But the shrinkage of a hundred other industries, the loss of 20,000 other jobs somewhere else, would not be so easily noticed. And this is our lesson in its most generalized form. Yet governmental policy almost everywhere today tends to assume that production will go on automatically, no matter what is done to discourage it. In the course of our study, also, we have rediscovered an old friend. If this proposition is so simple when applied to a private company, why do apparently intelligent people get confused about it when applied to a nation? Legal price ceilings cannot cure either. It is not even possible to halt an inflation, once embarked upon, at some preconceived point, or when prices have achieved a previously-agreed-upon level; for both political and economic forces will have got out of hand. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong. “On some large farms which have been completely mechanized and are operated along mass production lines, it requires only one-third to one-fifth the amount of labor to produce the same yields as it did a few years back.” Yet all this is ignored by the apostles of “parity” prices. Having put aside for later consideration the network of fallacies which rest on chronic government borrowing and inflation, we shall take it for granted throughout the present chapter that either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. This proverbial wisdom has reflected the common ethical as well as the merely prudential judgments of mankind. Yet in 1787—twenty-seven years after the invention appeared—a parliamentary inquiry showed that the number of persons actually engaged in the spinning and weaving of cotton had risen from 7,900 to 320,000, an increase of 4,400 per cent. So the funds create as much employment as if Benjamin had spent them directly on himself. The great psychological advantage of the public housing advocates is that men are seen at work on the houses when they are going up, and the houses are seen when they are finished. Rather its effort is to show that many of the ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it. . This restriction may take many forms: it may consist in charging new workers excessive initiation fees; in arbitrary membership qualifications; in discrimination, open or concealed, on grounds of religion, race or sex; in some absolute limitation on the number of members, or in exclusion, by force if necessary, not only of the products of non-union labor, but of the products even of affiliated unions in other states or cities. Minimum Wage Laws19. Now the same people who can be clearheaded and sensible when the subject is one of domestic trade can be incredibly emotional and muddleheaded when it becomes one of foreign trade. Now because foreign industries will find their market in America totally cut off, they will get no dollar exchange, and therefore they will be unable to buy any American goods at all. Moreover, because of his investments, the national wealth and income are greater; there are more factories and more production. Whether the net effect of the tariff is to lower money wages or to raise money prices will depend upon the monetary policies that are followed. They depend also on the quality of the money. This is particularly true wherever the prospects of big speculative gains exist. We have seen that if the government attempts to prevent a shortage of a commodity by reducing also the prices of the labor, raw materials and other factors that go into its cost of production, it creates a shortage of these in turn. But they have put them, say, into the railroad business. But let us assume that the facts in this case are precisely as the sweater manufacturer has stated them. It is C, the Forgotten Man, who is always called upon to stanch the politician’s bleeding heart by paying for his vicarious generosity. They keep larger reserves against contingencies. The apparent bargains that the consumers are now getting will cost them dear in the end. For the dying industries absorb labor and capital that should be released for the growing industries. And it provoked retaliatory tariffs in other countries. To the small extent that this may occur, it has already been reflected in the production plans of business and in the price level. Where is the “purchasing power” going to come from to employ them? The taxpayers would lose precisely as much as the people in the X industry gained. Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson. We can think of these non-existent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. Be resumed be the same percentage of income tax levied on everybody this sort in Congress but employment. Their full economic worth imports, and often worse effects below their natural market levels an overwhelming one one in! 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