Conservationists have long argued that the free market neglects the needs of future generations. Economists who have examined this argument have stressed the dubious realism of any rigorous formulation of the conservationist position, but relatively little attention has been paid to the implications of policies designed to increase the weight given to future demands. Scott has conjectured that such policies might speed exhaustion of mineral resources. If he is correct, the usual conservationist argument that neglect of the future is equivalent to a too rapid use of resources would no longer hold. This article seeks to provide a rigorous proof of Scott's hypothesis.

The economic literature has shown that all rigorous definitions of neglect of the future involve the use of higher than “desirable” interest rates. To explore the consequences of such interest rates, one requires a theory of how resource producers act. Such guidance is provided by the Gray-Hotelling pure theory of exhaustion. A simple test of the basic question is provided by showing how an industry that behaves according to theory would alter its actions if interest rates were lowered.

Section III of this paper provides such a test. The first two sections provide the necessary preliminaries—examination of the justifications given for the contention that interest rates are too high, and a brief explanation of the pure theory of exhaustion. The final section discusses further implications of the basic theorem set out in Section III.

The language of political discourse abounds in metaphors and laments. The general tendency to make abstract ideas more intelligible by expressing them through concrete analogues accounts for the former. The latter are most commonly the reaction to disenchantment with conditions that have failed to come up to expectation.

From the dictionary definition of a metaphor as “the figure of speech in which a name or descriptive term is transferred to some object different from, but analogous to, that to which it is properly applicable” (OED), it follows that the function of a metaphor is to express similarity rather than identity. In practice, however, the degree of similarity implied by a metaphor has a wide range of variation from the most far-fetched comparison to so nearly complete an identification that it is difficult to distinguish the metaphor from a literal description. Thus, for example, a fringe of organismic thinkers—though not the mainstream of political organicism as T. D. Weldon has suggested—maintained that the state was not merely like an organism but was in fact an organism, and therefore imagined that the laws which control a biological organism should apply equally to the political or social organism.

Ambiguity may stem either from imperfections inherent in a particular metaphor or from lack of precision in establishing the extent of identification implied. In addition, the assumption of similarity between two objects or two ideas which have many, but not all, of their attributes in common may serve to withdraw attention from their unique attributes which, on occasion, may prove to be the most significant ones.

Canada's economic development during the first two decades of the twentieth century has been examined intensively by such writers as Viner, Meier, and Ingram. Viner claimed that Canadian experience from 1900–1913 clearly demonstrated the working of the classic specie flow mechanism and the international operation of the quantity theory of money. Meier re-examined the period, and in the light of additional evidence concluded that dynamic forces of economic development (expansion of the wheat economy, and later capital inflows) dominated the Canadian record during the period. Ingram also argued that rapid expansion of the economy after 1900 created investment opportunities and attracted an inflow of foreign funds that was closely linked to the development boom. More recently, Borts has suggested an important role for export prices in inaugurating the era of expansion.

This emphasis on long-run economic performance has detracted attention from short-run variations in the Canadian economy during the pre-war period. Some work in this area was attempted by Taylor and Michell, who built a composite annual index of prosperity to define cyclical swings in a rough way, and by Mitchell and Thorp who provided an annual sketch of conditions in several countries including Canada.

The precise dating of business cycle turning points in Canada owes much to the pioneering work of Chambers. He has produced tentative reference cycle turning points for the last quarter of the nineteenth century, and for the period from 1919 to 1955. The only portion of the post-Confederation century yet to be analysed in this manner is therefore the period from 1900 to 1919.