Some recent developments in economic theory

Abstract

The outbreak of war has produced, among its consequences, a complete change in the type of economic problems confronting statesmen and their economic advisers. Many of the problems which engaged the attention of economists during the last war and many novel ones arising out of the peculiar circumstances of total warfare have come to the foreground, and it is inevitable that in the course of their solution, or of their nonsolution, as the case may be, many developments in the realm of economic theory will take place. Economic theory has developed to a large extent side by side with practical problems. It has been in analysing the issues underlying a concrete situation that the theoretical issues involved have clearly emerged. Professor Cannan stated that "when economic questions get into politics, though they are often somewhat roughly handled, they are really thought about." After an abrupt change of interest such as that caused by the war, it may prove useful to attempt to review briefly some of the matters which were agitating the world of economic theory in the last years of the disturbed and unstable peace. Such is the purpose of the present paper, which is designed to explain some of these issues to an audience mainly composed of amateur rather than professional economists.