The failure of the League of Nations is due to many causes. One of them is that the Covenant of the League did not establish an adequate system of effective sanctions. Sanctions are coercive measures provided for by a legal order as reactions against violations of this order. The coercive measures consist in a forcible deprivation of certain possessions, such as life, freedom, property, or other rights. The measure we call a sanction is coercive in so far as it is to be carried out even against the will of the subject against whom it is directed, by the employment of force, if necessary. The Covenant of the League, in its Article 16, provided two kinds of sanctions: a general sanction for any violation of the Covenant, expulsion from the League, and special sanctions for the violation of the Covenant which was constituted by illegally resorting to war. The sanctions for this delict were: either economic reprisals, or action taken by armed forces against the member-state responsible for the violation of the Covenant.

The Charter of the United Nations follows the Covenant, in principle at least, in establishing the same kinds of sanctions as the Covenant. Article 6 of the Charter stipulates: “A Member of the United Nations which has persistently violated the Principles contained in the present Charter may be expelled from the Organization by the General Assembly upon the recommendation of the Security Council.” It may be doubtful whether expulsion from an organization whose purpose is the maintenance of peace is an adequate sanction at all. This is certainly not the case, if by expulsion the member gets rid of the obligations which it has violated and thus has shown that it considers these obligations as an unwelcome burden. Expulsion has the effect of a sanction, that is, to be felt as an evil, only in so far as it deprives the state of its rights as a member. This effect, however, can be realized without releasing the guilty member from its obligations.

The Charter provides for such a possibility in Article S, which runs as follows: “A Member of the United Nations against which preventive or enforcement action has been taken by the Security Council may be suspended from the exercise of the rights and privileges of membership by the General Assembly upon the recommendation of the Security Council. The exercise of these rights and privileges may be restored by the Security Council.” This Article introduces, as a valuable innovation, suspension from the exercise of the rights of membership.

There is probably no other form of organized group life in the Canadian community which has been more unstable than the organization of religion. The history of Protestantism in the country is very largely a history of church unions and sectarian divisions. If account were taken of the activities of the Jesuit Order in New France, of the defection at various times of many Catholics to Protestant religious sects, and of recent anti-clerical movements in the province of Quebec and among the Catholic immigrant population in Western Canada, the same would be found to be true in a general way of Catholic development in the country.

The dream of the universal church, of the church which would unite all nations and all classes, has never been fully realized, in Canada as elsewhere in the Western World. Efforts to accomplish such an object, by the establishment of a state church, by the union of separate religious bodies, or by the initiation of a new religious movement which would transcend all other religious groups have invariably failed in face of the expression of strong separatist forces in religious organization. Out of every such effort to create an all-embracing religious body in the community have come new movements of religious protest, the religious sect.

On the other hand, the sect form of religious organization has proved equally unstable. The pure sect, the religious group organized exclusively in terms of the other-worldly or spiritual interests of its members, has never been more than an idealistic conception of religious organization finding expression in movements of religious reform at various times. The necessity of existing in a worldly society has led religious sects from the very beginning to accept to some extent a worldly outlook. Where they have not succeeded in developing into churches, or at any rate into types of religious organization accommodated to the secular community, they have perished. Almost from the moment of their inception, they have been forced to make such a choice between social accommodation or extinction.

The economist J. B. Say once wrote that “our duty with regard to errors is not to revive them, but simply to forget them.” Complete acceptance of this doctrine would expose the political scientist to ruin, for the study of government is largely the study of errors and man's clumsy efforts to correct them. The history of errors, so far as government control of radio broadcasting in Canada is concerned, centres on the Canadian Radio Broadcasting Commission which struggled for survival between 1932 and 1936. Our concern, however, is not with this history of errors but rather with the attempt, through the creation of the Canadian Broadcasting Corporation, to correct these errors. In particular, our interest is focussed on the pressing problems of integrating administration and politics in the public interest, through the device of an independent government corporation.

In 1900, Professor Frank Goodnow first differentiated between politics and administration by suggesting that all activities involved in expressing the will of the state should be classified as “politics,” while all operations necessary to the execution of the will of the state should be termed “administration.” The harmonization of these two activities, according to Goodnow, depends on the subordination of one to the other. In a parliamentary system, harmonization in the public interest is presumably obtained by having the agents responsible for the execution of the will of the state dominated by the agents responsible for its expression. This simple bifurcation has been complicated by the fact that the cabinet, the supreme instrument of party government, has become responsible in large measure for both the expression and execution of the will of the state. In certain sectors of governmental activity the party (partisan) character of cabinet supervision has led to the demand for a withdrawal from its hands of the direct responsibility for “politics” and “administration.”

In recent years no form of property right has been subject to more serious criticism or evoked more strenuous defence than the right conferred by a patent of invention. In Canada, which has so far been a patent-dependent economy, i.e. utilizing largely imported patents, it has taken somewhat longer for the issues to be brought into sharp focus. Dr. Fox's paper serves as a rallying-point for the defence. As one of the leading authorities on Canadian patent law and as an outstanding industrialist of St. Catharines, Ontario, with practical experience in marketing patented articles on both the domestic and international markets, his views deserve respect. Any apparent presumption in taking issue with some of Dr. Fox's statements and conclusions is justified only by the fact that his subject was not confined to patents but raised implications respecting legal and economic aspects of monopolies and restraints of trade and respecting some general principles of public administration and enforcement of criminal and regulatory laws affecting business.

Dr. Fox suggests that the abuses of patents which have been the subject of much discussion and criticism in the United States and other countries with reference to the activities of domestic and international cartels cannot and do not occur in Canada. He claims that the remedies provided by the Canadian Patent Act, the Statute of Monopolies, and the Combines Investigation Act prevent such abuses from arising. He suggests that because these supposedly adequate remedies have only very rarely been invoked such abuses do not exist in Canada. His vigorous exposition of this theme is supplemented by well-deserved encomium of the Canadian patent system in its technical aspects and by a perhaps less deserved condemnation of all who suggest that patents, like corporations and other law-created instruments of trade and commerce, can sometimes be misused.

It is the intention in this paper to conduct an inquiry into the relations between general equilibrium analysis and public policy by the indirect method of examining the place of such analysis in the solution of a definite economic problem. The problem selected is the possibility of raising wages without raising prices. Traditional partial equilibrium theory made the solution of this problem a fairly simple one, but modern general equilibrium considerations, dynamic qualifications on these, and institutional changes in the organization of business and labour have opened up such areas of indeterminateness in the formation of prices that we may no longer trust the answers given by the simpler generalizations.

In the development of ideas during this paper, the term “degree of monopoly” will be employed rather frequently. The term will be used in Professor Lerner's sense of the ratio between the excess of price over marginal cost and price itself. In terms of Figure 1, this is the ratio RP/MP. This definition has limitations but it is retained as the simplest to which analysis may be referred and sufficient for the particular purposes for which it is required here.

The idea that the rise of wages in relation to prices may have consequences for the levels of employment and national income is, of course, based upon the Keynesian hypothesis that larger wage incomes in relation to national income as a whole tend to mean a lower level of savings, and the corollary that a lower level of net new investment will be needed to maintain a given level of employment and income where the wage share is higher. There is also some opinion that changes in the degree of monopoly during the business cycle are such as to aggravate the operation of the disequilibrating forces. For example, Dr. M. Kalecki in an article published in Econometrica in April, 1938, suggests that the Keynesian analysis respecting the relation between wages and prices requires emendation and expansion because it appears from his statistical and theoretical analysis that the degree of monopoly increases with recessions of the business cycle and decreases with its upward phase. If this be so, Dr. Kalecki points out that the cyclical redistribution of income carries with it the necessity of attaching a larger quantity of new investment to any given level of national income as the level of national income recedes, though this reasoning is qualified for effects of falling wages on the foreign balance.