Why must industry as a whole slow down because of 'overproduction,' when millions are suffering from 'underconsumption?' Here is at least one economic question that anybody can answer. The main reason, plainly, is that in a period of increased productivity the time soon comes when the people who want the goods which have already been produced lack the money wherewith to buy them. This answer, however, merely brings us to another question, and one which appears to baffle the entire financial and industrial world: What causes this deficiency of purchasing power? Or, to put the question in another way: Why is it impossible for the people, as consumers, to acquire and enjoy all the commodities which, as producers, they are perfectly able and willing to make?
The concluding section of this book, Part V, is an attempt to answer that question. The answer is based no less on Money, a book issued two years ago by the Pollak Foundation for Economic Research, than on Parts I to IV of Profits. The reading of Money is, therefore, to some extent a preparation for the reading of Profits. Since, however, some of those who have not read the earlier work will read Profits, we here give references to various parts of Money and summaries of other parts.
The reader of Profits who wants to get the substance of what we have to say, without going very far into the technical analysis or statistical basis, can take short cuts by following the guide-posts along the way. The reader who, on the other hand, wishes to pursue the statistical inquiry beyond the text will find references in the Appendix.