3: Production: the Four Factors; the Function of Government.
There are usually three factors of production recognised: Land, Labour and Capital. I have heard in discussion in the SSISI as late as the 60s grudging reference to things called 'residuals' as the locations where lurk knowhow and the decision-making process. JJ in 1925 comes out squarely with 'Enterprise or Initiative' as the fourth and most important factor. I quote:
"Everybody recognises ...at least three Factors in production...but the Factor of Enterprise is so enormously important that, although it is itself a form of Labour, it requires to be treated as a distinct Factor in production. The efforts of Labour to produce Wealth are likely to be addled efforts, unless they are fertilised by a fruitful association with the element of intelligent organisation and direction..."
JJ goes on to enumerate various types of enterprise other than individual, naming as forms of Group Enterprise not only the Joint Stock Company but also the Producers Co-op and the Consumers Co-op. At this time JJ was working closely with Plunkett House.
He adds Government as a tentative fifth factor of production, providing law, sanitation, education and other background services, but warns that while its power for good is limited its power for evil is unlimited and can be directly exercised. He lists the provision of agricultural and industrial research, statistical services, penalising dishonesty etc as important positive services.
When considering this chapter in full, one should bear in mind that JJ based this book on his Barrington Lectures, which he gave extensively during the 1920s all over rural Ireland. The language is therefore very much directed towards a lay audience, and towards members of the farming community, whom he characterises as self-employed entrepreneurs.
4: Production: Division of Labour; Forms of Business Organisation.
JJ goes on to treat Managerial Skill, Mass Production etc; at the end of the chapter he gives a promotional mention to the co-operative movement, in both its retail outlet and agricultural producer forms.
5: Production: Increasing, Diminishing and Constant Returns.
Cost of production, Productive Power; he goes at some length into the question of the weather and prices in the agricultural market...
6: Distribution of the Product of Industry; Rent; Interest.
In this chapter he touches very lightly on the question of Private Property in Producers' Goods, an issue which was in process of being addressed by the Soviet Government, with consequences discussed elsewhere.
7: Distribution of the Product of Industry: Wages; Profit.
Real and Nominal Wages; Trade Unions; Marginal Productivity of Labour; Wages of outstanding individuals ('Rent of Ability'); Profit of Enterprise as Rent of Ability; the role of Profit in co-operative group enterprise.
8: Exchange: Relative Prices and Relative Values; Markets; Supply; Demand; Market Price; Cost of Production.
JJ here goes into the theory of Money as a Medium of Exchange and a Measure of Value, using simple worked examples of exchanges between commodities. He develops a critique of the then current procedure at country markets and fairs, where a host of isolated sellers confront few wealthy purchasers, using this again as a peg to hang the argument for producers co-operatives. He develops the concept of 'short run' and 'long run' prices.
9: Exchange: Money as a Standard of Value; an Imaginary Currency of Hazel Nuts; the Essence of Banking.
JJ here goes into the concept of the 'Floating Surplus' in banks which is available for loan to Enterprisers, thus enabling the Banks to play a positive productive role. He calls for co-operative credit banks specialising in short-term loans for farmers for periods more than the current 3-month norm.
10: Exchange: Domestic and International Trade.
JJ here concludes with the classic Free Trade arguments, going into the Balance of Trade, Visible and Invisible Exports and Imports, and making the case that the latter can't be reduced without reducing the former. He points out the danger of Protectionism leading to corruption of government. He does however admit that non-economic arguments for Protection may be valid in a context where '..a nation, like an individual, has a right to sacrifice Economic Goods for social, cultural or political ends... the Economist as such is not concerned'. He thus gives de Valera a let-out clause, although the whole tenor of the book is directed against the protectionist approach, as earlier promoted by Arthur Griffith, and then in gestation in the policies of de Valera in pre-governmental Fianna Fail.
Reviews
I have a file of nine reviews which JJ kept. Four alas are not marked as to origin. These four are all favourable; two are signed (RIOC and WJW). The one signed RIOC is quite extensive, about 20 column inches, and JJ or someone had pasted it to a paper.
A review in the Voice of Labour on August 29 1925 claims JJ as being already well-known in Dublin Labour circles, on foot of having voluntarily undertaken the conduct of a class of workers in the study of economics in Trinity College previously. It was also noted that he was at the time a candidate for the Seanad. The reviewer credits JJ with a '...progressive and social attitude of mind..' though he does go on the nitpick a bit.
A short review in the London 'Times' I give in full: 'A work on general economics with special reference to Ireland. The author has excellent qualifications for his task. Having deserted Oxford for Dublin he is now fellow and tutor of Trinity and had had foreign travel as an Albert Kahn fellow. With care and precision he gives a good, average account of economic theory of the most orthodox type, with necessary illustrations, say, from Co Roscommon instead of Wiltshire. He has no opportunities, however, to deal with any great divergences between Great Britain and Ireland. The banking systems of the two are, for instance, practically identical, while Dublin is also in possession of a Stock Exchange. The book is an excellent one for the Irish student.'
There was a lengthy review in the Church of Ireland Gazette, which linked the publication with JJ's Seanad candidature, and urged support. The review mentioned his comments on Lough Allen, Arigna coal and Leitrim iron, and the constraining factors on their development, such as the failure to develop the Shannon navigation effectively up to Lough Allen. It also picked up on the Dublin vegetable market and the need for consumer co-operative trading.
George O'Brien reviewed in the Irish Statesman; the cutting is headed '..Statesman July 11 1926'. JJ was '..to be congratulated on having produced a very useful introductory treatise to the general study of economics.... originality of emphasis and arrangement.... illustrations.... taken from actual Irish conditions... Dublin housing.... Guinness...'. G O'B further picked on JJ's promotion of co-operation, highlighting the lack of training of co-op managers as a constraint. He was supportive of the use of Irish instances for illustration.
The only 'bad review' was in the Journal of the Economics Society by J Lemberger, who dismisses it as being too 'slight and discursive' as an introduction for university students, and too arid to stimulate the general reader. 'The claims made for this small work seem to me to be slightly exaggerated'. Lemberger turns up during the 30s as the Barrington Lecturer for Ulster (see the SSISI overview), and there are indications that JJ tried hard to get rid of him. I mentioned the name of Lemberger to Paul Bew of QUB at the Irish Association conference in Carrickfergus (November 1999) and he came up with the lore that he had been somewhat of an eccentric, living out on the Ards peninsula, never went near Queens, expected his students to go to him.
Correspondence
I have a letter from the publishers (Educational Company of Ireland) objecting to sending a free review copy to the Weltwirtschafts-Institut in Kiel, though in the end they sent one, with invoice, and a short review in German appeared in their Archiv XXIII/2 (1926).
From other correspondence it appears that by May 1926 only 400 of the 1000 printed had moved, and the publisher was awaiting impatiently a time when the study of economics would be taken up seriously in Ireland. He goes on to say: '..the English publishers assure me that there is no chance of selling the book in England as the examples are taken from Irish trade - and the professors of the 'dismal science' think that no good can come out of Ireland.'
There is an appreciative letter from Dexter M Keezer of the Economics and Commerce Department of the University of North Carolina, Chapel Hill; this could have been a contact made in the US during his Albert Kahn travels, over a decade previously. JJ seems to have had an eye on the US market, and sent over copies to such contacts as he had.
He must have sent a copy to JAR Munro the Rector of Lincoln College Oxford; there is a handwritten appreciation, and an enclosed copy of the Lincoln newsletter, which names some notable Lincoln economists of the previous half-century, among whom he considers that JJ should now be numbered: Sir Edward Gonner, JA Hobson, Percy Ashley, George Unwin, Sir William Ashley and JF Rees.
(** Look these up; were any of any significance? Hobson I seem to recognise as someone.)
There is a letter of appreciation from a student, one Ellen Desart.
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Copyright Dr Roy Johnston 1999