278 VALUATION, DEPRECIATION AND THE RATE-BASE
But the generally accepted remedy, the granting of more pay,
is at best only a temporary expedient.
Scarcity of labor is not responsible for high prices. It may be
assumed that there is and always will be an abundance of labor
to produce and to distribute the things that man demands in
order to live in comfort. High prices are themselves an ade-
quate stimulant to the production in quantity of all varieties
of things which are in demand. But the occasional periods
during which there is a rapid advance of what is commonly
called “ the cost of living >’ have the gradual but none the less
certain effect of reducing the amount, despite their possible
abundance, of the desirable things which the family can afford.
The standard of living at such times gradually comes down when
considered by averages for an entire nation.
A rise in the cost of living is always sure to accompany or to
closely follow an inflation of currency and will, naturally, prevail
when countries are running heavily into debt — when, in con-
sequence, taxes are high and the individual strives to earn more
dollars than theretofore with the same output of effort, in order
that the greater number of dollars wanted by the government
for taxes, and required to meet his family requirements, shall be
forthcoming. The value of the money unit measured in terms
of commodities is at such times dropping down. Everybody
wants more of the currency for every service performed. Wages
must go up. All prices rise, and as they rise there is new de-
mand for higher wages and salaries. Some one has said that the
movement thus goes on in an endless circle. The illustration
would perhaps be more apt if an ever widening spiral were sub-
stituted for the circle. There has been no remedy for such
conditions, heretofore, except as found in the succeeding periods
of business depression such as have been recurrent during
more than a hundred years with rather surprising regularity
at intervals of about twenty years. At such times the over
speculation incident to rising prices, frequently inflated,
particularly of land, has passed its crest. Appreciation has
been forestalled. New investments in land cease. Loans are
