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In the article, the author comments on the paper "Private Sector Asset Management and the Effectiveness of Monetary Policy: Theory and Practice," by Hyman P. Minsky, published in this issue of the journal. The author comments on the separate sections of Minsky's paper such as whether a capitalistic economy is inherently unstable or not, and whether mild inflation is accepted as a satisfactory trade-off against a deep depression. The author argues that there is no complete system for analyzing the behavior of the economy and the U.S. Federal Reserve System. The author states that Minsky's framework did not present evidence for the 1966 credit crunch or the threats to the financial integrity of mutual savings banks and savings and loan associations in the U.S.

This section presents abstracts of studies on economics which were published in the February 1965 issue of the Quarterly Journal of Economics. The paper titled Corporate Control and Capitalism, by Shorey Peterson, appraises the nature and meaning of internal corporate change. The paper titled Per Capita Consumption and Growth, by John C. H. Fei, investigates a growth model of the contemporary variety of per capita consumption. The paper titled Labor Mobility and the Industrial Wage Structure in the Postwar U.S., by Lloyd Ulman, explores characteristics of individual and institutional behavior towards industrial wage structure.

The title of this paper presumes that we should be teaching courses called Investments. Before we address ourselves to the subject title, it appears to be of some importance to ask the question--Why should we teach an Investments course? The answer to this fundamental question should lead to some conclusions as to where in the curriculum a course or courses in Investments should be offered and what the course content should be. [ABSTRACT FROM AUTHOR]

This paper examines the following apparent paradox. Adam Smith's Wealth of Nations is universally regarded as a book that powerfully presented the social case for giving the businessman the maximum degree of freedom of action. And yet, although Smith unqualifiedly treats high wages as desirable, he treats high profits as undesirable. Why did so eloquent a spokesman for capitalism and laissez faire treat high profits with such unrelieved hostility? The interpretation of Smith presented in answering this question revolves primarily around the belief that easily earned high profits destroy the effectiveness with which the capitalist carries out his social role. This paper is not the paper I had originally set out to write. Adam Smith's treatment of the business community in general and the entrepreneur in particular is a subject that has long fascinated me.[1] It seemed therefore to be both useful and rewarding to ferret out and to examine Smith's treatment of the role of the entrepreneur in the Wealth of Nations.[2] After all, in a book that has been regarded as the locus classicus of the laissez faire ideology for 200 years, a book that shook the world by recommending a maximum degree of freedom for business enterprise--in such a book surely the entrepreneur would play a major role. Although this originally seemed like a reasonable expectation, it was not fulfilled. [ABSTRACT FROM AUTHOR]

Recently, the classical position that free markets will underprovide public goods has come under attack. Critics have argued that, if exclusion is costless, the proposition is false. Underlying this argument, however, is the assumption that preference maps of consumers are known. In this paper, this assumption is relaxed. It is shown that a system of atomistic competition will lead to suboptimal levels of public goods, and that those public goods which are produced will be inefficiently allocated. Furthermore, owing to different intensities of use, units of public goods will command different prices. However, for any particular unit of public good, price will be the same for all individuals. [ABSTRACT FROM AUTHOR]

It is the purpose of this paper to review and appraise some conceptual problems in the field of economic base identification, suggest an alternative approach to the problems, and implement a case study. Many different units of measure such as income, payrolls, employment, value added, and sales can be used to quantify economic activity of a community. Employment as a unit of measure is used throughout this study mainly for simplicity and convenience in terms of data available. [ABSTRACT FROM AUTHOR]

The article presents a list of titles of new books related to economics. The books related to general economics are Economics -- An Introduction to Analysis and Policy by G.L. Bach, The Changing Structure of the Western Economy by D. Copland. The book The American Economy edited by J.W. Markham, is designed to explain the nature of the economy of the U.S. to those interested in, but not necessarily trained in the skills of economics. Its purpose is to describe and analyze the American mixed economy and the processes by which it has been, and continues to be, changed. Books on economic history, economic development and national economies include the following. Economic Development -- Objectives and Methods by P. Alpert. Essays in economic history E.M. Carus-Wilson. In 1954 a collection of reprints from Economic History and the first twenty years of the Economic History Review was published. The success of the first volume encouraged the publication of two further volumes of reprints, drawn from among articles on English economic history published anywhere in English, at any time.

The article presents a discussion on the article on business enterprises by George Soule, published in the March 1935 issue of the periodical of the American Economic Association. Soule's paper on business enterprise, like most of his writings, is characterized by keen penetration and brilliant persuasiveness. According to Soule; to put it briefly and baldly, the individual enterpriser has disappeared or is rapidly fading into innocuous desuetude. It was the coming of capitalism during the Renaissance and the development of the doctrine of laissez faire in a revolutionary era which had produced the end of one-manship, and developed relatively new theories and practices of economic liberty, distinguishing it from comparative freedom, from artificial and legalistic interference, and with subjection only to natural forces of an automatic price system. It may well be said that increased prosperity and increased freedom of enterprise that were evidenced during the age of capitalism were concomitant variations without casual connection, and Soule has either ignored or disclaimed this.

The article informs that profit motive has frequently been described as the "driving force" of capitalistic society, and some of the more ardent supporters of this belief hold the profit motive in the same high esteem as their most sacred beliefs. The profit motive is assumed to be the implicit expression of society's goal for the firm. Further more, the profit motive is ascribed as being the objective of enterprise management, and this objective is assumed to be explicitly stated by the stockholders for the corporate management. The changes in the socio-economic environment, since the concept of a profit motive was first advanced, do not mean, analogously, that the profit motive is no longer a reasonable assumption regarding corporate management's goal. This paper re-examines the "profit motive" in modem society and relates the "modified profit motive" assumption to accounting practice. Thus, the paper consists of two parts. The first part describes, compares, and contrasts three viewpoints on how the motivational assumption for accounting theory can be re-interpreted in the current socioeconomic environment. The second part suggests specific extensions, from the foregoing analysis, to accounting practice.

The article presents a section of abstracts relating to marketing management. They include "Corporate control and capitalism," "The impact of the corporation on classical economic theory," and "Another view of corporate capitalism."

The article discusses the use of double-entry accounting for the solution of problems in business organization and administration. The contributions of economist Werner Sombart is discussed. Sombart is largely responsible for the thesis that systematic or scientific accounting has played in generating the rationalistic pursuit of unlimited profits by capitalists. The author notes that the calculation of an enterprises' profits and capital is central to the development of Sombart's thesis. In continuing enterprises, knowledge of the total or aggregated profitability or rate of return on capital is not relevant to decisions on changes in the use of firm resources.

The way in which taxation affects corporate financial policy, and the level of investment through the structure of the cost of capital, is still a bone of contention. Various specifications of the cost of capital have been used in econometric models (for example, Jorgenson) although in a recent theoretical paper Stiglitz has claimed that, ignoring uncertainty, the cost of capital is simply the rate of interest. In this paper we shall analyse the effect of personal and corporate taxation on both the firm's choice of financial policy and its investment decision. We shall see that the latter is influenced by the former because the cost of capital depends upon the optimal financial policy. The results have implications for the specification of the neoclassical investment model which has come to play such an important part in the econometric study of investment behaviour, because the cost of capital is a good deal more complicated than most of this work allows for. [ABSTRACT FROM AUTHOR]

There exists a need in less—as well as more—advanced economies for human resource development as an integral part of a planning program and a means of avoiding structural or sectoral unemployment. As a first approximation in planning a human capital structure for a given country, a set of ratios such as students per teacher, inhabitants per physician, nurse or lawyer, etc., may be considered a longrun plan objective. In this paper, economic as well as demographic and educational factors and parameters are used to construct a production function for human capital structure which is called the technical model. The technical model is subsequently used as a constraint in the determination and analysis of the least-cost condition of achieving alternative plans. One of the theoretical results here is that such ratios become larger as the average percentage of student "dropouts" per year increase. The model shows that the marginal cost of improving the quality of human capital (by a requirement for a longer training period or by the establishment of stiffer educational standards) is an increasing function of such educational variables. Finally, the model gives an explicit algebraic expression for the qualitative-quantitative transformation-professional expertise vs. the number of personnel produced-existing in the production of human capital for equal or comparable costs. The model can be used for regional as well as global planning and in a mixed capitalist as well as a socialist economy. [ABSTRACT FROM AUTHOR]

The development of this paper was supported by a grant from the U.S. Office of Economic Opportunity to the Project on the Economics of Discrimination at the University of Maryland, with which the author was formerly associated The paper was completed at M.I.T. in the summer of 1973. I am grateful for comments by Robert S. Browne, Vernon Dixon, and several anonymous referees of this Journal. For an earlier, more abbreviated survey of the subject and a complementary bibliography, see Spratlen [169, 1971]. [ABSTRACT FROM AUTHOR]

The main object of this paper is to separate several strands in the relationship between the works of Marx and Max Weber. Max Weber has rightly been regarded as Marx's most profound intellectual critic. But there has been much confusion in subsequent literature over the nature and validity of Weber's critique of Marx. This perhaps stems, in part at least, from a failure to distinguish a number of different, although interrelated, themes in Weber's writings. Weber wrote not simply as a critic of Marx, but also in response to the writings and political involvements of the prominent Marxists of his day. Three partially separable aspects of Weber's views thus may be isolated: (a) His attitude towards Marxism in the shape of the main Marxist political agency in Germany, the Social Democratic Party. (b) His views upon the academic contributions of Marxist authors to history and sociology. (c) His views upon what he considered to be Man's own original ideas. These three aspects of Weber's thought may in turn be distinguished from the analytic problem of how far Weber's own understanding of Marx's theory of historical materialism was in fact a valid one. Some of Marx's posthumously published writings, unavailable to Weber, allow us to form a clear judgement on this question. The historical changes in the social and political structure of Germany from the middle to the latter part of the nineteenth century form an essential background to the whole of the paper: Weber's attitudes toward Marx and Marxism cannot be understood out of this context. Weber's work was written not solely in response to a wraith-like "ghost of Marx", but also in response to a force--Marxism--which played a vital political and intellectual role in Imperial Germany. [ABSTRACT FROM AUTHOR]

Local industrial subsidy continues to be as popular among communities plagued by labor surplus, as it is controversial among academic economists. There is developing, however, among economists a reappraisal of the legitimacy of the policy. This paper endeavors to make a modest contribution to that reappraisal. The role of local subsidy in a market economy has been clarified considerably by recent work. Economists James M. Buchanan and John E. Moes have noted that subsidies may be utilized by individual states in such a manner as to offset effectively national wage standardization policies. In this manner, labor surplus regions might protect themselves from the adverse employment effects of minimum wage legislation imposed upon them by higher political authority. The case for local subsidies to industry does not end with the granting of subsidies to offset or circumvent man-made impediments to market adjustment and regional development. In addition, subsidies may serve as a lubricant for market frictions, thereby accelerating market adjustments and buying time for areas suffering unemployment and low income. Subsidies may also perform the closely related function of facilitating the formation within labor surplus regions of the external economies so important for economic development.

This paper discusses the classical liberal doctrine that capitalism is conducive to individual freedom in the light of the Marxian doctrine that capitalism causes alienation. It first examines the literature on alienation, attempting to develop a meaningful definition and elucidate its economic origins. It then considers whether the existence of alienation in a society is compatible with the maintenance of freedom. The conclusions do not bear on whether capitalism is a necessary condition for freedom. Rather, they attempt to clarify the limited circumstances under which the sufficient condition for freedom can be established. It has long been an established tenet of political economy that politics and economics are not two separate realms, but are, in fact, so closely related that only a relatively limited number of configurations of political, economic, and social organization can exist as internally consistent wholes. (As Marx once put it, in a famous fit of hyperbole, the economy is "the real foundation on which rise legal and political superstructures.") Agreement on this basic proposition has not, however, prevented political economists from holding divergent opinions on such questions of detail as exactly what sort of economic organization produces the optimal social and political results. [ABSTRACT FROM AUTHOR]

To evaluate, government programs, it, is necessary to say what individuals are "entitled" to in regard to wealth distribution. This paper explores the normative implications for government action of the presumption that factors are "entitled" to their marginal product. The conclusions are that imperfections in knowledge, mobility, and competition should be removed by court action as a matter of distributive justice, and that collective goods, including income redistribution, should be paid for by those who demand the goods. Compensation is appropriate when government, changes the rules it has itself imposed or when it recognizes new property rights where they did not formerly exist. [ABSTRACT FROM AUTHOR]

This paper summarizes an emerging radical theory of labor market segmentation. The theory argues that political and economic forces within American capitalism have given rise to and perpetuated segmented labor markets, and that it is incorrect to view the sources of segmented markets as exogenous to the economic system. While minority workers are present in secondary, subordinate primary and independent primary segments they often face distinct segments within those submarkets. Wages in the female segment are usually lower than in comparable male jobs, female jobs often require and encourage a serving mentality--an orientation toward providing services to other people and particularly to men. Monopoly capitalist corporations devised deliberate strategies to resolve the contradictions between the increased proletarianization of the work force and the growth and consolidation of concentrated corporate power. From this effort emerged the intensification of hierarchical control, particularly the bureaucratic form of modern corporations. In response, unions often sought to gain freedom from the arbitrary discretionary power of supervisors by demanding a seniority criterion for promotion. Employers also consciously manipulated ethnic antagonisms to achieve segmentation. Along with the dualism in the industrial structure, there developed a corresponding dualism of working environments, wages, and mobility patterns. One of the principal barriers to united anticapitalist opposition among workers has been the evolution and persistence of labor market segmentation.