"Now, John," said the teacher, "we will ask you a few questions. We have seen by what process a chronic glut of goods in the market resulted from the operation of the profit system to put products out of reach of the purchasing power of the people at large. Now, what notable characteristic and main feature of the business system of our forefathers resulted from the glut thus produced?"
"I suppose you refer to competition?" said the boy.
"Yes. What was competition and what caused it, referring especially to the competition between capitalists?"
"It resulted, as you intimate, from the insufficient consuming power of the public at large, which in turn resulted from the profit system. If the wage-earners and first-hand producers had received purchasing power sufficient to enable them to take up their numerical proportion of the total product offered in the market, it would have been cleared of goods without any effort on the part of sellers, for the buyers would have sought the sellers and been enough to buy all. But the purchasing power of the masses, owing to the profits charged on their products, being left wholly inadequate to take those products out of the market, there naturally followed a great struggle between the capitalists engaged in production and distribution to divert the most possible of the all too scanty buying each in his own direction. The total buying could not of course be increased a dollar without relatively, or absolutely increasing the purchasing power in the people's hands, but it was possible by effort to alter the particular directions in which it should be expended, and this was the sole aim and effect of competition. Our forefathers thought it a wonderfully fine thing. They called it the life of trade, but, as we have seen, it was merely a symptom of the effect of the profit system to cripple consumption."
"What were the methods which the capitalists engaged in production and exchange made use of to bring trade their way, as they used to say?"
"First was direct solicitation of buyers and a shameless vaunting of every one's wares by himself and his hired mouthpieces, coupled with a boundless depreciation of rival sellers and the wares they offered. Unscrupulous and unbounded misrepresentation was so universally the rule in business that even when here and there a dealer told the truth he commanded no credence. History indicates that lying has always been more or less common, but it remained for the competitive system as fully developed in the nineteenth century to make it the means of livelihood of the whole world. According to our grandfathers--and they certainly ought to have known--the only lubricant which was adapted to the machinery of the profit system was falsehood, and the demand for it was unlimited."
"And all this ocean of lying, you say, did not and could not increase the total of goods consumed by a dollar's worth."
"Of course not. Nothing, as I said, could increase that save an increase in the purchasing power of the people. The system of solicitation or advertising, as it was called, far from increasing the total sale, tended powerfully to decrease it."
"How so?"
"Because it was prodigiously expensive and the expense had to be added to the price of the goods and paid by the consumer, who therefore could buy just so much less than if he had been left in peace and the price of the goods had been reduced by the saving in advertising."