Mr. Robertson's Views on Banking Policy

AN age of science at intervals gives birth to opportunities for general expansion in the scale of industrial production. These opportunities find expression in altered relations of utility and real cost in some part of the industrial system, which generate alterations similar in kind, if various in degree, in the industrial system at large. Barring proportionately adverse tendencies which might be set up by the way, the more rapid the transition from the equilibrium of utility and real cost on the lower level of output to the equilibriunm of utility and real cost on the higher level of output, the greater will be the aggregate real income of the community through time. Given our present indirect system of production, conducted by private enterprise, the new equilibrium of utility, cost and output demanded by the forces of change is approached more or less readily, and more or less exactly, on the one hand according as the interests of those who directly control the pace of industry, namely entrepreneurs, are recognisably touched, and on the other hand according as the following conditions, called for by the technical structure of industry, are satisfied. To expand, industry first requires that industrialists should be enabled to acquire in appropriate measure an increased volume of current resources in the form of raw materials, intermediate pro-ducts and the composite content of real wages, representing circu-lating capital when assigned to use in the process of production, including stores. Second, it requires that final holders and consumers should be enabled to acquire the enlarged stock of permanent capital equipment and the increased yield of immediately consumable goods respectively, when in due course after an interval these mature. At any time the circulating capital required to maintain a given industrial output, both stated in a common

Economics · Keynesian economics · Economic Theory and Policy · Philosophy