The Mechanics of Prosperity

Abstract

WHEN the admitted imperfections of the present monetary system come to be impartially and scientifically investigated, the system advocated by Mr. Dickinson in this book will surely deserve consideration. The book is directed to American conditions, and does not attempt to give a complete survey; in particular, it scarcely touches at all on the unstabilizing effects of gold–to which Prof. Gustav Cassel gave such prominence in his recent book, "The Downfall of the Gold Standard", confirming the views of the late Sir Basil Blackett, in his "Planned Money". Mr. Dickinson, in contrast to the two authors just mentioned, takes the view that the trade cycle arises primarily from the operation of interest–which in his view is neither completely elastic in rate, and returned to circulation (as assumed in classical economics) nor reinvested and compounded at a fixed rate (as assumed by Marx). It follows that, owing to this 'stickiness' of interest rates, accumulations of unused spending power occur periodically, and cause a temporary inflation which is followed by deflation. During deflation the debts, due to the issue of new money and credits during the inflation period, are wiped out by bankruptcy and defaults, and the cycle begins again.

The Mechanics of Prosperity

By Hobart C. Dickinson. Pp. xvi + 136. (Baltimore, Md.: Williams and Wilkins Co.; London: Baillière, Tindall and Cox, 1937.) 9s.