Economic disadvantage

“ My plan would rectify the fundamental inequalities of our present economic system, in which we follow a hit-or-miss method, one getting much more than he needs or can use, and another less or nothing. We should learn to use our material resources so that all can partake of them, yet so that none will be any poorer or worse off than today. ”

“ 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. ”

“ 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 process of wasting the surplus profits in competition and luxury was slow and protracted, and meanwhile productive industry languished and the workers waited in idleness and want for the surplus to be so far reduced as to make room for more production. ”

“ These problems of job control, of wealth and income distribution, of industrial inter-relations and of the relation between the state and industry are pressing for solution in every important centre of modern economic life. Each constitutes a disturbing element and contributes its mite to the aggregate of social instability and unrest that are racking the economic world. ”

“ 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 ”

“ The consequent shifting of the incidence of industrial returns may be ascertained by enumerating the respective beneficiaries and exploitees of the profit-taking process—the trade advantages of the one class measure the economic disability of the other class; and the attenuation of the incomes of the less favored, as a means to augment the profits of the more favored, is a significant attribute of changing social costs. ”

“ Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. ”

“ For these many reasons economic thinking has been weak and futile in the problems of conservation, of haphazard invention, of unrestricted advertising, of anti-social production, of the inadequacy of income, of criminality. These are problems within the zone of the intimate life of the population. They are economic problems, and determine efficiencies within the whole economic life. ”

“ Economy without industry will barely appear in a whole coat; industry without economy will appear in rags. The first is detrimental to the community, by preventing the circulation of property; the last is detrimental to itself. It is a singular remark, that even industry is sometimes the way to poverty. ”

“ Upon high economic authority we have been told that the prevailing depression is due to overconsumption; upon equally high authority, that it is due to overproduction; while the wastes of war, the extension of rail11roads, the attempts of workmen to keep up wages, the demonetization of silver, the issues of paper money, the increase of labor-saving machinery, the opening of shorter avenues to trade, etc., are separately pointed out as the cause, by writers of reputation. ”

“ And in the insatiable thirst of enjoyment, the ordinary revenues no longer sufficing, they were augmented; the cultivator, seeing his labors increase without compensation, lost all courage; the merchant, despoiled, was disgusted with industry; the multitude, condemned to perpetual poverty, restrained their labor to simple necessaries; and all productive industry vanished. ”

“ Chapter XIV The persistence of poverty amidst advancing wealth Look over the world today. In countries the most widely differing - under conditions the most diverse as to government, as to industries, as to tariffs, as to currency - you will find distress among the working-classes; but everywhere that you thus find distress and destitution in the midst of wealth you will find that the land is monopolized; that, for its use by labour, large revenues are extorted from the earnings of labour. ”

“ This check to production, beginning at the basis of interlaced industry, propagates itself from exchange point to exchange point, cessation of supply becoming failure of demand, until, so to speak, the whole machine is thrown out of gear, and the spectacle is everywhere presented of labor going to waste while laborers suffer from want.
This strange and unnatural spectacle of large numbers of willing men who cannot find employment is enough to suggest the true cause to whomsoever can think consecutively. ”

“ The primary and fundamental occupations, which create a demand for all others, are evidently those that extract wealth from nature; and hence, if from one exchange point to another and from one occupation to another we trace this check to production, which shows itself in decreased purchasing power, we must ultimately find it in some obstacle that checks labour in expending itself on land. And that obstacle, it is clear, is the speculative advance in rent, or the value of land, which produces the same effects as (in fact, it is) a lock-out of labour and capital by landowners. ”

“ 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." ”

“ To-morrow, maybe, negligence, improvidence, or the greed of their employers, will deprive these privileged men of their work, and they will pay for the period of comfort they have enjoyed with months and years of poverty or destitution. How many important industries—the textiles, iron, sugar, etc.—without mentioning all sorts of short-lived trades, have we not seen decline or come to a standstill on account of speculations, or in consequence of natural displacement of work, or from the effects of competition amongst the capitalists themselves! ”

“ The inability of the debtor class to meet their obligations increases the risk of business investments, and the accumulation of money in the hands of the financial class depriving the channels of commerce of the needed medium of exchange, a stagnation of business will ensue, which readily accounts for the accumulation of all kinds of products in the hands of the producers and for the consequent dearth of employment. ”

“ Many are the factors that lessen the workingman’s income and frequently deprive him of that meagre income altogether. Hard times and industrial crises throw him out of employment; the introduction of new machinery or of new methods of production, makes him superfluous; wars, unfavorable tariff and commercial treaties, the imposition of new indirect taxes, or black-listing by his employers as a result of his political convictions, destroy his means of subsistence or gravely injure them. ”

“ Mercantile business would come to supersede every other—it alone would be attended with any profit. Meanwhile, domestic industry would languish and decline—the home market would be destroyed—the rural population, the main stay of a nation, gradually withered away and wasted. Poverty and misery would weaken and alienate the working classes; and, amidst a constant increase of exports and imports, and growth of commercial wealth, the nation would be destroyed. ”

“ The other school say that the speculation has produced the depression by leading to over-consumption, and point to full warehouses, rusting steamers, closed mills, and idle workmen as evidences of a cessation of effective demand, which, they say, evidently results from the fact that people, made extravagant by a fictitious prosperity, have lived beyond their means and are now obliged to retrench - that is, to consume less wealth. ”

“ The effect of our present commercial system is to paralyse the home trade, by decreasing the value of all kinds of domestic produce; by lowering all incomes, and consequently reducing the amount of the internal business of the country. ”

“ Added to which evil comes the still greater one—an extensive damage to the organization of society. Numerous importing, producing, and distributing establishments are swept away; tens of thousands of their dependents are left without work; and before the industrial fabric can be repaired, a long time must elapse, much labour must lie idle, and great distress be borne. ”

“ And, without consumption, what does production amount to? What does it avail us that our stores and granaries are overstocked, if the people are unable to buy? The thing is reduced to a cruel mockery when stores and granaries are over-gorged, while people clamor in vain for clothing and food, and drop dead within reach of these prime elements of warmth and sustentation.
What does it avail us if the balance of trade be in our favor by one, or two, or three hundred millions of dollars, if this result be obtained by the degradation and death of our own people? ”

“ 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. ”

“ In matters of this kind men of business are much like a flock of sheep which follow each other without any clear idea why they do so. In a year or two the prices of iron, coal, timber, &c., are reduced to the lowest point; great losses are suffered by those who make or deal in such materials, and many workmen are out of employment. The working classes then have less to spend on luxuries, and the demand for other goods decreases; trade in general becomes depressed; many people find themselves paupers, or spend their savings accumulated during previous years. ”

“ The conditions of labour are altered for the benefit of the existing workmen, perhaps at the cost of diverting capital from some great form of industry, making it impossible to resist foreign competition, and thus in the long run restricting employment and seriously injuring the very class who were to have been benefited. ”

“ The market place, of course, scoffs at such scarcity-making measures, for it yields no more than it receives; if its offerings are made scarce by trade restrictions, that which remains becomes harder to get, calls for an expenditure of more labor to acquire. The wage level of Society is lowered. ”

“ These are the low value of money in the rich state, in consequence of its plenty, compared with its high value in the poor one, in consequence of its poverty, and the experienced inapplicability of machinery or the division of labour to agricultural operations. ”

“ The usual balance of demand and supply of labour being thus deranged, has caused occasional gluts, and it may require a time, and much further misery may ensue, risking political convulsion, before the social economy adjust itself, unassisted, to the new order of things. ”

“ The other phenomenon from which the notion of a general excess of wealth and superfluity of accumulation seems to derive countenance, is one of a more permanent nature, namely, the fall of profits and interest which naturally takes place with the progress of population and production. The cause of this decline of profit is the increased cost of maintaining labour, which results from an increase of population and of the demand for food, outstripping the advance of agricultural improvement. ”

“ The real trouble must be that supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labour from producing the things that labourers want.
Denial of access to land When we speak of labour creating wealth, we speak metaphorically. ”

“ A consideration of the manner in which the speculative advance in land values cuts down the earnings of labor and capital and checks production leads, I think, irresistibly to the conclusion that this is the main cause of those periodical industrial depressions to which every civilized country, and all civilized countries together, seem increasingly liable. ”

“ The cumulative effects of demoralizing price falls of these important commodities in the process of adjustment of production to world consumption have produced financial crises in many countries and have diminished the buying power of these countries for imported goods to a degree which extended the difficulties farther afield by creating unemployment in all the industrial nations. ”