| RISING PRICES AND THE PUBLIC |
By Professor JOHN BAUER
CORNELL UNIVERSITY
THE increasing cost of living, or more properly rising prices, has been the subject of much recent discussion. The causes have been explained and reexplained; everybody knows about increased gold production, also about the trusts, the tariff, labor unions, etc., in their joint and several relations to the subject. But the evils, especially in their broad social relations, have been less definitely analyzed and stated. It is true that the ordinary consumer has paid more money month by month to the grocer, the landlord and others, and that he is complaining rather vigorously about it. Neverthless, for the most part he has imagined and has been taught to believe that the higher prices have meant public prosperity—i. e., larger profits and more business.
Rising prices usually do mean more profits, but not necessarily more real business. The profits usually go to the grocer, the landlord and others, while the ordinary consumer pays them and is so much the poorer. Unluckily the losses and gains, both unwarranted and unearned, have not stopped simply with making the consumers poorer and the dealers richer. They have not been individual matters. The broad effects have permeated our entire social structure, operating through devious ways, working mischief upon the public.
The evils complained of are not due to high, but to rising prices. Either high or low prices in themselves signify nothing, if the incomes are adjusted accordingly. If the prices are simply high, not rising, then wages, salaries and other money incomes will be correspondingly high; all exchanges will simply be based upon a high level. Likewise, if prices are low throughout, not falling, then again wages and other money incomes will be correspondingly low and exchanges will be carried on at a low level. It is the shifting from low to high, or from high to low, that produces mischief. Various mal-adjustments in economic relations follow. All prices and values do not change at the same rate. The normal forces of supply and demand are upset. Some incomes are unduly diminished while others are correspondingly inflated. There are undue losses and undue gains; both are unearned and both are detrimental to the public welfare.
In 1910 general prices in the United States were 47 per cent.
