The Washington times., 1934-12-07

o4Iu W SpCI1O UI161E ulO11Cy.
It is evident that they are
not as cocksure as they were
a year ago.
This is interesting. 1t would
be more hopeful, however, if
these key men showed any real
understanding Of our funda-
mental problem. In reality, they
cling to their half-baked social
ideas, and show no understand
ing of economies at time when
our most acute problems are
economic.
The root Of their error lies in
their extreme and unreal ideal
ism. BY this, mean the notion
that man can make economic
law-that man can set up ideals
of social justice" and then put
them across, regardless Of ex-
ternal realities.
For example, both these men
clearly are laboring under the de-
lusion that it is somebody's job"
to go to it and make the heart
of economic life beat. It is some
body's LOB" to put money into
circulation, and to supply work
to the millions.
They think of economic life as
a sort of machine pump, run by
man, and they speak as though
somebody (buSineSs leaders or
"the Government must crank it
or prime it or give it gas, in order
to make it run.
But the fact is that the desires
of individual men, their costs,
and the land, weather, location
and various natural forces, can
not be made by man. We have
to adjust ourselves to them, and
to limit our ideals accordingly.
BY seeing facts, and adjusting
ourselves to them, we can hasten
conditions which will allow men
to work. Then money will cir
culate, because goods will circu-
late.
For example, Prof. MOIey
stresses the old notion that
what ais us is not OverprOduc.
tion, but "undercOnSumptiOn."
All we have to do, says he, IL
to start in and consume. Then,
/ suppose, in order to consume,
we must spend. In order to
spend, we must have money. In
order to have money, we must
borrow. Hence more credit and
debt.
If you want to understand this
old confusion concerning ''oVer-
production" VS.. "underconsump-
tion," all you have to do is to
note that neither means any,
thing except with regard to
prices. There would usually be
no overproduction unless prices
were so high as to encourage
more production than can be sold
at a profit. There would be no
underconsumption if prices were
low enough to enable consumers
to buy.
For example, if cotton were AZ
cents a pound, there would be a
demand for all our cotton. At
the same time, overproduction
would disappear, because farmers
would grow less, and mills would
take more. So with copper.
Idealistic (unrealistic) persons
howl about "underconSumption"
while they are trying to boost
prices so that consumers can't az
ford to consumed
Then they plunge deeper into
their folly. by trying to give peo-
pie the money with which to pay
the high prices. And Of course
people clamor for more money
because prices are high.
When a man overeatS, he has to
undereat for while. When he
overspendS, he has to save for
while. Initiation and debt in 1929
led to high prices and overproduc.
ton. Now what we need is low
prices and thrift. People will
spend fast enough as soon as they
can afford it.
Until the New Dealers get it
into their heads that there are
economic laws which govern
economic life, and learn to ad-
just their ideals of social JUS
tice" to realities, we are going
to have the uncertainty which
comes when money and prices
are subject to manipulation.
In economic life what "ought"
to be done Is what can be done.
You can't have prices higher than
demand and supply conditions
allow, without having "undercon-
sumption" and restricted circula-
ton of goods. And you can't
make money circulate unless goods
circulate.
Is that "old fashioned?" Well,
1t Is true.
Whenever YOU wish to know the