Russel Wallace : Alfred Russell Wallace (sic)
Our fellow-worker in Tasmania, Mr. A. J. Ogilvy, has issued a tract on the above subject in which he shows, I think conclusively, that the alleged increase of the value of gold, as a cause of low prices of other commodities, is purely imaginary, and moreover is under present conditions quite impossible. And, so far as the alleged general fall in prices is real, his explanation of the phenomenon as being due to land-monopoly, and to the continuous increase of interest-bearing securities, or false capital, is also quite correct. It is also clear, as he states, that prices have fallen in many cases through the natural effects of improved processes, larger demand, or cheaper raw materials; and again, much of the lower prices of which manufacturers complain is in the case of wholesale prices only, the price to the consumer remaining what it was or being even dearer.
There are only two points on which I differ somewhat from Mr. Ogilvy, (1) the great amount of the fall in prices and whether it is really general, and (2) the assumption throughout the article, that wages have fallen as much as prices, an assumption which is necessary if his general arguments are sound, but which is contradicted by all modern authorities, and which is only true in an indirect way.
The first sentence of Mr. Ogilvy's article runs as follows: "It seems to be admitted on all sides that the pound sterling has about twice the purchasing power that it had a generation ago." And further on he speaks of "that general fall of prices which producers all round complain of." Now if "capitalist producers" is put instead of "producers", I think the statement may be to a large extent true; but the "general fall of prices" is used continually as if it were a fall of retail prices (as it is in some few cases) and the conclusion is drawn that the whole of the workers must be much better off than they were 40, 50, or 60 years ago. Now this is most misleading for two reasons, first, because many of the necessaries of life are dearer than formerly, and secondly because large masses of workers have as low wages as 40 years ago or even lower, while, an even larger number owing to irregularity of work live continually on the verge of starvation.
As to the prices of necessaries from 30 to 50 years ago my own recollection and references to some old account books may be of interest. But we must first limit ourselves to necessaries. There come under four heads--food, house, clothes, fire. Food is probably on the whole cheaper, but not so much as is generally assumed.
Copyright: Alfred Russel Wallace Literary Estate.