Page:Stabilizing the dollar, Fisher, 1920.djvu/34

xxx '''4. Price Movements during the Great War'''. During the war prices in the United States rose seven or eight times as rapidly as in the last-named period. In Europe the rise was even faster,—fastest of all in Russia. Prices doubled in the United States and England, trebled in western Europe, and increased ten- or twentyfold in Russia. The purchasing power of a dollar to-day in the United States is about that of 35 cents in 1896.

1. False Scents. Of forty-one causes alleged for the high cost of living, some are important factors in raising particular prices, but none of them, except the war, has been an important factor in raising the general level of prices, and that factor, of course, only recently. Prices have risen where there were and where there were not trusts, trade unions, tariffs, luxury, advertising, militarism, sanitation, the individual package, etc.

2. Profiteers, Speculators, and Middlemen. Speculation regulates but seldom successfully manipulates price movements. Middlemen's profits have declined while prices were rising. (Figure 4.)

3. Circular Reasoning. High prices of labor may tend to raise prices of commodities and vice versa. But these and other influences between two classes of prices do not explain the general rise of all classes of prices. Prices cannot lift themselves by their own bootstraps.

4. The Error of Selecting Special Cases. No one commodity is important enough to influence greatly the price level. Wheat must rise 20% to raise the price level 1%, other things equal.