The years 1867–75 were ominous ones in the history of British trade unionism; they were also years of some of its greatest successes. The renewal in 1867 of trade union violence and murder by the Saw-Grinders of Sheffield created a widespread demand for suppression or at least investigation of the unions; and in the same year the Court of Queen's Bench in the case of Hornby vs. Close questioned the legality of unions and denied their funds the protection of the law. Legislation of some kind was certain to follow from these events and organized labour was therefore faced with a serious situation. The Conservative Government of the day decided to proceed by way of Royal Commission and it was only after the organization and practices of the unions had been examined exhaustively over a period of almost two years in 1867–9 that the first steps were taken in the direction of new legislation. Even then the Government—the first Gladstone administration had come to power—moved with exasperating slowness and the unions were kept uncertain of their fate until 1871. But the Liberal enactments of that year did not dispose of the problem; only with R. A. Cross's acts of 1875 were British trade unions set upon their modern foundations. Though long delayed, the two instalments of reform, in 1871 and 1875, constituted a complete success for the unionists, the first great legislative victory won by organized labour and a forecast of its power in the twentieth century.

The Co-operative Commonwealth Federation (C.C.F.) claims to open all its policy-making agencies and channels to its dues-paying membership. This very claim runs counter to what is usually considered the proper operation of political parties. Most groups of active supporters, if they enrol in a party at all, do so primarily for the purpose of closer identification and to lend more substance to their support, but not in order to determine the party's affairs. Even in the case of the major U.S. parties where voters enrol as members with the purpose of helping to nominate candidates, and of those interest-based parties such as the British Labour party and the Mouvement Republicain Populaire, where the party consists of constituent organizations with dues-paying members, the claims of the members to participate in the direction of party affairs receive little support from party theorists. And even where the legitimacy of an assertion by members of a right to participate in policy-making receives consideration, we find at once an insistence that apathy toward public affairs on the part of most people renders widespread membership participation in policy-making nugatory, and that parties, engaged as they are in a struggle for political power, demand in their operations secrecy, flexibility, and unity, none of which permits the kind of open policy-making in which lay members can freely participate.

Policy-making in the two major parties in Canada follows the traditional parliamentary pattern. The parliamentary leader is responsible for the initiation and execution of policy, which he discusses with advisers of his own choosing.

It is a rather puzzling historical coincidence that in many countries attention is being paid once more to inflationary tendencies at the very moment when the international situation suggests the possibility of relaxation of world political tension. If the East has, or ever does, come to the conclusion that the only way to keep the consequences of the Paris agreements under control is to act in time, the quickest form of diplomatic retreat reconcilable with exigencies of an inconspicuous negotiation-technique is the most probable. Correspondingly rapid demobilization in the West accompanied by inflexible pursuit of anti-inflation measures might produce a demobilization crisis that would fulfil Communist hopes for economic and social difficulties in the democratic world. Whether the immediate danger is inflation or deflation, an analysis of the recent history of savings, including periods of unemployment and overfull employment, should be enlightening.

The development of national savings is recorded by Canadian statistics for the last three decades in a very informative way. They offer historical examples of all the typical combinations of factors that are important for a balanced economic development: what is commonly accepted as normal or full employment is followed by years of high unemployment and then comes a period of over-employment during the war years. An examination of the survey in Table II can tell more than lengthy theoretical disputations.

Before discussing the details of the historical development in Canada, let us consider the essential components of the process in a simple arithmetical example.

The problems of present-day Brazil are the travail of a people in the midst of a three-dimensional renovation. Their economy, politics, and social structure are changing simultaneously, but at different speeds. Much the fastest transformation is the economic. Political alterations are slower. Social reconstruction is the slowest. The purpose of this paper is to analyse some of the contradictions that exist within the state when the economy propels it forward while the social order holds it back. What happens in politics when reform of government must be adjusted to a fast rate of economic change and a slow rate of social change? And can such reform be accomplished when foreign examples are invoked to displace ingrained traditions?

The character of Brazilian government is curiously akin to that of the new buildings which abound in the Copacabana suburb of Rio and elsewhere. The architect, a master of the modern idiom, has designed an imposing elevation to the street and an entrance of striking beauty. But, as one enters, much will be found in the finish of the interior, and in the services and maintenance, that conflicts with the external view. For periods of varying length, water will cease to flow from the faucets; electricity will be cut off; street drains may be inadequate to carry off rain and sewage; and, sooner or later, the bichos will find their way in. A building may look a thing of beauty, but without the necessary utilities it will not be a joy forever to live in.

Membership in an élite group implies a role by virtue of which the individual has the power to make effective decisions and to co-ordinate activity in a particular sector of the social structure. In simpler types of social structure, or the “folk” society, decision-making roles tend to be fused with other roles such as headship of kinship units or magical and religious functions. In industrial types of social structure with a great differentiation of social life, decision-making and co-ordinating roles are assigned to members of élite groups. The élite groups which can be distinguished are the economic, political, bureaucratic, military, and, where the ideology has a strong religious component, church hierarchies. Where the ideology tends to be secular, the position held by church hierarchies is taken over by an intellectual élite. The spheres of influence of the several élite groups are not always clearly defined, but in general they correspond to essential social functions.

Such a scheme of élite groups has been suggested by Professor Aron as a more useful analytical device in the study of power than the classes of Marxian theory. It might be added that a scheme of élite groups is also more useful than the “Warner” system of classification which is more relevant to prestige than to power. Hollywood film stars might be considered both “capitalists” and “lower-uppers” but they do not exercise power, although the élite groups who do exercise power might use them for purposes of prestige in the way that advertising and political campaigns suggest.

On October 1, 1950, Canadian authorities abandoned the policy of maintaining a fixed rate of exchange for the Canadian dollar for the first time since the beginning of the Second World War. Thereafter the dollar was allowed to fluctuate with little interference from official quarters. The significance of this event extends beyond the evolution of exchange policy in Canada, for it must have affected the attitudes of those countries that have been studying a more flexible exchange system than the one envisaged by the Articles of Agreement of the International Monetary Fund.

Canadian monetary authorities have been pursuing a policy designed to reduce changes in the value of the Canadian dollar. Official policy has been described as follows: “Transactions of the Exchange Fund Account in the market in United States dollars were directed to helping to maintain orderly conditions without preventing basic supply and demand factors from determining the level of the rate.” It is argued in this paper that a stabilizing agency that operates according to the commonly accepted principle of resisting all movements in the rate does not, in fact, contribute to that rate's stability. An examination of the operations of the Canadian Exchange Fund Account from September, 1950, to December, 1954, supports this argument. An analysis of the meaning of stabilizing policy will precede the discussion of Canadian experience.

The year 1954 was an active one in the development of Canada's financial system. Important revisions were made to banking legislation. The statutory minimum cash reserve ratio required of the chartered banks was changed from a fixed daily ratio of 5 per cent to a daily average of 8 per cent which the banks must achieve for the calendar month. The central bank was granted another tool of monetary control—the right to alter the minimum cash reserve ratio. The chartered banks were admitted to new fields of lending. In June another step was taken to broaden the short-term money market when the chartered banks commenced to make day-to-day loans. These developments reflected a desire on the part of the monetary authorities to increase the sensitivity and flexibility of the nation's financial system.

Meanwhile Canada's fourth housing act was passed. The National Housing Act, 1954, marked the federal government's twentieth year of continuous assistance to housebuilding. Like its forerunners, the Dominion Housing Act of 1935 and the National Housing Acts of 1938 and 1944, the new act provides assistance primarily through the medium of the mortgage market. All the acts have been concerned with the provision of mortgage credit for housebuilding at terms more favourable to the borrower than those prevailing in the conventional loan market.