Journal Article Schumpeter and Underdeveloped Countries: Comment Get access Richard C. Wiles Richard C. Wiles Connecticut College Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 77, Issue 4, November 1963, Pages 697–699, https://doi.org/10.2307/1879460 Published: 01 November 1963

C. E. Ferguson, Cross-Section Production Functions and the Elasticity of Substitution in American Manufacturing Industry, The Review of Economics and Statistics, Vol. 45, No. 3 (Aug., 1963), pp. 305-313

SPECULATIVE activity may contribute to the stability of price, or it may promote and feed on instability. But how may one determine, for a specific market over a specific period of time, whether on balance the activities of speculators have been stabilizing or destabilizing? It has been maintained by Milton Friedman that destabilizing speculation must be unprofitable since it involves selling at low prices and buying at high prices.' If this proposition were valid, and if it were also true that stabilizing speculation is always profitable (because it involves buying at low prices and selling at high), the question would take a more tractable form. For then the empirical investigators need only identify the sign of speculative profits: if they were positive, the speculators must have contributed to price stability; if profits were negative, speculators must have added to instability. Unfortunately, neither proposition is generally true; counter examples will be produced in sections 2 and 3. They may be untrue, however, only under conditions which in practice are most unlikely to be satisfied. If this were so, speculators' profits might yet serve as a useful, if not infallible, guide to the stabilizing or destabilizing effects of speculators' activities. This possibility is examined in Section 3. In Section 4 there is outlined an alternative, more direct approach to the problem of determining the effects of speculation on stability. It possesses the incidental but substantial advantage of not requiring the direct measurement of speculative profits and losses.

Abstract One hundred years ago the Parliament of the Great Britain enacted the Companies Act of 1862. This Act was to be, for nearly half a century, the main statute for the regulation of British companies; and in the Act's provisions, or in what was lacking in those provisions, the strong individualism and laissez-faire spirit of latter 19th century Great Britain were manifest. For the Act contained no mandatory provisions with respect to accounts or audit: these were matters of private contract, to be left to the stockholders. Major reforms related to company Act took place in Great Britain. In the year 1962, Jenkins Report was presented. Much of the Report is concerned with the general law. Generally, the accounting recommendations of this Report can be regarded as an attempt to add marginal improvements to existing legislation, rather than as a plan of radical change. Many of the improvements will be valuable. The general impression that the Report gives is of a Committee that, as a whole, possessed a high technical competence in law and accounting, but a substantially lower one in economic policy.