‘great spokesnien’ in cvcryday life, were later seized and executed by the Germans, and their ftcuteiiants wcre appointed as ‘chiefs’ by the Coforiial adiniriistrafion. When the British st~coccdcd the Gerrnans, these ‘chiefs’ were given magisterial powers, thris firnily entrenching them as oliicial leaders and thcrcby increasing thcir authority. During his period of field work Gulliver noted the tendcncy for younger men to assert that they (the Arusha) had always had ‘chiek’, i.e. political leaders who held power through tlieir oflice. This tendency to make claim to traditional chiefship, which in fact never existed, has been noted in other parts of the world where colonial governments have found it necessary to install ‘chiefs‘ as a technique for maintaining a conquest situation. Gulliver docs not appcar to see the myths surrounding the colonial chiefs in this sense, but prefcrs to interpret (erroneously 1 believe) their function as providing charters for chauvinistic progress. Yet in a footnote on page 156 he states: “By 1961, under the influence of national self-government and democratic representation, the Arusha, or a vocal majority, rejected the Chiefship i n favour of an elected head of the Tribal Council”.

I n his analysis of social control arid dispirte setfknwnt, Gulliver has to take into account the opcmtion of prc-contact stirvivals, the imposed administrative and legal systems, and the inter- action between the old and the new. This is cornpetenlly handled by examining the interconnected complex of rOlcs of inflricncc and authority and the extent to which these receive collective sup- port. Chapter 9, in which he analyses the locus of dispute procedure - with numerous cases to illtistrate his argument - is of exceptional merit. In fact the whole of Part Four, “The Processes of Dispufe Settlement”, contains one of the best accounts of conflict resolution in a changing society whcre indigenously there werc no judges or specialist authorities with power to make and enforce dccisions and scttlements.

Perhaps the most interesting and significant structural aspects of Arusha society in lhis regard is that the imposed system of local government and local courts have not precipitated any important corporate groups or categories, which are not of indigenous origin. W e can attribute this. I think. not only to the lack of urbanisation among the Arusha, but also to the colonial administrative system which so effectively isolated them in a sort of ‘Arushastan’. Thus all readers of Dr. Gullivcr’s book will no doubt look forward to one of those ‘revisited‘ studies which will report the elFccts of Tanganyika’s independence on Arusha local affairs in general and social control in particular.

PETER CARSTENS Unhersity of Cupc Town

COeirwe tfc John Maynard Keyner. By Paul Lambert, Professor d’konomie politique a la Faculte

1 H I Y ROOK traces the devclopnient in (or perhaps, more accurately, apparent changes in) Keynes’ ideas through his Indian Cirrrerrcy and Finance (191 3), his tract on Monetary Reform (1923). his 7i.mtise on Money (1930). his General 7/teory (1936) and his subsequent articles - contribu- tions in which some economists believe they have discerned a significant late shift of conviction.

Although Profcssor Lambert’s approach is less idolatrous than that of most Keynesians.’ it is scarcely critical. He mentions Keynes’ critics and quotes passages which express their broad concliisions; but nowhere does he attempt to explain and refute in rigorous terms the grounds o n which these critics reach these conclusions and reject the propositions with which Keynes’ name is associated.

For instance, Lambcrt rejwts an interpretation suggested by Lord Robbins’ which would have made sense of Keynes’ underconsumption doctrine and claims (quite validly in my opinion) that it is very dnubtftil whether Keynes would have admitted the interpretation suggested. Robbins submitted that “if the propensity to save is compensated by an equivalent propensity to invest, all is well” (p. 70).’ But Malthus (Robbins maintains) did not perceive this, for he “explicitly repudiated hoarding as a factor” (p. 70). Now, in rejecting Robbins’ interpretation of what Kcynes meant (or ought to have meant), Lambert needs some other escape from the absurdity which Robbins perceives and srrRgests that Keynes perceived. If the one escape is spurned, there is need for another. But Lambert does not seem to realise this.

In its niost gcneralised form, the vital question is: Why should any change of human pre- fcrence about thc iise to which the flow of valuable productive services shall be put (such as between the importance to be given to the more distant, future as distinct from the immediate

I . Thus, he admits that there is lillle novelty in the General Theory which, in essence, merely “repeals the themes of hlalthu~” (P. 46). he admits also lhal in 1951 “the crowd of over-failhful pupils and worshipping disciples of Kc nes) was dirniniriing in the world” (p. i4); and i e claims that whilst to-day Keynes “haa disciples, he has no faithd.”

dc Droit de Liege. (Martinus Nijhoff, La Haye, Belgium.)

[m L, b .~ ..--., 2. Contained in a private letter. quoted OR pp. 69-71. 3. If Robbins’ suggestion i s acceptable thrift as such (a low propensit to consume cannot be regarded as a

contributory cause of depression unless for s&ne reason a changs in time pre&rence prccipkates a c h a n r in liquldity preference (i.e.. induces hoarding) under monelary rigidity.

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future) lead to the cumulative uncmplaynicnt of men and other resources? Keynes’ critics hold that this can happcn only through disco-ordinations which prcvcnt adjustments of exchange values (expressed as prices) to change.. in preference - dis-co-ordinations which may be aggravated at times by changcs in the demand for monetary services (when such clianges arc accompanied by monetary rigidity). Disco-ordination so caused may leave prices out of range of uninflated income and inconsistent with expectations.

The kernel of Keynesianism (as the reviewer has always understood it) lies in the denial of this proposition; and because Lambert fails to recognise that this is rhe issue, he makes no real effort at explanation of why that vcry useful division of function between the saver and the entrepreneur should be a source of occasional disequilibrium and cumulative decline in activity.

h i their consumer-saver rble, people decide fo whuf exfenr their valuable assets (in all forms) shall be consumed (through the extcrmination of their value) or accumulated net. In their entre- preneurial file. people determine rhe Jurm in which the replacement and net accumulation of assets (in all forms) shall occur. Although all persons expressing preferences in respect of ends, and making judgenients about m a n s to ends. are continuously and simulatneousl expressing aaving preference and exercising wnie entrepreneurial authority, tliesc prefercnces mijudgements are conceptually distinct. Moreover, thcre is some mcasure of perceivable specialisation of the two functions.

The typical saver (one who accumulates assets) cannot have the detailed knowledge essential for determining the form in which the flow of services into resources (for replacement or net accumulation) can be. most f i i i i r f d in the sense of irrconie-prodicing. Hence he can often ‘invest’ most profitably (for himself as well as for society) by lending to those who have that knowldge. Similarly, those who have the most expert knowledge of (a) the community’s desires that certain kinds of out-put shall be curtailed, maintained or expanded. arid (b) the values and whcreabouts of the resources needed for responding to these desires, and seldom those who themselves own all the necessary resources. Hence it is to their advantage (as well as society’s) that they shall be able to borrow.

The Keynesians have envisaged. as Lambert understands. the “progressive disappearance of interest” (p. 149). i.e.. the gradual elimination of any return to savings as such, in order to leave Pigher profits: But it is impossible to eliminate rhe vuhe elenrent which we call ‘interest’ (or rent’): Certainly, by m a n s of inflation and totalitarian controls we can eliminate the division of

function under which (i) an interest return is enjoyed by those savers who prefer a mirket- determined contractual yield, (ii) a return of profits p h s interest accrues to those savers who devote their own services and their own resources to chosen productive activities and (iii) a return of profit alone is received by those whose sole function is putting borrowed capital to the most prolitable prospective use. When the division of function so distinguished has been suppressed. is.. when all entrepreneurs have been forced into category (ii), we can. if we wish, define ‘profits’ to include the interest element. Nut that element would still be there. as the average prospective return t o the rundorn acquisitioii of. assets (meaning by ‘random’ here. in the absence of ell entrepreneurial judgement).

In the reviewer’s judgement the separation of lendcr and entrepreneur (fallacious thinking about which led to the enunciation of Keynes’ ‘euthanasia of the renrier’ dictum) is a paramount source of etticient specialisation in the modem world. But there is no recognition on hmbert’s part of this’basic insight in ‘classical’ thinking. He fails. consequently. to get to grips with the reul controversy between the Keynesians and the non-Keynesians.

Lambert does not even rncntion the contribution which most effectively, although very gradually, caused many Keynesians to retreat (in a smokescreen of ambiguity). namely, Modig- lianib now famous 1944 article which challenged the unemployment equilibrium thesis. Yet the very essence of the Keynesianism which is still (in 1964) being absorbed by at least 90 per cent of all economics students throughout the world is recorded in the text-books in thc form of theories which directly or indirectly rely upon the notion of unemployment equilibrium.

It is the reviewer’s duty to refcr to one other point. Lambert typically leaves the impression that Kcynesianism saved capitalism, ihrough rescuing the world from chronic. everdeepening depression. Yet all that the Generul Theory really did was to supply il plausible justification for groping. pragmatic policies which sevemI governmcnts had adopted before the sophisticated justification of 1936 had been thoiight out - most blatantly in the United States. Sweden and Australia.’ Given the political necessity to pander to organised laboiir, a nccessity which was rendered strongcr bcwusc therc was already sufficient Keynesian teaching in the universities to

4. In the Trratirc on Money (e.8. KC Vol. I, p. 295). and before the Macniillsn Commission, this objective of rdsin8 the share of profits waa declared more unequivocally than in the General Throry.

5. Unless. of course. it is somehow possible lo induce an exprcrsion of positive saving prefcrence under the fantastic imaginary conditions in which all the community’s needs have reached satiely.

6. Lambcrt Secnis to think that thc General ‘rheary led to “the birth *if policies previously unknown” (p. 41). But there was nothing new in prirciple either in the dchasemcnt orcurrencies or ill mercantilist controls to supprcsr the .voidance of Ihcsc iiijustices via private contract In the free market.

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weakcn respect for academic authority,' inflation and breach of international good faith through dcvalu;ition may have heen the only way out. For instance, even so uncompromising an anti- Keynesian as L. A. tlnhn holds that the deflationary policy of the last pre-tlitler government - unacconipanied by thc price and wage-rate adjustments required for co-ordination to deflation - was responsible for the Nazi revolution.'

Not all non-Keynesi:ins cvould agree that the policies of the 1930's. with the era of competitive currcncy depreciation which they inaugurated, reprcsented the sole solution to the disastrous situation which political disregard of chssical teachings had then created. But those who do bclieve that the policies on which 7/w Generol P'heory seemed to confer respectability at that time were the only escape route from disaster in some cases, still deny strenuously that Keynes' concepts, niodels and analysis throw any light whatsoever upon the 'full employment' which has followed. No rigorous explanation of the creeping inflation with which the world h.as been suhsequcntly burdened is to be found either in Tire General Theory or in subsequent Keynesian writings. Unirersify OJ Cope Tonrr. w. H. H u n

Iriferrrotioriol Economics. 3rd edition. By C. P. Kindleberger. (Irwin, Homewood. Illinois, 1963).

Introdiicfion to fnternnfionol Econorrrics. 3rd edition. By D. A. Snider. (Irwin. Homewood,

TIIFSF: TWO textbooks, both voluminous in the American manner, presuppose different levels of prior knowledge of economics and are therefore best discussed separately.

Kindlebcrger's widely used textbook is the more advanced of the two, though less difficult than Vanck's recent Internofionol l h l e : Theory and Economic Policy. The contents are organised around the balance of payments: the foreign exchange market is approached via an introductory discussion of the balance of payments; trade theory and commercial policy come under the current account and international investment under the capital account. This is followed by chapters on international resource allocation and balance-of-payments equilibrium. A series of appendices elaborate the finer theoretical points touched on in the main text.

The theoretical parts are better than the descriptive sections. Intricate relationships are explained in clear, simple language and often with elegance. Particularly well done are the effects on prices, incomes and the terms of trade of merchandise and capital movements. After an arithmetical example to demonstrate Ricardo's theorem of comparative costs, the theory of international trade is from then on presented in the graphical form of transformation ratios expressing opportunity rather than labour cost. The exposition is succinct and requires from the student a certain capacity for abstract thinking.

The very thorough discussion of balance of payments questions includes reference to the distinction between basic balance and overall balance, of great current significance to the United States. The 'basic' balance of payments m r d s currcnt account items and long term capital movements only. Particular weight is given the equilibrium aspect: "it is important to focus our attention completely on the establishment and maintenance of balance of payments equilibrium. This is the central problem in international economics today." The author posits as one criterion of equilibrium the absence of "undue restrictions on imports" (p. 506). thus linking the degree of 'openness' of the economy with equilibrium. Apart from the vagueness of 'undue'. which the author admits, one faces here the conceptual dilliculty that equilibrium would be indeterminate in the case of a country maintaining fairly substantial import restrictions -and what major country does not, what with tarilTs and import control? For the purpose of determining equili- brium, it would seem more practical to the reviewer to require that import restrictions - be they tariffs or quotas - remain broadly unchanged over the period of observation rather than that they should not be substantial. l h i s would amount to including import restrictions in the institutional framework within which international transactions take place, and is in line with

7. It must be admitted Chat the clarity of orthodox opinion was hlurred through the unwillingness of the great majurity ofeconoiiiistr who are usually supposed to be in the orthodox or classiesl tradition. to facs courageously the reality that trade-unions were causing output lo be priced beyond the reach of uninllated income and the expeelattons which such a situation created. The inadequacy of currenl treatment of this issue by the small Rroup of economists wilh whose work Keynes WN acquainted (parlicularly Marshall) was. in my judgement. responsible in part for his mis- conceptions ahoiil clasrical teachings. I do not think that Keynes ever gave his mind to the explicit teachings of Cannon in nritrin and RueC in Prance on the responsibility of wage-rates and unemployment insurance for apparently chronic depression. The reviewers' 7hrwy of Colleclive Dorsoining (lY30) and Eeonomisis and the Public (parliculrrly Chapler XI) were wholly iininfluenlial attempts to show the relevance of 'classical' twchinp to this problem.

8. Economirs of Illusion. p. 4. Curiously Lanibert fails to rekr lo the close similarity of lhe i d u s of L. A. Hahn to thore expressed in The Grnrrol Fhcory. "Everything that is wrong and exasserated In Keynes 1 rald much earlier and more clearly" claims Hahn (Eronnmics of Illusinn. p. 7). who ascribes the enormous success of his early work "mainly to the fact that . . . any book th$ romires prosperity hy the relatively easy means of monetary mmipu- lations is eagerly taken up by readers . . . fibid., p. 5)

Pp. xix t 686. Pricc S8.SO. Export edition: $4.75; in South Africa: R4.40.

Illinois, 1963). Pp. xix -I- 607. Price 88.50.

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