This discussion of capital grows out of investigation of the history of labour in Canada. Four major systems of organizing labour for the production of goods may be distinguished in the course of Canadian history. Each of these involved its peculiar methods of production, of organizing the labour market, and its characteristic attitudes of employers and employees. The change from one system to another is what is meant by economic development in this paper. The questions inevitably arise, why a period features one type of labour organization rather than another and why one system is displaced by another. These questions have led to concern with capital accumulation, importation, and investment, for it would appear that the availability and uses of capital are crucial to the answers. The role of capital is important, no doubt, to other fields of study as well. Many useful things about capital have been said by Canadian scholars, but no broad and coherent review of the whole subject appears to exist. The present is an exploratory paper, covering approximately two of the stages of development remarked above, and the change from one to the other.

About the middle of the nineteenth century, the Province of Canada was transformed from a raw, staple-producing area to a rounded, integrated economy that might be called metropolitan. Signs of the change were visible in 1830, unmistakable in 1840. By 1850 change had gone too far to be turned back, and 1860 and 1870 can denote only the filling out of the home-market exchange economy already implicit. Purely extractive industry was overlaid with a secondary development involving an elaborate transportation system, a capitalistic agriculture, an extensive list of manufactures that appear to have been efficient in their day, and a creditable financial structure. Probably the most telling evidence of the transformation was the fact that this colony, so recently at the mercy of the fluctuations of imperial markets for one or two commodities, could undertake successfully to swallow an empire of its own in the years after 1867.

Although the English tradition of analytical economics was established at least as long ago as the publication of David Ricardo's Principles in 1817, doubt has never ceased to exist concerning the fruitfulness of abstract and deductive methods in economics. Indeed, although the significant advances made since Ricardo's day were the products of men following closely the theoretical tradition, this doubt has increased rather than lessened. While the established methods weathered the attacks of the historical school during the latter part of the nineteenth century, they were severely shaken by the fundamental questionings of Thorstein Veblen. No one has emerged in our day as a true inheritor of the Veblenian mantle, but the institutionalist school of economics, which acknowledges him as its source of inspiration, is undeniably a very serious critic of orthodox economic theorizing.

This paper stems in part from the most recent controversy on the methods and conclusions of economic theory. It attempts to meet the sense of dissatisfaction with which I read the arguments of both attackers and defenders. Perhaps also the fact that during the past few years I have frequently been asked embarrassing questions by students may have something to do with my interest in this problem. I am surely not the only person who has had to contend with the remark that “it looks all right in theory but how does it work out in fact?” For some time now I have been either a consumer or a purveyor of economic theory and I feel motivated to demonstrate (at least to myself) that the activity constitutes productive labour. If that has given this paper the character of rationalization, I hope that it will not be one that cannot be put to good professional service.

Throughout the world governmental regulation of social and economic affairs has increased during the first half of the twentieth century. Whether prompted by the emergencies of two World Wars, by the wide-spread extension of social welfare measures, or by the rise of totalitarianism, this increase has caused apprehension among liberals and socialists alike. Enthusiasm for social reforms, whether they be moderate or radical, has declined in the face of these developments. The many social problems, which remain unsolved, call for reform measures as insistently as ever; yet the fear of governmental regulation besets the advocates of social change. They are confronted by the danger of regimentation in every extension of governmental power.

This concern with the danger of bureaucracy has grown apace with the realization that the countries of Western Europe and North America are on the road to a planned society. It is curious that among the advocates of a planned society, socialists are perhaps more apprehensive of these dangers of regimentation than are New-Deal liberals. In fact, fear of bureaucracy and dictatorial methods has been a recurrent theme of socialist thought. Before and after World War I the Revisionists advocated a gradual transition from capitalism to socialism in order to safeguard the institutions of democratic government; during the same period the Guild Socialists attempted to formulate a programme of industrial democracy, which would regularize worker-participation in the management of industry and government; and throughout the nineteenth century anarchists and “utopian socialists” sought to safeguard the freedom of the individual by conceiving of voluntary associations and co-operation in community organizations as the foundation of the ideal society of the future. Others, then as now, retained the belief that a proletarian revolution was necessary or inevitable; but they insisted that democracy could be preserved, if the people gave full support to the revolution; indeed, only then was a successful revolution possible. All these interpretations were concerned with the transition to a planned society. They were concerned to retain democratic institutions in this transitional period. Yet it is fair to say that the interpreters who were specific in proposing organizational safeguards against a future tyranny were usually vague when they discussed the political means by which socialism was to be established. Conversely, those who specified the necessary political means were ordinarily vague when they discussed how a revolutionary dictatorship could avoid a new oppression.

A Bibliography on Canadian war-time economic controls appeared in the February, 1947 issue of the Canadian Journal of Economics and Political Science. This bibliography covered the period from 1939 to 1946 during which the war-time controls were introduced and brought to full development. The following supplement has been prepared to record the principal statutes, orders, and official statements relating to the period since 1946, which coincides approximately with the period of decontrol.

In the earlier bibliography, there were few references to war-time controls relating to grain marketing and grain prices. In the present supplement, in response to a number of requests, this deficiency has been remedied by including references to the principal legislation and official statements in this field throughout the period since 1939.