Canadians never tire, and never will tire so long as they are Canadians, of considering the influence of the United States on their economic, political, and social structure. For many years past the United States has been the most important external influence on Canada. Since the war, it has become so much the predominant external influence that the traditional Canadian practice of balancing between the influence of Britain and the United States is no longer an effective procedure. Certainly in the economic sphere the United States constitutes the only real threat to Canadian independence and it will remain our chief economic preoccupation as far ahead as one can see.

The purpose of this paper is to discuss some aspects of the economic side of the relationship between the United States and Canada. In so doing I shall attempt to outline some of the main facts with emphasis on the changes which have occurred since before the war and to offer a few reflections on the meaning of these facts in terms of Canadian interests and Canadian policies.

Even the briefest examination of the facts makes it clear that our ties with the American economy have become closer and more important during the past decade than ever before. Today 60 per cent of our commodity exports go to the United States compared with less than 40 per cent before the war. Almost three-quarters of our commodity imports come from the United States compared with less than two-thirds before the war. Though foreign trade in total has been playing a gradually decreasing part in our national economic life, our business with the United States occupies just as large a part in Canadian activity as it did in most pre-war years. Canadian exports of goods and services to the United States in 1955 were equivalent to about 14 per cent of the national production, and Canadian imports of goods and services from the United States to about 18 per cent.

The years 1867–75 were ominous ones in the history of British trade unionism; they were also years of some of its greatest successes. The renewal in 1867 of trade union violence and murder by the Saw-Grinders of Sheffield created a widespread demand for suppression or at least investigation of the unions; and in the same year the Court of Queen's Bench in the case of Hornby vs. Close questioned the legality of unions and denied their funds the protection of the law. Legislation of some kind was certain to follow from these events and organized labour was therefore faced with a serious situation. The Conservative Government of the day decided to proceed by way of Royal Commission and it was only after the organization and practices of the unions had been examined exhaustively over a period of almost two years in 1867–9 that the first steps were taken in the direction of new legislation. Even then the Government—the first Gladstone administration had come to power—moved with exasperating slowness and the unions were kept uncertain of their fate until 1871. But the Liberal enactments of that year did not dispose of the problem; only with R. A. Cross's acts of 1875 were British trade unions set upon their modern foundations. Though long delayed, the two instalments of reform, in 1871 and 1875, constituted a complete success for the unionists, the first great legislative victory won by organized labour and a forecast of its power in the twentieth century.

Some confusion regarding the present position ot the Canadian wheat economy is inevitable if one reads the newspapers at all. One press report will suggest a temporary lull in the almost monotonous prosperity in which the prairies are said to have basked for the last ten years or more; another suggests blue ruin and a return to the hungry thirties. The Toronto Globe and Mail, viewing the essentially simple economic and social phenomena of the hinterland as from a metropolitan eminence, attempted a compromise some weeks ago in a cartoon showing a horde of embattled western farmers descending on Ottawa demanding justice and parity in a fleet of Cadillacs. Yet the gibe seems a bit unfair at a time when the wheat farmer does not know where his next Cadillac is coming from. All this may suggest that an effort is necessary to find some middle path between the unfailing optimism of the Minister of Trade and Commerce, whose department and board have in their custody and care the disposition and sale of our wheat, on the one hand, and the almost unrelieved pessimism of certain other V.I.P.'s and the Interprovincial Farm Union Council on the other.

If there are problems facing the prairie economy today they can hardly be charged either to reckless expansion of wheat acreage or to improvident gambling on high prices for wheat in the world market. Perhaps it is prairie experience with the heavy human and capital losses of prolonged depression, through the thirties and early forties, which explains why the wheat grower seems to have put so much emphasis on stability in the post-war period.

I doubt very much if I can effectively shovel any more platitudes on the huge heap of them that have been piled on Canadian-American relations in the past. I will, however, do my best to produce a few more. I have been lured on to this platform by nothing more worthy than personal vanity, and, since accepting the invitation, I have been regretting my weakness. There is nothing I can add to this subject that has not been said, in one or another form, a score, a hundred times, before. Yet here I am, pretending to have a thesis, and I suppose I had better produce one.

What I have to say, such as it is, is addressed to persons my own age or older, and I was 59 last April. Younger persons, or most of them, will wonder what all the shouting is about—if there is any shouting; and I would suggest to the programme committee of this association that they might consider having a repetition of this paper next year, or the year after, read to them by somebody who is 29, and not 59 years of age. The effect, at least on the older members, might be salutary and perhaps even startling.

The reason why I make this suggestion is that I was brought up in an old school, a school which thought about Canadian-American relations in a context very different from that which has become necessary now. It was a school in which one of the great teachers was John W. Dafoe, who was my master for 20 years and whose memory I will honour for whatever years are left to me. But the cardinal thesis of that school was that, at all costs, Canada had to fight its way out from under the traditional influence of British imperialist and colonial rule; and that one of the best ways of doing it was to use the influence of the United States as a counter-balance against the pressure from Westminster.

According to the Balfour formula, enunciated by the Imperial Conference of 1926, the position of the United Kingdom and the dominions was that of “autonomous communities within the British Empire, equal in status, in no way subordinate to one another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown, and freely associated as members of the British Commonwealth of Nations.” Equality of status as a declared principle was one thing: its application in constitutional procedure was another.

For equality of status did not necessarily mean equality of function. There was a deliberate ambiguity in the 1926 declaration. The United Kingdom and some of the dominions were satisfied with the principle of equality, for an attempt to define its meaning in institutional terms would reveal the disagreement which had been so carefully glossed over. The United Kingdom did not like to think of the dominions as functionally autonomous, for if they were, the sacred shibboleth of the diplomatic unity of the Empire would be undermined, and there were not many in the dominions who were prepared to bear the full burden of the bureaucratic, diplomatic, and military structure which real independence would bring. So, on the whole, ambiguity was preferred. Today, this ambiguity has been resolved. In fact, the Commonwealth in 1926 meant something rather different than it has now come to mean, though both meanings can be covered by the Balfour formula.

The Co-operative Commonwealth Federation (C.C.F.) claims to open all its policy-making agencies and channels to its dues-paying membership. This very claim runs counter to what is usually considered the proper operation of political parties. Most groups of active supporters, if they enrol in a party at all, do so primarily for the purpose of closer identification and to lend more substance to their support, but not in order to determine the party's affairs. Even in the case of the major U.S. parties where voters enrol as members with the purpose of helping to nominate candidates, and of those interest-based parties such as the British Labour party and the Mouvement Republicain Populaire, where the party consists of constituent organizations with dues-paying members, the claims of the members to participate in the direction of party affairs receive little support from party theorists. And even where the legitimacy of an assertion by members of a right to participate in policy-making receives consideration, we find at once an insistence that apathy toward public affairs on the part of most people renders widespread membership participation in policy-making nugatory, and that parties, engaged as they are in a struggle for political power, demand in their operations secrecy, flexibility, and unity, none of which permits the kind of open policy-making in which lay members can freely participate.

Policy-making in the two major parties in Canada follows the traditional parliamentary pattern. The parliamentary leader is responsible for the initiation and execution of policy, which he discusses with advisers of his own choosing.

In reviewing the literature on the purpose and administration of the combines and anti-trust legislation for this paper, it became apparent that there were topics very close to the core of the matter which, although they were separately the subject of exhaustive analysis, were rarely brought face to face; nor were the problems involved in their integration fully probed. Recent developments in economic theory and differences of approach on the part of lawyers and economists, to mention only two areas of potential discord, may create issues that are attributed to quite different sources. Neither time nor personal competence will permit a detailed exploration of this important subject. Nevertheless, a brief survey of some of the issues that often lie submerged in our discussions of combines matters may serve as a useful background for the more detailed review that follows.

The difference in the approach of lawyers and economists to the problems of monopoly and restraints of trade was the subject of a recent paper by Dr. Jesse W. Markham, then Acting Director of the Bureau of Industrial Economics of the Federal Trade Commission. Basically, legal and economic disciplines are regarded as being oriented toward different sets of values and sometimes differently toward the same set of values.

Economics [Dr. Markham said] is concerned largely with fundamental social phenomena and with the laws of human behaviour by which man brings order to economic activity. The law, on the other hand, is concerned with formal rules enforceable in the courts. The law, on the other hand, is concerned with formal rules enforceable in the courts. Thus, the economist views the competitive enterprise system as a particular form of economic organization … while the legal mind views it as a set of rights and obligations related to private property, contracts, and other aspects of business as expressed in the formal law. In brief, economics is oriented toward fundamental relationships among men and business firms; while the law is simply the accepted rules of conduct for such relationships.

In any study of Canadian industry today, words such as growth and development quickly come into their own. The very scope and rapidity of the changes have introduced a new pace which in many ways is unique. Some of the reasons are not hard to trace. Once growth reaches a certain stage it seems to accumulate momentum. The proximity of Canada to the United States and her access to the industrial technology of that country have also contributed greatly.

A large measure of the expansion of Canadian industry has been the result of extensions of United States corporate activity into Canada through the establishment or development of branches and subsidiaries. In this manner, United States industrial technology, supported by abundant sources of financing in that country, has speeded and extended the process of Canadian development. And important parts of the growth which provide sources of supply for United States industry are in turn closely linking Canadian growth to growth in the United States economy. Participation by British and European enterprise and industry to a greater degree than formerly should also be noted, although it is much smaller in scale than the parts sponsored by United States industry. The pace of development would have been much slower had there not been this borrowing of non-resident resources both technological and financial. In the past half-dozen years or so, over half the increase in investment in Canadian industry has been owned by non-residents. That suggests the degree of financial assistance. It would be very difficult to evaluate the borrowing of technology but in some industries it has been very great and has provided the indispensable “know-how” without which ventures would carry much greater risks. Most of this increased investment has taken the form of equity ownership and control which carries with it potential claims to participate in subsequent growth in the rapidly developing, commodity-producing industries—manufacturing and mineral production.

Two recent articles by Professors H. Scott Gordon and Anthony Scott present an interesting analysis of the conditions for economic maximization in a renewable resource industry the primary raw material for which is drawn from the public domain. While their criticism of the concepts which now govern fishery conservation programmes will be generally accepted among the handful of economists dealing with the fishing industry, some aspects of the problem call for additional consideration. In this paper I should like to elaborate and modify the general outlines of the analysis, largely in terms of a specific and important case: the Pacific halibut fishery.

As Gordon and Scott point out, the core of the “over-fishing” problem inheres in the fact that the basic resource is incapable of ownership in any meaningful sense. When the demand for a given species exceeds the level at which supplies can be drawn from local waters at relatively constant costs, further exploitation of the fishery gives rise to higher costs at both intensive and extensive margins. The catch per unit of fishing effort will decline in the closer, more populous grounds as stocks are reduced, and greater costs must be incurred in pushing fishing activities to more distant grounds. If the grounds could be and were privately owned, the incremental income resulting from, say, secular growth in demand would, of course, accrue as rent in a purely Ricardian sense. Since they are not, and since there are no substantive barriers to the entry of new vessels, the increasing aggregate returns will simply be dissipated in excess capacity and higher monetary and real costs. If the reduction in stocks, viewed with grave alarm by biologist and legislator alike, now gives rise to restrictions on the catch designed to hold fish populations at some predetermined level or to rebuild them, the increases in price, aggregate returns, and excess capacity will continue. There is obviously no assurance that the final effect on economic output over time relative to total factor inputs is the same, better, or worse than in the absence of such restrictions.

It is a rather puzzling historical coincidence that in many countries attention is being paid once more to inflationary tendencies at the very moment when the international situation suggests the possibility of relaxation of world political tension. If the East has, or ever does, come to the conclusion that the only way to keep the consequences of the Paris agreements under control is to act in time, the quickest form of diplomatic retreat reconcilable with exigencies of an inconspicuous negotiation-technique is the most probable. Correspondingly rapid demobilization in the West accompanied by inflexible pursuit of anti-inflation measures might produce a demobilization crisis that would fulfil Communist hopes for economic and social difficulties in the democratic world. Whether the immediate danger is inflation or deflation, an analysis of the recent history of savings, including periods of unemployment and overfull employment, should be enlightening.

The development of national savings is recorded by Canadian statistics for the last three decades in a very informative way. They offer historical examples of all the typical combinations of factors that are important for a balanced economic development: what is commonly accepted as normal or full employment is followed by years of high unemployment and then comes a period of over-employment during the war years. An examination of the survey in Table II can tell more than lengthy theoretical disputations.

Before discussing the details of the historical development in Canada, let us consider the essential components of the process in a simple arithmetical example.

St. Justin occupies a special place in the social study of French Canada. It was there that Léon Gérin began, in 1886, his pioneer study of the rural communities of the province of Quebec. It was on the basis of the data he collected there that he formulated his analysis of rural French Canada as a close causal cycle in which the dominant factors were the family, the land, and religion. The basis of his argument is the proposition that the people of St. Justin lead a life which “presents itself here as a simple juxtaposition of families which are very nearly all equal; nearly all occupied in agriculture; nearly all self-sufficient; but none of which has a higher ambition than to transmit intact the family property to one of the children, although favouring, within the limits of its resources, the settlement of the other children outside the family home.”

He elaborated this proposition into a complex of interlocking institutions which gave to the inhabitants of St. Justin a definite form of social organization, as well as a definite culture. In fact, he built a model which has remained unequalled in the analysis of French Canada. Presented as a functional entity, St. Justin was made to represent a stage in the historical, as well as the geographical, development of Quebec. According to Gérin, St. Justin had reached a balanced relationship among its various institutions. The family unit was said by him to be stable and well-integrated. The size of the farm was in direct relation to the size of the family, and the work on the land, carried out by the members of the family, was limited to their needs. The total output thus depended on the quantity of labour each family could supply for a given unit of land, and on the natural fertility of the soil. The general expectation of the members of a family was limited to the creation and maintenance of a unit of property large enough to supply their daily needs, maintain the aged, and provide for the settlement of those who would have to leave the household to go elsewhere. Such an aim demanded a high degree of personal sacrifice from all the members of a family, and tended to turn family property into a communal possession. While the stability of the family was obtained in this manner, the stability of the community had been achieved through the creation of a single broad social class.

When I was invited to present a paper on “Problems of Public Administration in International Organizations” I readily accepted as I am a firm believer in the efficacy of public discussion of important issues. Ordinarily, the selection of a topic in this broad field would offer unlimited choice, but taking into account recent changes in the international political scene, there was no doubt in my mind about the subject on which I should speak.

Anyone associated with the activities of international organizations over the past ten years has inevitably been impressed by the intense desire of the poorer countries for improved standards of living through accelerated economic development. Equally impressive has been the substantial response of the more advanced countries.

Reflecting their mutual interest in achieving social progress and economic development, and acting in fulfilment of article 55 of the United Nations Charter, governments of most advanced countries (outside the Soviet sphere) increased the flow of bilateral aid in the early post-war period and at the same time joined in establishing a number of new international agencies and programmes for economic development. In the time at my disposal today I will not attempt to describe in detail the different concepts underlying each of these programmes. But it will give some indication of their objectives and scope if I mention the large amounts of bilateral aid now being provided by the United States through the International Cooperation Administration and by Canada and other Commonwealth countries under the Colombo Plan. At the same time international organizations have increased their programmes substantially. Loans extended by the International Bank since the war now exceed $2½ billion.

The object of combines policy is to preserve effective competition by reducing the monopolistic attributes of markets, industries, or industry-market complexes. Neither effective competition nor monopolistic attributes can be measured without ambiguity. Efforts to protect the former and dispose of the latter cannot be evaluated by the customary criterion of economic efficiency, namely, the ratio of the quantity of competition preserved–or of monopolistic elements removed–to the quantity of resources devoted to the purpose.

The following, then, is a collection of qualitative comments, rather than an evaluation. The amount of resources devoted to combines policy is taken as given. The manner in which they have been used is considered on the premise that there are always some markets in which competition can be made more effective by public intervention. The resources in question are those of the Combines Branch of the Department of Justice. While the entire policy includes also the work of the Minister of Justice, of the Attorneys General of the several provinces, and of the courts, in this paper attention is mainly directed to some of the reports prepared under the authority of the Combines Investigation Act since the end of the Second World War. The choice of markets where the threat to competition must be checked, and of remedies by which the threat is to be reduced, has a bearing on the effectiveness of combines policy.

The increasing importance of institutional investors in the provision of private and public long-term credit has focused the attention of economists on the activities of these investors in the saving-investment process in the economy. Institutions have become crucial factors in the determination of the nature and the extent of the expansion that takes place in industry and business, and of the nature and extent of credit supplied, including the relationship between equity and debt in the capital structure of corporations. In addition, they are important suppliers of public credit, particularly in time of heavy government borrowing, as in wartime. Also, from the point of view of government policy, they are important in determining the nature and types of credit controls needed in inflation and deflation.

The life insurance companies merit particular attention not only because of the size but also because of the nature of the funds under their administration. Their funds, amounting to some $6 billion, represent almost 50 per cent of institutional funds, excluding those administered by the banks. The assets of these funds comprise approximately 20 per cent of the total long-term public and private debt, including mortgages, in Canada. In contrast to other institutions, life companies acquire their funds as the result of contractual saving on the part of millions of policyholders. Thus their funds exhibit, and will continue to exhibit, a sustained growth. Since they are the result of personal saving, the income arising from their investment is important to a large segment of the economy, and the way in which they are invested is important for the nation as a whole.

The problems of present-day Brazil are the travail of a people in the midst of a three-dimensional renovation. Their economy, politics, and social structure are changing simultaneously, but at different speeds. Much the fastest transformation is the economic. Political alterations are slower. Social reconstruction is the slowest. The purpose of this paper is to analyse some of the contradictions that exist within the state when the economy propels it forward while the social order holds it back. What happens in politics when reform of government must be adjusted to a fast rate of economic change and a slow rate of social change? And can such reform be accomplished when foreign examples are invoked to displace ingrained traditions?

The character of Brazilian government is curiously akin to that of the new buildings which abound in the Copacabana suburb of Rio and elsewhere. The architect, a master of the modern idiom, has designed an imposing elevation to the street and an entrance of striking beauty. But, as one enters, much will be found in the finish of the interior, and in the services and maintenance, that conflicts with the external view. For periods of varying length, water will cease to flow from the faucets; electricity will be cut off; street drains may be inadequate to carry off rain and sewage; and, sooner or later, the bichos will find their way in. A building may look a thing of beauty, but without the necessary utilities it will not be a joy forever to live in.

Experience, not design, first confronted me with contrasts in the roles of clergymen, teachers, and psychiatrists. On second thoughts these contrasts seemed theoretically important. Their importance will here be assessed on the basis of a tradition of developing thought that as such must, however, be taken for granted. Still, the concrete observations from which this essay takes its departure, as well as the conditions under which they were made and initially interpreted, need prior attention. Subsequently various theoretical proposals will then have their proper balance in material that at best can illustrate them. Rigorous assessment must, as usual, come later still.

For four years I was on the staff of “a mental health project,” called the Human Relations Service, as a sociologist. It was the intention of this project to extend the traditional patterns of psychiatric practice and to gather relevant knowledge about matters of emotional balance to be found in a town of 20 thousand fairly well-to-do people in the Commonwealth of Massachusetts. The staff of the project included psychiatrists, a psychiatric social worker, clinical psychologists, and various social scientists. Administratively the H.R.S. was linked with the community through an executive committee the chairman of which was the local Unitarian minister. The project, in other words, was committed to research as well as service, including short-term psychotherapy.

The Maxim “divide and rule” has often been supposed to govern the policy of imperial powers with respect to their dependencies. The United Kingdom, however, has for many years favoured the closer association of its colonies in the Caribbean area, and since 1945 has been actively promoting their federation. As this effort approaches a successful conclusion, it is of some interest to inquire into the reasons for the adoption and pursuit of a policy which seems so much at variance with one of the classic precepts of imperialism.