SEVEN ECONOMIES EXAMINED

Press, Volume CIII, Issue 30454, 30 May 1964, Page 4

SEVEN ECONOMIES EXAMINED

(Reveiwed bu M FLI P J

Types of Economy: A Comparative Study of Seven Types of Economic Life. By C. Westrate. University of Canterbury, 188 pp. 1963.

This work by Professor Westrate, Head of the Department of Economics in the University of Canterbury until his death in 1961, is valuable for people who wish to become better informed in the field of political economy. So many (and particularly magistrates) use terms such as "the welfare state” without knowing precisely what they mean. The book, an exercise in economic characterology is a comparative study of different economies with reference to their major characteristics. The prevailing attitude of mind therein; the end sought by economic activity and the effect of the search on the shape of the economy: the nature of the organisation; the techniques whether simple or developed, stagnant or progressing.

Seven types of economic life are examined: capitalist economies (Britain 1815-1914, Belguim 1839-1914, France 18521914, United States 1865-1914 and Germany 1871-1914); modern mixed economies (Britain, France, the Netherlands, Belgium, the Scandinavian countries, Australia, and New Zealand during the 1950’5); Communist economies (the Soviet Union, Poland, Czechoslovakia, Hungary, Rumania, and Eastern Germany); mercantilist economies (Britain and France between 1550 and 1750); guild economies (Western European towns in the 14th and 15th centuries); manor economies (European countries in the 12th and 13th centuries); and primitive economies (in tropical regions largely unaffected by the West). A special section is devoted to the United States in the 1950’s as a “mixed free enterprise economic system.” This was Samuelson’s terminology though Hoover’s phrase “organisational economy” referring to the part played by powerful organisations as well as government in economic life, seems preferable. The author’s choice of dates is, of course, arbitrary. The reader should be warned that the period selected for the capitalist economies is that of the heyday of capitalism and that the capitalist system goes further back in time than the 19th century and comes further forward in the present century than 1914. The author tries, however, to draw distinctions between the economies and his method is best illustrated by taking his treatment of the most fundamental characteristics—the underlying attitude of mind, whether individualistic, collectivist, or sectionalism rationalist or irrationalist, personal or Impersonal, monistic or dualistic. Capitalism is judged Individualist. Ford says of America: “The welfare of the country is squarely up to us as individuals.” The modern mixed economy is taken to be partly collectivist, partly individualist and partly sectional ist. The author says (p. 23) that in this type, individualism is strongest and collectivism weakest, but later (p. 91) he comments that the elements of collectivism are much stronger and those of individualism correspondingly weaker in the modern mixed economy than in the capitalist economy which it replaced. Sectionalism is also strong. For example, among workers, “the doctrine of the Class war is no longer alive . . . (but) it is reasonable to assume that it still

exercises an influence," an interesting statement in view of the recent exchanges between the New Zealand Federation of Labour and the Labour Party. Communism is, of course. collectivist but Khrushchev is noted as writing: "The little work of individual property still sits in the mind of the kolkhoznik.” Both collectivism and individualism are present in the mercantilist and primitive economies. The guild is a mixture of the three, but in the manor economy, the collectivist attitude is strong. The capital and modern mixed economies and communism are deemed highly rational and impersonal: the rest largely irrational and personal.

Of the seven economies, three —capitalist, modern mixed and mercantilist —are dualistic, but in the second type, the dualist attitude is diluted because the struggle for social justice affects economic life through income redistribution. But under capitalism there is the separation of the economic and other facets of life. The author suggests that the attempt in the Rotary Code, to bridge business and morals with the phrase “He profits most who serves best” was honest but naive.

Chapters 3, 4. and 5 discuss ends, organisation and techniques of the several economies and in the Epilogue, the author queries Robbins’s assertion that there can be a universal economic theory applicable for all places and periods, which is salutary not only for the student who, steeped in capitalist economic theory, supposes that what is gospel according to Samuelson is valid for all economies, but for the administrator who feels that what is right for Western capitalism must apply in Asia or Latin America. In fact, the examination of the different economies makes the reader see his own economic system clearly and saves him from the danger of narrow self-centredness and self-complacency. This book can be highly recommended to New Zealand readers as a means of more complete understanding of their own and other people's way of living and the University of Canterbury congratulated on adding another useful book to its list of publications.