Jack Weldon’s death in February 1987 deprived McGill’s Department of Economics of its outstanding intellect. Lost to older colleagues and a new generation of department members alike are Weldon’s incisive and inquiring mind, his encyclopedic knowledge, his thoughtful comments on his colleagues’ written work, his dedication to the Department’s eclectic traditions which he did so much to develop, and the engaging sense of humour which could melt friend and foe alike. He is missed!

John C. Weldon was born in Magpie Mine, Ontario. However, there were family roots in the Maritimes. His father came from Saint John, New Brunswick, and...

In a market economy, what is the role of collective efforts to improve social welfare and what does economic theory have to say about it? The chapters in this volume, written by former colleagues and friends of the late Jack Weldon, all touch on this pair of questions in a way that reflects the concerns of Weldon’s career. One of my more vivid recollections of Weldon was his continual insistence on ‘the essential unity of economies’. Possibly a part of that unity is its consistent attempt to address these two questions. In spite of the jokes about economists’ habitual divergence...

Economic thought, as it spreads out through time and space, has some resemblance to a tree. There are roots, some of which may go down a long way, but most prominent, in the seventeenth and eighteenth centuries, are people like Sir William Petty, Richard Cantillon, the Physiocrats like A. R. J. Turgot and Francois Quesnay, and perhaps we should add Thomas Mun and Sir James Steuart on the Mercantilist side, and perhaps even Bernard Mandeville. There is no doubt, however, that the main trunk begins with Adam Smith. Even if he is not the ‘Adam’ of economics (for he had...

Over the last two centuries, there has been a great cycle of opinion among economists about the sources of inefficiency: from Adam Smith’s sharp and unqualified contrast between private sector enterprise and public sector sloth; to Mill’s qualified and reluctant allowance of large domains within the economy where the public sector must act because the private sector would not or could not do so; to Sidgwick’s concern in the latter part of the nineteenth century with what we would now call market failure and his willingness to trust the public sector to put things right; to Pigou’s detailed analysis in...

The axiom of individual self-interest is the source of both the strength and the weakness of economic theory. It leads directly to maximising subject to constraints, that most powerful tool of economic analysis. On the other hand its patent conflict with observed behaviour in many situations means that conventional economic theory does not provide fruitful insights or guides to research on many problems that are reasonably classified as economic.²

It is ironic that when economists come toapplythe axiom of individual self-interest, the ‘individual’ more often than not turns out to be a small group – the household or...

Many years ago, Knight (1921) insisted that ‘if we are to understand the workings of the economic system we must examine the meaning and significance of uncertainty; and to this end some inquiry into the nature and significance of knowledge itself is necessary’. He provided a simple distinction between risk and uncertainty, in which the former was identified with the existence of probability distributions, but this distinction proved inadequate as probabilistic concepts were expanded and as their connections with knowledge were clarified. Further the vagaries of individual decisions produced a conflict between views that the axioms of probability were descriptive...

Jack Weldon¹ wrote on money as a public good.² Peter Howitt, in theNew Palgrave, addresses the problem.³ Ten years before Howitt, David Laidler had also turned to the same theme.⁴ Like them, I take up Weldon’s question.

In Weldon’s writings there were a number of subdivisions of the central theme. He argued, first, that money exists only as a public good and that, appearing as ‘real’ balances, it is subject to change by public contrivance; second, that money so interacts with the rest of the monetary technology that private valuation of welfare gains or losses owing (say) to inflation...

In the conventional theory of international trade it is assumed that, world-wide, technical information available to one producer is freely and completely available to every other actual or potential producer; this is the assumption ofopen access. Evidently the assumption lies at one extreme of a continuum of possibilities. At the other extreme, world-wide, technical information is available to only one producer in each industry; this is the assumption ofclosed access.

When combined with the assumption of constant returns to scale, open access implies a perfectly competitive relationship of producers, whereas closed access implies a strategic relationship, at least...

It has been known since the time of Torrens (1848) and Mill (1848) that a country, if it can be considered as acting as a rational unit, can gain by imposition of a tariff (provided the foreign country does not retaliate), since a tariff will improve its terms of trade. If the improvement in the terms of trade is sufficiently great, it is possible that the domestic price of importables, which includes the tariff, will still be lower than formerly relative to the export price, in which case the tariff will not be protective. If, say, labour is the factor...

Mention of Canadian economic history almost always elicits the knowing response of ‘Ah, yes, the Innis staple theory’, or its variant, ‘the Toronto staple theory’. More than a decade ago Hugh Aitken pointed out that this ‘theory’ had nothing to do with any testable proposition in economics, and the point bears repeating. Innis’s magnificent works on the cod fishery and the fur trade stand with Eileen Power’s lectures onThe Wool Trade in English Medieval Historyand L. C. Gray’sHistory of Agriculture in the Southern United States to 1860as classics in the histories of staple economies. These authors’...

As the Great depression has receded in time, fears of its recurrence, which were widespread in 1945, have gradually ebbed as memories have faded, a new generation has arrived upon the economic scene and the world has experienced an extended period of sustained growth. Still, as the stock market crash of October 1987 reminded us all, fears of another severe depression linger. This chapter examines the basis for these concerns. In particular, it outlines the changes in structure, in economic institutions and in attitudes to economic policy that might be expected to affect the world economy’s vulnerability to severe and...

Demographic explanations of the rise in unemployment in the United States since the 1950s have had little success (Summers, 1986). Greater female labour force participation has had no noticeable effect, and there are now relatively fewer unemployment-prone teenagers than in 1965. Surprisingly, unemployment has gone up despite a higher general level of education.

This chapter looks at skill and unemployment. Despite the prosperity of recent years, a high rate of unemployment has persisted – so much so that economists have revised the ‘natural’ rate upward. However, it is misleading to treat the unemployment rate as an aggregate. Occupational unemployment rates...

What are public pensions? Should they be viewed and analysed as schemes of forced individual saving that provide income when retired, or as tax and transfer arrangements that are used to produce incomes for the elderly that are consistent with social goals? If these pensions are viewed as the outcomes of ‘forced’ individual savings, then judgements about the scope and usefulness of these programmes would revolve around the rates of return that these ‘savings’ appear to earn in this form, as compared to what they would have earned if they had been invested in alternative forms. Different criteria would be...

Jack Weldon’s theory of intergenerational transfers was a contribution of the first order to economic theory.² He took as his starting-point Lerner’s (1959) observation that public pensions and other programmes with an impact on intergenerational distribution are not saving plans but rather plans for reallocating the resources currently available between the generations currently alive. Given a realistic amount of uncertainty and ignorance about what will happen over a horizon of thirty years or more, no one can tell what retirement benefits the current young will enjoy. But the programmes now in effect will directly determine how much they must contribute...

Almost all discussions of pension reform have focused on the plight of elderly women. Several of the recent changes in public and private pensions have been aimed at raising the living standards of this particular group. For example, the Guaranteed Income Supplement (GIS) and Spouses’ Allowances have been raised in real terms and the group eligible to receive these benefits has been widened. Ideally, one would like to have a panel data set spanning the reform period to identify what effects the various changes have had on the income, asset-holding and consumption patterns of all concerned. It is well known,...