Back to Homepage Income Measures Income: Saving and Investment Methods of Buying That Save Money The Choice of Goods Methods of Buying That Reduce Mistakes In Selection Methods of Securing Information Concerning Goods Plans and Motives of Consumers Consuming the Product Who Is the Consumer? The Consumer in the Market Priorities and Preferences in Consuming Decisions The Consumer as User of Wealth The Consumer as a Buyer Consumers as Self-Conscious Agents Criteria of a Good Market Information Versus Persuasion of the Buyer The Rate of Interest Interest Rates and Economic Activity Saving, Investment, and Income Saving Motives Saving Plans and their Realization Total Spending Is the Key to Prosperity The More We Spend, The More We Have Spending by Private Enterprise

The More We Spend, The More We Have Out of production, buying power is generated. The activation or use of that buying power is the mainspring of continued production. For society as a whole, the more we spend the more we have, for the greater the spending the greater the production, provided there are available resources. Of course, this does not mean that money can be printed in unlimited quantities and spent and thereby create more output. Rather, it applies to spending the income, or its equivalent, which is received for engaging in productive activities when all resources are fully employed. Any attempts to spend for goods and services which are beyond the productive capacity of the country will merely cause higher prices. But up to the point of maximum capacity, increased spending means increased output and therefore more jobs and more income. CONSUMING MORE AT HOME First and foremost, we all know that there is a tremendous expansion possible in our standard of living. One need only observe the large slum districts in all our large cities. The low standard of living of large segments of the population throughout the United States, and especially in large cities and in the southeastern area of the country, even in our best peacetime years, is nothing of which to be proud. The need for housing is particularly great. There is unnecessary overcrowding and there are still large numbers of houses without electricity or running water or sanitary facilities. Beyond the basic necessities, the potential demand for modern kitchens and bathrooms and air conditioning and new electrical equipment is very large. Inadequate supplies of food when incomes are increased is amply demonstrated at the present time, when the available supply, even after exports, is at new peaks and shortages still prevail. More and better food is needed and will be consumed if only the income is available to the of our people. In the service industries output could be increased tremendously without concern about oversupply. Much more medical care, education, recreation, transportation, and other services are needed by large numbers of our people. Everyone recognizes the need and desirability of raising standards of living, especially at the lower extremes of our income scale, but its achievement is not easy. It is not only a matter of increasing the total income so that those in the lower brackets can have more, but also of increasing the share of that higher total for those who have the greatest needs for more goods and services and who will spend their higher income. Those who point with pride to the living standards of the higher income groups are often blind to the squalor and poverty of millions of families, and these same people are the first to raise the cry of "unAmerican" and "radical" against any suggestion that an increased share should go to those having the lowest incomes. Not only may this be socially and morally desirable, but it is economically necessary if more drastic measures are to be avoided. It will result in higher total spending and less total saving and therefore in a higher total production with less likelihood of depressions. Many are in favor of increasing the relative share of the lower income groups through higher wages. Anything that can be accomplished in this direction through ever increasing minimum wage requirements is desirable, but history reveals that prices increase when labor costs increase. It is then suggested that prices be arbitrarily held down while wages are arbitrarily raised. This is a most difficult administrative task and one which can disrupt competitive forces, with unfortunate consequences. Rather than expect from businessmen a benevolence which is incompatible with vigorous competition or impose arbitrary controls by government on prices, it would seem better to rely on tax and social security measures in directing a larger flow of income to those who will spend it. Further consideration is given to this problem in subsequent chapters.   Home