OVER-CONSUMPTION OR OVER-PRODUCTION ? 311 



we understand the economic principle that there can be no production 

 without capital; that if the working reserves of a community are 

 really impaired, the productive force is also straitened. 



It will be said that consumption is rather the product than the 

 cause of abundance. Undoubtedly, use is greatly increased by abun- 

 dance ; there is, in fact, action and reaction, the one stimulating the 

 other. It will also be adhered to by some that capital is the sole 

 source of production. Assuredly capital is not fixed in activity, nor 

 are human energies rigidly limited ; and as the resources of Nature 

 are fairly boundless, wealth is wrought out of her bowels in our mines, 

 and extracted from her chemistry in our fields, to an extent immensely 

 determined by the demands of consumers. In the old fable of the 

 purse of Fortunatus a gold j^iece appeared as rapidly as the contents 

 were withdrawn ; in the new purse of Fortunatus, called production, 

 two or more pieces appear as rapidly as one is withdrawn ; but we 

 must not lose the purse, which let us consider as capital. 



There is something more to be said about national extravagance. 

 What is it that railways, and bridges, and canals, and fine buildings, 

 cost ? We hear continually the money-price mentioned. This is most 

 misleading. The price paid is simply a sum of money that has changed 

 hands ; it represents the cost of the structures to those who built 

 them, but not the cost to the community. What is this cost ? What 

 does a church or a railway cost the people as a whole ? Some have 

 paid wages, and some have received wages. This is only diffusion. 

 Some money has gone for stone, iron, and timber, but this is only dif- 

 fusion. The community is less this iron, stone, and timber,* but we 

 have already seen that, as the production of this material is unlimited, 

 no practical loss is inflicted here. It is asserted by all economists 

 that food and clothing for the laborers are part of the cost. But the 

 laborers would have been fed in any case, although they might have 

 held on to their old clothes longer, had not the wage-fund been dis- 

 tributed among them. Now, to our mind, the real cost of this church 

 or railway is the cost of the energy that might have been more profit- 

 ably employed elsewhere. If all the productive industries are in full 

 operation ; if it is released labor, and the material is not required for 

 more necessary purposes, then it cannot be shown that the church and 

 railway have impaired the wealth of the community at all that is, it 

 cannot be shown that they have fundamentally cost the community 

 anything. They were erected by released energies, by labor not 

 otherwise required, and the community is not the poorer by a mite in 

 consequence of their construction. A church may be a very ex- 

 travagant undertaking for those who pay the money-price for it; the 



' An exception must be made with timber. We are, in America, encroaching upon 

 the forests, and hence consumption is now making this staple dearer; but, when all our 

 hill-sides are covered -w'lih. planted forests, the normal rule will operate in this product as 

 in others. 



