Our real values do not rise and fall fifty per cent in a year as we imagine. We think we have chills and fevers because the graduated scale slips up and down our economic thermometer.
In the last analysis, inflation and deflation are the mathematical consequences of employing an unrepresentative measure of value. During a period of inflation our relatively contracting measure tells us that fifty is rapidly becoming a hundred; and with a shortage of goods we call ourselves rich. During a period of deflation our relatively expanding measure tells us that one hundred is rapidly becoming fifty; and with our shelves bursting with goods we call in our creditors. We measure facts by a fiction and live in a perpetual state of hysterical elation or hysterical fear.
The further symptoms which indicate a lack of organic relationship between basic economic power and basic economic responsibility, due to this failure to measure them scientifically, may be indicated as follows:
(e) Seduction of Capital. There is a growing tendency on the part of such capital as has survived the buffeting referred to above, to align itself, by invitation, with the taxing power of the community instead of identifying itself, as would be normal, with that group in the community naturally interested in venture and production. Such capital is now offered tax-exempt sanctuary by the politician, who in granting immunity gains for himself large means of patronage and perpetuation of office. For the average citizen some immediate facility is compassed with no reckoning of ultimate cost, but he has to face the immediate increase in his own share of current taxation, arising from the inevitable payment of interest to the exempt, since all exemption from taxation throws a diverted burden upon the consumer who has steadily more to pay as stronger interests gain exemption or privilege.[1]
(f) Seduction of Labor. As already stated, the word labor is employed, as economists usually employ it today, to cover both physical and mental effort. Our failure to tax justly, and to subsequently measure justly, are the underlying reasons for the fact that hundreds of thousands of normal United States citizens, who would prefer to produce when they have accumulated a little capital, actually find it safer to try to make a hazardous living off paltry trading. Trading or exchanging,- ↑ Compare footnote, page 243.
