They are happening right now to several million Americans who are hunting jobs and not finding them!
This insanity of “hard times” comes periodically in our affairs, in great waves known as “business cycles”; they are due at intervals of from seven to ten years, and are just as inevitable as the tides of the sea. Learned economists study the history of these tides of ruin and make charts and diagrams of them; but if you state the cause, you become an outcast from the business world; and so naturally nobody does state it—except a few outcasts like myself.
The professors of economics admit that this trouble is caused by “over-production,” and we must get straight exactly what that means. It doesn’t mean that we have produced more than we need; on the contrary, we have millions living below the wage level of common decency—our average wage is $1,200 a year, and the cost of keeping a family on the bare necessities is $2,000. But it doesn’t matter how much people need; the thing that counts is what they can buy. I give you another slogan, and next time you meet a professor of economics, ask him about it:
If you’ve got the price, you’re a consumer; if you haven’t got the price, you’re a bum.
Well, since we American consumers can’t buy our own product, the owners of the product—that is, the rich—have to look elsewhere for customers, and so comes the hunt for “foreign markets.” Understand me, I do not object to our going abroad for the things we can’t raise at home; to exchange automobiles and moving pictures for bananas and coffee—that is normal business. What I am talking about is a glut of goods that we can’t sell at home, but must sell abroad, under penalty of seeing our workers turned off to starve. We don’t take goods in exchange—oh no, that would break down our home industries, and we protect them by a high tariff wall. What we take are paper promises to pay us at some future date; we go on continually selling more than we buy, and filling our bank vaults with these paper promises, and that is called a “favorable balance of trade.”
But all the highly developed nations, Britain and France and Germany and Italy and Japan, are in exactly the same plight as ourselves; they also have more goods than their half-starved workers can purchase; they also are looking for foreign markets, to save their business system from collapse. Each finds its chance of salvation in selling to the backward nations, which cannot yet do their own manufacturing. So we run upon this curious situation:
The existence of American industry depends upon our selling cotton shirts to Chinamen, who are so poor they can’t afford but one shirt at a time.
And now, see the next step! Trying to save our own business system, we threaten ruin to the business system of some other country, say Japan. Naturally, the business men of Japan don’t like that; so we have trade rivalry, and out of that we have war. The cause of modern war may be put into one sentence—and I beg you to realize that it’s no joke, but the grimmest of grim realities:
If we don’t go to war with other nations, they will take away from us the chance to sell to Chinamen those cotton shirts of which our workers have produced so many that they have to go in rags.
I could go on like that indefinitely, making funny sentences about this funny system. I could tell the hilarious story of how Britain and Germany went to war to take away from each other the chance to sell shirts to Chinamen—and to Hindoos and Persians and Arabs and Turks, of course. When they had destroyed 30,000,000 human lives and $300,000,000,000 worth of goods you might think they would have cured their “over-production” for quite a while; but they had made a miscalculation, and fought too long, and borrowed too much money from us, and so their governments are burdened with enormous fixed charges, and there is chronic unemployment in both Britain and Germany, and almost a collapse in France.