Page:Popular Science Monthly Volume 11.djvu/633

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To the Editor of the Popular Science monthly.

IR: In the last number of Mr. E. R. Leland replies to my article in the July issue entitled "Over-Consumption, or Over-Production?" misstating some and misconceiving other of my arguments. It would be an infringement on your space for me to follow Mr. Leland through all his assertions, and at best I should be only repeating arguments already made. But Mr. Leland attempts to formulate my theories, and, as I think I can do this more accurately than he, permit me to reaffirm what I have said in this compact form, which will be the briefest and most satisfactory method of meeting Mr. Leland's reply:

1. The resources of Nature are gratuitous; they are practically exhaustless; and, as the activity of capital and the energy of labor are not fixities, large consumption or demand (Mr. Leland talks of wasteful consumption as if the word "wasteful" were mine) stimulates the energy of capitalists, leads to the application of improved machinery, brings about better transportation, so that as a result all, or nearly all, products are proportionately increased in abundance because of extended consumption, and the possibilities of consumption. Mr. Leland says: "That the demand for a commodity stimulates the supply is most true, and, where increase is possible, the supply is increased until the widest area of demand is filled at a minimum cost, but it is only by economy that this minimum can be reached." We repeat Mr. Leland's words—"most true." But large consumption is a powerful agent in securing minimum of cost in production; it brings in competition, it leads to the invention of machinery and improved methods of production or manufacture—in fact, minimum of cost is never reached except in those things that are in general use. Consumption or demand leads, therefore, as a rule, not only to greater abundance, but to greater cheapness. But I do not mean, and I did not speak of, wasteful destruction, which Mr. Leland dwells upon so much, but of use. Waste is foolish, in the first place, because it confers no good upon any one; and, secondly, because it is only the certainty and regularity of legitimate use that exercise a healthful stimulus upon production. Waste, that destroys machinery, permits bridges to go into decay, destroys roads, lets grain rot in its storehouses, burns up cities, exhausts the reserves of capital, is direful; but use, which is the means of setting millions of busy hands to work, is another thing. I know the economists say that capital alone determines the fact of production, demand merely governing the direction it shall take; but is it not clear that, if we reduce consumption to its minimum, production will shrivel up?

2. The extravagance of an individual has some essential difference from the extravagance of a whole community. Of course, one bankrupt multiplied ten thousand times simply gives us ten thousand bankrupts. It was scarcely necessary for Mr. Leland to point this out. But a community considered as a unit has for its resources the boundless wealth of Nature, which, as we have already seen, increases with the demands made upon it, so that liberal use makes rather than reduces abundance. This proposition hangs upon the first; if that is true, this is true. By extravagance I simply meant free use, not idle destruction; and what I wished to show is, that Nature yields her treasures in increasing proportion to the activity that demands them, so that we are richer in coal, iron, fabrics, food, etc., because our wants are many, our demand eager, our use of these things abundant. It is perfectly true that if the wealth of a community is simply the aggregate incomes of its members, then the whole must partake of the nature of its parts; but there is a kind of wealth that accrues to the individual and does not to the community as a whole, such as rent, for instance, which, enriching some, is a tax upon others, and no addition whatever to the sum total of the wealth of the community; and in like manner there is wealth which accrues to the whole, but is not a part of an individual's income.

3. Mr. Leland makes me affirm that no part of the nation's capital has been lost in unproductive enterprises. There have been, as all know, immense losses in foolish rail-road and speculative enterprises; but I consider these losses to have fallen upon our surplus rather than our reserves; that our ability to keep all our machinery in motion, to run our mills, erect warehouses, build ships, construct railroads really needed, do all forms of legitimate productive labor, is not impaired—while, according to Prof. Price, it is impaired, and this is the reason of our business distress. I can detect no evidence that business cannot revive