bluuebunny/crossref_metadata_2025 huggingface dataset:
THEORIES OF CONTROLLED CAPITALISM
Authors: Schweitzer Arthur
Published: May 2007

Recent theories of capitalism concentrate upon the defects of markets. The theories of Karl Polanyi and Bruno Seidel are examined in this article. In a broad survey of economic history since the middle ages, Polanyi concludes that the whole economic market system destroys the substance of society and creates disadvantages for all groups. Yet disintegration was halted through the principle of social protection which comprises all forms of collective economic actions, whether by groups or states. Yet, the author has failed to give a specific market analysis which would indicate how specific disadvantages arise in the process of pricing. The all comprehensive “social protection” contains so many diverse elements that one cannot infer from the principle how interventions have reformed the market system of capitalism.

In his analysis of industrialism and capitalism, Seidel sees a conflict between the industrial and capitalist elements of our economy. Capitalist elements have been “tamed”, while we have been unable to control the industrial elements. Modern technology has become independent of capitalist property and markets. Industrialism has been economically beneficial and socially disintegrating. Deconcentration of large concerns and decentralization of large cities are proposed as necessary reforms. Interventions in markets spring from cartels of producers, organizations of farmers, unions of laborers, and the interference of states. The multitude of interventions is developing into a planned capitalism. The result of these interventions has been a greater degree of equality in the economic and social relationships among men. Control of capitalism was achieved through introducing social‐ethical principles into the economy.

The newer version of the defect theory limits control of the market system to the most recent period, and states some of the reasons why organized groups control their markets. The theory of social protection is limited in its scope; its economic, political and social impact upon capitalism is traced in detail. Yet missing is still a theory of deficient markets as well as of controlled markets. The future task of economic research is to provide an analysis of the different market sectors controlled by groups, of the monopoly of concentrated property, of the specific nature of social protection, and the economic role of big government in controlled capitalism.
SCHUMPETER'S CONSTRUCTED TYPE —THE ENTREPRENEUR
Authors: Carlin EdwardA.
Published: May 2007

In this paper it has been argued that a comparison between Schumpeter's entrepreneur type and a charismatic leader developed by Max Weber discloses certain factors that can be utilized to make the Schumpeterian construct a more useful conceptual tool.

Both Schumpeter and Weber were faced with very similar analytical problems, In each case it was necessary to explain how the dynamics of change could be encompassed within a functional system. In each case a disturbing force was introduced. Schumpeter called his the entrepreneur—Weber's designation was the charismatic leader. Schumpeter attempted to make the entrepreneur endogenous to the system he was attempting to explain. Weber's type was frankly exogenous to any system. The strength of Schumpeter's position was that he could explain in some measure how the entrepreneur could be nurtured. The weaknesss was that the type never remained completely endogenous to the capitalism to which Schumpeter related it.

If the entrepreneur‐type is viewed as a sub‐type of the Weberian charismatic leader certain analytical advantages can be realized. The Weberian type is a generalized one that may take a number of forms. The Schumpeterian type is specific and is dependent upon certain objective conditions for it to emerge. In this paper it has been argued that the minimum essentials for the emergence of the entrepreneur‐type from the more generalized type are the following: (1) accessible resources, (2) large markets, (3) an independent banking system, (4) consumer choice, and (5) calcuable law. There is no plea made for the values that may underlie the attainment of these objective conditions but that merely if charisma is to be channeled into entrepreneurship, rather than any of the other numerous paths it may take, then these conditions as they have been explained must be present.

A better understanding of the significance and the usefulness of Weber's type can be gained to the extent that a large variety of other sub‐types are constructed and the objective conditions for their operation explored. In this way, it is argued, the significance not only of Weber's type can be better understood but the value of Schumpeter's entrepreneur may be realized both as it stands by itself and as it is supported by a variety of other types. The policy implications of this kind of analysis seem particularly important in a world characterized not only by great change but by a wide variety of conditions that may channel charisma into as wide a variety of directions.
THE EFFECT OF PRICE ON EUROPE'S EXPORTS TO THE UNITED STATESa
Authors: GEHRELS FRANZ
Published: May 2007

Most studies of international demand determinants have found income to be the significant explainer of variations in both imports and exports, while price appeared to have only marginal importance. The present study deals with exports to the United States from eight European countries and gives support to a rather different conclusion: Two price variables—a price index of imports from a particular country, and an index of general‐import prices—were significant and sometimes showed high elasticities. United States national income, on the other hand, was a poor explainer of imports from a country supplying finished manufactures, while industrial output was a fair explainer of imports from the suppliers of raw and semimanufactured materials.

Of the two successful price variables, general‐import prices showed the higher numerical price elasticities. This fact was contrary to the theoretical expectation, and arguments were advanced for believing that there might be greater downward bias in the direct‐ than in the cross‐price elasticities of demand. It was concluded that in general the higher of the two calculated elasticities came closer to the true price elasticity for the country concerned.

However, the findings, if taken at face value, also suggest that a European exporting country may be more successful in gaining dollar earnings at the expense of its rivals than at the expense of domestic United States producers. Elasticity with respect to United States domestic prices was low or insignificant; and total imports showed little price response.

If it were in fact difficult for the non‐dollar world together or even for Europe alone, to adjust its dollar earnings by means of price, it would still be possible for the countries involved to adjust both their dollar and their overall balances. For to the extent that they reduced prices competitively they would be induced to substitute imports from one another for those from the United States.

Finally, if the behaviour of overall United States imports can be taken as typical for manufacturing countries' imports, while particular countries' exports to the world as a whole respond to price much as do those to the United States, we can infer that their balance‐of‐trade adjustments to price will be mainly on the export, rather than on the import, side.
THE INTERNATIONAL DISEQUILIBRIUM SYSTEM
Authors: MUNDELL ROBERT A.
Published: May 2007

Most of the important generalizations of international trade theory that owe their origin to the classical school are long‐run and static in nature, implicitly assuming that disequilibrium is a transitory state and that passage between equilibria is untroubled. Yet past experience seems to indicate that external disequilibria can remain for extended periods of time, and that the modern system is a disequilibrium system.

The nature of the international disequilibrium system has sometimes been attributed, erroneously, to the Keynesian foreign‐trade‐multiplier theorem that an increase in exports will induce an increase in imports which is smaller than the initial increase in exports, and this has been the origin of the belief that “HUME'S law” is invalid in the case of saving and unemployment. However, HUME'S law is valid even in this case if gold flows are allowed to have their natural effect on the internal money supply and hence on interest rates, investment and incomes. HUME'S law is therefore valid in the case of Keynesian unemployment, although the price‐specie‐flow mechanism is replaced by an income‐specie‐flow process.

The true nature of the international disequilibrium system derives from the fact that central banks do not allow externally‐induced gold flows to affect the internal supply of money since that would conflict with the new primary goal of monetary policy; full employmentwithout inflation. The new function of monetary policy leaves a policy vacuum with respect to the balance of payments, except insofar as ad hoc policies are designed to suit special circumstances. Gold flows are therefore automatically neutralized by open market operations in some countries, while in other countries monetary policy in effect cancels or reinforces the monetary effect of gold flows in the pursuit of internal stability.

At critical times, when foreign exchange reserves become dangerously low and subject to speculation, or when they become burdensomely high, action by the authorities must be introduced even if this is at the expense of internal stability. Even in these cases, however, the system need not become an equilibrium system since the objective might be to recoup reserves or allow them to run down.
PROLEGOMENA TO A THEORY OF SOCIAL CHANGEa
Authors: FRANCIS E. K.
Published: May 2007

Prolegomena to a Theory of Social Change. The formulation of a general theory of the processes of change of social systems is one of the chief tasks of sociology; none of the models of society currently in vogue provides an adequate basis on which such a theory could be built. The structural‐functional analysis of social interaction systems is capable of understanding the majority of the various processes which go under the name of “social change” as processes within a (major) social system whose boundaries may be theoretically determined at will. On the other hand a working definition of a sociology of “social change” is suggested, in which the term will primarily refer to processes of transition from one social system to another.

An obstacle to a “dynamic” sociology of this kind appears in the form of the conception of social systems in equilibrium. The inadequacy of functionalism lies in its ontological postulate that the final end of a social system is its own existence, which is derived from a false analogy with the biological law of the preservation of the species. This analogy holds good only for one social system in “Society” as a whole; the functionalist approach does not suffice to explain the existence of any particular social system or type of system as a particular case among any number of possible arrangements, each of which may equally well satisfy the basic needs of man.

The criteria for the transition from one social system to another must be sought in the change of social structure. Since the notion of dynamic equilibrium always implies processes changing the relative position of units within the structure, “social change” must be viewed as the changing of changing structures with regard to the essential properties of particular structures. The change of power structure in the form of the substitution of one social stratum through another one as the ruling element has inescapable consequences for the structural arrangement of the total system. To a certain extent Marxian sociology offers univocal criteria which permit identification of social change, but the alternation of ruling classes is not the only significant change of social structure one could think of.

Social change should above all be viewed independently of culture change. Both concepts refer to the same total reality, but at different levels of abstraction. The problem of determining the boundaries of cultural units is not solved by identifying any particular culture with the behaviour patterns and/or norm systems of given social groups. The concept of an “integrated culture” is as much a theoretical model as a social system in equilibrium. The essential property of cultural unity consists in a definite, existentially coloured hierarchy of values, the “Weltanschauung”, whose change is the criterion of cultural change. One possibility of correlating social and cultural change arises from the consideration of the underlying world view as one among many essential properties of social systems.
THE RANDOM‐WALK HYPOTHESIS OF STOCK MARKET BEHAVIORa
Authors: Godfrey Michael D. , Granger Clive W. J. , Morgenstern Oskar
Published: May 2007

A model of the form xt ‐ xt‐1= et

where xt is the price of a share at time t and et forms a sequence of independent random variates is postulated as a model of the price determining mechanism of stock markets.

The form of the distribution function of the et's is investigated. In opposition to suggestions that have been made in connection with other speculative price mechanisms it is found that the distribution function appears to be well approximated by a normal distribution. There is no evidence that the data treated are samples from a stable process with an infinite variance.

It is found that the model mentioned above, termed the random‐walk model, provides a good explanation of the variation of stock market prices for daily observations of the price, and for the series formed by the price of every transaction taking place in the market. In the context of this model it is noted that it appears that the price determining mechanism continues to operate at a reduced ‘speed’ during times when the actual market is closed.

While it has been suggested that a correlation between the volume of shares transacted and the absolute value of the first differences of the price series should be expected, no such correlation was observed.

Two questions which the paper leaves open are the question of cross‐sectional correlation between different shares, and the question of the possibility of information in moments of order greater than two.

In conclusion the following law is stated: ‘The price determining mechanism described in Section II (i. e. the random‐walk indicated above) is the only mechanism which is consistent with the unrestrained pursuit of the profit motive by the participants in the market’.
THE MARKET PRINCIPLE AND ROMAN CATHOLIC THOUGHT
Authors: McKee A. F.
Published: May 2007

The attitude that Roman Catholic thought should adopt towards the market principle of price establishment turns on implications to be derived from its support for the foudations of the private enterprise economy, the reaction evident in recent years in favour of some more liberal version of the goal of a reformed socio‐economic order, and such direct discussion of the market principle as has occurred.

‘Official’ Catholic thought has repeatedly affirmed the necessity of guarding private property, initiative and freedom, and urged limiting the role of the state; so that basic, though duly qualified, support for the private enterprise economy is the clear and inescapable consequence.

Next respecting the vision of an ideal socio‐economic order Mater et Magistra seems to mark a welcome resetting of the balance in favour of the neo‐liberal trend in Catholic social thought. It makes no mention of the goal of a corporative economy with the rigid implications inherent in this, substitutes a looser perspective of associational groups and action as the means of filling the old void between unorganised individuals and the state, and shows awareness of the diversity of desirable patterns of reform in different coutries.

Lastly, incorporation of the market principle into Roman Catholic thought requires, on the one hand, full acceptance of it as inevitably associated with and necessary to private property and enterprise, and on the other hand and more formally, a working out of its institutional character and the legal and moral safeguards dictated by commutative, distributive and social justices.

It has to be borne in mind that the entire argument implicitly views the advanced Western country as the norm, and is subject to considerable qualification respecting the underdeveloped country and various special cases.
BALANCE OF PAYMENTS ADJUSTMENT IN A DISEQUILIBRIUM SYSTEMa
Authors: Linder Staffan B. , Cohen Benjamin J.
Published: May 2007

A balance of payments adjustment mechanism should be defined as ‘any balance of payments disturbance which can be deliberately initiated in order to correct some other disturbance’. The traditional mechanisms, based on changes in exchange rates, prices and incomes, can no longer be applied effectively because they are domestically impalatable. Consequently, governments have come to rely on new ways of initiating countervailing disturbances, among them (a) pressures on surplus countries; (b) changes in foreign tastes; (c) stimulating economic growth; and (d) forming or joining a customs union. In the present disequilibrium system, new adjustment mechanisms like these are being widely used, and are in fact becoming the only effective means for maintaining international equilibrium.
THE TYRANNY OF SMALL DECISIONS: MARKET FAILURES, IMPERFECTIONS, AND THE LIMITS OF ECONOMICS*
Authors: Kahn Alfred E.
Published: May 2007

A market economy makes its large allocations and reallocation of resources on the basis of a summing up of the ‘votes’ recorded by customers in a host of small, individual market transactions. A critical task in appraising the efficiency of such an economy, then, is to determine whether and under what conditions this adding up process produces optimal results. The ‘smallness’ of the decisive, individual transactions—their limited size, scope and time‐perspective—can, it is argued, be a source of misallocations, in the sense that consumers might disapprove of the larger result thereby produced, if they were ever given the opportunity explicitly to vote for or against it.

In certain circumstances, the smallness of the relevant decisions may produce authentic market failure. This will be the case where they do not include an independent appraisal of customers’ desire to keep available for possible future use a service that they do not actually use in sufficient amount to cover the costs of providing it. In other circumstances, the smallness of the individual transactions may encourage irrational consumer choice, because they are too small to justify the effort of securing good market information. In yet others, monopoly elements may cause the buyer to be presented with excessively narrow choices that do not correctly reflect that actual costs of the competing alternatives; and the result may be an uneconomic spiral of product quality changes over time so‐called ‘product inflation’. Finally, the cumulation of individual choices may have the ultimate effect of changing consumer preference function themselves, in which event it is not possible for welfare economics to judge the optimality of market performance. These possible defects of the market may be conceived in the more familiar terms—as attributable to externalities, market imperfections or the defects of consumer sovereignty itself. Emphasis on the contribution influence of the smallness of the controlling decisions has the virtue of suggesting the possible necessity of substituting a ‘large’ for a piecemeal accumulation of small decisions if the results are to be intelligently appraised or improved.
CATTLE‐MEAT AND ECONOMIC WELFARE*
Authors: Mishra S. N.
Published: May 2007

The object of this paper is two‐fold. First, an attempt has been made to show that under certain specific circumstances a livestock production system can be raised to a higher level of output by slaughtering some of the animals. Second, it has been then shown that given a free say to exchange and clearly defined preference scales of the consuming coalitions, this policy is strongly Pareto‐wise optimal. Finally the attention is drawn to the relevance of the policy to the problem of scarcity of food in India. It is suggested that India could do well by slaughtering of its animal population.
ECONOMIC PROBLEMS AFFECTING AGRICULTURE IN EUROPE AND POLICIES CALLED FOR*
Authors: Simantov A.
Published: May 2007

Since the early 1950's most of the European economies have been growing at an unprecedented high rate associated with a situation of full employment. These two phenomena are at the root of the profound changes which are occurring in European agriculture and which have led on the one hand to a production capacity greater than the potential increase in effective demand for food and on the other hand to rapidly growing income aspirations by farmers.

Policies applied so far have been applied uniformly to the entire agricultural sector and have thus been unable to provide satisfactory solutions to these problems. It is necessary to develop more selective policies which should be adapted to the particular problems of each broad group of farmers: (a) policies for those whose economic future in agriculture is doubtful and who should be assisted to transfer to other occupations or to retire; (b) policies for those whose economic future in agriculture might be secured if their size of business was increased and their management improved; and (c) policies for the ‘commercial’ sector of agriculture. The answer to agriculture's problems could be found in the combination of a structural and of a price policy.
MORE ON THE FACTOR‐PRICE EQUALISATION THEOREM*
Authors: Ford J. L.
Published: May 2007

This paper was concerned with giving a fuller discussion of the factor‐price equalisation theorem in a three‐commodity two‐factor model and with giving a different ‘proof of it. The Appendix considered a more tentative issue: the factor‐price equalisation theorem in a three‐factor two‐commodity model. It was suggested that in certain conditions it would be seen that factor‐price equalisation was possible.
ORDNUNGSIDEE UND ORDNUNGSPOLITIK ‐KRITIK EINER WIRTSCHAFTSPOLITISCHEN KONZEPTION: Edgar Salin zum 10. Februar 1972
Authors: Riese Hajo
Published: May 2007

The Economic Theory of German neoliberalism comprises a certain conglomerate of an absolutely free choice of selecting an economic system on the one hand and a definite determination of the economic policy that results of this choice on the other; this conglomerate prevented the theory of neoliberalism to become a valid theory of economic policy. The former German neoliberalism reduces the categories of aims and means to the choice of the economic system, an unhistorical approach, because such a choice never happened at all. But such an approach enabled the neoliberal authors to reduce any economic policy to only conservate the market system. Even the modern approach of separating qualitative and quantitative policies pursues the same intentions: although indefensible positions vanished under the impression of Keynesian theories, nevertheless the definition of a genuine qualitative policy implicates that the latter has the function of conservating the market system. This distinction of qualitative and quantitative policy has another meaning than in the system of Tinbergen. Since the criteria of separation are ambiguous, even the modern approaches of German neoliberal economic policies remain inadequate compared with the modern theory of economic policy a la Tinbergen.
STEADY STATE, IMBALANCE, AND STABILITY OF TWO‐COUNTRY GROWTH*
Authors: Brems Hans
Published: May 2007

Defining steady‐state growth as stationary proportionate rates of growth, defining balanced growth as stationary mutual proportions between physical output of all goods, defining equilibrium as zero excess demand, and defining stability as a tendency for equilibrium to restore itself if disturbed, the paper tests a neoclassical two‐country growth model for steady state, balance, and stability. The model uses prices and the exchange rate as equilibrating variables and admits consumer preferences, disparity of rates of technological progress, and disparity of rates of growth of labor forces. Growth is found to be steady‐state, unbalanced, and stable.
THE FULL EMPLOYMENT MODEL: A CRITIQUE
Authors: Weintraub E. Roy , Weintraub Sidney
Published: May 2007

Full employment models proliferate in economic journals while excessive unemployment (U. S. and Canada, 1969‐71) troubles some major (and many under‐developed) economies. As in Keynes’ time, the analytic work is often at odds with reality. Patinkin, for example, decleares that ‘the labor market… does not interest us’ and that ‘its sole function is to provide the benchmark of full employment’. For Patinkin, and others, full employment exists apparently only by assumption. The implicit mechanism assumes that labor market bargains are made in real terms and, in describing the ‘equilibrium’ tatonnement, a fictional change in money wages is imposed while product prices are assumed to remain constant.

Keynes rejected this ‘analysis’ on the grounds that higher (lower) money wages must lead to higher (lower) prices with, at best, limited employment effects ultimately analogous to monetary manipulations. Yet Keynes’ remarks on this vital matter are commonly ignored, even in ‘Keynesian’ models.

This matter is reopened inasmuch as the analysis has profound policy implications. On the theoretical level it is also demonstrated that on plausible behavioral grounds Lange's representation of a perfectly elastic labor supply function (over some range) is defensible. Patinkin's supply points ‘off’ the supply function really entails a misspecification of the appropriate function.
ENVIRONMENTAL POLLUTION, THE TERMS OF TRADE AND BALANCE OF PAYMENTS OF THE UNITED STATES
Authors: Magee Stephen P. , Ford William Freithaler
Published: May 2007

This paper uses some partial equilibrium models to assess the possible theoretical effects of pollution abatement on the terms of trade and the trade balance of the United States. The results depend on the sectoral location of the pollution (export or import‐competing) and on the type of pollution (production or consumption). The U. S. will experience a deterioration in its trade balance in combatting production pollution and probably an increase in the abatement of consumption pollution. For import‐consumption pollution and export‐production pollution, abatement results in an increase in the U. S. terms of trade and welfare while the opposite occurs for import‐production and export‐consumption pollution. It is possible that the less developed countries have been bearing part of the burden for unabated pollution in the United States.
ELABORATION OF THE TWO‐SECTOR VARIANT: AN EXPANSION OF PROFESSOR ROTHSCHILD'S ARTICLE
Authors: Ferguson C. E.
Published: May 2007

The article presents a two‐sector, fixed‐proportions neoclassical model with endogenous demand. The object of the model is to demonstrate two important points: (a) neoclassical theory, distribution theory or capital theory, is not dependent upon smoothly continuous and well‐defined marginal productivity functions; and (b) any theory of distribution that is not merely based upon accounting identities must contain a supply side as well as a demand side. The model does not contain an ‘unobtrusive postulate’, and it demonstrates that neoclassical theory does not depend upon aggregating capital and defining the rate of interest as the marginal productivity of ‘it’.
ÜBERNAGHFRAGE UND LOHNENTWICKLUNG IN DER SCHWEIZ‐ EINE NEUE HYPOTHESE*
Authors: Rossi A. A. , Schiltknecht K.
Published: May 2007

The purpose of this paper is to present a new hypothesis to explain the excess demand for labour in an economy with large foreign labour immigration. Home and foreign labour force are not homogeneous. Starting from this preliminary observation, the authors were finally led to propose a new indicator for the excess demand for labour, consisting of the relationship between the foreign labour force and the home labour force of the preceding period. Empirical testing of this hypothesis for the case of the Swiss economy has given satisfactory results.
ON THE RELATIVE EFFICIENCY OF THE NATIONAL HEALTH SERVICE*
Authors: Culyer A. J.
Published: May 2007

This paper utilises standard welfare economics to explore a number of assertions that are frequently encountered in connection with the economic rationale of the National Health Service (NHS). It is shown that the NHS‐type of delivery system is likely to produce neither a socially nor medically optimal amount of care, that it is unlikely to achieve consumption equality (even if private practice were to be abolished), that private practice does not enable an optimum to be reached (though some are enabled to make Pareto‐preferred moves) and that non‐price discrimination may systematically discriminate against the poor. A case is also made for the general validity of the choice‐theoretic approach to health care on the grounds that neither demand nor supply is as uniquely determined by technical considerations as is commonly supposed.
FISCAL ILLUSION, POLITICAL INSTITUTIONS, AND LOCAL PUBLIC SPENDING
Authors: Pommerehne Werner W. , Schneider* Friedrich
Published: May 2007

This paper deals with the occurrence of fiscal illusion and its effect on public expenditures. Fiscal illusion is here taken to be a systematic misperception by individuals of both the public revenue burden borne by them and the amount of benefit they derive from public expenditures. Taking the revenue structure and public outlays of the 110 largest Swiss cities as an example, it is shown that there is in fact empirical evidence for the existence of fiscal illusion (presently defined for the most part in the literature as a systematic underestimation of fiscal burden) and, as a result, for higher public expenditures when it occurs than when it is absent. By dividing the Swiss cities according to the degree of citizen participation in the making of public decisions, we were able to formulate hypotheses predicting to what degree fiscal burden illusion (understood as systematic underestimation) will occur under each system. These hypotheses have been empirically confirmed. Further analysis of the results has indicated that in cities in which the citizens can only indirectly participate in public decision‐making, the government and public bureaucracy have more freedom to act independent of the wishes of the voters with respect to expenditures, though these are taken more and more into consideration as elections approach. This expenditure behavior and particularly the concrete manner in which expenditures are adjusted to approaching general elections leads us to the conclusion that illusion with respect to the benefit derived from public expenditures also exists.
THE STRUCTURE OF THE MILITARY‐INDUSTRIAL COMPLEX IN THE UNITED STATES AND ITS IMPACT ON INDUSTRIAL CONCENTRATION
Authors: Marfels* Christian
Published: May 2007

It comes perhaps as no surprise that approximately 70% of all outlays for military procurement in the United States were accounted for by the 100 largest military contractors in each year during 1965–1974. This clear dominance can be primarily explained by the non‐market character of the defense market where the bulk of contracts is negotiated rather than competitive in terms of sealed bids. Long‐term procurement contracts as a steady and secure source of income may also serve as an incentive for conglomerates to acquire defense contractors in order to enter the defense market via toehold acquisitions. The penetration of the so‐called ‘new conglomerates’ during the 1960s into the defense market is a case in point. It can be safely assumed that the procurement incentive was the prime motivation in the merger decision among these pure‐conglomerate mergers. Furthermore, the majority of mergers benefited greatly from a generous implicit grant for mergers, viz. the provision of a tax‐free reorganization according to Sec. 368 IRC.
INVESTMENT STABILITY AND INDUSTRIAL STRUCTURE IN U.K. MANUFACTURING
Authors: Sarantis* Nicholas C.
Published: May 2007

The objective of this paper is to present the empirical results of an investigation into the links between investment stability and industrial structure in U.K. manufacturing industry. First, the alternative theoretical propositions concerning the influence of industrial structure on the stability of capital investment over the business cycle are discussed. This is followed by a description of the data and the specification of the variables used. Subsequently, the empirical results obtained from multivariate regression equations are analysed. The influence of industrial structure and diversification on the adjustment of capital stock and on the convergence of dynamic systems to equilibrium is then examined. Finally, the main conclusions drawn from the analysis are discussed.
ANSPRUCHSNIVEAU UND PERMANENTE FRUSTRATION IM VERBRAUCHSVERHALTEN*
Authors: Pöll Günther
Published: May 2007

In diesem Aufsatz zeigt der Autor am Beispiel der inversen (hyperbolischen)Engelkurve, dass modernere psychologische und soziologische Konzepte wie Frustration und Anspruchsniveau gut in die «alte» Theorie passen und diese auch verhaltenstheoretisch anreichern. Am Beispiel der Verbrauchsausgaben städtischer Arbeitnehmer für privaten Verkehr von 1962 bis 1974 werden diese Hypothesen illustriert, wobei die geschätzten Parameter der Engelkurve als interessante (auch für Soziologen) schichtspezifische Masszahlen fur Frustration und An‐spruchsniveau im Kontext demonstrativen Konsums (T. Veblen) städtischer Arbeitnehmer interpretiert werden.
LABOUR MARKET IMBALANCES AND STRUCTURAL UNEMPLOYMENT
Authors: Driehuis* W.
Published: May 2007

The rise in unemployment after 1970 has reinforced the issue of structural versus cyclical unemployment. Structural unemployment can be distinguished into Demand, Cost and Search Structuralism. The importance of the last‐mentioned type, which involves structural changes in search behaviour of individuals and changes in the structure of the labour market, is investigated for Germany, France, the United Kingdom, the Netherlands and Belgium. After a view oflabour market data 1955–1975 and their characteristics, an analytical framework is introduced which underlies the analysis of the labour market in terms of unemployment and vacancy rates. Cyclical and structural shifts of the relationship between these rates are studied separately. For all the countries a structural shift, pointing to Search Structuralism, is observed after 1967. In combination with frictional unemployment, it seems to amount to about 56–60% of total unemployment in 1975. The results suggest that macroeconomic policies aiming at the stimulation of demand and/or the reduction of costs, are considerably constrained in their potential effects on unemployment with the present functioning of the labour market.
THE IMF: AN EMERGING CENTRAL BANK?
Authors: Scaperlanda* Anthony
Published: May 2007

This article argues that in the post‐Bretton Woods era, the International Monetary Fund is rapidly acquiring the characteristics of a central bank for national central banks. Support for this argument is found in the fact that since 1974 the IMF has significantly broadened both its financial intermediation and lending activities. The extent and quality ofconditions which the Fund attached to the January 1977 stand‐by arrangement with the United Kingdom is also cited as resembling central‐bank‐type control. The IMF's influence over the large banks which dominate the commercial interbank market, the new (June 1974) system for valuing Special Drawing Rights (SDRs), the actual and potential new uses of SDRs, and the broad recasting of the Fund's Articles of Agreement which is accomplished by the Second Amendment are also reviewed and cited as supporting the basic argument.
Law, Economics and Risk‐Taking
Authors: Clem Tisdell
Published: May 2007

The law shifts the risks borne by individuals in society and thereby influences the allocation of resources in society, the distribution of income and economic growth. Consequences for economic efficiency of the legal sanctioning of risk spillovers or externalities are analysed using the Kaldor‐Hicks criterion. Examples are given in which the law encourages excessive risk‐taking from a social point of view along with a few cases in which it leads to an excessive reduction in risk‐taking. It is observed that the legal practice of compensating for actual damages sustained, rather than for the risk or possibility of damage, is least costly to parties creating the risk. Product liability is discussed. It is argued that the distribution of income rather than gains in economic efficiency provides the main rationale for strict product liability.
The Impact of Democracy on Economic Growth: Some Evidence from Cross‐National Analysis
Authors: Erich Weede
Published: May 2007

It has often been maintained that political democracy has a negative impact on economic growth, particularly in less developed countries. Here, cross‐national regressions of two different growth variables on political democracy and on control variables, based on about 90 nations, are reported for the 1960 to 1979 period. Control variables include GNP per capita, gross domestic investment, school enrollment ratios, and sometimes the military participation ratio. While first results seem to support the notion of a negative growth effect of democracy, closer scrutiny reveals that this effect is no longer significant once the analysis is restricted to (more than 70) LDCs only. While a fairly strong and negative impact of democracy on growth can be demonstrated for nations where government revenue exceeds 20|X% of GDP, elsewhere there is no effect at all. It is not democracy itself that hurts the growth prospects of nations, but the combination of democracy and strong state interference with the economy.
An Analysis of the Growth and Profitability of the World's Largest Firms 1972 to 1977
Authors: Buckley Peter J. , Dunning John H. , Fearce Robert D.
Published: May 2007

The paper analyses the growth and profitability of the world's largest firms by reference to their size, degree of multinationality, main industry of operation, nationality of ownership and research intensity. The influence of size of firm on growth is stable but weak, its influence on profitability is negligible. Industry of operation has generally strongly influenced growth but the effect on profitability is not consistent amongst different time periods and samples. Division by research intensities of firms is significant in analysing growth, less in the analysis of profitability. Degree of multinationality does not contribute consistently to the explanatory power of the full equation for either dependent variable but nationality of ownership is a consistently powerful explanatory factor.
The Government's Money Monopoly: Externalities or Natural Monopoly?
Authors: Vaubel Roland
Published: May 2007

Does externality theory provide a basis for the government's monopoly in the production of base money? Money, as has been shown, is not a public good because it does not satisfy the non‐rivalness criterion (nor the non‐excludability criterion). Like any public decision, political agreement on a common money or unit of account (i. e., exchange rate fixity) passes the non‐rivalness test. However, whether the imposition of a common money or monetary unit is a public good or a public bad depends on whether money is a natural‐monopoly good or not. Hence, there is no independent public‐good justification for the government's money monopoly. The public good argument is redundant. Whether money is a natural monopoly good cannot be determined a priori, but only on the basis of experience. If governments are natural money monopolists, they should have gained their monopoly position by prevailing in the market. Historically, this is not the case. The only valid test of the natural monopoly argument is to abolish all barriers to entry and to admit free currency competition from private issuers on equal terms. An international cross‐section estimate of money demand functions reveals only weak evidence of social economies of scale in the use of money. By contrast, choice among currencies is shown to be strongly affected by restrictions of convertibility.
The Political Economy of Voluntary Export Restraint Agreements
Authors: Jones Kent
Published: May 2007

Voluntary export restraint agreements (VERs) have emerged as a popular alternative to traditional protectionist devices, whose use is severely limited by trade agreements. Aimed at ‘disruptive’ suppliers, VERs tend to shift the source of imports away from the most efficient producers. Yet such negotiated agreements are attractive to exporters because they are preferable to the alternative of unilateral import barriers, especially since they allow exporters to control the trade restriction and thereby raise the export price. In fact all effective participants gain from the VER agreement, while consumers and others hurt by it are excluded from the negotiating process. Among the inherent problems of VERs, however, is their tendency to divert exports towards third markets, spreading protectionism worldwide and destabilizing trade relations. Continuing protectionist pressure in such an environment encourages the development of more sophisticated and comprehensive methods of induced export restraint.
Discontinuity and the Theory of International Migration
Authors: Stark Oded
Published: May 2007

In this exploratory paper, the notion of (strong) discontinuity is introduced into the theory of international labour migration. It is suggested that inter‐country wage differentials alone may fail to induce international migration at the level of the decision making entity. However, three factors ‐ risk aversion, relative deprivation and asymmetric information ‐ in conjunction with these wage differentials, may account for international migration.
A Positive Analysis of the Theory of Market Failure
Authors: Toumanoff Peter G.
Published: May 2007

Implications of inefficiency in theories of market failure reveal a flawed methodology. Behavior which is apparently inefficient is actually the symptom of an inappropriate analytical model. The standard examples of market failure, monopoly power and external effects, are forthcoming only from models which omit transactions costs as explanatory variables. The unfortunate consequence of this conclusion is that complete and appropriate economic models, which incorporate all relevant variables, will always certify any behavior as efficient. This poses the ‘Panglossian dilemma’, that whatever is, is optimal. This dilemma is resolved by an analytical approach which compares behavior under alternative economic institutions. This analysis depends on two propositions: that transactions costs are affected by alternative institutional environments; and that institutions are themselves responses to the existence of transactions costs. These propositions are used to predict behavior under alternative institutions, and to explain the long run evolution of the institutions.
Pricetakers' Plenty: A Neglected Benefit of Capitalism*
Authors: SCITOVSKY TIBOR
Published: May 2007

Capitalists in the pricemaker's position protect the pricetakers facing them from being buffeted by economic fluctuations, and competition among them provides pricetakers with market information and other valuable marketing facilities not provided under perfect competition. The nature of all those benefits and the conditions that favored their creation in product markets are analyzed, and the reasons why they failed to develop in labor markets and why the employers’ position as pricemakers has been resented and largely eliminated are explored. Finally, Weitzman's important proposal to introduce Japanese‐type profit‐sharing wage contracts as a means of securing all the benefits of employers’ domination of the labor market without its costs is shortly summarized.

Besteht für eine der Marktseiten die Möglichkeit als Preissetzer aufzutreten, so entstehen der preisnehmenden Marktseite verschiedene Vorteile: Zum einen werden dadurch die wirtschaftlichen Schwankungen stark gedämpft, zu anderen führt die Konkurrenz zwischen den Preissetzern zu mehr Marktinformationen und zu einem Angebot verschiedener Marketingleistungen, die bei vollkommenem Wettbewerb nicht bereitgestellt wiirden. Im vorliegenden Beitrag wird die Art dieser Vorteile und die Bedingungen, die für ihr Zustandekommen in einem Produktemarkt verantwort‐lich sind, analysiert. Danach werden die Gründe hergeleitet, weshalb sie sich auf dem Arbeitsmarkt nicht einstellen und weshalb den Arbeitgebern die Rolle als Preissetzer veriibelt wird. Zum Schluss wird kurz Weitzmans Vorschlag zusammengefasst, der, nach japanischem Muster, eine Verankerung der Gewinnbeteiligung im Arbeitsver‐trag vorsieht. Damit sollen die Vorteile der Arbeitgeberdominanz auf dem Arbeitsmarkt bewahrt werden, ohne dies mit hohen Kosten zu erkaufen.

Les capitalistes qui fixent les prix protègent les acheteurs des à‐coups consécutifs aux fluctuations économiques. La concurrence entre les premiers fournit à ces derniers une information sur le marché, ainsi que ďautres éléments marketing très utiles, qui n'existent pas en concurrence parfaite. Cette étude analyse la nature de tous ces avantages et les conditions qui ont favorisé leur apparition sur les marchés. Ľauteur essaie de comprendre pourquoi ces avantages ne se sont pas étendus au marché du travail. II explique ainsi pourquoi la position des employeurs est mal perçue lorsqu'ils fixent le montant des salaires. Ľarticle se termine par un résume rapide des propositions fort intéressantes de Weitzman: ľintroduction de contrat de travail avec participation aux bénéfices, comme au Japon, permettant de garder tous les avantages de la prééminence des employeurs sur le marché du travail, et ďen supprimer les inconvénients.
Weltwirtschaftliches Wachstum durch Liberalisierung
Authors: GIERSCH HERBERT
Published: May 2007

Instead of a relapse into the depression of the 30's, as the stagnationists had foreseen, the end of the war marked the beginning of a quarter of a century of unprecedented growth. The saturation thesis, based on a misperception of human wants, turned out to be wrong, and with innovations and an opening of markets, the apprehended technological and spatial limits to growth were overcome. However, the extraordinary post‐war growth eventually met with supply side bottlenecks: excessive wage increases, higher energy and environmental costs, and an inflation‐induced waste of capital led to a relative stagnation in the 70's. The growth poles USA and East Asia have extricated themselves more quickly from this stagnation than Europe which suffers from more rigidities and still lacks sufficient downward flexibility of real wages. To revitalize its economy, Europe has to free its markets from state regulations and make them more accessible to domestic and international competition. With a swift trade liberalization, Europe ‐ and the world ‐ could tap a large source of productivity growth. Admittedly, this would go along with a process of creative destruction. In order to facilitate the import‐induced decline of old industries, free activity zones should be established in the affected regions.