Goods

Written by Louis Even on Saturday, 15 October 2016. Posted in In This Age of Plenty (book)

In this age of plenty - Chapter 4

Do necessary goods exist? Do they exist in sufficient quantity to satisfy all the consumers' basic needs?

Mankind has gone through periods of food shortages; famines covered large countries, and there lacked the appropriate means of transportation to bring to these countries the wealth from other parts of the planet.

It is no longer the case today. There is an overabundance of everything. It is abundance — no longer scarcity — that creates the problem.

No need to go into details to demonstrate this fact. No need to give examples of voluntary destruction on a large scale; to "stabilize markets” by making stocks disappear.

The example of two world wars sufficiently demonstrates the point.

From 1914 to 1918, and from 1939 to 1945, millions of human beings, in the prime of life — the ones most capable of producing — were diverted from the production of useful things, and were employed at destruction. Whole industries, powerful machinery were subjected to the same fate.  And in spite of this, mankind could still provide the necessities of life for itself.

Famines are now nothing more than artificial shortages willed by men. It takes minefields, submarines, torpedoes, blockades organized by force, to prevent abundance from flowing over into all countries.

When postwar problems are considered, one never wonders where one will find wheat for the next day, or materials and workers. It is quite a different matter which bewilders statesmen and sociologists: What will we do with all these arms, all of the machinery, all of the productive inventions that the end of the war will again make available?

If, between the two wars, all homes did not benefit from an abundance, it was certainly not due to a lack of goods or to the inability to produce goods. It was solely because consumers did not have the means to command production.

The active production was far from being oriented towards answering the true needs of the country's men and women. Most production was for the purpose of making a profit. Goods were often of no use to the ordinary man and woman. They were even harmful in certain cases.

A multitude of parasitic occupations, of agencies, of advertising campaigns — born from the incapacity of the consumers to express effectively their wishes — could otherwise have been employed usefully to serve consumers capable of expressing their wishes.  

Within our country, we can assert that there exists no obstacles of a material or technical nature to prevent us from satisfying the legitimate needs of ALL consumers. 

Two kinds of goods

It is useful, in order to understand several price and purchasing power problems, to distinguish between two kinds of goods.

On the one hand, there are goods which serve to support or embellish life. These goods are offered directly to the consumers for their use and that is why they are called consumer goods.

Food, clothing, fuel, produce that one finds on the market, the doctor's services, are consumer goods.

On the other hand, there are goods that are not put up for sale to the public, but are kept by producers precisely to produce consumer goods. Thus, a factory is not a consumer good. It is nevertheless a good, since it serves to produce consumer goods. The machines used to make books, to manufacture shoes or clothing, to transport merchandise, fall in the same category as the factory.

These factories, machines, means of transportation, the goods that we do not buy, but which serve to produce other goods, are called capital goods. They are in fact the producers' real capital. A farm is a capital good. It is the farmer's capital.

Sometimes they are called producer goods, since they are goods used in production. To simplify matters, we will use the term “capital goods” rather than “producer goods” because capital goods include some items which do not serve directly in production. Examples of these are roads, public monuments and armaments.

To clarify this distinction between consumer goods and capital goods, as well as to show how it may be used, let us give an example of the different ways in which these two kinds of goods behave in relation to the consumers' standard of living, at least under the present system.

We know that to buy the products which are on the market, we need money. Money is obtained mostly through wages and salaries. Wages and salaries are distributed to employees, whether they work to make capital goods or consumer goods.

A man produces saleable goods, let us say, shoes. With his wages, he can buy shoes, but not all the shoes he makes. Another man works in an arms factory. With his wages, he buys neither shells nor machine guns, but saleable goods, such as shoes. The two wages combined are more likely to liquidate the production of the first wage-earner.

This means that the wages obtained for the production of capital goods, added to the wages obtained for the production of consumer goods, allow consumer goods — the only ones put up for sale —to be sold more easily.

This is the reason why industrial developments that bring new constructions, or wars that bring the manufacture of armaments, create a kind of prosperity by allowing people to buy goods that would otherwise be immobilized because of a lack of money. From whence the popular saying: ''As construction goes, so goes everything''. And this reflection which could appear cynical but which nevertheless expresses a factual trend: War would bring back prosperity (through employment).

War is much more effective than construction. Any normal industrial development such as a factory, once it is built, throws onto the market goods which must recover the expenses of the factory. The problem of the lack of purchasing power then becomes more acute. War and the arms factories put no products on the market; they even destroy or restrict the production of useful goods by mobilizing manpower and machinery, while continuing to distribute wages and salaries to those who work at nothing but destruction. 

 


Previous chapter - Next chapter -

About the Author