Oliver Bell Bunce

“ We say nothing as to which is the wisest direction for consumption to take, with all it stimulating power; we do not deny that consumption may make champagne, diamonds, silks, broadcloth, fine furniture abundant, at the cost of more useful and desirable things. The thing is simply that the energy, the zeal, the exertion of men are so expansive, that great demand compels to great production; and, of course, we understand the economic principle that there can be no production without capital ”

“ Whatever the cause of the business prostration may be, it evidently is something that lies deep, something far more serious than the loss of a part of our wealth. A merchant who loses all his profits is still enabled to go on; a merchant who loses even half of his capital is still enabled to go on: how is it, then, that the community is so nearly at a standstill because a portion of its surplus was lost? Distinctly the railway over-speculation, hurtful as it was, cannot account for the paralysis in industry which now, four years afterward, so generally exists. ”

“ Almost any practical man of business, upon being asked what the trouble is, would attribute it to over-production. To this the economist promptly exclaims that there can be no such thing. "What," he would say, "over-production! too much wealth! an excess of prosperity! ”

“ It is unfortunate for the consumer because it makes prices uneven, and it inflicts cruel injury upon laborers and operatives, and through them upon the whole community.
Here, then, is the evil. Speculation inflames it; currency inflation stimulates it; but undiffused, unregulated, and unrestrained production throws the whole complex machinery of trade out of order; it stirs the whole energies of the people into producing at one period, and arrests energies at another; in suddenly stopping production, it reduces consumption, and hence renders recovery the very labor indeed of Sisyphus. ”

“ The prostration of trade has arisen from extravagance, he repeatedly declares. "The commercial depression, so long, so monotonous, so heavy, and so dull, came from the excessive consumption of English capital in unwarranted constructions beyond savings, and unwarranted expenditure in living by all classes, which destroyed wealth without repairing it with new productions." ”

“ How is it, if the savings of a country have been really impaired, that capital at the same moment should be seeking investment at any rate of interest it can command—that all the financial centres are choked with an excess of money, for which it is impossible to find borrowers? Assuredly, loans at a low rate of interest imply an excess of capital over the needs of trade or production ”

“ We must not be understood to utter a word against the power, the advantages, the immense boon of machinery; but, as all things have their compensations and their penalties, so machinery, beneficent and marvelous as it is, is one means of bringing about certain unfortunate consequences, as we think may be demonstrated.
Production and consumption do not have that intimate relation to each other they once had. ”

“ Now, we think it can be shown that expenditure in the case of an individual and expenditure in case of a large group of individuals have certain very essential differences. When a community exchanges its goods for foreign luxuries to an extent to impair its productive capital, or has invested in railways or similar enterprises so as to reduce its working capital, it is in the position of an individual who has lived beyond his income. But the difference between an individual and a community is, that the income of the former is absolutely fixed, that of the other is wholly expansive. ”

“ This equable and uniform production is like a stream that is fed by ten thousand springs and many affluents; it flows steadily on, calm, perennial, beneficent: but our speculative and spasmodic production is too much like a mountain-river, that at one season comes down in a flood and deluges the land, at another subsides into a rivulet, and all the land is parched. ”

“ The only remedy we can discover is the wise cooperation of producers, the determination to put the production of goods in careful and just relation to the means possessed by the community for exchanging for them.
We hear recently a great deal of the example of France, and Prof. Price is among those who point admiringly to her in this crisis. Now, as every one knows, the savings of people in England, Germany, and America, are deposited in banks, whence they are loaned and become utilized as capital; in France the peasants hoard their savings in old stockings and secret corners. ”

“ What does a church or a railway cost the people as a whole? Some have paid wages, and some have received wages. This is only diffusion. Some money has gone for stone, iron, and timber, but this is only diffusion. The community is less this iron, stone, and timber, [2] but we have already seen that, as the production of this material is unlimited, no practical loss is inflicted here. It is asserted by all economists that food and clothing for the laborers are part of the cost. ”

“ The spindles cannot be set in motion until the stock of goods on hand is reduced and a fresh demand revives; this demand cannot revive because the great body of consumers are in a state of impoverishment. This condition of things is entirely sufficient to explain the genesis and the prolongation of business prostration. Capital is not impaired: it is locked up in machinery that is silent, in goods that cannot be exchanged, in money that has no borrowers. It is the paralysis of consumption that is the cause ”

“ We have an immense wealth of coal because we consume coal so extensively; if we used but little we should have little, and this little would be dear.
This rule works in all or nearly all our staples. Cotton fabrics are a marvel of cheapness and abundance. The consumption and the possibilities of extended consumption have stimulated invention and industry so greatly that the world has become wealthy in its supply of this staple alone. Rarely, indeed, is there a woman so poor that she cannot own a calico gown; few are the men so destitute as to be without cotton shirts. ”

“ Why are the times so "hard?" Why is the long-hoped-for revival of trade so backward? What is it that has put the times so disastrously out of joint?
Every one is asking these questions, and nearly every one is ready with an answer. Some will declare that the trouble is all of the green-backs; others will go so far as to affirm that the lack of greenbacks is the cause. ”

“ Price give an instance where any civilized nation, unless at war, or suffering from some great calamity, has impaired its capital by over-consumption? Can he name a period when, at the end of any year, with the exceptions mentioned, England has possessed less wealth than at the beginning of that year? ”

“ It can make no difference whether we call money capital or not; it cannot affect the heart of the question what it is that is offered at one per cent.—gold, notes, assets of any kind—whatever money may really be, it would seem clear that, if over-consumption had impaired the capital of the country, those individuals who could come into the field as lenders would be enabled to dictate terms to the needy borrowers. Over-consumption means a destruction of food, clothing, coals, metals, etc., to an extent that impairs the reserves of these products ”

“ The unusually large consumption of stone would lead either to the opening of new quarries or the erection of improved machinery for working the stone, and to the construction of railways, boats, etc., for facilitating its transportation; so that stone for building purposes would thereafter be cheaper and more abundant as the consequence of what at first sight appeared a wasteful consumption. In all staple things, at least, a nation is richer because it consumes, while a man is richer by what he saves. ”

“ It is true, there must be economy; there must be saving; but there is economy and economy. The real cause of the more prosperous condition of France is not starved existence but sustained and unspeculative production. There is less concentration there, less wild overtrading; there are more diffusion and old-fashioned relation of production to consumption. ”

“ We are scarcely to argue therefrom that hoarding is the true principle; that a nation is better off because its work-people hide their savings, withdrawing them from public use, rather than placing them in banks where they may become active capital. ”

“ It is evident that the immense consumption of coal has made coal cheap and abundant. It has rendered possible the employment of vast capital in the erection of costly machinery for the working of the mines, for the construction of adequate means of transportation, thereby making remote deposits accessible, and enabling capitalists to work the mines at the minimum of cost, which never would have been done had not the vast consumption of coal rendered it wise and practicable to do so. It is true the consumption of coal is increased by cheapness ”

“ There is, moreover, no evidence that this loss was anything more than a part of our surplus; the assumption that it impaired our capital, and depleted our productive resources, is wholly groundless. No one can say, we imagine, that capital was withdrawn from any other pursuit; that productive industry in any direction was weakened by a secession of its resources by this "craze." The nation was much in the position of a merchant who has many ventures abroad, some of which have proved disastrous. ”

“ Let us say here that the ordinary idea of national extravagance—meaning excessive expenditure by the people, and not governmental expenses—is peculiarly erroneous; an assertion we confidently make, notwithstanding the fact that Prof. Price accepts the usual theory. He declares that "a nation is only an aggregate of individuals," that "analysis will always resolve the action of the single man, and the combined coöperation of a host, etc., into the same constituent parts;" ”

“ Much more is produced than there is corn, leather, or other goods, to exchange for it. The resources of the mills are great; they can borrow from the banks while they pile up their fabrics in their ware-rooms; they can by means of their concentrated capital keep their machinery running, even at a loss, if by so doing they can crush out a rival or manipulate the market. ”

“ Almost every one will assert that over-speculation has something to do with it: some will attribute the whole mischief to the intense railway "craze" of a few years ago, and the consequent losses. Not a few are confident that extravagance and over-trading are the explanation. There seems to be no general agreement of opinion; even men of equal business knowledge and experience differ essentially in their views as to the genesis and remedy of the evil, and the professors of political science are scarcely nearer of accord. ”

“ Now it was solely due to the manner in which her savings had been held. The fact seems to have dazzled everybody. The example of the French peasant is now held up on all sides—that he lives the narrowest and most restricted of lives; that his excessive economical spirit not only limits his comforts, but keeps him ignorant, superstitious, dull, spiritless, hopeless (the tragedy of the French peasant-life is only too well told in the pictures of Millet) ; that he has neither intellectual life nor any grace of art or refined civilization—these facts are nothing to the economist ”

“ He does not show that consumption and expenditure have exceeded production; he declares that capital has been impaired, but gives no facts nor figures in support of the affirmation. The whole groundwork of his theory is boldly and flatly assumed, without the slightest regard whether there is evidence to support it or not. It is grossly illogical to assume that there is over-spending simply because to casual observation there is high and extravagant living. A class may be extravagant; a group of people may be impairing their capital ”

“ If all the productive industries are in full operation; if it is released labor, and the material is not required for more necessary purposes, then it cannot be shown that the church and railway have impaired the wealth of the community at all—that is, it cannot be shown that they have fundamentally cost the community anything. They were erected by released energies, by labor not otherwise required, and the community is not the poorer by a mite in consequence of their construction. ”

“ Men have acted as a man who farmed his own land and had consumed not only the portion of the crops which were his true income. . . but had himself and his dependents devoured a portion of the seed-corn and the breeding-stock, had exchanged a portion of the produce which was required for wages in the coming year for foreign luxuries, or had consumed these necessary reserves on an excess of drainage, however valuable in itself and ultimately enriching. ”