In a discussion of recent developments it is well to keep in mind that the new grows out of and is founded on the old; that, in statistics as in other fields, our achievements of the present evolve from the endeavours of the past. Similarly our future gains will represent a further stage growing out of our present and past accomplishments.

In Canada we have had a well-developed statistical system for many years. The decennial population and distribution censuses, annual industrial censuses, foreign trade and balance of payments statistics, price and agricultural statistics, to mention only some of the more prominent examples, had been securely established as “going concerns” prior to the Second World War. From this substantial base, the war and events in the post-war years hastened the process of extension into new statistical fields and the qualitative improvement of our whole statistical system.

While our present achievements stem from past accomplishments, one can discern a substantially different attitude toward statistics now than in pre-war years, by public and private bodies alike. There appears to be a much more widespread awareness of the importance of quantitative data in the solution of problems of various sorts than formerly. This is a natural concomitant of an advancing industrial society. The rapid expansion of the Canadian economy, the vigorous emphasis on social welfare, the increasing complexity of our social structure, and the broader role in economic and social affairs that governments have been forced to assume, all find expression in pressing and persistent demands for more statistics of the highest quality by business, governments, and the public at large. In addition, the work of the United Nations Statistical Commission, the Statistical Office of the Economic and Social Council, and other international bodies have created new demands for statistical information.

The most important source of data for research into Canadian society is the federal census. These decennial inventories, of which there have been nine since Confederation, contain hosts of numbers, most of them unfortunately rather widely ignored by social scientists. Of the battery of questions to which every individual is subjected, a few are singled out as yielding fundamental facts, and appear again and again in the tabulated product in cross-classification with other subjects. The three basic attributes, which are the sine qua non of a personal census, are age, sex, and geographical location. Next to these in importance, if we may judge by the volume and detail of published tabulations and analysis, is origin. Now the intriguing circumstance about this highly emphasized piece of information is that it remained undefined until 1951. There was no explicit indication of the operations required to identify the referent of the term. Furthermore, the answers obtained and published clearly applied to an array of different types of evidence, which could easily overlap for a given individual.

Consider, for example, the 1941 census, and its question, there termed “racial origin.” The “Instructions to Commissioners and Enumerators,” which are required reading for anyone making serious use of census statistics, give the following clues:

What is racial origin? The word “race” signifies—“Descendants of a common ancestor.” [It may be asserted that this does not specify a practicable operation.] … a person's racial origin and nationality very often are different …. The name of a country from which a person came to Canada gives no indication of that person's racial origin …. The word “Canadian” does not denote a racial origin, but a nationality; the same applies to the word “American” …. What determines racial origin? As a general rule a person's racial origin is to be traced through his father ….

According to the principle of acceleration, net induced investment is proportional to the rate of increase in national product. The principle is usually qualified by a statement to the effect that if the economy's production is at a rate lower than some previous peak, the proportionality may not hold. Once, however, capacity is reached, increases in the rate of production will induce investment.

This paper derives its relevance from the current attempts to construct a set of dynamic input-output equations which will generate demand for additional stocks of capital facilities on the basis of a set of capital coefficients and measures of capacity for the “industries” of the system. The basic arguments set forth are applicable also to tests for the feasibility of solutions of static input-output systems with respect to existing stocks of capital, but most attention will be directed to the dynamic formulation.

Professor Leontief's dynamic input-output equations are of the form:

Xi represents the rate of output of the ith industry, Yi is the amount of this output taken by the autonomous final demand sector and aik is the now familiar coefficient of production, the amount of the ith industry's product which the kth industry purchases per unit of output of the kth industry. This much of the equation set is identical to the static input-output system. The dynamic addition is in the bik capital coefficients, which measure the amount of stock of the ith industry's product held by the kth industry per unit of annual output, and in the values, which are the first derivatives of the annual rates of output of the various industries with respect to time. The capital coefficients are accelerator values for each industry with respect to all other industries. The summated value,

is the instantaneous annual rate of induced investment for the economy at any given moment of time.

In the controversy between Professor Chamberlin and Mrs. Robinson and their respective supporters concerning what Professor Chamberlin calls “monopolistic competition,” and Mrs. Robinson has named “imperfect competition,” neither side seems ever to have referred to Marshall's Industry and Trade. In the field of history of economic doctrines and analysis, only three writers seem to have given serious attention to the work. Two of these wrote before the publication of either The Theory of Monopolistic Competition, or The Economics of Imperfect Competition. The other, though he comes to the conclusion at which this paper also arrives, fails to mention a number of notions presented by Marshall in his analysis of markets under conditions less than perfectly competitive.

Industry and Trade is not mentioned in the report of the “Round Table on Monopolistic Competition” found in the American Economic Review of June, 1937. In addition—chronologically this series of articles should be put first—no writer participating in the Economic Journal's “Symposium” of 1930 mentions Industry and Trade, while Professor Sraffa mentions it only once in the famous article which is considered by some to have been the beginning of the “revolutionary” new approach. Professor Chamberlin makes no reference to Industry and Trade either in the text of, or bibliographies to, the fifth or sixth editions of The Theory of Monopolistic Competition, and Mrs. Robinson cites Industry and Trade only once, on a minor point, in The Economics of Imperfect Competition.

Bitter disputes regarding the relation of morals to politics did not begin with Machiavefli but have been almost continuous since his time. No wonder, therefore, that the conflict has broken out in our own day with specific reference to American foreign policy. Now, as in times past, the proponents of differing viewpoints utter harsh and dogmatic judgments concerning one another. This is probably unavoidable if one considers that the issue is both vital and highly controversial, but recent arguments have thrown more heat than light upon the ancient dilemma. It is therefore proposed, in this paper, to ascertain what nub of truth there is in the arguments.

Most jarring to American traditions are the central tenets of what might be called the “realpolitik school” of American policy. There are many advocates of this view, but it finds its most complete expression in the writings of Hans J. Morgenthau. Although the theories of this school have many ramifications, its central position might be stated somewhat as follows:

International politics consists of a struggle for power between nations. This struggle goes on continuously and, apparently, never ends. Since each nation is only interested in maximizing its own power, the one true guide to a successful foreign policy is “the national interest.” Idealism is sentimental and Utopian. The brute facts of power render idealism not only a luxury but a delusion.

The essence of federalism is the division of sovereignty between two levels of government. In any system of government, there are sovereign and delegated authorities. In a unitary government all sovereign powers are concentrated in the central government, although decentralization for the purpose of administrative efficiency may result in the delegation of certain powers from the central and supreme government to the regional and local subordinate authorities. In a federal state, on the other hand, regional governments, as well as the central authority, are invested with sovereign powers. In no actual case, however, do both levels of government enjoy sovereignty in all domains, since complete concurrence of jurisdictions would lead to incessant conflicts of coordinate authorities. For this reason, federal constitutions indicate, in a more or less precise way, the special fields of absolute competence of the central and the regional authorities. Partial concurrence of jurisdictions may not be excluded, in which case the problem of bringing about agreements between the sovereign powers arises.

Administrative efficiency in a federal state requires both centralization and decentralization of executive functions, in much the same way as in a unitary state. If subordinate functions are delegated to the regional governments, these governments become subordinate to the central authority in these fields. On the other hand, administrative efficiency may require the centralized administration of certain matters in the realm of provincial supremacy, for example, the collection of provincial taxes. In this case, the central government would act as an agent of the provincial governments, and be subordinate to them. The two types of powers–sovereign and delegated–must be clearly distinguished in order to prevent unnecessary conflicts of authority.

When the Labour party came to power in Britain in 1945 and again when it was returned to office in 1950, it was committed to a programme that rejected “the claims of the few to live on the labour of the many,” and demanded that “fair shares should be the national rule.” As was noted in Labour and the New Social Order, “The first principle of the Labour Party—in significant contrast with those of the Capitalist System, whether expressed by the Liberal or by the Conservative Party—is the securing to every member of the community, in good times and bad alike (and not only to the strong and able, the well-born or the fortunate), of all the requisites of healthy life and worthy citizenship.” In 1945 “fair shares” was interpreted to mean, among other things, nationalization of certain basic industries, provision of welfare services, and taxation designed to redistribute income. It was assumed that egalitarian measures would not be difficult to apply, notwithstanding the fact that the bulk of the economy would continue to be privately owned and operated. Labour leaders and voters confidently looked forward to what one Labour M.P. called “a general levelling, upward, outward, and downward.”

The Dominion Bureau of Statistics is currently completing a table of the inter-industry flow of goods and services in Canada for the year 1949. This paper is a preliminary report on the project which tries to answer the following questions: (1) What are the objectives of the Bureau's study of inter-industry relationships? (2) What are the principal characteristics of the 1949 table of inter-industry flows? (3) What are the principal sources of the data, the methods of estimation, and the reliability of the estimates? (4) What are the limitations of the use of the 1949 table for input-output analysis? The task of evaluating the results of the project must be left until the table has been completed and has been carefully studied.

The primary reason for constructing a set of inter-industry accounts for 1949 was to bring together, in an integrated framework, industrial and other economic statistics collected by the Bureau in order to create a tool for statistical management which draws attention to inconsistencies in classification and gaps in the data. The backbone of a good statistical system is standard classification of industries and commodities but, to ensure that the classifications are being implemented uniformly and to ensure that the classifications are analytically useful, statistics based on them should be integrated in some suitable framework. A table of inter-industry flows is ideally suited for this integration since one of its main features, as will be explained later, is that the total value of output of an industry is defined to be identical to the total value of input. If input and output can be estimated independently, the discrepancy between the two estimates provides an indicator of the accuracy of the data. Moreover, as Dr. Milton Gilbert has suggested: “It is only by having such an all-embracing framework that one can establish any order of priority in statistical collection. Otherwise the national ‘program’ of data-gathering tends to be like the program of a variety show; the first act is an acrobat, the second is an Irish tenor, the third is a tap dancer, and so on, with no connection between them. The parts of the program do not make up a whole drama or tell one story.”

Gaetano Mosca, in his work which has been translated as The Ruling Class, engaged in an extensive criticism of the democratic theory that stems in particular from Rousseau. In the light of the historical evidence which he considered important he concluded:

Among the constant facts and tendencies which are to be found in all political organisms one is so obvious that it is apparent to the most casual eye. In all societies—from societies that are meagerly developed and have barely attained the dawnings of civilization, down to the most advanced and powerful societies—two classes of people appear—a class that rules and a class that is ruled. The first always the less numerous, performs all political functions, monopolizes power and enjoys the advantages that power brings, whereas the second, the more numerous class is directed and controlled by the first ….

Mosca, of course, is but one of a long line of writers who have tried to show that as an explanation of the power processes democratic theory is absurd. At the same time, however, most of these anti-democratic writers grant that there is, in all human beings, a compelling sentiment that justice and equality should temper power; that the masses should enforce some restraint on their leaders; and that government always involves some kind of consent of the governed. Those who bring an empirical method to the study of power are frequently condemned on the ethical grounds that they seek to justify some kind of tyranny, but what they do more than anything else is to show up the realities of power. Only after some examination of a power system has been made, can it be determined whether or not that system conforms to some ethical ideal. The ideals which are widespread in the Western democracies are, first, that there is popular participation in decision-making; and, second, that the class system is open, that is, that recruitment to positions of power is the result of personal achievement in a competitive society.

Economists have long been aware of the interdependence of the consumption and the consumption plans of individuals. For the most part they have been interested in the implications of this interdependence for the theory of market behaviour rather than in its implications for welfare. The purpose of this article is to give a detailed diagrammatic treatment of the welfare implications of external economies and diseconomies of consumption. In particular, we shall discuss the fiscal measures which, in a competitive economy, would provide the incentives necessary to the attainment of an optimal allocation of resources.

We shall distinguish from each other, and consider separately, three types of interdependence of consumption and consumption plans.

(i) The consumption of a particular commodity X by a particular individual A may increase (decrease) the satisfactions of other individuals, that is, generate external economies (diseconomies).

(ii) The consumption of a particular commodity X may change the satisfactions of other individuals independently of the identity of the consumer.

(iii) The receipt of money income by a particular individual A may, independently of his manner of disposal of the income, change the satisfactions of other individuals.

No doubt this classification is not exhaustive. Thus no place is found for various external repercussions of consumption which might be discussed in a dynamic model, that is, in a model permitting instability of preference maps. Even in static models a place could be found for types of interdependence not discussed here. Many of these excluded types, however, can be described as combinations of those already enumerated (for example, a particular act of consumption may lower the satisfaction of some, raise that of other individuals) and can be treated by the techniques to be developed for their analysis.

This paper is concerned with measuring and comparing the value of the productivity of a similar unit of labour in the agricultural and the non-agricultural sectors of the economy. In such a study the term “productivity of labour” may have several meanings. It may mean the gross value of the product of a given combination of labour with other factors of production, divided by the number of units of labour employed. Or, secondly, it may refer to the inherent ability or the willingness on the part of a person to contribute his efforts. Thirdly, the term may refer to the value of the incremental product resulting from the addition of one unit of labour to a fixed quantity of other factors, given the demand for the product, the inherent ability of the worker, and the nature of the production function. Economic theory has identified this third concept as the marginal product of labour; it is the increment to the value of the total product contributed by an additional unit of labour in the particular circumstances in which it is being used. It is this concept which has meaning in the solution of the problem of the best allocation of factors within an industry or among industries. Notwithstanding the crudeness of the method which I have been forced to use to measure productivity of labour it is this third concept which I have in mind for this study.

During the recent session of Parliament a Conservative member flourished a small garment before the House to dramatize the fact that a Canadian baby is surrounded by the influence of our tariff from the time he is first wrapped in a tariff-protected blanket until at length he is driven out to some cemetery in a tariff-protected hearse and interred in a tariff-protected coffin. And yet I suspect that most economists have been less surprised at the continued importance of our tariff than at the consistency with which Canada has moved in the direction of freer trade during the past decade or more. One admittedly defective measure of tariff levels, the ratio of the total amount of duty collected to the total value of dutiable imports, has fallen from 29.6 per cent in 1933 to 18.6 per cent in 1953 and during the past few years has been at its lowest level since Confederation. Moreover, despite the acute import competition in a number of industries during recent years, the Government has steadily refused any openly protective measures on their behalf. The sharp declines in employment in our woollen textile and deep-sea shipping industries suggest a willingness to tolerate substantial readjustments in employment arising at least in part out of the changing pattern of international competition. The active role our Government has taken in supporting the General Agreement on Tariffs and Trade, the International Monetary Fund and the International Bank and in pressing for a removal of quantitative restrictions and the restoration of a more multilateral pattern of trade is further evidence of tins freer-trade attitude. After a regrettable lapse in 1947, Canada has been one of the few countries that has managed to avoid the use of import quotas since the end of the war and is almost alone in her abandonment of exchange controls. Then too, in line with the provisions of GATT, our regulations with respect to the valuation of goods for duty purposes and the application of dumping duties have been revised and in some respects made even more liberal than a strict interpretation of GATT would require. Even the party of Sir John A. Macdonald no longer gives outright support to the cause of protection. One European economist has suggested that Canada now has the most open economy in the world. Nowhere else is the international movement of goods, people, and capital as free as it is across the Canadian border.