of demand, or it is a foolish response by the producer to the fictitious “gold-dollar” which we still insist upon interposing between supply and demand. This acts as a bait, and just as soon as it is taken, and the trap sprung, we get logically enough under-production and unemployment. The producer and wage-earner in due time are let out of the trap—but upon terms. What we must try to arrive at are these terms if we are to measure the “value” of this havoc to the intelligent controller of massed gold.
Let us first realize that in a well-ordered community the coordinated work of a thousand men upon ten thousand acres should constantly become more effective. This means that a fractional unit of, say, one man upon ten acres should steadily command more return. Upon this basis prices should have declined over an extended period, owing to growing co-ordination, just as an automobile runs more smoothly, a ship “finds” herself by use, or as the same kilowatt-hour gives us more value in a Tungsten lamp than it did in a Carbon lamp. But prices actually have risen, and this is not because of the very dubious “law of diminishing returns” which, even if it should prove valid, has certainly not yet emerged in the United States. We may have exhausted some of our oil-wells, but we have developed, up to date, hydro-electric energy per annum amounting to nearly 16,500,000,000 k.w.h. and it is estimated that we can look forward to an ultimate development of 456,172,400,000 k.w.h. This is estimated to be the equivalent of the labor of 1520 million men per annum, and the cost, based upon past experience, is calculated to be not more than 11⁄2 cents per day per man-power. This is obviously something to set against the law of diminishing returns. It is one of the first-fruits of freedom and order in the realm of physical economy.[1]
A valid unit of value, then, should buy more rather than less than it did in 1776, and it is probable that the dollar does buy much more in the way of sanitation, education, convenience and order than we reckon. Unfortunately we cannot accurately compute this or anything else without any means of
- ↑ Compare with our mechanical emancipation. See pages 324–6.
