Los Angeles herald., 1910-02-20
SAYS HIGH COST OF LIVING
HAS A SIMPLE EXPLANATION

LOS ANGELES, Feb. 12-GEditor
Herald: To analyze the recent issue
of high prices would take more space
than is usual for correspondents, so l
will but "effleurer la question" touch
upon the main points and let those
interested study out the details.
So long as scientists and astronomers
believed and worked on the theory
that the earth was fiat and stationary,
cosmology could make no Roadway,
but when the optic illusion was dis
covered, that instead of standing still
the earth was revolving at breakneck
speed, myths and prejudice were part
ly oVerthrown and science made head
way.
So with the theory of high prices.
1t is a sociological illusion, and the
prejudice against its correct under
standing is greater because material
and economic than was the mytholog-
ical opposition to the motion of the
earth.
Gold is a commodity the value of
which is determined by the amount of
social labor crystallized in its produc-
ton, same as all other commodities.
In capitalist production gold performs
three functions: First, it is a measure
of value; second, a standard of price;
third a medium of exchange. 1t is a
measure of value because it has social
labor embodied in it, it is a standard
of price because it is a fixed weight
of metal and a medium of exchange
because it has the physical properties
best adapted to serve as money. The
value of gold changes the same as
other commodities, but the changes
only manifest themselves in other
commodities. Suppose in 1903 1 paid
SIS for two shirts and in 1910 on account
of improved machinery, better trans
portation and opening of new mines
the same amount of labor time needed
in 1909 to produce $5 in gold produces
$40 in gold; if the labor time necessary
to make the shirts remains the same
as 1909 | would have to give So in gold
for one shirt. The $5 in gold remained
the same standard of price but the
value of the gold, or it's purchasing
power had decreased. In other words,
high prices is just a delusiVe way of
saying low wages" Price is simply q
monetary expression of value, but
price and value do not always coin
eide. A chair used by George Wash
ington would sell at Il price above its
value, while a Woman'S winter hat,
out of style and season, would sell
below its value. When gold is plenti-
full prices of other comm modities rise,
when gold is scarce prices fall.
Profits are made by selling commodi-
ties at their exchange value; for the
commodity labor power develops a
value over and above its simple ex-
change value called surplus value.
Mental labor in the last analysis is
physical labor The value of labor
power is determined by the competi-
ton on the labor market and the av-
erage cost of subsistence; the value
labor produces over and above it's sub
sistence, or the purchasing power of
the money wage is surplus value, and
it is this increment that all labor is
exploited of inherent in the present
system of production-that is the es-
sence of industrial fortunes today.
Profits are also increased by .monop-
oily, combination. adulteration, short
weights, short measures, ETC., but these
are variations from the general laws
of exploitation, which merely cloud