Overproduction?

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

IN the Old Testament we are told that, when the Israelites journeyed through the desert, they were hungered, and that God sent down out of the heavens — manna. There was enough for all of them, and they all took it and were relieved. But, supposing that desert had been held as private property, as the soil of Great Britain is held; as the soil even of our new states is being held. Supposing that one of the Israelites had a square mile, and another one had twenty square miles, and another one had a hundred square miles, and the great majority of the Israelites did not have enough to set the soles of their feet upon, which they could call their own — what would become of the manna? What good would it have done to the majority? Not a whit. Though God had sent down manna enough for all, that manna would have been the property of the landholders; they would have employed some of the others, perhaps, to gather it up in heaps for them, and would have sold it to the hungry brethren. Consider it: this purchase and sale of manna might have gone on until the majority of the Israelites had given up all they had, even to the clothes off their backs. What then? Well, then they would not have had anything left with which to buy manna, and the consequence would have been that while they went hungry the manna would be lying in great heaps, and the landowners would be complaining about the over-production of manna. There would have been a great harvest of manna and hungry people, just precisely the Phenomenon that we see today. — The Crime of Poverty

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Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894)

Let us now complete this chart. When we began it a distinction was noted between Personal Servants, who render mere intangible services, and the other classes, who produce tangible wealth. But essentially there is no difference. By referring to the chart and observing the course of the arrows, Food-makers are seen working for Personal Servants precisely as Personal Servants work for Luxury-makers. We may therefore abandon the distinction. This makes it no longer necessary to mention particular classes of products in the chart; it is enough to distinguish the different kinds of labor.76 Thus:

76. "This, then, we may say is the great law which binds society — 'service for service.' "— Dick's Outlines, p. 9.

For simplicity the workers have been divided into great classes, and each class has been supposed to serve only one other class. But the actual currents of trade are much more complex. It would be practically impossible to follow them in detail, or to illustrate their particular movements in any simple way. And it is unnecessary. The principle illustrated in the chart is the principle of all division of labor and trade, however minute the details and intricate the movement; and any person of ordinary intelligence who wishes to understand will need only to grasp the principle as illustrated by the chart to be able to apply it to the experiences of everyday industrial life. All legitimate trade is the interchange of Labor for Labor.77

77. In the light of this principle how absurd are some of the explanations of hard times.

Overproduction! when an infinite variety of wants are unsatisfied which those who are in want are anxious and able to satisfy for one another. Hatters want bread, and bakers want hats, and farmers want both, and they all want machines, and machinists want bread and hats and machines, and so on without end. Yet while men are against their will in partial or complete idleness, their wants go unsatisfied! Since producers are also consumers, and production is governed by demand for consumption, there can be no real overproduction until demand ceases. The apparent overproduction which we see — overproduction relatively to "effective demand" — is in fact a congestion of some things due to an abnormal underproduction of other things, the underproduction being caused by obstructions in the way of labor.

Scarcity of capital! when makers of capital in all its forms are involuntarily idle. Scarcity of capital, like scarcity of money, is only an expression for lack of employment. But why should there be any lack of employment while men have unsatisfied wants which they can reciprocally satisfy?

Too much competition! when competition and freedom are the same. It is not freedom but restraint, not competition but protection, that obstructs the action and reaction of demand and supply which we have illustrated in the chart.

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