SECTIONAL TRANSACTIONS— F. 385 



If the rules of thumb could be formulated, it might be found that they 

 contained some definite bias, e.g. leading in certain types of situation to 

 over-production or under-production compared with that resulting from 

 a random choice within the range of ignorance. This bias might be due 

 to certain considerations of convenience in the formation of the rules of 

 thumb, e.g. simplicity, tradition (in an old firm traditional rules may be 

 sponsored by past success, yet none the less be unsuitable in a new environ- 

 ment), and even quasi-ethical considerations. This bias may be important 

 in the explanation of the sequence of events in a trade cycle. 



It is often assumed that competition leads to the survival of the most 

 efficient. Efficiency is thought of in terms of intelligence, accuracy, 

 punctuality, etc. It may be that the survival of firms occurs in a somewhat 

 different way, more analogous to Natural Selection in biological survival. 

 Where ignorance is great, the exercise of choice based on pure reason may 

 be much circumscribed, firms may exhibit random variation in their rules 

 of thumb, and those which throw up successful rules be selected. This 

 success may not be the result of intelligence, since in the circumstances 

 intelligence would be unable to say which rule of thunrb is best. 



Possible modes of operation of these principles will be explained with 

 special reference to the treatment of overhead costs. 



A group of Oxford economists interested in the Trade Cycle has recently 

 instituted an inquiry, with the object of eliciting certain matters of fact 

 with regard to business behaviour relevant to the determination of disputed 

 points in trade cycle theory. Entrepreneurs have been interviewed by the 

 group as a whole and by individual members of it, and have been subjected 

 to intensive interrogation with regard to their normal behaviour in certain 

 defined circumstances. While the question of what general conclusions 

 emerge from these inquiries is still sub judice, and details cannot be given, 

 something will be said about the light thrown by them on the general 

 questions outlined above. 



Afternoon. 



Sir Wm. Beveridge, K.C.B. — The co-operation of business men in the 

 advancement of economics (2.45). 



Prof. Z. C. Dickinson. — The co-operation of business men in economic 

 research in U.S.A. (3.15). 



Monday, September 6. 



Discussion on Retail distribution (10. 0). 



Prof. A. Plant. — The scope for operating cost comparisons and their 

 limitations. 



A signal example of collaboration for the comparison of operating expenses 

 has been furnished for the whole distributing trade, and indeed for carefully 

 selected groups of industrial firms, by over one hundred of the department 

 stores of Great Britain, which regularly, for the last six years, have pooled 

 their annual operating returns upon an agreed schedule of carefully defined 

 costs issued by the Retail Distributors Association. The method used has 

 two essential characteristics which are worthy of wider adoption. The 

 handling of the returns, the devising of methods for utilising them, and the 



