Economic pressure

“ In these crises, the contradiction between socialized production and capitalist [117] appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of circulation, becomes a hindrance to circulation. All the laws of production and circulation of commodities are turned upside down. The economic collision has reached its apogee. The mode of production is in rebellion against the mode of exchange. ”

“ The truth of the matter is that we are in the midst of another turn of the wheel in the economic cycle and that production in most instances has outrun consumption. To this domestic crisis has been added a tremendous falling off in our exports. ”

“ Demand for commodities stimulates and regulates the machinery of production.
Those in control of the modern economic system have no choice but to produce surplus, and once having produced it, they have no choice except to dispose of it. An inexorable fate drives them onward—augmenting their burdens as it multiplies their labors.
Investment opportunities, of necessity, are eagerly sought by the plutocracy, since the law of their system is "Invest or perish"! ”

“ But the greater and cheaper food supply, and the abundant capital of your recent times, while serving to neutralize the depressing effect of increase of population in the labor ranks, and to institute a condition of general prosperity in trade and mercantile pursuits, has at the same time offered to all your monopolists of land the opportunity to extort, under the pressure of competition, the whole surplus of the earnings of your workmen. ”

“ For half a century, therefore, with regularly recurring seasons of surplus production, there came those inevitable commercial crises which emphasized with increasing force the necessity for foreign markets. ”

“ But if, on the other hand, growth in the supply of money does not keep pace with the economy's current production, then prices will fall, the nations's labor force, factories, and other production facilities will not be fully employed, or both. ”

“ Herein flows the lifeblood of material existence. The economic mechanism is intricate and its parts interdependent, and has suffered the shocks and jars incident to abnormal demands, credit inflations, and price upheavals. ”

“ While for the present they may be working at high pressure to complete old contracts within the stipulated time, they face a serious restriction of trade in the near future.
The imposing fabric of prosperity is built with a liberal factor of safety: but the larger grows the structure the more severe become these internal stresses. ”

“ Even if we have been wrong in our deductions concerning the heightening of the economic struggle through the presence of spinsters in excessive numbers in the professions, commerce, industry and trade, this principal objection still stands, and it leaves us no alternative but to consider means and ways of mitigating it. ”

“ They are evident to all careful observers, and may be concisely summarized as consisting in: (1) the injustice to creditors through being paid in a much lower standard than that in which they lent; (2) the disturbance to trade, both domestic and foreign, by the fluctuations in the value of money; (3) the pressure on the working classes from the slower rise of money wages, in contrast with the quicker movement of the prices of commodities, resulting in a fall of real wages; and (4) the check to dealings in relation with the international money market, due to the risk of exchange fluctuations. ”

“ 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. ”

“ 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. ”

“ Political economy requires farther expansion in order to include all the elements of this great social problem.
It is a true doctrine that demand and supply regulate the price of all things, labour included. ”

“ When you hear talk about a tough trade bill, remember that being tough on trade and commerce, the lifeblood of the economy, will have the worst possible consequences for the consumer and the American worker. ”

“ When insisting that we needed more currency, they evidently did not consider that during a crisis business contracts itself; that people reduce their expenses; that demand falls off, and thereby production is necessarily discouraged; that capital becomes more than ordinarily timid in its investments; that enterprise grows very circumspect, and confines itself to the safest ventures ”

“ That step, enabling the directors of the Bank of England to issue notes unsecured by bullion, had the effect of gradually restoring confidence. But a grave commercial crisis of this character is often attended with other than financial consequences. The stringency of the money market increases the distress of the industrial classes by diminishing the demand for work; and, when labour suffers, political agitation flourishes. ”

“ 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. ”

“ But notwithstanding all these facts I admit there are evils, serious evils, and much distress in the manufacturing districts; many are still out of employment, and in many branches of trade wages are low. We have violent fluctuations in trade, and periods when multitudes endure great suffering and it becomes this House to inquire why do these fluctuations occur, and what is the great cause of their suffering. I attribute much of this [Pg 611] to the mistaken and unjust policy pursued by this House, with respect to the trade and industry of the country. ”

“ 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. ”

“ In addition to the burdens imposed by high inflation and persistent trade deficits, businesses have been subject to pressure on the part of central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, retroactive application of new business regulations, and arrests of "disruptive" businessmen and factory owners. ”

“ 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." ”

“ 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. ”

“ It is plain that the general effect is a fluctuation of rates between wide limits, an enormous waste of capital and labor, and ultimately, the permanent death of competition by the consolidation of the two lines. ”

“ 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. ”

“ 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 ”

“ 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. ”

“ The inevitable result was to check production, and this check to production propagated itself in a cessation of demand, which checked production to the furthest verge of the wide circle of exchanges, operating with accumulated force in the centers of the great industrial commonwealth into which commerce links the civilized world. ”

“ The problem is to reduce the volume of money in circulation so as to correspond to a decreased supply of commodities at the same time as we increase the amount of employment and services called for from the Nation. ”

“ 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 experience that crises are caused by blind, anarchic production, i. e., that production is carried on without a knowledge of the volume of supply, of sales and of demand of and for the several goods in the world's market, has, as indicated in previous passages, caused large manufacturers in several branches of industry to join in Trusts and rings, partly with the view of steadying prices, partly also for the purpose of regulating production by the light of previous experience and of the orders received. ”

“ He explained the principle of this rise and fall of values, with his usual lucidity, to a committee of the House of Lords, which investigated the panic of 1847:—
“Monetary distress tends to produce fall of prices; that fall of prices encourages exports and diminishes imports; consequently it tends to promote an influx of bullion. I can quote a fact of rather a striking character, which tends to show that a contracting operation upon the circulation tends to cheapen the cost of our manufactured productions, and therefore to increase our exports.” ”

“ 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. ”

“ 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. ”

“ Now, with the necessities of life standing at fully three times normal prices, a large number of trades employing many thousands of work-people were suddenly shut down upon, and rendered completely inoperative. ”

“ Our credit in finance today is greater than that of any other country on earth. Our standing before the world in credit is the very highest. Business in our land is prosperous, barring one or two instances, such, for example, as the decrease for a while in the demand for steel as building moves slowly and, if you please, something of a decadence in the -construction or selling of automobiles, caused by war, of nations decreasing export sales. ”

“ And that this latter effect is so necessary, in order to create a continued stimulus to productive industry, and keep up an abundant supply of commodities, that in the cases in which it does not take place, a stagnation in the demand for labour is immediately perceptible, and the progress of wealth is checked. ”

“ We will continue policies of sound monetary management and containment of public sector deficits to ensure that private sector enterprise will invest, expand production, generate employment and realize fair returns, particularly for exporters. As the power crisis eases, and as we carry out structural reforms, the economy should accelerate. ”

“ 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. ”