The United States is an outstanding illustration of a liberally managed economy. Direct government participation in economic life is comparatively limited, but a cheap money policy and public spending have been resorted to extensively. The outcome of this policy will be of immense importance to the further development of the idea of balanced capitalism. At the moment, however, this policy has obviously reached a critical point. The government has borrowed and spent about twenty billion dollars to overcome the depression by priming the pump. But now that the government hopes that it has restored self-sustaining prosperity and tries to decrease public spending, a new depression threatens. If the political and psychological resistance to simple resumption or continuation of public spending cannot be overcome, what further can the government do? Is it true that there are only two alternatives left, either to a step from a monetary economic policy to a directly planned and bureaucratically managed economy, or to trust once more the automatism of the liberal economic market?
After careful consideration, and especially after cautiously weighing the United States census methods against those applied in the majority of other countries that have any agricultural statistics to speak of, it is my conviction that one of the basic concepts underlying the statistical terminology of the United States census is untenable and not only contrary to concepts of rural sociology and farm management, but equally in disagreement with the agricultural and industrial, the social and economic interpretation of forms of enterprise unanimously adhered to in this country.
The United States has enacted in a very few years social insurance schemes for which European countries required decades. This is an advantage and a danger. In the slow development of security schemes in Europe each part of the program was followed by years of experiment and education as the structure slowly expanded. Unemployment insurance was only very cautiously included, and a nationwide system of employment offices was in place well before it started. In the United States there is general agreement that the federal as well as the state acts are still incomplete and show many weaknesses. Unemployment insurance and its supplements will be in the experimental stage for a long time. The reform is handicapped by the impossibility of projecting unemployment estimates into the future.
The term "thin market" implies a quantitative and qualitative judgment. "Thin markets" are markets with small turnover: narrow markets. The "thinness" of the market in this sense can be measured by the quantity of sales. "Thin markets" on the other hand are markets in which the price of stocks rises relatively much on a relatively small buying order and falls relatively much on a relatively small selling order: "thin markets" in the qualitative connotation of the term are inelastic markets. Those who complain about the "thinness" of the market believe that the market is inelastic because it is narrow. This is not a truism. We might well conceive of an inactive market, inactive because of the lack of stimulating or depressing factors but highly elastic in so far as potential demand and potential supply are great and will appear whenever some selling or some buying tends to depress or to raise prices.
There is no economic miracle in the Germany of today. There is no wizard who uses unknown tricks of financing or of creating capital to produce the airplanes, gasproof dugouts, fortresses, battleships, barracks, tanks, immense stores of ammunition and all the other paraphernalia of a modern war. Those who appear to be wizards are only doing it on a large scale, with the help of a powerful and efficient bureaucracy, what despots have always done--use the labor of the nation as the source of expenditures. German armament has been financed almost entirely by a systematic and far-reaching exploitation of the workers, and to this extent it is "sound."
The particular idea of equality incorporated in modern democracy is characterized by the fact that it seeks to involve all sections of the population in the shaping of the will of the state. But even in the most extreme form of democracy limits are set to equality. It is never possible for all subjects of the state to take part in the formation of the general will, for natural differences must always be taken into account, and certain sections of the population such as certain age-groups are excluded on practical grounds from the exercise of full citizen’s rights. Since ever-new democratic forms emerge in the process of historical development, all attempts to find an absolute, a priori definition of the idea of democratic equality must fail. In particular, it is impossible to derive a definition of democracy from the relative number of those who take part in the formation of the will of the state. Consideration of the idea of equality, and hence of democracy, must be based on a realistic and sociological study of democratic institutions.
If I understand correctly Mannheim’s position, the role of intellect is to constitute the Intelligence Service of organized political parties. The intellectuals need to have a passport released by a legitimate party, but they also have or should have a broad and somehow safe freedom of movement through the enemies’ territory. Among themselves, even when serving opposite interests, they have or should have a certain solidarity coming from the similarity of their function and from their scholarly breeding. Enlisted they are or must be, but in some a-political centers, whether universities or coffee houses, they can at times enjoy a meeting of the minds. Mannheim seems to hope, though, that mutual intellectual understanding the party warfare may be moderated, and political intelligence used not only as a corrosive of masks but as a healer of wounds.
Review of book by G.A. Borgese. New York: Viking. 1937. 483 pp.
Review of book by Grete De Francesco. Basel: Benno Schwabe. 1937. 258 pp.
Review of book by Hans L. Stoltenberg. Leipzig: Hans Buske. 1937. 448 pp.
Review of book by Werner Stark. Rechts- und staatswissenshaftliche Abhandlungen, vol. 7. Brunn: Rudolf M. Rohrer. 1934. 84 pp.
Review of book by Ferdinand Friedensburg. Stuttgart: Ferdinand Enke. 1936. 260 pp.
Review of book by Alice Salomon. Published by the International Committee of Schools for Social Work with the support of the Russell Sage Foundation. Zurich: Verlag fur Recht und Gesellschaft. 1937. 265 pp.
Review of book by Walter Lippmann. Boston: Little, Brown. 1937. 402 pp. $3.