Production and Distribution Theories: The Formative Period by George J. StiglerReview by: B. S. KeirsteadThe Canadian Journal of Economics and Political Science / Revue canadienne d'Economique etde Science politique, Vol. 8, No. 1 (Feb., 1942), pp. 132-135Published by: Wiley on behalf of Canadian Economics AssociationStable URL: http://www.jstor.org/stable/137011 .

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132 The Canadian Journal of Economics and Political Science 132 The Canadian Journal of Economics and Political Science

signed primarily for teaching purposes, consisting of judicial decisions, extracts from books and articles, and his own comments on salient issues. These materials bear on the general problems of administrative func- tioning in the United States; delegated legislation, administrative adju- dication, and the scope of judicial review of administrative action. Al- though the American constitution prescribes different answers in some situations, there is a striking fundamental similarity in the problems posed by the development of the administrative process in the United States, Britain, and Canada.

In the past ten years, there has been a great controversy in the United States over this development. The law relating to the control of the administration has been much expounded and modified in the judicial scrutiny of the New Deal legislation. A vast literature has appeared in bar association journals, law school reviews, and other periodicals. In terms both of quantity and quality, the British and Canadian literature has been trivial in comparison and we have much to learn from the American discussions. Professor Gellhorn's collection of materials, be- cause it contains much more of the literature than the usual case-book, is concerned with the larger governmental problem as well as specifically legal questions, and makes extensive reference to materials not included in his collection, is the most useful introduction to American adminis- trative law yet made available for Canadian lawyers, law teachers, and students of government.

An introductory chapter provides an excellent setting for the whole problem. Succeeding chapters contain materials on separation of powers, delegation of power, the right to adequate notice, the right to a fair hearing, the methods of obtaining judicial review, and the extent to which the court in reviewing may substitute its judgment for that of the official. In every chapter of the book there is a wealth of illuminating and suggestive material on the Anglo-American constitutional tradition, so much in everyone's thoughts nowadays.

J. A. CORRY Queen's University.

Production and Distribution Theories: The Formative Period. By GEORGE J. STIGLER. New York [Toronto]: The Macmillan Company. 1941. Pp. viii, 392. ($3.50)

THIS book is a real addition to the. literature of production and distribution theory for it compresses the essentials of the work of ten of the most significant writers in the field, and at the same time, by virtue of its analysis and criticism of the views of these men, it makes a positive con-

signed primarily for teaching purposes, consisting of judicial decisions, extracts from books and articles, and his own comments on salient issues. These materials bear on the general problems of administrative func- tioning in the United States; delegated legislation, administrative adju- dication, and the scope of judicial review of administrative action. Al- though the American constitution prescribes different answers in some situations, there is a striking fundamental similarity in the problems posed by the development of the administrative process in the United States, Britain, and Canada.

In the past ten years, there has been a great controversy in the United States over this development. The law relating to the control of the administration has been much expounded and modified in the judicial scrutiny of the New Deal legislation. A vast literature has appeared in bar association journals, law school reviews, and other periodicals. In terms both of quantity and quality, the British and Canadian literature has been trivial in comparison and we have much to learn from the American discussions. Professor Gellhorn's collection of materials, be- cause it contains much more of the literature than the usual case-book, is concerned with the larger governmental problem as well as specifically legal questions, and makes extensive reference to materials not included in his collection, is the most useful introduction to American adminis- trative law yet made available for Canadian lawyers, law teachers, and students of government.

An introductory chapter provides an excellent setting for the whole problem. Succeeding chapters contain materials on separation of powers, delegation of power, the right to adequate notice, the right to a fair hearing, the methods of obtaining judicial review, and the extent to which the court in reviewing may substitute its judgment for that of the official. In every chapter of the book there is a wealth of illuminating and suggestive material on the Anglo-American constitutional tradition, so much in everyone's thoughts nowadays.

J. A. CORRY Queen's University.

Production and Distribution Theories: The Formative Period. By GEORGE J. STIGLER. New York [Toronto]: The Macmillan Company. 1941. Pp. viii, 392. ($3.50)

THIS book is a real addition to the. literature of production and distribution theory for it compresses the essentials of the work of ten of the most significant writers in the field, and at the same time, by virtue of its analysis and criticism of the views of these men, it makes a positive con-

This content downloaded from 62.122.72.20 on Thu, 12 Jun 2014 22:27:14 PMAll use subject to JSTOR Terms and Conditions

Reviews of Books

tribution on its own account. The main theses are closely argued on a rigorous plane, the points of criticism are made definitely and precisely, and the style reflects clear and hard thinking, a certain toughness of intel- lectual fibre, at once convincing and refreshing. When this has been said it is with reluctance that one adds that the impression is left that the author might have written a better book, or two books, had he defined more clearly the purpose he wished the book to serve. In his preface Dr. Stigler says that there is a lack of good critical work on the group of economists who contributed to the almost revolutionary development of production and distribution theory in the last quarter of the nineteenth century and he wishes this book to fill in part this need. He expressly means to tease out the various threads of the theoretic design and to show how they were woven together in the final pattern which he accepts- and regards as generally accepted-as the definitive form of distribution theory. Such a book, addressed to his fellow academic economists, and avoiding the temptation to take on a text-book design, would have helped many in understanding, interpreting, and integrating the major studies in distribution theory. It would have helped more, perhaps, than the actual book Dr. Stigler has written. For the organization of Production and Distribution Theories does not follow the logic of the theory or even its historical development. On the contrary it is arranged about ten economists (Jevons, Wicksteed, Marshall, Edgeworth, Menger, von Wieser, von Bohm-Bawerk, Walras, Wicksell, Clark), grouped apparently by nationality, as though that were in some way a relevant and signi- ficant fact. This arrangement, with the interpolated, familiar, biographi- cal sketches, tends to break the book up into a series of separate studies, not always too well-connected. Instead of a continuous and compre- hensive argument we are offered discrete critical essays of great value on the distribution theories of these ten economists and we are left to make as best we can such jumps as that between Jevons's Theory and the eighth edition of Marshall's Principles without any treatment of the develop- ment of the imputative method applied to distribution theory which lies between. It is only fair to say that from the whole book one may obtain a notion both of the historical development of distribution theory and of its systematic construction, but this is somewhat lost in the author's interest in eliciting and criticizing the views of each of his selected ten economists.

Obviously the book is not designed as a text-book for the use of stu- dents. It is at once too difficult and too partial and selective. Much of the discussion demands of the reader an intimate knowledge of the men discussed and of advanced theoretic techniques. This is not to say that some graduate students in theory will not find the book helpful as a com-

133

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134 The Canadian Journal of Economics and Political Science

mentary on those authors with whom they are really familiar, but only the best of graduate students with a considerable mastery of mathe- matical techniques will find the book more helpful than confusing. In addition to the ordinary difficulties of the subject matter and the rigorous plane of discussion-which ought not to be obstacles to good students- there are the added difficulties of the author's tendency to sacrifice clarity by too great compression, as in his examination of Jevons's treatment of the rate of interest, his occasional rather over-subtle allusions, and his cool presumption, not of knowledge, but of agreement on the part of the reader, as in the case of his contemptuous dismissal of real cost doctrine in favour of the doctrine of alternative costs. This general criticism of the book as an aid to students at any but advanced graduate level must be qualified by saying that Dr. Stigler's presumption of advanced knowl- edge on the part of his reader is always greater in the case of economists that are fairly widely read such as Jevons, Marshall, von Bohm-Bawerk, and Clark than in the cases of Wicksteed and Walras, writers who are, perhaps, more discussed than read. His treatment of Walras, and in par- ticular of Walras's solution of the problem of Euler's theorem, is neat, precise, clear, and beautifully selected and compressed. Indeed, Dr. Stigler's final chapter on Euler's theorem may be regarded as the most valuable of his book. His definition of the problem, that marginal pro- ductivity theorists must show that the distributive shares exhaust the product, and his exposition of the controversy between those who assumed fixed technical coefficients and those who assumed a homogeneous linear production function is a model of clear writing and nice thinking, and it is hypercritical, perhaps, to suggest that this exposition might have gained by a statement of what these methodological assumptions implied in terms of a working economy.

One might finally suggest that a slight bias seems to be indicated in some of Dr. Stigler's critical evaluations. Is Jevons, in spite of the Preface to the Second Edition and his chapter on capital, to be regarded as blind to the implication his value theory bore to the field of distribution? Is Marshall's acceptance of real cost doctrine simply a sop to classical tradition and is not the criticism of Marshall's admittedly rather mud- dled historical treatment of diminishing returns given a somewhat dis- proportionate weight in the evaluation of Marshall? And does not J. B. Clark, with his ethical bias which unquestionably vitiated the objec- tivity and validity of his argument, escape rather lightly in comparison?

This book leaves one with the dissatisfied feeling that it tends to fall between two stools, for it is too much the text-book in design to be the ideal critical study, and too advanced in execution to be the ideal text- book. Sometimes, also, one feels the criticisms are too sharply pressed;

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Reviews of Books Reviews of Books

other times one feels that the argument would gain by a concrete exami- nation of the actual economic conditions implicit in the working assump- tions. To these dissatisfactions a reviewer must give expression, but he must hope that when he does so the natural emphasis which they will receive in a short review will not convey a generally unfavourable impres- sion. Dr. Stigler's book may not serve perfectly either the purpose of a unique critical study or of a textbook, but it succeeds, nevertheless, in being something of each and thus meeting in a brilliant and original way a great need in theoretic literature.

B. S. KEIRSTEAD The University of New Brunswick.

Capitalism the Creator: The Economic Foundations of Modern Industrial Society. By CARL SNYDER. New York: Macmillan Company. [Toronto: Macmillan Company of Canada]. 1940. Pp. xii, 473. ($4.50) 44 original charts.

THIS is a book which is highly significant in itself and still more signi- ficant for the trend in economic writing which it signalizes. The wheel has gone full circle. A man who has been pre-eminent among the statis- tical economists has dedicated this book to Adam Smith, has addressed it to the general public, and has made it a work of political economy in the great tradition. It is not narrowly scientific and ethically colourless, but an appeal to reason and a robust statement of the essential rightness and justice of a capitalistic order with wide disparities of wealth and rapid accumulation of capital. Shades of John Stuart Mill and his doubts which in one form or another have coloured almost a century of economic thought! This book would sweep them all away and substitute faith for doubt and a belief in progress for a namby-pamby longing for an impos- sible equality.

The power of this statement is that it is backed up at every point by detailed measurements of existing economic societies. The earlier econo- mists might believe passionately in the virtues of a free society. They might offer deductive proof that such a society ought to provide a rising standard of consumption to all members of it, but proof was impossible. That could only be done after the statistical measurement of the basic economic factors had been accomplished. Those measurements are now available, many of them as the result of Snyder's original work, and this book is one of the means by which knowledge of that tremendous advance will be generalized. The basic argument can be briefly stated. A com- mercial society is a highly complex phenomenon operating under laws of complete rigidity. Great commercial cities flourished in past millenia

other times one feels that the argument would gain by a concrete exami- nation of the actual economic conditions implicit in the working assump- tions. To these dissatisfactions a reviewer must give expression, but he must hope that when he does so the natural emphasis which they will receive in a short review will not convey a generally unfavourable impres- sion. Dr. Stigler's book may not serve perfectly either the purpose of a unique critical study or of a textbook, but it succeeds, nevertheless, in being something of each and thus meeting in a brilliant and original way a great need in theoretic literature.

B. S. KEIRSTEAD The University of New Brunswick.

Capitalism the Creator: The Economic Foundations of Modern Industrial Society. By CARL SNYDER. New York: Macmillan Company. [Toronto: Macmillan Company of Canada]. 1940. Pp. xii, 473. ($4.50) 44 original charts.

THIS is a book which is highly significant in itself and still more signi- ficant for the trend in economic writing which it signalizes. The wheel has gone full circle. A man who has been pre-eminent among the statis- tical economists has dedicated this book to Adam Smith, has addressed it to the general public, and has made it a work of political economy in the great tradition. It is not narrowly scientific and ethically colourless, but an appeal to reason and a robust statement of the essential rightness and justice of a capitalistic order with wide disparities of wealth and rapid accumulation of capital. Shades of John Stuart Mill and his doubts which in one form or another have coloured almost a century of economic thought! This book would sweep them all away and substitute faith for doubt and a belief in progress for a namby-pamby longing for an impos- sible equality.

The power of this statement is that it is backed up at every point by detailed measurements of existing economic societies. The earlier econo- mists might believe passionately in the virtues of a free society. They might offer deductive proof that such a society ought to provide a rising standard of consumption to all members of it, but proof was impossible. That could only be done after the statistical measurement of the basic economic factors had been accomplished. Those measurements are now available, many of them as the result of Snyder's original work, and this book is one of the means by which knowledge of that tremendous advance will be generalized. The basic argument can be briefly stated. A com- mercial society is a highly complex phenomenon operating under laws of complete rigidity. Great commercial cities flourished in past millenia

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