The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1934-11-30


| needed. Total sales would have TO
be four times greater than they
are before the proposed tax would
raise the necessary fund for the
first month of the Townsend old
age pension. Such a rise is i'm
. possible under capitalism, since,
through low wages and permanent
unemployment, the tendency is to-
ward limiting rather than increas-
ing the growth of sales.
1T the tax were lowered to five
per cent, as some supporters of
0. A. r. P. advocate, the POSSIBLE
ity of making the plan work
would become still more doubtful.
The whole purpose of the Town
send plan is to increase the vol
ume Of business by increasing the
amount of money in circulation.
This is more or less similar to the
theories of Roosevelt. However,
the desired result does not always
follow. Despite the rising volume
of expenditures of the government.
the volume of business has not
been rising, and for the past few
months It has even been falling.
InflatiOnary Character
Placing more money in circula
ton, as proposed by the plan.
would mean the introduction of in
flatiOnary measures and a rise in
prices. No amount of argument
will prevent a rise in prices in the
event that monthly expenditures of
the government are increased by
the issuance of $1,6OO,OOO,OO0 of
new money. Increased prices, ra-
Their than helping to increase the
volume of business, will have the
tendency of limiting consumption,
and, therefore, limiting production.
The whole theory of Townsend is
in accord with the belief that re-
striction of credit was the chief
cause of the crisis.
= The exact opposite was the case
in 1929. The restrictions on credit
were not very severe, interest rates
were not high, and great deal of
money was idle for lack of posi-
bilities of investment. Yet the
crisis broke in 1929. The loosen
ing up of credits will not alleviate
the dilemma which capitalist in
dustry finds itself in-excess ca
pacity in the face of a narrowing
market-but will tend rather to
deepen this predicament by in
creasing industrial capacity.
Increasing the amount Of money
in circulation will increase con-
sumption and consumption of the
products of the farm and factory
is the vital problem now facing
our nation" All inflationists use
the above argument, and the ex-
ample of Germany during its pc
Rod of postwar initiation is a good
example Of its falseness. The a.
mount Of money in circulation
there increased tremendously. but
consumption decreased steadily as
the cost of living rose because of
initiation.
Ignores Basis of Crisis
1t is not consumption which is
the vital problem of our society,
but production and the relation
ships which have sprung up around
the system of production. The
problem of consumption could be
readily solved if the limitations
placed upon the development of
consumption were abolished. It is
the private appropriation of the |
goods produced socially that pre-
vents the consumption of the pro-
duct of American farms and fac
tories. Capitalism is production
for profit and it is more profitable |
to prevent consumption by destruc-
ton of foods and natural resources,
thus creating an artificial scarcity
and high monopoly prices and pro-
fits, than to allow lower prices
which would mean increased con-
sumption.
Abolish capitalism, thus making
it possible for the millions who
today suffer for the lack of the
necessities of life to consume the
goods produced, and this problem
would be solved. But under cap
italism, any solution of this prob
lem is impossible.
In the Soviet Union, where in
dustry is run by the state in the
interest of the toiling masses, this
problem has been solved. Instead
of production for profit, there is
production to satisfy the needs Of
the masses and to build up social
list industry. AS a result, it has
been possible to institute planning,
and overproduction-t h t plague
of capitalism-is impossible. Plan
ming in the Soviet Union does not
result in limitation of production,
but in steadily increasing produc-
ton and rising living standards.
Linked up with his faith in cap
italism and his inability to see the
crisis as a normal phase in capt.
alist development, DR.. Townsend
blames the "machine" and "inven-
tive genius" for the widespread
unemployment and surplus of pro-
ducts. However, it is not the in
ventors nor their machines which
are responsible for unemployment,
but the use to which these are put
under capitalism. It is because of
the failure to understand this that
we have such proposals as that
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