Detroit evening times. (Detroit, Mich) 1921-1958, 1941-12-05
Present Period
Compared 10 :
18th Century
BY LEWIS HANEY


Professor OF Economics. y. Y. University
Looked at broadly, the pres
ent period, in some important
respects, is much like the early
Eighteenth Century, a little be-
fore the American Revolution.
Perhaps brief comment on this
likeness may contribute TO our
better understanding Of current
tendencies.
The earlier period referred to
was one in which the form OF
nationalism known as mercan-
tilism reached its peak in Eu-
rope, and beg IAN to decline.
There had been a couple of CEN
turtles during which a great
scramble to build up centralized
national powers in Europe went
on. incidentally, there was much
minute regulation of business,
and RECOMMENDATION"
The point ODE emphasized,
however. is the financial condi-
ton that prevailed, notably in
france. In many respects,
France was then the leading
nationD This was one of chronic
bankruptcy, as result OF eX-
cessive government spen d ng
and unsound monetary schemes.
II was part of the mercan-
tilist theory that the interests
of individuals and classes were
so conflicting that strong GEN.
trail control was necessary. Ac-
cordingly, the COVE rnmen t
undertook 10 do many things.
In those times, the technique
of raising funds for government
spending was little developed,
and government spending that
now looks small meant a rela-
lively heavy burden.
One of the heaviest burdens
came as a result of the constant
wars. The squandering by the
sovereign for what might now
be called public works. how
ever, was no small item.
As a result, public debts were
relatively large and very hard
TO bear. Taxes were extremely
heavy and discriminatory. AS
usual under such conditions,
there was a tendency to drbaSe
the currency and to resort to
inflated credit schemes.
The notorious fiat money
schemes Of John Law were tried
by the debt-ridden French SOW
ereign.
1t was under such circum-
stances that the first formula
ton of economics as a science
began to take shape. Economics
was born as a revolt against
the excessive government CEN
tralization and RECOMMENDATION Of
the mercantiliSt period. and the
unbearable burdens of debt and
taxation which were the result,
The economists of those days
revolted against currency manip-
ulation and the emphasis of
money income, and put the en-
phasis upon real wealth in the
form of material goods. They
revolted against the diScrimina-
tory burden of taxation, and
advocated simple system of
taxation at the source. They
revolted against government con-
troll over business, and adopted
the slogan, laiSsez faire!
At BIO m, their thought
rested upon the revolutionary
doctrine that there is in every
individual a capacity to under
stand his own best interests and
his interrelations with others,
that would make RECOMMENDATION
and centralized social planning
unnecessary and relatively in
efficient. They believed in the
reign of economic law instead
of economic diCtators.
II seems 10 me that our ex-
cessive government control,
spending and debt are leading
TO the same abuses which, in
the Eighteenth Century, led to
the birth of scientific economics
and 10 the American Revolution.
In due course, there will be
rebirth- of economics and OF
economic democracy. VIII we
have TO wait for A revolution?