[199] Adolf Wagner—A contribution to the method of statistics of the national income and national wealth and further statistic investigations of the distribution of the national income in Prussia, founded on the new income statistics, 1892–1902. Gazette of the royal Prussian bureau of statistics, 1904.
[200] F. L.—The distribution of the income in Austria. Leipzig, 1908.
[201] L. G. Chiozza Money. Riches and Poverty. London, 1908.
[202] E. Levasseur.
[203] G. Schmoller—Principles of Economics. Vol. II.
[CHAPTER XVIII.
Crisis and Competition.]
[1.—Causes and Effects of the Crises.]
The crisis arises because no standard exists whereby the real demand for a commodity may at any time be measured and ascertained. There is no power in bourgeois society that is enabled to regulate the entire production. In the first place, the consumers of a commodity are scattered over a wide area, and the purchasing ability of the consumers, who determine the consumption, is influenced by a number of causes that no individual producer is able to control. Moreover, every individual producer must compete with a number of other producers whose productive abilities are unknown to him. Each one seeks to defeat his competitors by every means at his command: by a reduction in prices, by advertising, by giving credit for prolonged periods, by sending out drummers, and even by cunningly and insidiously disparaging the products of his competitors, the latter means being especially frequently resorted to during critical times. The entire realm of production accordingly depends upon the subjective discretion of the individual. Every manufacturer must dispose of a certain quantity of goods in order to subsist. But he seeks to sell a far larger quantity, for this increased sale determines not only his larger income, but also the probability of his triumphing over his competitors. For a while sales are insured, they even increase; this leads to more extensive enterprises and to increased production. But good times and favorable conditions tempt not only one but all manufacturers to multiply their efforts. Production by far exceeds the demand. Suddenly it becomes manifest that the market is over-stocked with goods. The sales slacken, the prices fall, production is limited. To limit production in any branch means to decrease the number of workers employed in this branch, and a reduction in wages, whereby the workers in turn are compelled to limit their consumption. The inevitable result is, that production and consumption in other branches slacken likewise. Small dealers of all kinds, shopkeepers, bakers, butchers, etc. whose chief customers are workingmen fail to dispose of their goods and also suffer want.
The effects of such a crisis may be seen from the statistics of the unemployed that were compiled by the trade-unions of Berlin at the close of January, 1902. In Berlin and suburban towns there where over 70,000 persons who were entirely unemployed, and over 60,000 who were partly unemployed. On February 13, 1909, the trade-unions of Berlin took another census of the unemployed and found that there were 106,722 unemployed persons (92,655 men and 14,067 women).[204] In England there were 750,000 unemployed persons during September 1908. These figures represent workingmen and women who were willing and eager to work but unable to find work. The deplorable social conditions of these human beings may be easily imagined!