over-production. If there is an over-production of boots, trade is
flat, the wholesale dealers find they are making no profit, they stop
their purchases, the workmen are thrown out of employ on a large
scale. To this the reply is that there is almost a necessary
alternation of up and down in every particular trade, whether the
efficiency of the workmen is high or low. If trade is good, the large
dealers will extend their purchases, and very commonly rather over-
extend their purchases: a reaction follows, and _vice versa_ when
trade is bad.

But it must be recollected over-production in all trades at once is
impossible: capital is now not buried in pots by our great joint-
stock banks; if one trade is at standstill the capital is carried to
the most remunerative use that the experienced bank secretaries can
discover. If agriculture is, as we have lately seen it, in a
depressed state for years, inasmuch as wheat is "over-produced" in
America till the price in England falls to 36s. per quarter (and
less), at which it hardly pays to produce it in England; this of
itself implies an enormous spur to all other industries--the real
cost of labour has in them fallen (for the labourer will not be able
to keep to himself the whole benefit of cheapened food)--the rate of
profit in all other industries has risen (_pro tanto_). If we ever do
arrive at a state when all the desires are fully satisfied--when
there is over-production in all industries--we shall have general
reduction in the hours of labour: "efficiency" will take that form.



2. RECIPROCITY AND RETALIATION.