The fighting between nations and states, and domestically between political parties, pressure groups, and cliques, so greatly occupies our attention that we tend to overlook the fact that all the fighting parties, in spite of their furious battling, pursue identical economic objectives. We must include here even the advocates of a socialization of the means of production who, as partisans of the Second International and then the Third International with its approval of the New Economic Policy (NEP), at least for the present and near future renounced the realization of their program.

Arthur Travers-Borgstroem,* a Finnish writer, published a book entitled Mutualism that deals with ideas of social re­form, and culminates in a plea for the nationalization of credit. A German edition appeared in 1923.

According to Deumer, banks presently serve private interests. They serve public interests only inasmuch as these do not conflict with the former. Banks do not finance those enterprises that are most essential from the national point of view, but only those that promise to yield the highest re­turn.

The poor performance of public enterprises is usually blamed on bureaucratic management. In order to render state, municipal, and other public operations as successful as private enterprise they should be organized and directed along commercial lines. This is why for decades everything has been tried to make such operations more productive through “commercialization.” The problem became all the more important as state and municipal operations expanded. But not by a single step has anyone come closer to the solution.

What has been said here applies to every attempt at transferring private enterprises, especially the banking system, into the hands of the state, which in its effects would amount to all-round nationalization. But in addition, it would create credit problems that must not be overlooked.

Deumer seeks to show that the credit monopoly could not be abused for fiscal reasons. But the dangers of credit nationalization do not lie here; they lie with the purchasing power of money.

Deumer’s book clearly reveals that etatism, socialism, and interventionism have run their course. Deumer is unable to support his proposals with anything but the old etatist and Marxian arguments which have been refuted a hundred times. He simply ignores the critique of these arguments. Nor does he consider the problems that arose from recent socialistic experience. He still takes his stand on the ground of an ideology that welcomes every nationalization as prog­ress, even though it has been shaken to its foundations in recent years.

We explain a phenomenon when we trace it back to general principles. Any other mode of explanation is denied to us. Explanation in this sense in no way means the elucidation of the final cause, the ontological basis, of the being and becoming of a phenomenon. Sooner or later we must always reach a point beyond which we cannot advance.

In German logic and philosophy the term “understanding” (Verstehen) has been adopted to signify the procedure of the sciences of human action, the essence of which lies in grasping the meaning of action.3 To take this term in the sense accepted by the majority of those who have employed it, one must, above all, bear in mind that in Germany the d

Sanctioning Controls. We may call those controls “sanctioning” that set prices so close to those the unhampered market would set that only insignificant consequences can ensue. Such controls merely pursue a limited task and do not achieve great economic objectives through interference with market forces. Government may simply accept the market prices and sanction them with its intervention. The case is similar when government imposes price ceilings that lie above the market prices, and minimum prices that lie below them.