault. For he himself warily steers clear of any effort to say what he means by the term self-interest or egoism. We find only the negative and noncommittal statement that the assumption proper to economic theory “does not necessarily have anything to do with ‘egoism’ in the usual sense” (p. 189, my italics).

It is, perhaps, at least partly an unfortunate consequence of the pressure for brevity in the formulation of titles that Professor Knight begins his critical discussion of my article with the statement that though it “in terms of bulk consists of sound and valuable insights” it is “utterly misleading with respect to the main question at issue.” It may be permissible to suggest that for Professor Knight and myself the main questions at issue are not identical, as so often happens in intellectual discussion. To help clarify the question I shall attempt to state more explicitly than was done in the article itself what it was designed to accomplish.

The aim of this tentative outline was overwhelmingly positive rather than critical. It contained, in the introductory paragraphs, only sufficient statement of the historical and interdisciplinary aspects of the problem of “self-interest” to give a very broad orientation to the setting of the problem. The bulk of the article, which it may be hoped includes at least partly the “sound and valuable insights” of which Professor Kjiight speaks, was devoted to the outlining of what seems to the author, in the light of the present state of development both of economic and of sociological theory, to be the closest attainable approach, in such broad outline, to a satisfactorily usable account of the subject.