SIMPLER ECONOMICS.

Auckland Star, Volume LXIV, Issue 261, 4 November 1933, Page 8

SIMPLER ECONOMICS.

Professor Edwin Caiman, in the current 'number of the "Economic Journal," makes an J impressive plea for the teaching of simpler economics (says the "Manchester Guardian"). He points out that since the war there has developed a pronounced tendency among i economists to concentrate on the more abstruse theoretical aspects of their subject and to , allow the propagation of its elementary principles to be neglected. He claims that this has resulted in a more ready acceptance of fallacies by politicians and public than was customary in the past, and even fears it may llead to national and international economic disaster. His argument is worthy of the most serious from university and other teachers of economics. One has not far to look for numerous examples of the kind of fallacies and crankeries that are deplored. Underlying many of them is the assumption that foreign trade is an evil thing. Imports are believed to invoke a "loss" to a country, exports a "gain." Therefore Governments .stimulate exports, to which other Government's I retort by shutting out imports, so. that the . total amount of international trade is inevi- i : tably decreased. Vet, as Professor Oannan I [! trenchantly observes, nobody maintains that | [. when Lancashire sells goods to Yorkshire it I jcauses a' "loss" to Yorkshire or vice versa; j I for wealth is derived essentially, from the ( |exchange of goods and services between differl ent 'producers. Again, Professor Caiman draws attention to the way in' which money lent , abroad and other "invisible" exports were [ first omitted from the official Board of Trade ! returns, and bow these have given a spurious .jbasis to the famous and apparently unex.pioded fallacy that Great Britain suffers from an enormous adverse balance of trade. The crude view'that the economic position of ai country can be regained by its Government, printing vast quantities of notes on the ground ! that low prices arc "artificial" and high I .'prices '•natural'', is another example of the 1 ichildish doctrines fed to a public largely j deprived of the benefits of intelligent instruc- I j tion. J