profit. Crises, unemployment, and "hard times" are often the direct
result of this over-production. Malnutrition, disease, vice, crime,
and pauperism are often its indirect results.

In still other ways the capitalistic system allows of an uneconomical
expenditure of labor and capital. There is no adequate method of
directing labor and capital toward the production of durable and
helpful commodities, and away from the production of luxuries and such
harmful commodities as have not been made illegal. Under competitive
conditions, too, a number of shops or stores may exist in a community
that might easily be served by a single firm. This is wasteful
duplication, just as advertising is a waste when it goes beyond the
point of informing the public as to whereabouts and character of
commodities. Still another source of waste is traceable to an
excessive number of middlemen, each of whom adds to the price of the
product as it passes through his hands.

101. THE INEQUALITY OF WEALTH.--In all of the great industrial
countries of the world, including the United States, the existing
distribution of wealth is roughly in the form of a pyramid, i.e., at
the top or apex of the pyramid there is a relatively small number of
persons who enjoy large incomes, while at the base there is a large
number with relatively small incomes. This inequality is explained by
Professor Taussig on two grounds: First, it is likely that some
individuals originally secured an economic advantage over their
fellows because of inborn superiority of some kind. Second, the
economic advantage thus secured has been maintained from generation to
generation by inheritance. Where, for example, wealth is invested so
that the principal remains intact while a large annual income is
thrown off as interest, the heirs may live in affluence, regardless of