ABSTRACT
Characteristic of post-war economics is an avowal of public purpose as a goal toward which the theories are directed, and of experiment as the means of realizing that purpose; Investigations start with the assumption of a “disease” of capitalism, then follow with a comparison of remedies proposed elsewhere, and end with the author’s proposed remedy and experiment designed to reach the goal of an ideal democracy. Moulton invites large business establishments to quit their policy of maintaining prices and to join with the Brookings Institution in making experiments of reducing prices in order that the abandoned goal of classical economics may be reached by benefiting consumers who are “the whole of society.” Irving Fisher looked forward to an experiment announced in 1932 by the Bank of Sweden of raising and stabilizing domestic prices which he thought would remedy “the private profits disease.” Reports of progress are being made on the Swedish experiment. The contrasted theories started several years ago from opposite poles of the same credit—debit relation, Moulton with credits, Fisher with debits. Moulton’s credit turns out to play a passive role, consistent with the classical economics of production and consumption. The active role of credit is played by central banks of discount, and turns on “commitments” made by everybody for the unknown future for which statistics are not yet available for investigation.
