This paper is the product of the rather unusual experience of interdisciplinary collaboration which I have had during the last two years. It will, I believe, be more intelligible if it is prefaced by a brief indication of the character of that experience. After a long residence in the ivory tower of economic theory I was thrown, some two years ago, into the muddy field of industrial relations, being appointed director of a new Institute of Industrial Relations in the University of Toronto. Though an economist by profession, I had for a long time subscribed to the view that economics is but a part, albeit an important part, of social science. It was therefore not too difficult for me to decide to put a good deal of the new Institute's resources into the study of what has come to be known as “Human Relations in Industry,” where the contributions of anthropology, psychology, and sociology appear to be more valuable than does that of my own specialty, economic theory.

My interest in the work on human relations of Dr. Elton Mayo and his colleagues at Harvard had been stimulated by Professor Hart, whose article on the “Hawthorne Experiments” in this Journal stressed their methodological importance as “steps towards a unified social science.” “The experiments,” he wrote, “started with, continued with, and ended with, attention focussed exclusively on one thing and one thing only, what people do. This was the new procedure and it was revolutionary.”

The fruits of victory in a world war are never easy to appraise and perhaps it is not wise to look this gift horse of Providence too closely in the mouth. We cannot say with any degree of confidence what our condition would have been if we had lost the war, if we had made a compromise peace, or if we had avoided the conflict altogether by submitting to the will of the enemy. And the results of victory consist only in part in escaping the unpleasant consequences of defeat and the possibly less distasteful consequences of compromise or submission. They include, as well, a fleeting opportunity to reorganize the world on better lines.

So probable is it that this opportunity will vanish in abject failure, as similar opportunities have vanished in the past, and so little can anyone do to enhance its prospects of success, that it bears some resemblance to an expensive lottery ticket, whose holder has paid a high price for an infinitesimal chance of winning a great prize. Mathematics may reveal to us (as they did to Pascal) that an infinitesimal chance may have an immense value if the prize is adequate; but psychologically even the most inveterate of gamblers will shrink from backing an argument such as this.

Although the doctrines of Social Credit have been systematically and extensively promoted throughout many parts of the British Commonwealth and the United States for nearly thirty years, it is only in Alberta that there has emerged a Social Credit movement sufficiently strong to win and maintain political power. It is proposed, in the present paper, to trace the historical development of this movement with specific reference to those data that are essential for its interpretation as a phenomenon of mass psychology. Such an approach must be restrictive and selective: data of primary importance to the economist, the political scientist, and even the sociologist must necessarily be omitted.

The Social Credit upsurge in Alberta was essentially a people's movement which sought to reform, but not to revolutionize, the existing social order by changing the pattern of certain existing institutions. It has passed through the four stages which constitute the natural history of a social movement—social unrest, popular excitement, formalization, and institutionalization; and it has exhibited, in the course of its evolution, the five mechanisms of reform movements—agitation, esprit de corps, morale, ideology, and operating tactics. From the perspective of social psychology, the movement may best be understood if, taking its more general sociological aspects for granted we consider its appeal to the people of Alberta in terms of its leadership, its philosophy, and its techniques of organization and promotion. In analysing this particular social movement, the social psychologist is faced with two serious methodological difficulties: he must be careful not to confuse the evolution of the movement with the political history of Alberta, especially after 1935; and he must, as far as possible, present the movement as a dynamic rather than a static social phenomenon.

In the Canadian constitution, that which relates to the national interest is the responsibility of the federal government; while the provincial governments deal with those matters of local concern. In a perfectly static situation this division of labour would present no problem because the national interest would always assume the same form. But governments operate in a situation that is never static. Changes in techniques or beliefs, in the location of population, and in the political and economic conditions of the external world are taking place all the time. If there is an equilibrium within the Canadian federal system, it is a dynamic equilibrium in which those common purposes which are the proper concern of the federal government are in a constant state of flux. The national interest expands and contracts: it is ever shifting its ground.

It has been quite impossible to contain this elusive concept within the angular Victorian frame of the British North America Act. It would be unreal to suppose that the division of legislative power produced entirely water-tight compartments of action for the Dominion and the provinces. It could not. There is a large range of governmental activity which quite evidently may be the preserve of either the federal parliament or of the provincial legislatures, or, in fact, of both. Much of the difficulty which was created by the judicial interpretation of the constitution between the eighteen-nineties and the nineteen-thirties flowed from an attempt to make the enumerated heads of Sections 91 and 92 represent fields of exclusive legislative power. The only way in which this could be done was by interpreting away the meaning of several heads of Section 91 in order to preserve some meaning for Section 92. This search for water-tight compartments was unnecessary and contributed to the unsatisfactory decisions of those years. One of the results of this before 1939 was that it limited the effective range of action of Canadian governments—Dominion and provincial—to such activities as would commend themselves to a Victorian liberal.

The “shortage of dollars” seems unfortunately to mean all things to all men; hence we must try first to come to a precise definition of the problem. I have myself, in my personal affairs, experienced both a dollar crisis and a chronic shortage of dollars; and I suppose that most mortal creatures have the same difficulties, expressible equally well in terms of their own or of other countries' currencies. But in this sense, which is really nonsense, the “shortage” means only that we have not attained to an “economy of abundance.” Official pronouncements on the problem do not always escape this nonsense.

A much more sophisticated interpretation of the dollar shortage, but one which I am sure must finally be rejected, is “an excess of dollars used over dollars supplied, the difference being made up by borrowing on short-term account from the United States and shipping gold to the United States.” The peculiar character of this definition of Professor Seymour Harris is dramatically shown by the dollar shortage of the thirties, which was marked—and indeed by common knowledge to a large extent caused—by the withdrawal of American short-term capital from Europe, and the flight of capital, mostly short-term, from Europe to the United States. Quite possibly Professor Harris might wish to extend his definition from an outflow of short-term capital from the United States to an inflow also, to be able to cover the European capital flight case. This solution would then apparently associate the idea of a dollar shortage with an undesirable short-term capital movement in either direction, but it would fail to specify in what respect the movement is undesirable. Furthermore, one would be forced to relinquish the idea of a dollar shortage in all cases in which no capital exports or imports take place.

International discussions with a view to establishing improved conditions in international trade began early in the war. There was a general feeling that world trading relations during the inter-war period, particularly after 1929, had been most unsatisfactory. It was realized also that at the conclusion of hostilities large quantities of capital equipment would have been destroyed or worn out, that the relative financial position of the major trading countries would be drastically altered, and that the productive structures and capacities of all but a few of the belligerents would be badly disrupted. Since wide reconversion and reconstruction were going to be necessary in any event, national economies could perhaps be moulded with a view to fitting in with more liberal trading policies and, if the type of framework for expanding multilateral trade could be established, there was less possibility of countries developing what they might feel later were vested rights in restrictive business practices.

Consequently, as early as 1942, a series of international discussions was begun with the object of establishing those monetary and trade relations which would provide the desired framework for international trade. The outcome has been the establishment of, or provision for, a number of interrelated international institutions. While the whole programme has included many provisions, such as UNRRA., E.R.P. and the like, to meet temporary problems, and while some of these are of great importance in helping to place disrupted economies in a position where they can play their part in a restored world economy, from the long-run point of view the major achievements are four in number: the establishment of an International Bank for Reconstruction and Development; the establishment of an International Monetary Fund; the preparation of a final draft of a charter to establish an International Trade Organization; and the conclusion of the Geneva Trade Agreement, lowering barriers to trade among the most important trading nations of the world.