MICHIGAN ACADEMY OF SCIENCE. 107 



may starve at la»t" tliroiigli the exhaustion of natural resources — a 

 fear wliich has been ministered to by the dire forbodings of Sir William 

 Crooks, >Mr. J. J. Hill, "Sir. Pinchot and others — while tariff eontro- 

 versys resound with the elaims and counter claims in behalf of the ''ulti- 

 mate consumer." 



It is preeminently a })ractical question to the economist and its in- 

 fluence upon economic theory also is manifest when we remember that 

 such important laws as those of diminishing utility, of diminishing re- 

 turns and of substitution would become almost insignificant if detached 

 from their relation to the "cost of living.'' 



Curiously enough the provocation which has stirred the agitation 

 of the day concerning ''cost of living" — namely, high prices — is nowhere 

 regarded by economists as of serious importance in comparison with 

 some of the other causes which have been suggested. The subject of 

 high prices in most of the economic text books is found in connection 

 with the treatment of money and the explanation from Prof. Laughlin 

 "that he who sells goods for more money (that is for higher prices) will 

 have to pay more for the goods he buys and is no better off' than where 

 there was less money"^ typifies fairly well it will be found the attitude 

 of most economic writers toward high prices. 



The term "cost of living" itself when approached for purposes of 

 definition is found to be without significance except as it has reference 

 to sacrifice. Most studies upon this subject, indeed, like the one com- 

 pleted by Prof. Chapiu last year or the one carried on by the United 

 States Bureau of Labor in 1903 have given equal emphasis to the matter 

 of income as to the matter of expenditure. The family is the customary 

 object of investigation in determining costs of living because it is a 

 social unit with such interdependencies among its members that all alike 

 are affected by changes in the scale of living and it is the household 

 budget which reflects the constituents which enter into this outlay. The 

 very flexible but imperative body of wants and acquirements which goes 

 by the name of standard of living must also be reckoned with in any 

 thorough going study of wealth consumption. Whether we take the 

 scale of living which Congress intimated last year was the suitable one 

 for our chief magistrate or the one which John Mitchell has drawn up 

 as fitting for the unskilled laborer or any intermediates for our model 

 it will still be found that ''the standard of living" is the real determinate 

 of the satisfactoriness or the unsatisfactoriness of our state with regard 

 to cost of living. As another has well said "actual privations are not 

 necessary to create a sense of economic disadvantage; mere thwarted 

 hopes are amply sufficient." 



Whatever may ultimately be established as to the relations between 

 increased "cost of living" and ''high prices" the reality of this latter con- 

 dition seems assured and the facts with regard to high prices remain now 

 to be examined. In an able treatise upon wealth distribution written 

 by the late Charles Spahr the belief is expressed "that in matters con- 

 cerning which they are interested the common observations of common 

 people is more trustworthy than the statistical investigations of the 

 most unprejudiced experts," and that "social statistics are only trust- 



'Elements of Economics, p. 78. 



