Page:Walter Renton Ingalls - Current Economic Affairs (1924).pdf/217

Rh But the market value of wealth, or of real capital, expressed in current prices, may rise or fall so greatly within a short time that there may be extraordinary increases or decreases in credit facilities producing illusions and consequences that lead to painful corrections, particularly when there is the fictitious appearance of increased capital that is really only a development of over-expanded credit.

The market value of the stock of a corporation may change greatly without there being any change in either the physical or the intangible wealth that it represents. Nevertheless in rising it may become the basis for more credit, while in falling it entails a contraction of credit. It is precisely such conditions that lead to pyramiding and liquidation in the stock market. The same conditions obtain with respect to commodities. In a bull market credit expands and in a bear market it contracts, without there being any corresponding expansion or contraction of wealth. Credit is therefore a different thing from wealth, although it is founded on wealth.

I do not suppose that any socialistic economists would deliberately propose reversion for the people to a lower scale of civilization. I am not so sure as to the unwillingness of the people themselves to decline. Dr. Lothrop Stoddard in his recently published “Revolt Against Civilization” draws attention to the mental strain that modern conditions have imposed upon masses of people who are incapable of living up to them, and indicates a willingness on their part to go backward as the easier way. This is not the idea of the intellectual socialists, however. To their fatuous minds the