chapter  11
3 Pages

THE THEORY OF PRODUCTS

Ricardo and the German text-book here confuse the technical and economic possibilities of increase. This occurs because they adhere to the view-point of the simple economy. For this reason they fail to grasp the facts of the general relationship of products and the unity of production, which are conspicuous only when the economy is seen as a social whole. Of course it is technically possible to produce clothes, shoes or many other manufactures in quantities so great as to over-supply the existing need. However, any such increase is economically precluded. It conflicts with the principle of the greatest utility. Clothes and shoes may be produced in excess of the need only by simultaneously decreasing the manufacture of other productively related goods. This means that things which are not suited for use and are therefore useless, are turned out at the expense of others which could be used and would consequently affect an increase in available utilities. One may not assume that clothes or shoes can be made in unlimited quantities without compelling a retrenchment in related lines. If such an assumption were made, it would lead logically to the statement that mass-production may be indefinitely expanded where there are no specific, restraining conditions and "we stand ready to apply the required labor.' ' This is Utopian. It contradicts all experience. The latter shows beyond a shadow of doubt that the total stock which may be produced is always less than are total needs.