The Freeman 1972 - The Ludwig von Mises Institute

708 THE FREEMAN Decemberon a sandy beach or on the grassin the pleasant shade of a palmtree), and is also valid in the complextype of economy, endowedwith an advanced technology, withwhich we are familiar. This propositionshould perhaps be regardedas an adaptation of Say's law,which proclaims the equalityandidentity - of supply and demandin the aggregate, and is likewisea universal truth, not to begainsaid, anywhere, in any economicframework.Basic Proposition One is soplainly in view to any intelligentmind that calling for its stressingmay seem to be hardly necessary.In today's cloudy atmosphere, however,I feel that there is amplejustification for explicit statementand restatement of this inescapablelimitation on the many schemesdesigned to banish poverty - asofficially defined - that are beingcurrently proposed. To puncturethe dreams of pie-in-the-sky with\vhich the air is filled - to counterpolitical promises to provide thisor that level of living for everybody- there is surely need for renewedemphasis on the point thatthe total amount we can eat dependson the size of the pie ratherthan the cutting pattern.Production Is PrimaryHere I come to an importantcorollary of Proposition One: production,not cons10nption, deservesrecognition as the primary sectorof economic activity. This positionconflicts with the widespread andpersistent tendency to be concernedwith the consumer's needsand problems - a tendency thathas currently found expression ina wave of governmental interferencein producing and marketingprocesses, and a lot of popularclamor for more of the same. Theultimate objective of economic activity,of course, is to providegoods to meet consumer needs.This is just as true in an economyequipped with an elaborate structureof factories and machines, andyielding a wide range of consumablecommodities and services, asin a primitive community subsistingon the results of hunting andfishing. We don't use machinessimply to make more machines.But since the level of consuming,in total, depends on the level ofoutput it may well be urged thatmaintaining and enhancing productiveefficiency is the matter ofprime importance, and worthy ofbroad popular support. Thus thelong history of opposition to technicaladvance, and the currentslackening of concern as to diligenceand workmanship on the assemblyline and elsewhere, are atodds with Proposition One, socan't be justified in terms of overallwelfare and progress. Preoccu-