TRANSACTIONS OF SECTION F. — PRESIDENTIAL ADDRESS. 495 



Section F.— ECONOMIC SCIENCE AND STATISTICS.* 



President of the Section: — Professor W. R. Scott, M.A., D.Pnii; 



LiTT.D., F.B.A. 



WEDNESDAY, SEPTEMBER 8. 

 The President delivered the following Address : — 



Economics of Peace in Time of War. 



The economists of great distinction who have presided over this Section of the 

 Association in past years have usually addressed themselves to the discussion 

 of the progress of Economic Science in relation to some problem which had 

 become striking or significant at the time when each meeting was held. It has 

 fallen to my lot to prepare an address at a period when the Empire is involved 

 in a war of tremendous moment both to our country and to the world. Not 

 the least dominant phase of this epoch-making struggle is the economic one ; 

 and it is inevitable that, on this occasion, consideration should be given to some 

 of the reactions of this great war upon industry, credit, and finance. 



It is both remarkable and significant how silent British economic theory has 

 been upon what may be described as 'the economics of war.' No doubt there 

 are volumes, treatises, and isolated passages which record the effect of some 

 specific war upon prices, or upon credit, or upon the national finances. Or, 

 again, other works may deal with some practical inconvenience which the 

 writer experienced ; but, when the total result is estimated, it will be found 

 that by far the larger .part of the scanty discussions of this subject are either 

 purely historical or else purely practical. In the vast majority of cases our 

 writers have confined themselves to an analysis of the effects of some specific 

 war on finance and commerce with a view to suggesting measures towards 

 counteracting the inevitable losses, instead of studying the principles of war in 

 general with a view to strengthening the national resources in preparation for 

 future hostilities. Thus, while British economists have said something about 

 former wars, they are almost wholly silent concerning wars to come. This is 

 a fact of immense significance. It demonstrates beyond the i)ossibility of 

 doubt or cavil that in this country there has been no such thing as a mobilisa- 

 tion of economic opinion. On the contrary, our economists can claim with 

 justice that they have been ever on the side of the world's peacemakers, not 

 with false lip-service but through serious and sustained reasoning. 



Once Mercantilism began to decline, it is astonishing how little one finds in 

 British economic literature relating to causal relations between war and 

 industry. What there is usually appears as a side issue in some other investi- 

 gation. For instance, at the end of the seventeenth century, during the 

 eighteenth century, and in the early years of the nineteenth, there was a long- 

 controversy over the nature of credit, with frequent digressions upon the 

 character of public debts, which was in effect the consideration of the financing 

 of past wars. In its extremest form one theory represented public borrowings 

 as ' a mine of gold ' — a statement which influenced both theory and practice 

 duiing the eighteenth century. The exaggeration of 'the fund of credit' no 

 doubt seems strange and almost laughable to us now, but it does not differ 

 greatly in principle from the vague popular opinion that a nation can become 



* The greater part of the Transactions of this Section were published in book 

 form, by authority of the Council, under the title Cittlil, Industrii, nnd the Wni . 

 edited by Professor A. W. Kirkaldy. (London : Pitman, 1915.) 



