DOMESTIC PRODUCTION 15 



tribution. While we were busily reducing the amount 

 of labor needed to produce things as the technocrats 

 recently discovered we were busily engaged in in- 

 creasing the numbers employed to transport, and sell, 

 and deliver the products which we were consuming. 

 That a time might come when all the economies of 

 factory production would be lost in the cost of get- 

 ting the product from the points of production to 

 the points of consumption had been generally ignored. 



Eventually I stumbled on an economic law which 

 still seems to me the only satisfactory explanation of 

 our adventure with the canned tomatoes: Distribu- 

 tion costs tend to move in inverse relationship to pro- 

 duction costs. The more production costs are reduced 

 in our factories, the higher distribution costs on fac- 

 tory products become. At some point in the case of 

 most products a time comes when it is cheaper to pro- 

 duce them individually than to buy them factory 

 made. Nothing that we can do to lower distribution 

 costs by increasing the efficiency of our railroads, and 

 nothing that we can do to eliminate competition as 

 socialists propose, upsets this law. As long as we stick 

 to the industrial production of goods this law is oper- 

 ative. 



A simple illustration makes this clear. With fac- 

 tory production, large quantities of one product are 

 made in one spot. To use automatic machinery, to 

 divide labor most efficiently, to transport raw mate- 

 rials inexpensively, it is necessary to manufacture in 

 quantity. Raw materials and fuel must therefore be 



