improving run-clown properties, planning and laying out new residence sections where demand is likely to go, and in other ways anticipating the needs of the people. On the contrary, they are merely guessing at changing values, holding property, not to improve it, not to supply any need which they have foreseen or created, but merely hoping for higher prices and handsome profits. Undoubtedly many persons have reaped and many others will reap large rewards by this process; also many have lost and many others will lose by it. But this is the important point: all are neglecting any real industry, so that for the public at large there is a scandalous waste of energy, which should be turned to useful purposes.
3. Finally, rising prices have fostered extravagance. Some one has facetiously remarked that we are suffering less from the high cost of living than from the cost of high living. This is in a large measure true. The point here is that the high living has resulted in a considerable degree from the increasing cost of living.
The ordinary consumer feels clearly enough the greater cost of practically everything he buys compared with fifteen years ago; but he also receives a greater money income, whether in the form of profits, interest, wages or even salaries. On the one hand, he realizes perfectly that money is not worth so much as in 1897, for prices are higher; at the same time he has an ingrained feeling that the value of money never changes. He receives now more actual dollars and he feels almost correspondingly better off and spends according to more lavish standards. Further, after paying for food, rent and other necessaries, although the sums are large, he has now left a larger surplus than in 1897 to be used for other things. It is particularly the value of this surplus that he does not understand; it is only apparently larger, actually it is smaller. And it is particularly the spending of this chimerical sum that has led to extravagance.
We have to do here with a peculiar contradiction in feeling. In one sense people are perfectly aware that the value of the dollar has decreased, for prices are higher; but in another sense they have the ingrained notion that the value of the dollar is a fixed, absolute, unchanging thing. We may call this contradiction, the paradox of the sense of value. This paradox is common even among persons trained in the science of money. It has led many classes of people to adopt unwarranted scales of expenditure, especially in reference to amusements and various forms of display.
For an illustration, suppose that since 1897 prices have increased 50 per cent, and wages 40 per cent. Then a working man who received $600 a year in 1897 and spent $400 for food and rent, receives now $840, and spends $600 for food and rent. Naturally he feels better
