Purchasing power

“ By this I do not mean to imply that people should suddenly stop buying, but only that they should stop buying things that they do not need or that they can get along without. For how, pray, are we to place some seven billion dollars of purchasing power at the disposal of the Government unless we curtail our individual expenditures? ”

“ With reference to Professor Laughlin's fourth proposition it may be said that no economist of standing claims that purchasing power is "identical with the quantity of the media of exchange in circulation." Effective purchasing power, however, [Pg 189] in our modern business communities, does depend upon the possession of money or of the right to demand money. ”

“ General demand and supply are thus reciprocal to each other. But as soon as money, or general purchasing power, is introduced, Mr. Cairnes208 defines “demand as the desire for commodities or services, seeking its end by an offer of general purchasing power; and supply, as the desire for general purchasing power, seeking its end by an offer of specific commodities or services.” But many persons find a difficulty because they insist upon separating the idea of supply from that of demand, owing to the fact that producers seem to be a distinct class in the community, different from consumers. ”

“ Since the purchasing power of any part of the world is chiefly in what it has to sell, the constant motion of checks and drafts in opposite directions will balance each other. If there were no long time credits, the purchases of any city would essentially equal its sales ”

“ If you increase that purchasing power for the farmers and for the industrial workers, especially for those in both groups who have least of it today, you will increase the purchasing power of the final third of our population--those who transport and distribute the products of farm and factory, and those of the professions who serve all groups. ”

“ The amounts of money which different people are prepared to pay for different consumers' goods are no reliable indication of the real utilities, the amounts of human satisfaction which they yield. Here we must take account not only of varying needs and capacities for enjoyment, but of the very unequal manner in which purchasing power is distributed among the people. ”

“ The dealer, exchanging his perishable products for money, may keep its power of purchase locked in this form as long as he lists, putting an interval at his own pleasure between selling and buying, and with this generalized power in his pocket he may buy when he will and what he will and where he will. Money, too, makes any purchasing-power portable, divisible, and loanable. A man may carry the value of his farm in his purse, and may divide it up for a thousand different purchases, and especially is able to loan it in this form in order to receive it back again with interest at a future day. ”

“ So long as the rank and file even of business men fail to realize that they are daily gambling in changes in the value of money, a fact of which they are blissfully unaware, they will exert no demand for preventing those changes. They are the parties whose interests are chiefly involved, and the first essential step in the reform process is that they shall be made to comprehend the benefits of a stable purchasing power.*53 Until this time arrives, any political proposals will be premature. ”

“ The power which that possession immediately and directly conveys to him, is the power of purchasing a certain command over all the labour, or over all the produce of labour which is then in the market. His fortune is greater or less, precisely in proportion to the extent of this power, or to the quantity either of other men's labour, or, what is the same thing, of the produce of other men's labour, which it enables him to purchase or command. The exchangeable value of every thing must always be precisely equal to the extent of this power which it conveys to its owner. ”

“ All these purchases have exactly the same effect on price, as if they were made with ready money. The amount of purchasing power which a person can exercise is composed of all the money in his possession or due to him, and of all his credit. ”

“ The total buying could not of course be increased a dollar without relatively, or absolutely increasing the purchasing power in the people's hands, but it was possible by effort to alter the particular directions in which it should be expended, and this was the sole aim and effect of competition. ”

“ With higher interest, the value of land, railroads, and other durable capital will be lower because the value depends on future earnings or future services, and these are now discounted at a higher rate.*36 The borrower, in paying back an equal purchasing power over consumable goods and services, is paying back a much higher purchasing power over such things as land, houses, and factories—a much higher purchasing power over future income—than he borrowed. ”

“ By the grace of strategic advantages of occupation and centralization, persons deriving incomes through proprietorship in relatively highly organized and capitalized industry are the recipients of differential gains which tend always to transcend price increments. Such persons are secure in the realization of a progressive ratio of purchasing power to prices. ”

“ As, on the other hand, a merchant may export the manufactures of his own country to his own loss and the nation’s gain. But if the merchants be gainers, the consumers, that is those for whose use manufactures are established, having a power of purchasing or not at pleasure, must be so too. ”

“ Every person who tries to buy an article for less than its proper value, or who tries to sell it at more than its proper value—every consumer who keeps a tradesman waiting for his money, and every tradesman who bribes a consumer to extravagance by credit, is helping forward, according to his own measure of power, a system of baseless and dishonourable commerce, and forcing his country down into poverty and shame. ”

“ So that the party who has received the money, the seller, has only thus obtained a power to make subsequently an inverse operation, that is a purchase where and when it pleases him. The operation of selling and buying is then nothing less than the exchange of a thing for a power. ”

“ The individuals who control them wield an immense power, which so impresses the public imagination that we dub them "kings," "supermen," "Napoleons of industry." But how small a portion of man's economic life is dominated by such men! Even as regards the affairs of their own businesses, how narrow, after all, are the limits of their influence! The prices at which they can buy their materials and borrow their capital, the quantities of their products which the public will consume, are factors at once vital to their prosperity and outside their own control. ”

“ I came to the conclusion that the present-day problem calls for action both by the Government and by the people, that we suffer primarily from a failure of consumer demand because of lack of buying power. ”

“ In all the vibrations of the political scale, whether in relation to a Bank or Sub-Treasury, Free Trade or a Tariff, this immense power has moved, and will continue to move, in one mass, for its own protection. ”

“ To understand the true commercial interests of a country, not only requires just ideas of the general commerce of the world, but also, and principally, a knowledge of the productions of your own country, and their value, what your soil is capable of producing, the nature of your manufactures, and the capacity of the country to increase both. To exercise the power of laying taxes, duties, and excises, with discretion, requires something more than an acquaintance with the abstruse parts of the system of finance. ”

“ Every voter in this Republic has a head above his shoulders supposed to contain a think-shop; and, if the “Power” now controlling our money volume, and as a result our “commerce and industries,” is to be removed and better times secured, every think-shop must get down to business, with a full determination to see that our “commerce and industries” shall not be interfered with, that the volume of money be increased enough to effect rapid exchange of products and the payment of debts. ”

“ Market power is therefore a source of serious concern for essentially the same reason, regardless of whether the seller has the greatest economic power possible or merely some lesser degree of appreciable economic power. ”

“ It was maintained that, where gold and silver abounded, there would be found no lack of the necessaries of life; 2. Therefore governments should do all in their power to secure an abundance of money. Noting that commerce and political power seemed to be in the hands of the states having the greatest quantity of money, men wished mainly to create such a relation of exports and imports of goods as would bring about an importation of money. ”

“ Let us therefore go to the bottom of this affair; and, by tracing the progress of such mercantile undertakings, as are proper objects for the foundation of companies, and which entitle them to demand and to obtain certain exclusive privileges, let us endeavour to find out a method by which a statesman may establish such societies, so as to have it in his power to lay their inland sales under certain regulations, capable to supply the want of competition ”

“ For some two centuries it had been held that it was the duty of the state to order trade with the object of increasing the wealth and power of the nation, and a policy was followed of interference with trade and its conditions by regulations, bounties, and restrictions, which is called the mercantile system. ”

“ We have the power, gentlemen, of going back to the time when protection was in full and unchecked force, and of examining the effect which it produced313 upon the wealth of the country. How, will you say, do I mean to test that wealth? I mean to test that wealth by the exports of the country, and I will tell you why, because your prosperity depends upon the wealth of your customers—that is to say, upon their capacity to buy what you produce. And who are your customers? Your customers are the industrial population of the country, who produce what we export and send all over the world. ”

“ But these sources of wealth and all sources of wealth, including the merchant service, can hardly be said to be elements of power themselves, but rather to be elements for whose protection power is required. ”

“ Low prices come from Competition—a fruitful source of wealth, and a daughter of Liberty. Therefore, a government wishing to establish on a firm basis the prosperity of trade must give commerce full liberty ”

“ By certain advantages, either of general policy or of individual acuteness, certain individuals have accumulated more than their necessities demanded they should expend, and this accumulation has become an added power to that possessed by the individual previously, which power endeavors to maintain itself partly at the expense of that which first produced it, and to transfer just so much of the cost of its production from itself. ”

“ Their power to fix prices, to restrict production, to crush small independent traders, and to concentrate large power in the few to the detriment of the many, were but some of numerous evils ascribed to them. ”

“ Will our folks never learn that there is nothing "dependent" in Buying and Selling, that the more any individual or nation Buys and Sells the more independent they become of course, and that the hermit in his poverty-stricken cell is the best image of Protectionism? ”

“ When the Demand is equal to the quantity of goods at market, the consumer generally pays the duty; but when the markets happen to be overstocked, the great proportion falls upon the merchant, and sometimes not only exhausts his profits, but breaks in upon his capital. I am apt to think, that a division of the duty between the seller and the buyer more often happens than is commonly imagined. There is no part of the administration of the Government that requires extensive information, and a thorough knowledge of the principles of Political Economy, so much as the business of taxation. ”

“ Moreover, to add to the troubles of the mediæval legislator, the consumer of those days was always insisting on his vested right to the first consideration of the government, as the ultimate dictator for whose benefit the whole colossal structure of trade had been reared, and by whose approval alone it was allowed to remain at that ambitious elevation. With every fresh enterprise of manufacturer or merchant, the problem with which the law-makers had to deal became more subtle and complex. ”

“ But if the workman is generally the best selector of means, can it be affirmed with the same universality, that the consumer, or person served, is the most competent judge of the end? Is the buyer always qualified to judge of the commodity? If not, the presumption in favour of the competition of the market does not apply to the case; and if the commodity be one, in the quality of which society has much at stake, the balance of advantages may be in favour of some mode and degree of intervention, by the authorized representatives of the collective interest of the state. ”

“ As they are the means by which alone commerce can exercise its comfort-distributing office, to deprive it of these means, is evidently to stab commerce precisely in its vital part. Both are produced by people, both are manufactures, and exchanges of one for a surplus of the other, will equally reflect an additional value on both, as on any other exchanges of useless surpluses. ”