LOWER COSTS AND HIGHER WAGES 203
as cheaply as he can. The higher he gets in earning power
above the line of mere existence, the more he can afford to
put into purchases returning a fair margin of profit to the
seller.
In other words, the employer who keeps wages low hurts
his own industry and all others. . . .
In view of these facts it seems to me rather futile to be
talking of overproduction in the United States. It seems also
that we are only going half way when employers devote all
‘heir attention to the problems of reducing costs, as a means
of increasing distribution. If an equal amount of brains and
energy were assigned to the task of bringing up the wage
levels in certain industries where they are now below the sav-
Ing line, I believe those lines of industry now having the most
trouble would be hard put to it to supply the demand; instead
of proposing, in effect, that we abandon or destroy shoe and
textile factories, their problem would be to meet the demand
with existing equipment. . . .
In my view, what we call the problem of overproduction is
no such “problem” at all. What appears to be the economic
problem of overproduction is really the psychological prob-
lem of underconsumption, which is far less to be feared. In
the long run, I believe, consumption will always catch up
with production.
And our demands only increase as the standards of living
rise. We have more prosperity here than any other country
secause our people need and demand more. But millions of
them have yet to get beyond the existence line, and when we
get them beyond that stage we shall not have to worry for the
present over the problem of overproduction. Eventually that
may be a grave problem, but it is not yet. When that time
comes I expect to see employers within an industry banded
together to maintain wages as the first step toward the insur-
ance of continued prosperity, provided always that as we de-
velop and improve this home market, we also protect it and
keep it to ourselves with wise and proper tariff laws.
