The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1920-11-08
HARD TIMES HAVE
ECONOMIC VALUE
Periods of Depression
Check Extravagant
Expenditures
american Exchange National Bank,
New York;

american Exchange National Bank,
New York;
Critics of the capitalistic system
of production and distribution have
commonly conferred their attacks up
on the assumed defect represented
by the periodic appearance Of de-
pression-hard times. AS we are ap-
parently entering upon a limited per-
iod of depression the situation pre-
sents unusual opportunities for an
examination of the merits of the
criticisms. Theorists usually take
ground SO far removed from practi-
cal considerations that comparisons
are impossible even if we concede
that any theoretical system of pro-
duction and distribution that offers
even remote chances of success has
ever been presented. Those who have
ventured to offer substitutes have
usually predicated them upon precon
ceptions founded upon the belief that
man is naturally altruistic and under
prOpitious conditions would draw a
sufficient incentive to work from
that assumed propensity. So far as
experience goes, and that is the foun-
dation upon which the present order
rests, there is no more than a modi-
cum Of evidence in support of that
assumption, and the theorists who
hold such views are therefore re-
garded as sentimentalists = Polly
annas. In fact, their theories are the
product of their deep sympathies for
those who are the stragglers in the
march of progress. '.
UphOlders of the present order,
basing their opinions upon expert
ence and reasoning by the inductive
see mans self-interest as his
only incentive to work, and the very
depressions which the theorists criti-
else and want to abolish prove that
they are right. In boom times the
capitalistic system of production and
tends to return the great
of us more in money than
we need for accustomed expenditures
and we develop extravaganza. Our
present equipment and knowledge
justities only limited production OF
what we now regard as luxuries.
Perhaps in another generation or so
the luXuries of today will be the
mere comforts. That at any rate is
the tendency, as any fair-minded
man who is willing to look back even
ten years will admit. 1t happens
therefore that when the majority of
us find ourselves in possession of
more funds than we need for every
day purposes, we either slow down in
our work, take it easy, or enter the
market for Injuries to compete for
the limited supply. The resultant in
creased demand for luxuries provides
an incentive for their producers to
increase the output, with the fur
Their result that men therefore en-
ployed in the production of essential
goods are diverted to the produc-
ton of luxury goods and the shortage
in essentials already produced by the
tendency to take it easy is increased.
In response to the law of supply
and demand the shortage inevitably
results in higher prices for food and
shelter, and the situation begins to
bear heavily upon those who did not
in the increased distri-
)ution of money. AS under our system
the supply Of money needed to en-
courage production tends to run
ahead of the actual demand, or at |
least to easily respond to the in
crease in prices, a SNOWFALL is set
rolling that will go ON growing until
he last bit is taken up. Heretofore
we have allowed the ball to roll on
20 the inevitable smash-up at the
bottom of the hill, but latterly we
nave undertaken to prevent the
by checking the ball in
The smash-up is the nat
lral corrective of the conditions
growing out of the tendency to de-
,rease productive effort in essentials