Journal Issue

Book Notices

International Monetary Fund. External Relations Dept.
Published Date:
December 1972
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Spanier, David, Europe, Our Europe, London, England, G. B. Martin Seeker and Warburg, Ltd., 1972, 193 pp., £1.95.

A man who lists poker as his only hobby—as does David Spanier in the biography on the jacket of his book-would be naturally attracted to what at that time might be described as the best game in town: the 1971 Brussels negotiations for British membership in the Common Market. His fascination with the subject would evidently increase if he were also a convinced Common Marketeer. And there’s no doubt about it with this author. It shows in the title of his book and is confirmed by its dedication to “All Good Europeans” and for that matter by Spanier’s position as European Editor of the staunchly pro-EEC Times of London.

All this gives David Spanier the clear conviction that he has a good story to tell and he tells it exceedingly well, with a novelist’s sense for setting the scene, peopling it with lively dramatis personae, and deftly carrying their actions toward a conclusion. That conclusion, the Treaty of Accession, is described elsewhere in Finance and Development. Spanier tells how it happened and why it happened, from the opening speech in Luxembourg of the first chief British negotiator, Anthony Barber, to Prime Minister Heath’s final stroke of the pen at the signing ceremony in Brussels.

In a sense, David Spanier’s book completes the story told by his colleague, Ian Davidson of the Financial Times, who in 1971 wrote Britain and the Making of Europe. In his book, Davidson goes back to Britain’s earliest involvement with European integration, back to Churchill’s 1946 speech in Zurich where he said, “we must build a kind of United States of Europe.” Davidson follows the few ups and several downs of that involvement throughout the 1950s and 1960s, devoting a final chapter to the last negotiations. He cuts off just before the Great Debate in the House of Commons, ending with an impassioned argument in favor of Britain’s joining.

Spanier takes up the story at this point; his subject is the final and successful round of negotiations and he neatly dovetails his description of the political evolution at home into his account of the negotiations themselves. His play-by-play description of developments in both fields focuses largely on the political aspects and one may readily infer his agreement with what Ian Davidson wrote earlier: “Any reasonably Informed civil servant from Britain or the Six could have forecast with great accuracy the terms that finally emerged, give or take half a per cent here, six months there, a tariff quota rather than a tariff reduction, one form of words rather than another. Together, seven civil servants could have concocted the essential terms within a week, if they or their governments had so wished. but what they could not have forecast with anything like the same confidence was that the negotiations would in the end succeed.” And he adds, “If there was any real drama in the negotiations, it was over the eventual choice between success and failure, not over the terms.” David Spanier describes that drama as it unfolds, lucidly and with a fine sense for the intricacies of political bluff and counter-bluff. His book is a real contribution to a better understanding of Britain’s move into the Common Market, because the poll tics behind the economic terms will continue to affect the execution o1 those terms for years to come.

Jan-Maarten Zegers

An Introduction to Flow of Funds Accounting: 1952-70, bank of England, Economic Intelligence Department, London, England, 1972, 98 pp., 50 pence.

This monograph, outlining the methodology and uses made of the bank of England sector financing accounts, is most welcome. In the first place, it provides one answer to the question most frequently asked in this field: “What use may be made of flow of funds statistics?” It is clear that forecasts of financial transactions in a complete and balanced form are now regarded as an important part of economic planning In the United Kingdom and that they are essential if the Government is to have any guarantee that Its general economic policies are Internally consistent. The comments on the problems associated with residual errors and unidentified transactions are a welcome reminder of the dangers Inherent in basing economic planning on national income and expenditure accounts alone. More detail on the bank’s method of forecasting financial flows would have been useful, bringing the 1964 and 1968 Economic Trends articles (particularly the latter) up to date. Perhaps a subsequent monograph or articles in the bank of England Quarterly bulletin will provide such detail.

The first part of this monograph (largely prepared by J. Boulter) clearly describes the accounting framework underlying the bank’s analysis. The second part is an example of the use of financial statistics in describing economic developments, as applied to the experience of 1969 and 1970. The third part (largely prepared by J. P. Burman) discusses the problems associated with seasonal adjustment of the data, including the problem of adjusting aggregative data. Finally, in addition to presenting the data annually for 1952-70 and quarterly for 1963-70, the monograph provides a comprehensive description of the entries and the sectors identified.

Altogether, this is a valuable addition to the official literature on financial accounting.

Graeme S. Dorrance

Yudelman, Montague, Gavin Butler, and Ranadev Banerji, Technological Change in Agriculture and Employment in Developing Countries, OECD Development Centre, Employment Series No. 4, Paris, 1971, 204 pp., $5.

This monograph examines the available evidence on the interaction between technological change and the generation of agricultural employment in low-income countries. In the first half of the monograph the authors review the economic literature, and in the other half examine a number of hypotheses related to the effect that land-augmenting technological change (i.e., introduction of high-yielding seeds, fertilizer, and irrigation) and mechanization will have on the demand for farm labor.

Using survey data from Ceylon (now Sri Lanka), India, Pakistan, and Thailand, they conclude that land-augmenting innovations will increase the demand for labor by 30 per cent, that the introduction of large-scale machinery will substantially reduce labor requirements, and that selective mechanization may relieve seasonal shortages without unduly displacing labor. The nature of technological change in a number of countries-Japan, Mexico, and Taiwan—is examined in this context, strengthening the conclusion that mechanization and land-augmenting innovations can be diametrically opposed in their effect on labor demand.

They also discuss the dangers of transferring changes that have begun in Western countries, and developed on the notion that displaced labor can find alternative employment. In concluding, they place emphasis on land reform and cooperatives as needed institutional entities, sensible encouragement of selective mechanization by tax exemptions or subsidies and agency bias toward small-scale low-income producers. All, of course, are worthy objectives but have proved difficult to implement in most countries.

This study is extremely readable—the authors bravely grapple with policy issues that are very topical in economic development. Their warning about the relative dearth of evidence and the likely inapplicability of some Western technology should be taken to heart by those making decisions on these issues.

Richard W. Longhurst

Finance and Development does not attempt to evaluate books or contributions thereto by Executive Directors or members or former members of the staff of the International Monetary Fund or the World Bank Group, but notes them as likely to be of interest to its readers.

The International Monetary System in Transition, Chicago 1972 (Proceedings), Federal Reserve Bank of Chicago, III., U.S.A., 1972, 155 pp., free.

This paperback is the transcript of the international financial symposium sponsored by the Federal Reserve Bank of Chicago in March 1972.

The participants represented government, banking, finance, academia, and business. Their subjects included the international monetary system in the 1970s and beyond, new trends in international banking and business, foreign exchange markets from commercial and banking viewpoints, and central bank cooperation.

The first paper in this collection, “The Development and Functioning of the Postwar International Monetary System” by Fred Hirsch, formerly on the staff of the Fund, appeared in the June 1972 issue of Finance and Development.

A free copy of The International Monetary System in Transition may be obtained from: Research Department, Federal Reserve Bank of Chicago, Box 834, Chicago, III. 60690, U.S.A.


Gittinger, J. Price, Economic Analysis of Agricultural Projects, Baltimore, Md., U.S.A., The Johns Hopkins University Press, 1972, 221 pp., $10.

Béguin, Jean-Pierre, Les Enterprises Conjointes Internationales dans les Pays en voie de Développement,

Geneva, Switzerland, Institut Universitaire de Hautes Etudes Internationales, 1972, xxiii + 271 pp., Sw F 40.

Kafka, Alexandre, The IMF: The Second Coming?, Princeton, N.J., U.S.A., International Finance Section, Princeton University, 1972, 43 pp., $.50.

Bertrand, Raymond, Economie Financière Internationale, Paris, France, Presses Universitaires de France, 1971, 288 pp., F 17.

Tewari, R. N., Agricultural Planning and Co-operatives, Delhi, India, Sultan Chand & Sons, 1972, vi + 100 pp., Rs 15.

Swann, Dennis, The Economics of the Common Market, Baltimore, Md., U.S.A., Penguin Books Inc., 1972 (second edition), 223 pp., $1.95.

Tait, Alan A., Value Added Tax, New

York, N.Y., U.S.A., McGraw-Hill book Co., 1972, vii + 184 pp., $12.50.

Ballon, Robert J. and Eugene H. Lee (Editors), Foreign Investment and Japan, Tokyo, Japan, Sophia University and Kodansha International Ltd., 1972, xviii + 340 pp., $10.

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