profits which compose the money-income of society and, per se, the direct means of acquiring the necessities and comforts of life. The measuring and estimating of changes in the cost of living, therefore, is resolved into a comparative study of incomes and expenditures. If incomes, expressed in terms of money, are found to increase more rapidly than contemporary expenditures or to decrease less rapidly, costs of living may be said to be declining; if converse relations exist, virtual costs are advancing.
It is doubtful whether a careful comparison of aggregate income and expenditure in the United States, during the regime of advancing prices following the depression of 1897, would show any considerable differential in their relative changes or any remarkable increment in the average cost of living. But it is quite possible that aggregates and averages may remain unchanged while a radical readjustment of incomes and costs is effected among individuals or among the differently circumstanced groups which compose the social organism. Indeed, it is quite plain that a readjustment of respective shares in the distribution of the total income among the different classes of the population is the raison d'être of present economic discontent, and a careful analysis of the apportionment of the "national dividend" affords a key to the current problems of living costs. If an increased proportion of the social income finds its way into the pockets of fortunate individuals and favored classes of society, other persons and groups must suffer a relative decrease in purchasing power. Since all buy in the same market, a part of the population possesses an increased proportion of cash to the prices which must be paid, and the exchequers of the less fortunate are inversely affected. In other words, persons identified with one economic class may experience an actual decrease in their cost of living, despite rising prices, while others must carry an increased burden, and, possibly, a third group may be affected not at all.
Space forbids an analytic treatment of the factors which have contributed to the unusual price movement of the last twelve years; they include such industrial and social phenomena as have affected the relative supply of and demand for the standard metal, on the one hand, and the supply of and demand for the things which make up a living on the other. That the unprecedented increase of the gold supply is a potent factor can not be denied; that there are other factors of equivalent significance is quite certain. Among the latter, are such socio-economic tendencies as effect a relative or per capita decline in the annual supply of the necessities and comforts of life and a consequent increased social cost of production, as well as an advanced scale of prices.
The following may be properly enumerated as characteristic attributes of social and industrial evolution which may contribute to changing costs: