Book Reviews : Presidential Nominating Procedures in 1964: A State-by-State Report. By the NATIONAL MUNICIPAL LEAGUE. (New York: The National Municipal League, 1965. Verifax, no consecutive pagination. $3.00.)
Published date | 01 March 1966 |
DOI | 10.1177/106591296601900143 |
Author | Clyde E. Jacobs |
Date | 01 March 1966 |
Subject Matter | Articles |
186
show that the over-all rate of growth of a (closed) economy cannot be sustained with-
out a simultaneous expansion in its slowest moving sector -
agricultural.&dquo; Other-
wise the marginal product of labor and capital will not be equalized and, hence,
resources not allocated in an optimum fashion.
But economies are not closed, so the author moves on to consider international
trade. Despite various arguments to the contrary, he concludes that protectionism is
rarely justified in the interests of growth. The problem of stabilizing commodity
prices should be resolved by international cooperation, not be diversifications into
uneconomic endeavors.
As an introduction into the difficulties of nationally planned economic develop-
ment, this volume is excellent. The reader, however, should be warned against a
number of misleading statements. For example, although the absolute gap in per
capita income between two countries, one poor and one relatively rich, growing by
the same percentage each year may widen, the relative size of the gap does not. The
theoretical maximum limit to population growth is not 3 per cent per annum: much
depends upon the relevant time period. When trade indices are used, one is uncer-
tain whether they are stated in constant prices. Is the amount of capital used per
unit of output in the peasant sector really relatively low? Technical knowledge,
credit, etc., are also equivalent to capital inputs. What is a minimum subsistence
level? One suspects that it is culturally determined. In addition to economic incen-
tive or compulsion, there is a third alternative -
ideology or religion-based incen-
tive. The dichotomy between labor and capital is not very meaningful if one recog-
nizes that labor is not homogeneous, but in fact differs in quality by reason of the
capital invested in developing human skill. High-level skill is very capital-intensive.
Therefore, shortages of skills and of material capital are not distinct: one flows from
the...
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