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“Stabilizing” Commodities 101equipment, or those working the poorest land, that are driven out.The most capable farmers on the best land do not have to restricttheir production. On the contrary, if the fall in price has been symptomaticof a lower average cost of production, reflected through anincreased supply, then the driving out of the marginal farmers on themarginal land enables the good farmers on the good land to expandtheir production. So there may be, in the long run, no reduction whateverin the output of that commodity. And the product is then producedand sold at a permanently lower price.If that is the outcome, then the consumers of that commodity willbe as well supplied with it as they were before. But, as a result of thelower price, they will have money left over, which they did not havebefore, to spend on other things. The consumers, therefore, will obviouslybe better off. But their increased spending in other directions willgive increased employment in other lines, which will then absorb theformer marginal farmers in occupations in which their efforts will bemore lucrative and more efficient.A uniform proportional restriction (to return to our governmentintervention scheme) means, on the one hand, that the efficient lowcostproducers are not permitted to turn out all the output they can ata low price. It means, on the other hand, that the inefficient high-costproducers are artificially kept in business. This increases the averagecost of producing the product. It is being produced less efficientlythan otherwise. The inefficient marginal producer thus artificially keptin that line of production continues to tie up land, labor, and capitalthat could much more profitably and efficiently be devoted to otheruses.There is no point in arguing that as a result of the restrictionscheme at least the price of farm products has been raised and “thefarmers have more purchasing power.” They have got it only by takingjust that much purchasing power away from the city buyer. (Wehave been over all this ground before in our analysis of “parity” prices.)To give farmers money for restricting production, or to give them thesame amount of money for an artificially restricted production, is nodifferent from forcing consumers or taxpayers to pay people for doing