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From The Militant, Vol. 12 No. 34, 23 August 1948, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Whenever you pin a good Republican to the wall and ask, “What is your program to combat inflation?” he’ll answer quick as a jack rabbit, “Supply and demand!”
This mysterious little formula – sometimes spoken of as “the natural law of supply and demand” – is supposed to provide the answer to all economic questions.
However the capitalists – and that goes for Republican and Democratic varieties – don’t demonstrate in practice any too much confidence in the workings of their all-inclusive “law of supply and demand.”
You don’t see food prices coming down any, for instance, through the operation of this “natural law.” And the reason is very simple. The government is taking hundreds of millions of your tax money and giving it to the big grain, potato and meat producers to “prop up” prices.
Read the 1948 Republican platform from cover to cover and you won’t find anything about the government’s policy of spending your money to keep up food prices. The Republicans even boast about what they’ve done for “farm support” – meaning government financing of inflated food , prices.
Right now, the government is buying potatoes for $1.55 a bushel to keep up the prices. You get soaked twice – first you pay high taxes for “price support” and then you pay the high price for the tax-supported potatoes.
But that’s not all. In 1946, the government spent 90 million dollars for potatoes that it dumped or burned. This raised an outcry from the suffering public. So now the government freights and ships potatoes at the cost of another 40 cents per bushel and sells them to alcohol processors for 9 cents a bushel. Some of the potatoes it mills into flour and sends to Germany and elsewhere at a cost of another 70 cents per bushel.
This year we are going to pay, through the government, another 70 million dollars so we can have the privilege of buying potatoes at twice or three times the price they would be without “price support.” And that goes for corn, wheat, oats, cotton, beef and other essential products.
The latest Department of Agriculture estimates reveal that the grain and cotton crops this year will be the greatest oh record – far exceeding anything expected by the government or farm experts. Do you hear the Republicans clamoring for the “law of supply and demand?” Not on your life!
The Aug. 16 N.Y. Times reports that Chicago Board of Trade members claim “that the Government’s support of prices for grains are the only preventives against a decline in the market.”
A decline in the market means a decline in profits – and that’s a fate worse than death for the capitalist. So you don’t hear any talk about “the natural law of supply and demand” when it comes to letting that “law” operate to the detriment of the commodities speculators and food trusts. That’s when Republicans and Democrats alike say “to hell with the law of supply and demand” and vote with both hands for “price support” – that is, inflation.
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Last updated: 16 October 2022