Page:Stabilizing the dollar, Fisher, 1920.djvu/70

16 4. The Error of Selecting Special Cases

Nor will special causes working on selected commodities prove to be general enough to explain the concerted behavior of commodities. While "scarcity," for instance, will go far toward explaining the rise of certain selected prices, it will not help explain changes in the general scale or level of prices,—at least not before the Great War.

Thus, even if, for reasons of scarcity, wheat should rise, let us say, 20%, nevertheless, so unimportant is wheat relatively to the great mass of commodities in commerce, that the index number for 300 commodities, computed by the United States Bureau of Labor Statistics, would be affected only 1%. So also potatoes would have to rise 100% to raise the index number by 1%. And even these negligible figures exaggerate the effect on the general price level,—for several reasons, which need not be discussed here.

The truth is, most explanations of the general rise in prices are mere graspings at the first straw in sight that seems to offer any explanation. People unconsciously pick out some particular cases with which they happen to be familiar and drag them before the public. A middleman or a trust raises prices, a firm announces a rise because of the demands of labor unions, a crop failure raises the price of a cereal,—and immediately some one hails the event as a representative cause of the high cost of living. The newspapers, with impressive headlines, feature the stories about such cases; and the more unusual and unrepresentative the cases are, the more glaringly they are featured.

Only a general survey is of any real value, and such