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ssss1That is to say, it costs not less than £1000 in new capital outlay to equip a working man with organisation and appliances, which will render his labour efficient, and to house and supply himself and his family. Indeed this is probably an underestimate.
On the other hand Deflation, as we shall see in the second section of the next chapter, is liable, in these days of huge national debts expressed in legal-tender money, to overturn the balance so far the other way in the interests of the rentier, that the burden of taxation becomes intolerable on the productive classes of the community.
II.—Changes in the Value of Money, As affecting Production.
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If, for any reason right or wrong, the business world expects that prices will fall, the processes of production tend to be inhibited; and if it expects that prices will rise, they tend to be over-stimulated. A fluctuation in the measuring-rod of value does not alter in the least the wealth of the world, the needs of the world, or the productive capacity of the world. It ought not, therefore, to affect the character or the volume of what is produced. A movement of relative prices, that is to say of the comparative prices of different commodities, ought to influence the character of production, because it is an indication that various commodities are not being produced in the exactly right proportions. But this is not true of a change, as such, in the general price level.