Economic collapse

“ When the resources have been depleted, a precipitous collapse of the economic system will result, manifested in massive unemployment, decreased food production, and a decline in population as the death rate soars. ”

“ To be sure, in the larger cities, and especially the great business-centers, the effects of the collapse were very serious. There was not only much commercial embarrassment of a disastrous nature and many sudden lapses from wealth to poverty, but among the laboring people, real distress and suffering. ”

“ The economic crisis we face is unlike any we've seen in our lifetime. It's a crisis of falling confidence and rising debt, of widely distributed risk and narrowly concentrated reward; a crisis written in the fine print of sub-prime mortgages, on the ledger lines of once mighty financial institutions, and on the pink slips that have upended the lives of so many people across this country and cost the economy 2.6 million jobs last year alone. ”

“ At this time last year, amidst headlines about banks on the verge of collapse and job losses of 700,000 a month, we received another troubling piece of news about our economy. Our economy was shrinking at an alarming rate – the largest six-month decline in 50 years. Our factories and farms were producing less; our businesses were selling less; and more job losses were on the horizon.
One year later, according to numbers released this past week, this trend has reversed itself. For the past six months, our economy has been growing again. ”

“ In the absence of money, the economy stagnates, degenerates and, finally, collapses because of massive mismatches of supply and demand aggregates and of the types of goods and services on offer and demanded. Still, this system has the advantages of keeping the economic patient alive even following a massive liquidity haemorrhage. In the absence of barter economy, the economy might have ground to a complete halt and deteriorated to subsistence agriculture. ”

“ The more ruthlessly capital sets about the destruction of non-capitalist strata at home and in the outside world, the more it [Pg 467] lowers the standard of living for the workers as a whole, the greater also is the change in the day-to-day history of capital. It becomes a string of political and social disasters and convulsions, and under these conditions, punctuated by periodical economic catastrophes or crises, accumulation can go on no longer. ”

“ It's not news to say that we're living through challenging times the worst economic downturn since the Great Depression. Credit crisis it's made that downturn worse in the fiscal disaster that is accumulated over a period of years. ”

“ The people of the United States are now confronted with an emergency more serious than war. Misery is widespread, in a time, not of scarcity, but of overabundance. The long-continued depression has brought unprecedented unemployment, a catastrophic fall in commodity prices, and a volume of economic losses which threatens our financial institutions. [49] Some people believe that the existing conditions threaten even the stability of the capitalistic system. ”

“ After having increased production to a considerable extent, it failed in its endeavours to regulate it, and struggled hopelessly in the toils of inextricable difficulties.
"'You are not totally ignorant, comrade, of the economic disturbances which filled the twentieth century. During the last hundred years of the capitalistic domination, the disorder of production and the delirium of competition piled up disasters high. The capitalists and the masters vainly attempted, by means of gigantic combinations, to regulate production and to annihilate competition. ”

“ The period leading up to a crisis is one of relative prosperity; then occurs a crisis in which prices fall, at first rapidly, and afterward for a while going slowly lower. When prices are at the lowest point many factories are closed, and much labor is unemployed. Let us start at that point. Conditions are worse in some industries than in others. General economy and great caution prevail; few new enterprises are undertaken. For those persons having available funds this is a good time to buy, and property begins to change hands. Then hoarded money begins to come out of its hiding places. ”

“ The end of the Price System is inevitable, and when it comes you are not faced with the choice of taking Technocracy or Socialism, Communism or any other 'ism'. You are faced with a choice of Tech. or chaos, out of which the majority of us will not emerge-- alive.
This nation is so highly inter-dependant, that the failure of one phase of its industrial sequence would mean the ultimate collapse of the whole country. ”

“ Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. ”

“ Other causes of Economic depression than “slumps” in speculative Land-values there doubtless are. They spring from such superficial maladjustments in the processes of Trade as are connected with defective banking, fluctuations in the values of corporate stocks and variations in Money standards from lack of effective stabilization. ”

“ The working-classes are often much injured; many are thrown out of employment, and others, not seeing why their wages should be reduced, make things worse by strikes, which, after a collapse, cannot possibly succeed. It is most important, therefore, that all people—working-people, capitalists, speculators, and all connected with any kind of business—should remember that very prosperous trade is sure to be followed by a collapse and by bad trade. ”

“ Bankruptcy and Chaos [Pg 28]
World economic affairs are in a muddle. Famine has gripped Central Europe since 1918; unemployment is rife in Japan, Argentina, Britain, and the United States; business depression is felt in all of the principal industrial countries; producer and consumer alike find the world's economic machinery sadly out of gear. ”

“ As the direct result of this kind of financial legerdemain, which converted the debt-paying medium of the country into an interest-bearing debt, the wages of labor and the prices of products steadily declined, business enterprises were wound up in bankruptcy at the rate of more than one thousand per month and millions of workmen were forced into idleness and thronged the highways in all parts of the country, demoralized, degraded and becoming a sure menace to civilization. ”

“ Everything seems to be going on as usual, commerce and industry vigorous and expanding, when suddenly there comes a shock, as of a thunderbolt out of a clear sky—a bank breaks, a great manufacturer or merchant fails, and, as if a blow had thrilled through the entire industrial organization, failure succeeds failure, and on every side workmen are discharged from employment, and capital shrinks into profitless security. ”

“ In that message I analyzed the causes of the collapse of 1929 in these words: "overspeculation in and overproduction of practically every article or instrument used by man . . . millions of people had been put to work, but the products of their hands had exceeded the purchasing power of their pocketbooks. . . .Under the inexorable law of supply and demand, supplies so overran demand which would pay that production was compelled to stop. Unemployment and closed factories resulted. ”

“ The fall in the value of many stocks and securities held by the banks forces many brokers and speculators to convert their resources into ready money. This is the moment of danger; weak enterprises find their foundations crumbling, and there are many failures. [6] The falling prices, the shattered credit, and the financial losses force many factories to close, and many workmen are thrown out of employment. This moment of widespread loss is the crisis, It is followed by another period of low prices and of small output, and therefore of profits small or negative in many industries. ”

“ It is easy to see that prosperity of this kind must very soon find its limit.... When a further fall in the assignats took place this prosperity would necessarily collapse, and be succeeded by a crisis all the more destructive the more deeply men had engaged in speculation under the influence of the first favorable prospects." 31
Thus came a collapse in manufacturing and commerce, just as it had come previously in France: just as it came at various periods in Austria, Russia, America, and in all countries where men have tried to build up prosperity on irredeemable paper. ”

“ Almost every conceivable cause has been assigned, or given as a partial explanation, for the stagnation of trade. A careful analysis of these recurring periods in the history of our country in 1837, 1848, 1857, 1873, 1887 and 1893, shows many partial causes of disaster in exchange, affecting the peculiar nature of each panic, yet one especial cause is evident in them all. That cause is large investment in fixed capital from which no immediate returns can be expected. ”

“ Capital is draining out to protectionist countries in all directions, but the amount at stake in our manufactories is so enormous that the struggle must be continued at any risk. Credit alone sustains the fabric, and as soon as that is thoroughly shaken, the collapse will be terrible and sudden. The working classes, so long as they receive higher wages than before, are unable to see the danger, but when the collapse comes—and come it surely will before long—the working classes will be the first to demand protection. ”

“ The rest of us have foreseen such rapid liquidation, as a certain result of such a policy, that not only would our town receive a blow from which it could never recover, but the investment world would suffer in the collapse. ”

“ When the reconversion of machinery to civil ends has been completed, the immediate arrears of demand supplied, shipping and rolling-stock replaced, houses built, repairs made good, and so forth, this slow shrinkage of purchasing power in every country will go hand in hand with shrinkage of demand, decline of trade and wages, and unemployment, in a slow process, till they culminate in what one fears may be the worst "times" we have ever known. ”

“ Such fall of prices has destroyed the profits of legitimate industry, injuring the producer for the benefit of the non-producer, increasing the burden of the debtor, swelling the gains of the creditor, paralyzing the productive energies of the American people, relegating to idleness vast numbers of willing workers, sending the shadows of despair into the home of the honest toiler, filling the land with tramps and paupers, and building up colossal fortunes at the money centres. ”

“ What always happens when scarcity appears is that "the trade," indeed the whole world, insists upon the duty of increased production. As a result, wages and everything necessary in production advance. Costs sink to a second place. People having been frightened inevitably hoard, and finally when the joint effort of the world oversteps the market, there come the collapses called "panics," and thousands of business men are swept to ruin. ”

“ The disastrous consequences that must of necessity follow on the economic order as it is constituted at the present time are already in evidence,—strikingly so in the case of the European breakdown. The owning class society is coming to an end—falling of its own weight. The time has come when the producers must take the control of the world into their own hands or suffer disaster. ”

“ A crisis is a jolt to prices which shatters the credit of some banks, brokers, merchants, and manufacturers. Crises are thus peculiar to the money economy and to a developed industry. Not every business misfortune is to be called an industrial crisis, but only those where prices and credit are generally depressed. A long period of hard times is sometimes called a crisis, but it is better to distinguish it by the term industrial depression. ”

“ The number of bankruptcies will be unparalleled; export stops—and thereby thousands of factories are condemned to idleness; the supply of food ceases—and thereby the prices of the means of life rise enormously. ”

“ A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. ”

“ With the maximum goods seek concealment; the terror increasing from the very effect of the law, the price of provisions rises and rises; soon circulation stops, and the catastrophe follows, as prompt and pitiless as a band of plunderers. With competition the progress of the scourge is slower, but no less fatal: how many deaths from exhaustion or hunger before the high prices attract food to the market! ”

“ The destruction of the social and economic structure of Christian states will also be brought about by the destruction of industrial prosperity, through speculation and constant strikes, “throwing masses of workmen out of employment,” artificially raising wages, thus increasing the cost of the necessaries of life, and finally by bringing about a general economic crisis and the disorganization of financial systems. ”

“ That the continued and increasing depression of the manufacturing, commercial, and agricultural interests of this country, and the wide-spreading distress of the working classes, are most alarming:—manufacturers without a market, and shipping without freight; capital without investment, trade without profit; and farmers struggling under a system of high rents, with prices falling, as the means of consumption by the people fail; a working population rapidly increasing, and a daily decreasing demand for its labour ”