50 Years Ago: High Prices, Low Prices (1972)

The 50 Years Ago column from the March 1972 issue of the Socialist Standard

The International Labour Office, acting upon the instructions of its governing body, instituted an enquiry as a result of a meeting held at Genoa in June 1920. At this meeting a representative of the employers’ group said: - 

‘The cost of living has increased in every country to an alarming extent; this phenomenon is due to many causes, but under-production is certainly one of these causes.’

* * *

The enquiry was entrusted to Professor Milhaud of the University of Geneva and the first volume of the ‘Enquiry on Production’ is now to hand and forms the basis of the article ‘An Enquiry into the Causes of the Decrease of Production’ from which we quote.

There are two lengthy quotations from well-known capitalist representatives, such as Mons. Millerand and Mr. Herbert Hoover . . . both of whom during 1919 and 1920 delivered speeches in which they called upon the workers for increased efforts towards greater production.

* * *

Then follow several lengthy extracts from the report showing the fluctuations of prices during December 1919 and June 1921 . . . which, reaching the highest price point in May 1920, fell considerably between that date and June 1921.

We insert this point because what follows shows that the writer of the article in question must have favoured the demand for increased production, for in commenting upon the great fall in prices he (or she) asks as follows: 

‘Was not this fall in prices just the very remedy of which the whole world was in need? Was not the general high level of prices the scourge under which the whole world had been groaning? Was not the return to normal prices the factor from which increased production was to be expected?’

* * * 

The main point of the article to which we draw attention is, that with the fall in prices the writer seems very disagreeably surprised to find that something else had happened, and with an air of injured innocence he laments: 

‘The fall in prices gave rise to a crisis in production such as the world had not yet witnessed’.

Strange! For it was then discovered that the crisis brought forth a universal restriction of production, a huge systematic plan for all over the world to hold up the production of wealth and thus maintain high prices.

(From an article ‘Capital’s Stranglehold’ by Bob Reynolds, Socialist Standard March 1922.)