When the Asquith Coalition Government took office in May, 1915, the new First Lord of the Admiralty was Mr. Arthur James Balfour. His appointment to that particular position at that time was due to a number of influences, among which political exigency was by no means the least important. In the Cabinet reconstruction, Asquith had insisted that Grey at the Foreign Office and Kitchener at the War Office were not to be changed, and these reservations materially lessened the higher Cabinet posts which were available for prominent Conservatives. As a result of this delicate weighing of leaders and offices, Balfour became the most obvious choice for the Admiralty, a position for which he was well qualified on at least two other grounds. He not only held a seat in the Commons, but his experience as an unofficial consultant and member of the War Council during the previous seven months had given him a more comprehensive knowledge of the problems of the fighting services than any of his Conservative colleagues. The suitability of his appointment, moreover, was endorsed by his predecessor, Mr. Churchill, who suggested that inasmuch as Balfour had recently been in unusually close touch with events at the Admiralty, he could take over its duties with very little break in the continuity of the administration.

This paper presents the first or exploratory phase of research in a study of the effect of invasion on the morale of a community. Although many studies have been made of spacial succession, and some of changes in social attitudes, there has been little attempt to investigate the relationship between these two phenomena, in other words, to show whether, or how, the solidarity of a group is affected by an ecological succession. The process of invasion has been described in connection with different areas of a city. The invasion of one section of a city by an outside ethnic group is a common phenomenon. The general pattern is that, with its first indication, the morale of the resident group strengthens, but eventually one point breaks, that is, someone sells out to one of the invaders. Then another gains a foothold—a house or a shop—and, once the area is well penetrated, both the invasion and exodus gather momentum.

This is a study of a large rural area in which the invasion has taken place over so long a period of time, and over such an extensive region, that the invaded population as a whole has taken longer to realize its significance. In this situation it is much easier to trace and observe the psychological effect of invasion on the invaded group.

The field of research chosen for this study was made up of the four counties of Compton, Richmond, Sherbrooke, and Stanstead in the Eastern Townships of the Province of Quebec. Interviews, practically all indirect, were obtained from the different sections—industrial towns, county towns, summer resorts, villages, and rural areas.

It is inevitable that, in time of war, the greater concentration of power necessary for the efficient prosecution of the war should lead to the abandonment of certain of the constitutional rules and traditional practices of popular government. It is possible that the new measures introduced under the cover of war, the new methods of social and economic policy which are now coming into use, not only serve the special requirements of a war-time economy but correspond as well to the lasting needs of a changed society. It is not the purpose of this inquiry to say whether these new methods are good or bad in themselves, permanent or temporary, nor am I concerned here with the conflict between them and individual liberties; I wish to discuss only how far they are compatible with popular government and how far it may be necessary to adapt its system to changed conditions. For though established institutions have a way of making their own adaptations to circumstances in the course of time, some conscious and considered human guidance may aid in the progress.

First, both the traditional forms of popular government and the new policies, which constitute its novel activities, need some defining. Popular government, in the English-speaking world, rests on the two-party system by which one party is in power and the other in opposition. Although the two-party system is not the only form of democracy, it is the one that has shown itself on the whole to be the most stable, lasting, and extensive.

The expansion of the Niagara Peninsula has occurred with its advance from a frontier of conflict to one of contact. Lying at the western extremity of the Hudson-Mohawk, that “greatest of all routes of continental migration,” it forms a major land bridge from New York to Ontario, and exerts the same attraction today, when it has become one of the chief international regions linking Canada with the United States, as it did in the mid-nineteenth century, when it formed part of the great overland route drawing immigrants to the West, or even earlier, when it was itself a pioneer zone. At the same time it is a prime water link between west and east, and, being used both by American and Canadian, has helped to bring them together, first in the commercialization of the St. Lawrence, and later in its industrialization. As a result it is one of the few districts of Canada able to show a continued native growth, together with a “pull on the northern margins of the neighbouring states at all comparable to that of the numerous urban and industrial regions of the United States.”

Thanks to these advantages, its population has increased fifteen times in the last 120 years, with an expansion in recent decades only exceeded by that of the early pioneer influx (see Figure 1). Its problems, therefore, are associated with growth, and with the attempts to work out a series of integrations with each new stage of development, in order to preserve equilibrium in expansion, and create new organizations of settlement and society. Its chequered history, especially as represented in the urban centre, has shown the varying success with which these issues have been met.

Less than justice has been done to Sir William Temple as a political scientist. It is true that his reputation now stands higher than it did in the nineteenth century when Courtenay, his biographer, observed, “Neither in science nor in politics, were his opinions founded upon an accurate combination of facts and principles,” and added, “Of Political Economy Temple knew nothing” and when Macaulay dismissed the essay on government as “exceedingly childish.” Three modern studies have done much to revise this unflattering estimate, but some aspects of Temple's political thought have remained unconsidered or confused. Professor Herriott in his analysis of Temple's ideas on government has pointed out the novelty of those ideas but has given little attention to the significance of Temple's approach and method. Dr. Marburg's excellent book, though it does not deal primarily with Temple's political ideas, has made a valuable contribution towards their understanding. But her views on Temple's attitude to science and his use of its method are open to question. Professor Woodbridge, in his recent very full study of Temple, praises “the astonishing originality” of the essay On the Original and Nature of Government, and remarks as its great merit that its argument is based “upon historical probability, observation and experience,” but he does not emphasize the inductive aspect of Temple's work nor discuss the relation of his political thought to the scientific movement. Apart from Professor G. N. Clark's explicit but passing references to Temple's significance as one of the first of the inductive political thinkers, the extent to which Temple participated in the prevailing scientific climate of opinion and was influenced by it has been generally overlooked or greatly underestimated.

On these annual ceremonial occasions it has been customary to have an Economist look at Economics, a Statistician discuss the role of Statistics, the Historian look at History, or all the Social Scientists look concertedly at some synthetic product called Social Science. There have been some exceptions to this type of procedure. I shall take my cue from the latter and discuss some matters in the Canadian scene in which the various Social Sciences have a common interest.

Canada's Population Possibilities. In the first place, let us consider Canada's population. In recent years we have heard much about the so-called over-populated and under-populated countries. The crudest form in which notions of this kind are presented is in terms of number of people per square mile of land surface. By this device Canada's 2½ per square mile seems to demonstrate obvious under-population as compared with England's 390, forgetting that this 390 involves resources not only at home but also abroad. We seem to be on safer ground when we take arable land surface as a base for presenting population densities. Then Canada seems not so vacant with 121 to the square mile. The arable land index should be supplemented by indices of available minerals and closely allied items. Such measuring rods could be extended to include (1) real income trends for the country as a whole as well as for its varied occupations, (2) the employment index, and (3) trends in population growth. These merely suggest some of the indices that could be used to make comparisons of population pressure on the living space of different countries.

The Canadian Political Science Association, half-way through the second year of the Century of the Common Man, naturally devotes some of its attention to the prospects of democracy in our own country. It is fitting that we should inquire into what has been happening to our party system, for we have had as long an experience as most modern countries in the working of popular political parties as part of the machinery of democracy, and our experience should be of some significance to other peoples as well as to ourselves. How little systematic study has been done on this subject, however, is brought home to a Canadian after he has lived for a time in the United States and has had to try to answer Americans when they ask for books on the principles, organization, and history of Canadian parties, such as they produce so abundantly on their own parties. It might not be a bad idea, therefore, to begin this paper with some reference to recent American discussions of their party system. One can usually derive from a study of American experience the most useful categories of thought in which to arrange our own Canadian experience. And American books on democracy in general and on political parties as one of the techniques of democracy have been pouring from their presses in great profusion in recent years.

American study of the subject of political parties in America has now reached the stage at which text-books digesting for university undergraduates the conclusions of the experts are almost as standardized as American motor-cars. When one reads the new ones that appear with each new publishing season one gets a strong impression that the chief reason for the new publication is not the author's urge to throw fresh light on the subject but simply the reason which produces new text-books in most subjects, namely the urge to supplement a meagre salary by a comfortable income from royalties.

In the opinion of many observers the most serious malady from which the social sciences suffer at the present stage of their development, is their compartmentalism. At the theoretical level, most social scientists would agree that the subject-matter of all the specialized social disciplines is the same, namely human behaviour: in practice most specialists deal with some aspect or department or area of human behaviour, or human behaviour viewed from some “viewpoint.” This separation, however, into areas or aspects, convenient as it may be, or at least as it is asserted to be, for research purposes, is a somewhat arbitrary proceeding and it has resulted, among other things, in a breakdown of communication between the different social science compartments. Another result has been a less, not a greater, understanding of man. There is a strong case to be made, as Robert Lynd, for example, has made it, for the view that the social scientist is the worst example extant of the person who knows more and more about less and less. This is particularly sad when it is noted that less and less in such a context is the human animal, who is clearly a complicated and many faceted piece of work on any viewpoint or from any aspect.

This article is an attempt to apply to certain problems of shifting equilibria some techniques which are familiar to readers of Professor Schumpeter. The problems to be examined are: the effect of a technical advance on the equilibrium position of a single firm which is in a position to adopt the new techniques; the effect of a technical advance on the optimum and typical size of firms in the industry; the social dispersal of benefits from a technical advance; the relation of a technical advance to the rate of investment and the rate of interest; and the implications of technical advance for social policy and the level of welfare.

I wish first to consider the position of a firm in imperfect competition experiencing a technical advance over a period of time. Now, whatever the nature of this firm, there will be a point, at any moment, beyond which increases in output can be achieved only at an increased unit cost. The greater the proportion of fixed to variable costs the further to the right (graphically speaking) this point will be. In industries like railroading the point may be to the right of the relevant sector of the curves because the proportionate decline in fixed costs per unit of output is absolutely so great as to offset rising variable unit costs for any practicable output. However diminishing returns inevitably exist in the rigorous sense that the intensification of the use of fixed plant, at any moment of time, will eventually result in diminished increments of product per unit of variable factor employed, and this implies increasing marginal variable cost. Total unit costs will increase when, with each increase in output, the absolute increases in variable costs exceed the absolute decrees in fixed costs per unit; and we should remember that, though the decline in fixed costs is uniform as a proportionate decline (the fixed unit cost curve is always a rectangular hyperbola of the type xy=k), the absolute decline, as output is increased, becomes less and less. Thus, and this is a commonplace of economic theory, any change in the proportion of fixed to variable costs of the firm, will have a definite effect on the optimum cost point and on whether or not the firm is operating, within any practicable range of output, under increasing or decreasing costs.

In recent years in many countries of the world a great deal of attention has been directed toward the need for more nutritious diets. The term “protective” foods has become established in the literature on nutrition. While there may be some differences of opinion as to what constitutes protective foods, practically all the lists of such foods which have been prepared by nutritionists include milk, meat, eggs, cheese, and fruits and vegetables.

The first studies of consumption of agricultural products in Canada were made by the Economics Division of the Dominion Department of Agriculture in 1930 when by the use of mail questionnaires a survey was made of the purchases of apples by consumers in Toronto and Montreal. A year later the first study of milk consumption in Canada was made by the Economics Division in the Sydney-Glace Bay area of Nova Scotia and in 1935 a more comprehensive study of milk consumption was undertaken in a number of urban and rural areas. Since 1935 additional studies of consumption of foods of various kinds have been made by the Economics Division as well as by other agencies. Most of these studies have been in relation to protective foods which in the main are the more expensive kinds of foods. These studies have been largely confined to city people although information has been gathered on the use of certain commodities in rural Canadian homes.

This paper is concerned with the changes in types of power in the Atlantic basin following the discovery of America. Direct control from Europe under the French, Dutch, Spanish, and British Empires has gradually changed with emergence of independent states in North and South America and of the British Commonwealth of Nations. In Canada European institutions were more strongly entrenched and feudalism continued to exercise a powerful influence, latterly, for example, in the control of natural resources by the provinces. The provinces have become land-lords with great disparity of wealth varying with federal policy, technological change, and provincial policy. The changing disparity enhances the complexity of democracy in Canada.

The advantages of the British Empire in its struggle with the French Empire were in part a result of the implications of imperfect competition between drainage basins in the interior as contrasted with more effective competition between the maritime regions of the Atlantic seaboard. In the latter region, imperfect competition was reflected in the slowness with which adjustments were made between the West Country in England, Newfoundland, Nova Scotia and New England. In the interior of the continent competition was less effective in the struggle between traders of various nationalities or of the same nationality as it was carried on between drainage basins. Trunk rivers and tributaries with low heights of land between drainage basins facilitated the tapping of vast regions. The relative effectiveness of competition on the seaboard and in the interior of the continent had implications for the struggle of empire.

As the trend toward total war creates an ever increasing demand for manpower, the necessity for establishing a programme for the rehabilitation of the physically handicapped becomes a national necessity. Industry is forced to employ marginal workers and to plan conservation of manpower. Rehabilitation, therefore, can no longer be regarded solely as a welfare measure designed to salvage the morale of the disabled. The handicapped person is a valuable person; he must be rehabilitated because the nation needs him. He must be vocationally trained, not in some diverting handicraft, but in skills that will fit him for a place in war-time industry.

The problem of the handicapped is essentially that of vocational maladjustment caused by social and economic prejudices. These prejudices are based on false concepts of working capacity which have developed social attitudes that serve to handicap the disabled in their efforts to earn a livelihood. Instead of utilizing their capacity for productive work, society has attempted to compensate them by providing relief.

Recent developments in economic theory are especially rich in policy implications for a single country seeking to maximize its welfare through international trade. They make necessary a restatement of certain parts of the ancient controversy over free trade and protection; namely, those affected by the theory of employment and the theory of imperfect competition.

There is little to add to the broader classical conclusions on the maximization of welfare in the world economy, or to the general, if cautious, acceptance of the infant industries argument. However, the former must be qualified in the light of the theory of imperfect competition, particularly the theory of monopsony, and the implications of decreasing costs; while the latter depends on technological considerations normally impounded in ceteris paribus even in modern value theory.

The special relevance of any of these universes of discourse in terms of which international trade policy may be discussed and evaluated is itself a controversial point. If, for example, a reasonable and steady approximation to full employment is considered of paramount importance, the practical alternatives of fiscal and international policy are considerably narrowed. The most efficient allocation of resources among alternative uses may have to wait on policies for getting all available human resources into some use. At another level, the optimum allocation of resources for one country may be defined for a national real income made possible by exploiting its neighbours. It is the duty of the economist, not to ignore or to condemn these judgments, but to show how the desired ends may be achieved in practice, and to point out any inconsistencies among ends of policy simultaneously desired.

Establishment of a uniform Dominion-wide vital statistical system in 1926 showed Canada to have gross and net reproduction rates above most of Northern and Western Europe and the Anglo-American world. What knowledge we have of trends indicates that fertility has been declining rapidly in Canada. In 1939 the Canadian net reproduction rate was well above unity and the war-time rise in marriages and births will have maintained it at that level. Probably, however, the rising birth-rate of the war years does not indicate any rise in the size of completed families. While the situation in Canada affords no grounds for complacency about that country's capacity to maintain its numbers in the future, there is no suggestion that declining fertility is an inevitable process. By analysing the trends now plainly visible, demographic research may provide a basis for policies aimed at their reversal. The prospect of a declining population may not cause much alarm in some countries. It can hardly be welcomed in Canada, with its empty spaces and undeveloped resources.

Previous post-war experience is so uniform, and economists differ so little in their prognoses for the next post-war period, that it seems safe to be somewhat dogmatic about the situation that post-war tax policy must meet. In the absence of measures specifically designed to prevent it, there is every reason to expect the typical post-war pattern of hesitation, inflation, deflation, boom, and prolonged depression. It is clear that the unprecedented magnitude of the war effort could lead to fluctuations of unprecedented violence. If the Japanese war were to end soon after the European war, or if it were on a much smaller scale, it is conceivable that the uncertainty characteristic of the months just after cessation of hostilities might lead directly to deep depression. During the reconversion period, there is bound to be serious unemployment in certain industries and regions, that could start a cumulative downswing if allowed to produce a commensurate drop in national income. If on the other hand the Japanese campaign lasts several months and is on a comparable but nevertheless smaller scale, the “hesitation” period may be completely ironed out.

In the first year or two after the European armistice, and perhaps even for a similar period after the Japanese armistice, the primary economic problem will still be scarcity of consumers' goods relative to potential demand for them. The money supply has already risen over 70 per cent since war began, and with $1.75 billion of war bonds in the hands of individuals and another $1.5 billion in the hands of non-financial corporations even before the fifth war loan, it could rise another 70 per cent through sale of government securities to the banking system if war ended tomorrow.

Apart from its legal aspects, and legislative promptings and permissions, collective bargaining on this continent is pretty much of a single piece. The international trade unions play out their bargaining offers and techniques in Canada as in the United States, with little attention to the boundary line. In this paper on trends, therefore, I have chosen to move freely over the whole movement rather than limit the study to Canada where in fact little of the pioneering has been done.

Expansion. Collective bargaining on this continent is enjoying rapid growth after marking time or even falling back for a decade in the 1920's and early 30's. In the United States, the year 1933 marks a dividing point in time. But the longer history of trade union development has in fact been characterized by a series of up-surges followed by slow-downs or flat periods. These have been affected in some measure by business cycle conditions, but the sequence of prosperity and depression is not always the central and frequently not a very revealing feature in their explanation. One needs to consider the unevenness of trade union advance in relation to many matters such as changing attitudes toward recognition by employers, attitudes of different governments as expressed through legislatures and courts, periods of war and cost-plus contracts, the social and political philosophy of the men who give leadership to the two sides, the Carnegies, Girdlers, Fords, Gompers, Hillmans, and Lewises. Above all, one must examine its different rate of progress among different industries and trades. With respect to the last, one must examine the areas of early conquest and the special additions made from time to time. This paper attempts to examine only two or three strands of causation.