Letters to the Editor
LIKES SKI ARTICLES
Dear Sir: Although since the days back in 1910 when I helped Fred Harris and Carl Shumway and Ty Cobb found the Dartmouth Outing Club I have not been able to do as much skiing as I would wish, I have followed the progress of this sport at Dartmouth with great interest.
The articles on skiing by Coach Schniebs in the recent numbers of the ALumni MAGAZINE are excellent and ski enthusiasts in this region are following them with interest.
I notice in the January number of the ALUMNI MAGAZINE that you have available for rental two 400-ft. reels 16 mm. movies showing among other things extensive filming of the skiing instruction by Coach Schniebs.
I want to secure these two reels to show to a group of enthusiasts next Monday afternoon, January 18.
GOVERNMENT INTERESTED
January 18, 1932
Dear Sir: Thank you very much for your letter of January 14, and for the twelve copies of the supplement to the January issue of the ALUMNI MAGAZINE.
I am very appreciative of your kindness in this matter. Owing to the interest which is prevalent in the subject discussed by Professor Ames, I want to distribute these copies among officials of the Department of Commerce and other men in Washington who will give Professor Ames' thesis the attention it merits. Incidentally, the Dartmouth ALUMNI MAGAZINE is to be congratulated upon making the results of such constructive thinking available to a large number of men throughout the United States.
If at any time I can be of service to you I hope that you will give me the opportunity to reciprocate.
Cordially yours,
Chief, Business Research Section,Marketing Service Division,U. S. Department of Commerce.
NOTES ON AMES
By AN ECONOMIST
Dear Sir: The recent Ames "progress and prosperity" proposal has such a strong appeal on purely cultural grounds that it may well seem sinful to call it in question. Nevertheless, it is not a remedy for business cycles. On the contrary, fluctuations are caused by essentially the sort of thing which he suggests as a cure, and there is little reason to suppose that such homeopathy would work. The present depression has been brought about largely by maladjustments in the distribution of productive resources among various industries, the net effect being that the outputs of some industries became greater than existing demand would take off at prices equal to costs of production. A number of factors contributed to the maladjustments: the war itself, reconstruction, reparations and rising tariffs following the war, "prohibition," an accelerated merger movement, profound agricultural depression, and unusually rapid changes in methods of production. Thus some industries became depressed; the disaffection spread to other industries related through buying and selling, borrowing and lending, and otherwise; and eventually a situation resembling general overproduction is the effect of particular overproduction as cause. Now Professor Ames proposes inadvertently to aggravate maladjustment by shifting resources from some activities to others without providing corresponding increases in demand for the products which would thus be increased, and by stimulating new developments which, no matter how admirable in the long run, are certainly disturbers of the peace. Underlying all this seems to be a misconception concerning the nature of overproduction.
The proposal begins with a misleading classification of commodities into consumable and non-consumable tangibles and intangibles. In last analysis, all goods are intangible services, and all are consumable. Production and consumption are functions of transformation and conversion, not of physical creation and annihilation. Thus there is no question of shifting resources from tangibles to intangibles, or from consumables to non-consumables, but only a question of shifting resources from some consumable intangibles to others. When it is further remembered that resources are limited, and that overproduction is therefore essentially a relative matter, it should become clear that there is no commodity whatever, and no individual category of commodities, which is "not subject to overdevelopment." This is palpably true even when ethics is brought into the question. Parishes have been impoverished by expensive churches; the French civil service suggests so much administration that it would be better to have some of the labor doing something else; and there are limits beyond which education itself may be increased at too great a sacrifice. The proposition is the more obviously valid in the strictly economic sense which has immediate bearing on economic fluctuations. The outputs of particular commodities can be and are pushed beyond the point where they will repay their costs, and this generates at particular places a depression capable of extending itself to the general field. It is thus that "capitalism," viz., freedom of competition, underlies fluctuation: the overproduction of given things causes disastrously low prices which lead to the underproduction of the same things afterwards, thence to high prices, thence to overproduction again, and so on.
The same problem is encountered with reference to "new developments." Uniform progress, or developments properly synchronized from one activity to another, would tend to shorten depressions. Under this condition overinvested industries would not need to shift so much capital to other fields, but might wait for the general increase of demand to catch up with their existing productive capacity. But in the real world "dynamic changes" are spasmodic they do not proceed uniformly from one industry to another. The maladjustments thus created, although we are amply compensated for them in the long run, constitute a positively aggravating factor in economic fluctuations. For example, at different times canal building and railway building contributed heavily to severe crises in the United States. Toward this source of disturbance there are four possible policies: simply taking the consequences, or repressing the developments, or synchronizing the developments, or preventing unsynchronized developments from causing fluctuations. The first is largely the present policy; the second is ridiculous; and the third and fourth call for more authoritative control and less freedom of competition.
The pasquinades sprayed by Professor Cabot at the "economic man," the "classical economists," and all that sort of thing, remind one of the Bolsheviks who, lest the class war might perish for lack of anybody left to hate, deliberately created innocent farmers into "capitalists" by legislative fiat and then treated them with the medicine deemed appropriate to capitalists. The "economic man" long since became a dead issue, and the last important classical economist died quite a while ago. De mortuis nihil. Now that most real economists are quite aware of changes in the world, and are studying them earnestly, and are even in favor of them, the professor really ought not to be inventing economists who misspend their days in "static methodology," "massive obscurantism," and rabid apologetics for our present system of private property. He is also wasting time when he makes untenable assertions about supply and demand, etc. Yet he is groping toward one important truth: rigid departmentalization of the "social sciences" is prenicious. Here the need is some type of coordination which will not obscure legitimate distinctions.
Hanover, N. H.
(Ed. Note: Professor Knight of the department of Economics is preparing a paper forpublication in the March issue of the MAGAZINE. He will point out the leading maladjustments which have contributed so heavily tothe present depression and will consider thecontrols appropriate to these underlying causesof existing business conditions.)
MORE AMES COMMENT
Dear Sir: I read with a great deal of interest the treatise by Professor Ames which was included as a supplement to the last issue of the ALUMNI MAGAZINE. I have had the opportunity of showing it to a number of men, prominent in finance and industry, and without exception they have been much interested and wished to procure a copy.
I would be most appreciative if you could forward me about fifteen copies.
New York City
SYRACUSE DINNER
Dear Sir: At the annual meeting of the Dartmouth Club of Syracuse on January 8 the following officers were elected: President Paul Howe '14 Vice-President. . . Judge Herbert J. Wilson' 94 Secretary-Treasurer Stuart Edgerly '25 "Chas. C. Tallman'24 Executive Committee William G. Morton'28 (.Hugh A. Johnson '30 In planning our activities for the next few months, we are hoping that someone from Hanover will be passing this way and can stop to talk informally at one of our meetings. Professor Lingley's and Sid Hazelton's visits are still being spoken of as high spots in last year's program, and we are eager to welcome anyone who may be going through this year.
The latest movies, which were shown at our annual meeting, made a tremendous hit. The slow-motion football scenes and the two reels of skiing pictures were certainly masterpieces, both as photography and as items of interest to Dartmouth groups. Everyone here praised them most enthusiastically.
I will appreciate it greatly if you will give our new list of officers to the ALTJMNI MAGAZINE and any other office in Hanover that publishes lists of such things.
THE DARTMOUTH CLUB Or SYRACUSE,
Secretary-Treasurer.
