RISK, PROFIT AND LOSS,

by Hastings Lyon '01. Felsberg (New York), 1943. 105 pp.$1.00.

This essay on risk and some of its economic consequences is complementary to the author's previously written book on the factors determining the rate of interest. It is made up of three parts together with an introduction setting forth the trend of the argument. Part I deals with the economic problem of uncertainty, an exposition of the influence of time, and an inventory of the sources of risk. Part II discusses the bearers of the burdens and the recipients of the benefits of risk bearing. Part 111 takes up the problems of profit and loss in relation to risk and discusses such questions as "What is profit and loss" and

"What is cost"? According to the reasoning presented, profits are the gains of uncertainty; risk is part of cost and is worthy of its hire. That justice is attained only when the distributive shares are equal to the contribution is the stock of the argument. The part played by risk in rendering a service brings the conclusion "That it cannot be said that any profits except those of damaging monopolistic practices or deceit are unearned."

Stealing some of the thunder of a hypothetical economist's review, in the Preface the author suggests for such a reviewer the subtitle "A Lawyer Takes a Glance at Economics" to imply that the author has only an amateur standing as an economist. On that score he defends his qualifications for economic analysis with one of his favorite similes . . that economics is like a glass of water, of which the law (and other institutions) is the container shaping the form of the economic con- tents." An economist would not quarrel with the views expressed for, while not new, they are sound and persuasive. However, the language is somewhat cryptic, the trend of thought involved and often not easy to follow. Probably a longer book, some chaff along with the grain, would have been for most readers more effective.