The purpose of this paper is to evaluate the impact of exports on the economy, particularly in the perspective of the over-all recovery in the thirties. In assessing the conclusions, the reader should note particularly that many other aspects of Canada's dependence on foreign countries, such as capital movements, have had to be neglected. The first part of this paper gives some statistical measurement of the role of exports, stressing both the great importance of exports to several large industries and the lead in exports at the turning points, but also suggesting that both the over-all level of exports and the proportion of an industry's product which is exported may be misleading indicators of the impact of exports on the economy. Changes in the composition of exports, and the reaction of the more or less domestic factors in the economy can affect the force of the stimulus from expanding exports. In particular, the paper suggests that while a rising or high level of exports may be a necessary condition for prosperity, it need not be a sufficient one.

The idea that scientific laws might apply to man and his society is not much more than one hundred years old, and even today many historians and other students of the so-called humanities fiercely deny the possibility of ascertaining sociological or historical laws similar to the laws of nature. In this sense, Anglo-American epistemology makes a distinction between the sciences proper and the humanities, as German and other European scholars distinguish between Natur- and Geisteswissenschaft, the natural sciences and the knowledge of cultural phenomena. Such distinctions are due, in part to an outmoded conception of the scientific law, but primarily to an even more obsolete conception of man, his society, culture, and history.

(1) Until the end of the nineteenth century, a scientific or natural law predominantly meant a law of causality, and such a law implied that the same cause always and invariably “produced” or “evoked” the same effect. The natural law, in this context, was not even a product of scientific cognition, but allegedly inherent in nature itself. The scientist merely “discovered” actually prevailing laws. This was the viewpoint of the so-called realistic school of thought. In a twofold way this concept of a law has been shaken.

Many social theories have been called scientific, but no one has insisted more than Marx on the scientific nature of his system of thought. It is the purpose of this article to examine the ambitious claim of Marxism to be the only real science of society. Dialectical materialism may be omitted from consideration since it concerns not science but philosophy (or even metaphysics), and in any case it is the Marxist social theory, or historical materialism, for which the claim of science is most insistently made.

There is no need to give here the details of Marx's historical materialism. The main point to be kept in mind is Marx's assumption, lying behind the entire body of his theory, that history and society move according to a pattern of knowable laws, the so-called “laws of motion” of society; and that Marx claims to have done nothing more than to have laid bare these laws. If Marx is right he obviously ranks as the greatest social scientist of all time. If he is not right he is a misguided and fanatical genius who has led man's thought up a long blind alley.

A preliminary word on the application of scientific methods to the study of society may not be out of place. The purposes of study, whether in the natural or social sciences, are the same: to explain how, to accomplish a practical result, or to predict. These three criteria may also be used to test a scientific theory. There are of course certain special difficulties in the social sciences, difficulties arising (to select from many reasons) because of the nature of the data, or because inference may so easily be confused with fact, or because merely studying the behaviour of people and publishing the results may affect the very behaviour being studied.

This Article is an attempt to reopen the question of the role of government in the economic life of Upper Canada before 1840. It stems from certain problems encountered in connection with a history of the Welland Canal Company, and material relating to the Welland Canal and to the career of William Hamilton Merritt, its promoter, will be used to illustrate the argument. The central problem to which we shall address ourselves is, quite simply: what difference did the political and social state of Upper Canada in this period make to the way in which the Welland Canal Company was founded and managed?

The general outlines of Upper Canada's political organization and social structure will already be familiar to most readers. Other historians have dealt more than adequately with such matters as the origin of the dominant élite which we know as the Family Compact, the slow development of the idea of responsible or parliamentary government, and the aims, grievances, and methods of the colonial reformers. It is to be regretted that our knowledge of Upper Canada's economic development in this period is less detailed, but the main features are clear enough for present purposes.

The few attempts that have been made to analyse the interaction of economic, political, and social factors in the history of Upper Canada, particularly in connection with the rebellion of 1837, suggest the fruitfulness of such an approach. The present essay is to be taken as a case-study in this type of analysis.

Although it was not his intention, Edward Gibbon once defined the whole duty and substance of any governmental body when he wrote “a heart to resolve, a head to contrive, and a hand to execute.” Of these attributes and responsibilities the third is not the least important. Nor is this anywhere more true than in the case of the United Nations, an international organization representing and serving sixty diverse states and performing functions both unique and novel. Above all it is true of the United Nations operational agency known as the Technical Assistance Administration.

The executive, that is the organizational and operational, problems of the Technical Assistance Administration break into two distinct categories. There is, first, the exceedingly difficult situation that is created by the administrative weakness of many of the governments of the underdeveloped countries which the TAA has been organized to aid. This weakness may be the result of inexperience, corruption, the general backwardness of the national economy, the primitive cultural structure, personal incompetence, or any combination of these factors. The second type of difficulty is that found in the formidable but essentially straightforward set of problems that will inevitably face an agency staffed by men and women drawn from a variety of national and personal environments, and charged with the conduct of business of an almost unique diversity, in areas globally dispersed.

The economic theory implied by the terms “New Economics,” “Douglasism,” and “Social Credit” rests on the plea that the present economic system is inherently defective; that capitalism has a “mechanical” flaw which assures in any given period a flow of purchasing power almost always less than the flow of prices. As a consequence there is a surplus of goods; a surplus, that is, only in relation to consumers' capacity to purchase and not in their capacity to consume. Major Douglas asserts that the deficiency of purchasing power is not periodic or accidental, but is chronic and ever present. He attributes the cause of the deficiency to the following factors: first, current banking practice which permits private banks to create and destroy credit at will; second, the process of saving and investment; and third, the difference of “circuit velocity between cost liquidation and price creation” which results in charges being carried over into prices from a previous cost-accountancy cycle. It has been pointed out repeatedly that each of these assumptions is of questionable validity.

In logical sequence to the hypothesis that capitalism produces a surplus of goods which consumers cannot purchase, Social Credit proposals for reform are designed to inject purchasing power into the consumption stream: in a word, to make consumption equal production. This can be achieved, it is stated, by introducing a “just-price” mechanism and by augmenting personal incomes through the issuance of “national dividends.” The “just” or “assisted price” is conceived as an arithmetic ratio (total national consumption over total national production) which is to be the means of deciding, from time to time, in what proportion the retail price level will be reduced.

Although, as Professor Norman Ward pointed out in The Canadian House of Commons: Representation, statistical studies of the personnel of Parliament are not entirely satisfactory, they are none the less valuable to the political scientist for they help him to a better understanding of legislative bodies. The nature of a parliament is partly determined by the characteristics of its members. Thus the British House of Commons, with its membership broadly distributed in many occupations and its many trade union members, has a collective approach to contemporary problems of government different from that of the American Congress dominated by lawyers; and a legislative body with a large proportion of Roman Catholics will handle legislation on divorce in a manner quite different from that of a parliament composed almost entirely of Protestants.

The present study does not consider whether the various segments of the Canadian population are represented in proportion to their size in the nation, nor question the quality of Canadian representation. It is simply an attempt to discover some of the measurable characteristics of members of the House of Commons elected June 27, 1949. An effort has been made to indicate trends by comparing the results of this study with the conclusions reached by Lionel Laing in his article on the characteristics of members of the twentieth Parliament. The major source of data has been The Canadian Parliamentary Guide. Although the information is not complete in all biographical sketches of members, the absence of only a few items does not seriously alter the final statistical picture. No attempt has been made to include information on members elected in by-elections since June, 1949.

Few Parts of the world have been so effective in carving the trends of human thought and action as the peripheral regions of the Eurasian land mass. These can be divided into two broad regions: the smaller crescent of European marine powers west of the Dardanelles, and the larger crescent of Asian peninsulas to the southeast. In spite of the earlier cultural and political development of a few areas in the latter, the former have outstripped them in the race and during the last four hundred years have controlled their resources and destiny. Recent events, however, indicate the beginnings of a reversal of this process. While European states seem to some extent to be descending the peak of political and economic power, the South Asian lands are desperately trying to ascend it. The centre of the stage is quickly changing from Europe to Asia.

The South Asian lands extend from the western Mediterranean to the eastern Pacific and cover 80 degrees of longitude and an average of 25 degrees of latitude. Comprising approximately one-tenth of the world's land area, they contain one-third of the world's population. Yet their combined national income is considerably less than that of the United States alone. The average individual monthly income in any of these lands is much less than the average individual daily income in the United States. This great discrepancy, rather than poverty, is the clue to South Asian behaviour and discontent. Poverty and degradation, which have become characteristic of the life of the Asian people, are usually blamed either entirely on the Western powers, or entirely on the Eastern people, depending upon whether one comes from the “subjugated” East or from the “exploiting” West. The very intensity of these two extreme accusations belies them; and truth, as always, is to be found somewhere between. It must be conceded that perhaps there would be fewer hospitals and schools, factories and railways, real and other assets, if the Western powers had not filled the political vacuum in the East; yet at the same time it is unjust to deny that many more of each of these improvements could have been made if political “morality” had been allowed to supersede the merely economic interests of the governing countries.

The two papers to which we have just listened throw a significant light upon the problem of developing underdeveloped areas. Mr. Tayyeb presented some of the material aspects of the conditions encountered in the attempt to integrate industrial activity with the still predominantly agricultural economies of South Asia, and Dr. Keenleyside throughout his thorough description of the problems of administering technical aid rightly discouraged thought that technical assistance amounts to very much more than a reflection of the difficulties which it is its aim to help solve. In my own remarks I should like to combine the two different aspects presented in the papers, namely, the problems of the aid-receiving countries or areas and the problems of the aid-giving nations, in discussing some of the structural characteristics of the economies involved. My aim is to elicit from the material at hand, or even to read into it, some criteria necessary for the formulation of adequate policies in aiding underdéveloped countries. Economic theory, in this context, will be defined as the means by which we establish relationships between data with the aim of understanding the structure and motion of the whole economy in a manner that makes possible the formulation of policy. The institutional flavour will be unmistakable.

Mr. Tayyeb has reminded us of some of the prominent features of South Asia. He suggested that the poverty and degradation characteristic of this area cannot be explained by analysing them solely in terms of the state of subjugation of the Asiatic people, nor solely in terms of European exploitation. “Truth,” he said, “is to be found somewhere between.” The word “between,” I take it, suggests a relationship.