Current Economic Affairs
CURRENT ECONOMIC AFFAIRS
CURRENT
ECONOMIC AFFAIRS
By
WALTER RENTON INGALLS, S.B., D.Eng.
Author of Wealth and Income of the
American People
G. H. MERLIN COMPANY
Publishers
100 East Philadelphia Street
York, Pennsylvania
Copyright, 1924, by G. H. Merlin Co.
printed in u. s. a.
by the maple press company, york pa.
PREFACE
This book is mainly a collection of addresses and papers that have previously been delivered and published. Many of them were originally published in Mining and Metallurgy. The paper on the “Distribution of Wealth in the United States” appeared first in the Iron Age. Several of the papers, however, are new.
As a collection of addresses and papers primarily prepared with no idea of republication in book-form there is naturally more or less repetition in them and a good deal of lack of coördination. If allowance be made for these faults there will be discernible, however, a certain continuity of thread and thought, which lead indeed from my earlier work on the “Wealth and Income of the American People.”
In the present papers I have made the first serious attempt to study the distribution of wealth among the classes of people in the United States, and in so doing I have been completely destructive of a fallacy that has been of powerfully harmful effect upon our public policy and will continue to be so if the exposure of it be not generally made known and recognized. The idea that about 65 per cent of the wealth of the country is owned by about 2 per cent of the people is the foundation of the principle of “soak the rich” in our system of taxation. The truth is no such thing. My constructive work on this subject is rough. I hew with an axe, but I am confident that I shape the thing correctly in a general way. Such a problem is no fit subject for meticulous work with a jig-saw.
In my two chapters on American production, consumption, and scale of living enjoyed by the people I have also entered a new field with iconoclastic hands. The commonly prevailing idea is that during the last 10 years the people of the United States have advanced greatly in their production and consequently their general scale of living. In earlier papers I have expressed doubt respecting these conceptions. The prevalent ideas did not appear to be supported by the collateral evidence. In the new papers I feel that I have gone a long way toward establishing the contrary. Should we just emerging from a war, that was stupendously costly and wasteful even to us, expect anything otherwise?
In 1919–20 we had a false boom. In 1920–22 a very real and intense depression. In 1922–23 a sharp revival. The study of the depression that was undertaken by the National Bureau of Economic Research for Secretary Hoover’s committee was finished after the revival was well under way. The doctrine of business cycles was elaborated in it. In reviewing the work I submitted the following words of warning, which I think it well to reprint here:
As one of the directors of the National Bureau of Economic Research I approve the publication of the report on “Business Cycles and Unemployment” as it has been submitted to me in manuscript, in common with other directors of the Bureau. I feel constrained, however, to append a note to the effect that the study of conditions and events that has been made does not give adequate attention to fundamental economic motivations that are beyond control. I refer to such things as broad national enterprises that may prove to be mistakes, to deep rooted and widely extending alterations in the conditions of production and consumption, to general wars, and to changes in social conditions.
In illustration of my meaning I cite too premature building of railways in the West of the United States, the greatly increased production of silver by fortuitous discovery and improvements in the arts of mining and metallurgy metallurgy that led eventually to the demonetization of silver, the Great War of 1914–18 with its consequential economic dislocations spreading all over the world, and the social disturbances and changes which confront us now. It is important not to confuse ordinary business cycles with the irregular undulations following some great upheaval of such nature.
The Great War of 1914–18 produced an economic cataclysm that enmeshed almost every human being in the civilized world. There will be no dissent from the statement that the world has not yet passed out of its shadow. It seems to me to be highly dangerous to convey any impression that the United States in 1921 simply passed through the depression of an ordinary business cycle.
The war of 1914–18 was not only immensely destructive of wealth and life, of systems of finance and of economic equilibria, but also it produced a new state of mind in all the people of the world, which finds expressions in the unwillingness to work and the thought that living may be enjoyed without it, owing to the experience of something that looked like that during the war. And along with this there was an extensive destruction of the principle of authority, which the masses of people had previously accepted for their guidance.
I wish that I had felt inspired to elaborate my chapter on the eight-hour and twelve-hour day. There is a great deal of documentary evidence from all of the principal countries of continental Europe that might have been cited and quoted more extensively. Whoever cares to dig more fully into this subject may easily do so. It is mainly of the same order, however, and to the same general effect and repetition of it would be wearisome. In the great post-war evil of shortening the hours of work I find the explanation of much of the failure of economic revival abroad and there is much reason to surmise that America is suffering from the same trouble, though of course much less acutely than Europe. This subject is associated in the closest ways with those of national production, general scale of living, and thrift.
I have in these papers made many references to classes of people, e.g. the capitalistic class, the wage-earning class, etc. These are not, of course, with any intention of making social distinctions, but rather of showing differences in economic interests. The wage-earner is a capitalist in so far as he owns property and he may cease to be a wage-earner at all. Oppositely, the property of a capitalist may vanish and he may be constrained to become a wage-earner.
I find no fault with any class of people for deliberately producing the bad situation that now exists among us. It simply developed because it had to. The correction will be similarly inevitable. I believe that all of our people are equally patriotic and are equally concerned in the national welfare. The desire of some for the maintenance of present evils is attributable to ignorance more than to anything else. Many persons who have tasted new luxuries feel that they have but acquired what is due them. With equal thoughtlessness they would vote a great bonus to the ex-soldiers. It is not to be expected that the millions of our people can work out for themselves the complicated economic conditions that have produced a phantasmagoria, or understand them, or foresee whither they are leading, i.e. to hard times that will be nature’s corrective. It is, however, the duty of everybody who thinks, to give attention to these subjects and out of their intelligence to promote clear thinking by others and thus contribute toward amelioration.
115 Broadway, New York,
- Oct. 1, 1923.
CONTENTS
| I. | 1 |
| II. | 17 |
| III. | 30 |
| IV. | 43 |
| V. | 59 |
| VI. | 71 |
| VII. | 87 |
| VIII. | 112 |
| IX. | 129 |
| X. | 142 |
| XI. | 162 |
| XII. | 174 |
| XIII. | 187 |
| XIV. | 196 |
| Index | 207 |
This work is in the public domain in the United States because it was published in 1924, before the cutoff of January 1, 1929.
The longest-living author of this work died in 1956, so this work is in the public domain in countries and areas where the copyright term is the author's life plus 67 years or less. This work may be in the public domain in countries and areas with longer native copyright terms that apply the rule of the shorter term to foreign works.
Public domainPublic domainfalsefalse