Affordability

“ But the income, which a man derives from the loan of money itself, is obtained only by the sacrifice, or at the expense of the crops, rents, or other incomes, which he might derive from the lands, houses, or other property which his money would purchase. If, therefore, a man can afford, for six per cent. interest on his money, to give up all the crops, rents, and other incomes, which he might obtain from the lands, houses, or other property, which his money would purchase, it is plain that for three per cent. ”

“ Of all conditions of society, that is most prosperous in which there is a gradual and regular increase of the circulating medium, and a gradual, but not too rapid increase in the value of property, and the price of commodities. In such a state of things, business of all kinds is active and animated, every department of it flourishes, and labor is liberally rewarded. No sacrifices are made of property, and debtors find, without difficulty, the means of discharging promptly their debts. ”

“ Sir, I firmly believe that abundance and cheapness of provisions is one of the constituents by which the continuance of manufacturing and commercial pre-eminence may be maintained. You may say the object of these observations is to flatter the love of gain, and administer merely to the desire of accumulating money. I advise this measure on no such ground. I believe that the accumulation of wealth, that is, the increase of capital, is a main element, or at least one of the chief means by which we can retain the eminence we have so long possessed. ”

“ Mill expounds the doctrine, that cost of production is made up of wages and profits. When we speak of an increased cost of production of a given article, we mean that its production requires more labor and capital than before; and of a decrease in cost of production, that it requires less labor and capital than before; meaning by “more labor” that a given quality of labor is exerted for a longer or shorter time, and by “more capital” that a greater or less quantity of wealth abstained from is employed for a longer or shorter time ”

“ Those whose degree of providence is below the usual standard, become impoverished, their capital perishes, and makes room for the savings of those whose effective desire of accumulation exceeds the average. These become the natural purchasers of the lands, manufactories, and other instruments of production owned by their less provident countrymen. ”

“ The present high cost of living raises questions in the theory of the economic aspect of life that have compelled the attention of the public. The theory of money, interest, savings, foreign investments, the place of gold in the world's economy is carried a step further and is popularly more extended. ”

“ If we examine, on what the pecuniary value of labour, and the pecuniary value of the use of land, depend, we shall find that it is on the very same causes by which we found that wages and rent would be regulated if there were no money and no exchange of commodities. ”

“ Since the worth of all property is measured by money, it is obviously conducive to the general welfare of the community that fluctuations in its value should be rendered as small, and as gradual as possible. ”

“ All I mean to contend for is that profits depend on wages, wages under common circumstances on the price of food and necessaries, and the price of food and necessaries on the fertility of the last cultivated land. In all cases it is perhaps true that rent will depend upon the demand compared with the supply of good land, and wages on the demand compared with the supply of labour, if it be allowed that the price of necessaries influence [s] the demand and supply of labour. ”

“ These loans, being drawn from capital (in lieu of taxes, which would generally have been paid from income, and made up in part or altogether by increased economy) must, according to the principles we have laid down, tend to impoverish the country: yet the years in which expenditure of this sort has been on the greatest scale, have often been years of great apparent prosperity: the wealth and resources of the country, instead of diminishing, have given every sign of rapid increase during the process, and of greatly expanded dimensions after its close. ”

“ He may proceed to consider the different forms of endowments, by tithes, by land, by rent-charges, and by the investment of money. He may show how the first is an obstacle to all improvement, and the second to improvement by the landlord; how the third diminishes with the progress of wealth, and the fourth may perish with the fund on which it is secured. ”

“ This property would all be needed by the organized consumers who, with their continually accumulating fund from pooling the savings of profit, interest and rent, even on a comparatively small scale, would always be able to buy. ”

“ Interest is determined by the equation between the demands of borrowers and the supply of capital offered by lenders. Or, if we take what is given as the law of profits, it is determined by wages, falling as wages rise and rising as wages fall—or, to use the phrase of Mill, by the cost of labor to the capitalist. ”

“ And now let us analyze first the Cost of Labor in this connection, and then second the Cost of Capital, and we shall soon reach radical and unchangeable ground, and find in the sum of these two an aggregate Cost of Production, and also all of the variables that can ever enter into such Cost. It is plain to reason, that only by Labor non-valuable land-pieces ever did or ever can become valuable. ”

“ Suppose, for the sake of simplicity, that he neither buys nor sells during the week, and after work has stopped and he has paid his hands on Saturday night, take a new inventory of his capital. The item of money will be less, for it has been paid out in wages; there will be less raw material, less coal, etc., and a proper deduction must be made from the value of the buildings and machinery for the week’s wear and tear. ”

“ If all commodities were produced directly by the expenditure of labour, and in such a way that capital need not be considered, as in the simple natural state of society taken by Ricardo, then the only element to consider in value would be the quantity of labour. And in a society of a more developed character, in which wages are Elements of expenses production. ”

“ Economy in personal and family expenditures was the text from which the lesson was drawn.
In my prosperous days when I made large annual profits, I did not realize how foolishly extravagant was my scale of living, for every year I was adding a handsome amount to my accumulations which were steadily increasing, and yet, looked at from the standpoint of this clear-headed, successful business man, I was expending far more than what should have been regarded as my income. ”

“ It may be claimed that the workman who receives an increase of wages, and whose cost of living is correspondingly increased, is no better off at the end of the year, yet economy brings to him larger apparent accumulations, and he is thereby encouraged to practice frugality. ”

“ And so long as the bringing in of superfluous commodities shall exceed in value the richness of our commodities carried out, so long and so much must you needs grant me, that our realm is impoverished, either in money or otherwise. ”

“ The labourer may obtain greater comforts; wages in kind real wages may rise. Or the progress of population may force down cultivation to inferior soils, and more costly processes; thus raising the cost of production, the value, and the price, of the chief articles of the labourer's consumption. On either of these suppositions, the rate of profit will fall. ”

“ We shall see that wages are the earnings-that is to say, the makings - of labour, not the advances of capital, and that the labourer who receives his wages in money (coined or printed, it may be, before his labour commenced) really receives in return for the addition his labour has made to the general stock of wealth a draft upon that general stock, which he may utilize in any particular form of wealth that will best satisfy his desires. ”

“ I would ask, by way of finishing the picture which our friend from Carolina so happily commenced, and in order to settle the question of reckless expenditure, on which you all seem to exhaust your eloquence, how many of those that belong to our fashionable society can afford its expenses without impairing their estates?—how many of them would be able to continue them without the assistance of credit?—and how many of them, if their estates were to be settled to-morrow, would be able to pay fifty cents in a dollar? ”

“ In the more fortunate class, whose incomes bear a progressive ratio to prices and whose cost changes are, therefore, inversely proportional to price movements, we may expect to find: (1) proprietors of mortgaged and bond-issuing commercial and industrial enterprises; (2) proprietors of highly capitalized and centralized industries not subject to public control; (3) employers of unorganized labor and salaried persons ”

“ The whole amount of our national riches—the capital of this and of every other country—has been formed by the same slow but certain process of individual savings, and the accumulations of savings, stimulating new industry, and yielding new accumulations. ”

“ With these explanations the proposition holds good that the normal values of freely produced commodities tend to be equal to their cost, or rather expenses, of production, and any price which yields a greater or less return to labour and capital is unstable. ”

“ The prime costs of doing business are reduced by the rapid fall in the prices of raw materials and of bank loans, by the marked increase in the efficiency of labor which comes when employment is scarce and men are anxious to hold their jobs, and by close economy on the part of managers. ”

“ The ordinary or average price of provisions determines the quantity of money which must be paid to the workman in order to enable him, one year with another, to purchase this liberal, moderate, or scanty subsistence. ”

“ If prices had not fallen, and fallen just when they did, I must have gone abroad to live, where I might work to some purpose,—where my capital might have been employed in producing wealth, instead of being given to my workmen to buy dear food. ”

“ In urging a course of strict economy we admit that it is hard, embarrassing, perplexing, onerous, but it is by no means impracticable. A cool survey of one's expenditures, compared with his income; a wise balancing of ends to be gained; a firm and calm determination to break with custom wherever it is opposed to good sense, and a patience that does not chafe at small and gradual results, will do much towards establishing the principle of economy and securing its benefits. Economy has, however, deeper roots than even this—in the desires. It is there, after all, that we control our expenditures. ”

“ Human labor, through all its forms, from the sharpening of a stake to the construction of a city or an epic, is one immense illustration of the perfect compensation of the universe. The absolute balance of Give and Take, the doctrine that every thing has its price, — and if that price is not paid, not that thing but something else is obtained, and that it is impossible to get any thing without its price, — is not less sublime in the columns of a leger than in the budgets of states, in the laws of light and darkness, in all the action and reaction of nature. ”

“ Your income, which formerly gave you a surplus of sixty thousand or seventy thousand dollars a year for new investments, is all at once not large enough to pay the interest on your debts, let alone your household and personal expenses. First, what has become of this income? It came from three sources—the furnaces, the telegraph stock, and a group of minor properties. These furnaces and iron-mines, which were all your own until you were persuaded to put a mortgage on them, have been closed by the orders of outsiders with whom you were persuaded to combine. ”

“ We have allowed you to pay us the highest rents you could afford, solely to develop in you the sense of competition and a stimulus to progress, and we have daily displayed to you, in our persons and equipments, the advantages of the higher life. ”

“ Wages, profits, interest and rent take the product.—It is common to consider distribution as made in the forms of wages for labor given without risk as to the product, profits to the one whose labor is associated with risk of loss as well as gain, interest to the one who furnishes capital in any form and waits for his compensation, and rent to the landlord, or owner of estate, whose property is used for a definite time and returned. ”

“ True money will be a present economy so far as it takes the place of the national debt, and it will be a future revenue to the extent of the increase of population. The rate of increase has been more than three and a half per cent. per annum, but taking it at three per cent. there are persons living who will be living when the population will be two hundred and fifty millions, and the currency proportionate. ”

“ I have no sort of connection whatever with any of these middle men or great farmers, who are now the objects of public indignation: and, as an individual with a small fixed income, I am certainly. among that class of persons on whom the high price of provisions must fall the heaviest. ”

“ It will be well if the grandchildren of your present dependants have not to emigrate at last, after the expenditure of much capital that might have been better employed, and at a much greater ultimate cost than at present. ”

“ How could there be any limit to the amount of useful saving when every item of saving went to increase the capital structure and the fund for paying wages? Sound economists could not fail to view with horror an argument which sought to check the source of all industrial progress. ”