THE RELATION OF PRODUCTION TO CONSUMPTION. 



By Pjkter Johannes du Toit. 



It seeni> superfluous to say that man eats food before he 

 produces any ; in other words, that he is a consumer before he 

 is a producer: that the need to consume renders it necessary to 

 produce. Yet increase of production in relation to agriculture, 

 without regard to consumption, is a favourite thenie with many, 

 as if, in the first place, production has no reference to consump- 

 tion, and, in the second place, cost of production does not enter 

 into consideration at all. And when we speak here of con- 

 sumption, which amounts in practice to demand for the article 

 produced, it matters not whether the consumer is in the country 

 in which the production takes place or in some other country, 

 so long as he is one who demands the particular article. For 

 the purposes of production in South Africa, therefore, both the 

 consumer in the country and the consumer beyond the shores 

 or boundaries thereof come under notice. So that anyone who 

 advocates only increase of production assumes that the demand 

 is there ; and not only does he assume such a demand, but he 

 also neglects to give attention to the important (|uestion of the 

 cost of production. 



It is evident that if there is no one who has the need or the 

 wish to consume a certain article, that article will not be or will, 

 cease to be produced ; antl, further, if one ])erson ]>roduces what 

 it takes ten to consume, then, if one of the ten also becomes a 

 producer, and both produce more than the one produced before, 

 there must be an over-su])ply and a fall in price. The same 

 would apply if there were such a disturbance between i)roduction 

 and consum])tion of the same article or articles iii a country, or 

 in several countries having the same external market. On the 

 other hand, there may be an under-supply and a consequent rise 

 in prices. In this event production would be very ])rofitable, 

 and the tendency would be towards an adjustment in favour of 

 the consumer by the latter being induced to become a producer. 



Taking the illustration already used, although a fall in price 

 may result when, instead of one producing for ten, two produce 

 for nine, it may be that the price realised is yet considered by 

 the two sufficient to encourage them to pursue their course. But, 

 again, it is evident that if the process of substituting ])roduction 

 for consumption be extended inimitably, a point will be reached 

 at which production becomes unprofitable. In this case the 

 cost of i)roduction will be considered by the producer to be too 

 high in comparison with the price realised. Too high cost of 

 l)ro(luction may also arise from physical disadvantages, troni 

 inade(|uate transport facilities, from want of education or of 

 suitable education, from inade(|uate security, from i.solation, from 

 bad governmen^ and, indeed, a large number of causes. Hence, 



