The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1930-12-26
THE ECONOMIC OUTLOOK
By SCOTT NEARING, Federated Press

BY SCOTT NEARING, Federated Press
Will things pick up in January? Will there
be turn in the economic tide after the first of
the year, or must the American workers face other
months of unemployment and part time work like
the IL months of 1880?
Three great economic forces operated to bring
about the present situation: ~ the invention of
machines that replaced labor; (2) the ping up of
economic surplus in factories, mines and other
productive units for whose output there was no
market; (3 the drastic reduction in the prices of
most raw materials and the consequent limitation
of buying power among the raw material produc-
ers. There is no space here to examine the causes
that led to these results. Suffice it to say that
these three forces united, have created one of the
most severe and most world wide economic disas-
tiers in the history of capitalist society.
Are these forces still operating? Will they con-
tinue to operate during the opening months of
1881?
United States business concerns are trying to
sell their goods in foreign markets in competition
with Germany, England and Japan. To sell they
must get their costs Of production down 30 point
at least as low as that of their rivals. Cost cut
ting therefore becomes matter of first hand inn
portance. One method Of cutting costs is to intro
duce labor replacing machines and processes. This
III
during recent years
How about "overproduction?" That is, the sur
plus of mines, factories and other productive tools
for whose output there is market? The revival
of active demand depends upon a number of fac
tors. First of all, it depends upon the number of
people who are at work, and therefore in posi-
ton to buy. Second it depends upon the amount
of surplus goods stores in grain elevators, ware
+bo GLo bird he ox-
| port market.
The buying power of the American people has
been greatly reduced. At least fifth of the wage
earners are either wholly unemployed, or else are
working so little that they cannot buy the neces-
sares of life with their wages There has also been
| sharp cut in the incomes of doctors, dentists,
lawyers and small shop keepers. They will buy less
in January 1881 than they bought in January 1880
Stocks of goods in the United States still
very large and while some things like flour and
bacon are steadily used up, the comforts and less
expensive luxuries are in very little demand Au-
tomoble production, for example, has fallen to 9
very low level AS for the export market, it took
billion dollars less in 1880 than it took in 1921
and the market is still shrinking
What is the position of the producers of foot
stuffs and raw materials? It is their demand tha
helps to keep factories and railroads busy Between
September 1929 and December 1880 the prices o.
wheat, oats, coffee, sugar, cotton copper rubber
silk tin and other materials suffered a de
cline that is without parallel in modern price his
tory Inflated during the war period the prices o
these commodities have been declining for years
but the decline of the past Ia months has degener
ated into wild rout
The consequence is that wheat growers, cottol
growers, sugar coffee, silk copper and tin pro
ducers find themselves in position where tn
market price of their products win not pay tn
costs of production. Therefore they have eithe
shut down their plants if they are producing com
modities like tin and copper; or if they are pro
ducing crops like wheat, cotton and sugar, the
have been compelled to choose between holdin
their crops until prices are higher, or dumpin
them on a market which viii not pay the costs o
production. No matter which of these three cours
es the producers of foods and raw materials hav
followed, they enter the year 1881 with their pun
chasing power cut to the bone. Until the prices o
foods and materials rise to level that wi
cover production costs and yield some profit, tn
bulk of the worlds population, which is engage
in food and raw material production will be unabl
to buy the factory-made wares
A survey of the three chief forces behind tn
present depression indicates that they are operat
ing as actively at the end of 1880 as they did
the opening months of that year. Consequent
there is no reason to suppose that January an
February of 1881 will differ in any essential r.
spect from November and December 1880
there is any difference it will lie in the further d
crease In purchasing power caused by price d
clnes and the extension of unemployment.