The Coal Problem of Saskatchewan

THE greatest problem confronting business managers in modern times is not production, but distribution. It would be easy to expand productive output, but it is difficult to find markets for all that is produced. The fundamental source of economic difficulty, in the view of many observers, is a lack of proper balance between productive capacity and consumptive capacity. The studies conducted by the Brookings Institution on the general subject, "The Distribution of Income in Relation to Economic Progress", have led to conclusions of far-reaching significance, which may be summarized briefly as follows: (1) We have never lived beyond our economic means or capacity. (2) We have not been suffering from general overproduction. (3) We have not as yet reached a stage in our economic evolution at which it is possible to provide adequate standards of living for everybody. ( 4) It would require less than a 25 per cent increase in purchasing power among the masses to absorb our full productive capacity. (5) Production-curtailment programmes-whatever their merit in meeting temporary maladjustments-can only lead to national impoverishment. (6) Our inability to find markets adequate to absorb the full output of our productive establishments is explained by the unequal distribution of income and consequent restricted flow of purchasing power through consumptive channels. (7) The slow rate of growth of consumptive demand serves to retard the rate at which new capital is constructed, and hence the rate of economic progress. (8) The primary need is a rapidly expanding total income, and a broader diffusion of this income among the masses of the people. (9) A broader diffusion of income can best be achieved by reducing prices as rapidly as increasing efficiency will permit. That is to say, the benefits of technological progress, mass production, and low unit costs must be promptly passed on to consumers in the form of lower prices-giving more for each dollar.