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Show CAN COSTS Ml LOWERED? Much has been spoken and written on the subject of postwar prices, and the possibilities of inflation. The arguments are based on two premises: That with full employment the people of the county , will be able to absorb the bulk of goods produced at almost any price and that the war increase in wage scales and material ma-terial prices are bound to result in more or less permanent per-manent advances in goods prices. There are half-truths in both these premises. The lirst premise presumes that the purchasing power of those; who work for salaries and wages is alone sufficient suf-ficient to maintain that of the nation as a whole. That ignores the simple fact that some 40 per cent of our citizens, to be conservative, do not depend upon wages, but upon agricultural production, for their purchasing-power. purchasing-power. Without this largest single segment of our people peo-ple in position to buy their share of the products of industry, there is no real hope of a continuing sustained sustain-ed national purchasing power. So long as the cost of living continues to mount, as it has for several generations prior to the war, just so long will the wage and salary earners require more income to live even as well as before. And as surely as wages are increased, just as surely will that rise be reflected in the costs of goods they produce. The largest factors in final costs are the cost of production and distribution, which, in turn, are determined de-termined by costs of labor, of raw materials and of capital. And here is where a reversal of the spiral of inflation is possible. Cost of labor is, in the long run, tied to the cost 'of living, which means the cost of foods raised on farms. Costs of raw materials, too, go straight back to the farm, since the largest part of them come from the farm. If farm costs can be reduced, it follows logically that it is no longer necessary to increase income to meet it; logically, income could be reduced, without lowering the standards of living. And if ' both costs of living and costs of raw materials are reduced, the cost of manufacturing and distribution can be lowered, and more people can live better'. The key to prosperity lies in reducing costs, or expenses, on the farm, to the point where the farmer has better purchasing power and all the rest of us also have a greater spendable surplus. J. E. Jones.. |