Economic hardship

“ 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. ”

“ And this is so because they refuse to work under conditions which compel them to breathe dust and remain out in the rain.
An economic crisis always entails an increase in the cost of living, as a consequence of a disturbance in the established economic relations. ”

“ In this age of enormous over-production of non-producers; of innumerable hordes of swivel chair folks, of middle men, "manipulators", runabouts, who are mostly parasites on the social organism, is there not need of emphasizing the production of something to meet real human needs?
There is much talk and theorizing about the cause or causes of the present high cost of living. There is, of course, no one single cause responsible for this situation so full of hardship for many and so great a menace to all. ”

“ 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 ”

“ It’s greed that makes this demand, and it’s poverty and sickness, and many mouths to feed, that makes the supply. It’s greed, and not decent competition, that milks the companies and busts them, and drags men down to lower wages, or throws them out of work altogether. ”

“ Can anything be clearer than that the cause of the poverty which festers in the centers of civilization is not in the weakness of the productive forces? In countries where poverty is deepest, the forces of production are evidently strong enough, if fully employed, to provide for the lowest not merely comfort but luxury. The industrial paralysis, the commercial depression which curses the civilized world to-day, evidently springs from no lack of productive power. Whatever be the trouble, it is clearly not in the want of ability to produce wealth. ”

“ 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. ”

“ With natural opportunities thus set free to labour, with capital and improvements exempt from tax and exchange released from restrictions, the spectacle of willing men unable to turn their labour into the things they want would become impossible; the recurring paroxysms which paralyse industry would cease; every wheel of production would be set in motion; trade would increase in every direction and wealth augment on every hand. ”

“ 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 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. ”

“ 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. ”

“ 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. ”

“ Thus the division of labor, without which production would be almost nothing, is subject to a thousand inconveniences, the worst of which is the demoralization of the laborer; machinery causes, not only cheapness, but obstruction of the market and stoppage of business; competition ends in oppression; taxation, the material bond of society, is generally a scourge dreaded equally with fire and hail; credit is necessarily accompanied by bankruptcy; property is a swarm of abuses ”

“ Let the once-opulent trader, let the starving mechanic, bear witness to this truth, that our commerce has been declining with hasty steps for these last ten years:—Let the numerous half famished poor which we meet at every turn in our streets; let the needy gentry, whose honest independent ancestors have handed down to them a moderate income, and who find that income yearly sinking from bare sufficiency to poverty, bear witness, that the high price of all the necessaries of life, with the oppressive burden of our taxes, are very weighty evils. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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." ”

“ It accumulates a heavier supply than is demanded in the home-market. It overwhelms factories with their own goods, and drowns the manufacturer in bankruptcy, unless he stops work. It turns worthy, as well as unworthy, working-men adrift. It brings on all the horrors so piteously complained of. What can avert such consequences? There are, doubtless, factors in this problem unnoticed here, but this to me appears to be the main one. Allow wages to descend steadily, as the market demands, instead of holding them up till a crisis is reached. ”

“ Our failure to act and stimulate this economy to create the jobs that are necessary, to lay down those long-term investments, and to provide people with the money they need to meet -- to pay their bills -- if we don't do that, then we're going to see month after month after month continued hurting and pain in the American people. ”

“ The industry of the nation is at stake, and what marvel that the people should demand their own?
That cheapness of itself is no blessing, even our opponents admit in the arguments which they try to direct against us. Read their accounts of the squalidness and poverty which prevail in the larger towns—the testimony which has been laboriously collected as to the lamentable fall of wages, and the diminished profits of thousands employed in the lower kinds of handicraft. ”

“ 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? ”

“ 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. ”

“ It increases the dearth of provisions by making the demand greater than the supply, and produces direful consequences to a large class of persons who labor under the evils, physical and moral, of poverty. ”

“ They simply take what you make, leaving you in poverty; thousands of you idle; if not now, when the times become hard. And every few years the times become hard in the capitalist system, for reasons you can easily understand, but I have not the time to fully explain this evening.
A panic comes, industry is paralyzed, because with machinery you can produce so much more than your paltry wage will allow you to consume. You make all things in great abundance, but you do not consume them. You can only consume that part of your product which your wage, the price of your labor power, will buy. ”

“ 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. ”

“ Because for a long period before the crash our production had been outrunning our consumption. The workers were producing more than they could buy with the wages they received. Our predicament is primarily due to the inequitable distribution of the earnings of industry as between capital and labor. ”

“ 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. ”

“ Old work-places are closed, production is regulated and organised, profits are guaranteed when works are idle, economies in management are effected, processes of manufacture are specialised and differentiated. The waste involved in competitive industry is enormous, and the sheer force of circumstances is tending to eliminate it.
4. Waste of Labour.
One further consideration must be noted. We have seen that the private ownership of land and capital is a serious drain upon national wealth and a heavy burden upon national production. ”

“ 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. ”