Kalos IV.: Poverty and false accounts

The Poor and neo-poverty

The poor are not diminishing in number even in the richest countries. They are changing in kind. Few of the poor go hungry in plutocracies. They are not bare-footed. They do not even worry very much about whether they will be poorer. Paleo-poverty is a mere shadow of what it once was.

In America, eighty-five percent of the population has lost its immediate fears of abject poverty. The fifteen per cent who have not are mostly dependent upon others because of their poor health, or their extreme youth or age, or their physical disabilities. Half of these are blacks, a fact that compounds the difficulties of race relations.

These paleo-poor are better off in that they have more varieties of food, more electricity, more clothing,plastic articles of many kinds, more antibiotics, better work machinery if they work. They are now less rickety and undernourished. But the neo-poor, who are in many cases also the paleo-poor, make up a larger part of the nation that has become more crowded, more regulated, more mentally disturbed apace with every small prideful announcement by officialdom of the increase in calories ingested per capita. They are so numerous as to give the whole nation an aspect of neo-poverty.

Neo-poverty comes from a lack or deterioration of material things and conditions beyond their surface definitions: the time at labor and the comfort of the means of getting to and from work; the pleasures and ease of one's work; the separation from one's loved ones during normal life; the quality of water, bread,food and drink generally as contrasted with its quantity; the cleanliness of the air and waters; the crowding of facilities of all kinds; the degree of enforcement of social and physical restraints such as parking restrictions or times of arrival and departure of public vehicles; complicatedness of consumption procedures, ranging from bottle-openers and packaging to posting mail and filling out questionnaires. Neo-poverty includes, too, those millions of cases where, in order to avoid abject poverty, at least two members of a family must work. Fully half the white families with one wage-earner had incomes under $7,283 in 1968. In white families with incomes of $5,000 to $6,900, 44.3 % had two ore more wage-earners. Negro families were worse off [1]. In metropolitan America, such earnings were still at the very margins of outright poverty.[2]

Real income of the average person

We are still speaking of emos, material well-being, but we are necessarily edging into Kalos in general. We are taking man as he is and not as he is statistically portrayed in plutocracies. The statistical picture of "advancing emos" is well known: per capita caloric diets, "ownership" of cars and televison sets, and money income are common indicators; then to avoid the most obvious logical failure, the concept of real income is introduced, which means that changes in the value of money are taken account of to show that, owing to inflation, income really is not increasing so much as it seems.

But the self-preservative ideology of the society covers its wounds and contradiction. The rich and the well-to-do live in their mental and physical ghettos. The poor read what is given them to read by the justifiers of the political regime. There is even a kind of natural illusion that, by affecting the leading elements of the poor and average classes, represses the worst side of emotic deprivation. This escalator illusion is easily understandable but nonetheless important: A youth moving towards maturity earns more money. He believes, "things are getting better," as he is lofted up the income scale by aging. He does not realize that he is consuming his life capital too, nor that the average of people of his class remains stationary. In inflationary times he is likely to say, if between 30 and 45 years of age, "Things cost more, fortunately my wages have been going up."[3]

Consequently, although it is not difficult to show how little the real income of the average plutocratic citizen has increased in the past generation, many people are reluctant to believe the fact. Let us adduce some evidence, drawing only upon widely published sources.[4]

Total personal income in the U.S.A. went up from $209 billions in 1947 to $547 billions in 1966.[5] The population increased from 144 millions to 197 millions in the same period. The average income per capita went up from $1430 in 1948 to $2932 in 1966, an increase of $1502. It doubled!

But the articles that make up the narrowly defined "living costs" of the middle income population have been raised in price by a cheapening of the dollar. Therefore a "constant dollar" is introduced. Now per capita income in constant dollars of the American people has risen considerably less, that is by $901.[6] Also, his taxes have increased. In constant dollars, all government revenues rose from $59.6 billions in 1948 to $190 billions in 1966. Some of these taxes may be supplements to his money income in the form of government services directly supplied him, but most of these income-raising taxes (for defence, education, roads, sewers, water, fire and police) were already being supplied in the earlier period.[7] It would be most difficult to say that he is getting superior service in any one of these regards! Hence his real money income has been diminished by his tax increases, adjusted of course to constant dollar value. A total of $466 has to be subtracted from $901, leaving him with an increase of $435 over the early twenty year period.

However, certain annoying costs have increased without their being reflected in his "cost-of-living" dollar. Among them are the following, for which an average cost has been assigned:

The average time a worker took to get to work and back home increased from 1947 to 1966 by 40 unpleasant minutes. Some 48 million workers were involved in 1966. Transportation conditions worsened in large cities; towns grew into cities; and a great many more farmers became workers over the period.[8] If the average employed person earned $2.50 per hour, then the per capita decrease in income [9] (or cost of earning an income, if you will) was about $106 per year. The slight decline in the regular number of hours worked is buried in paid overtime, which has already been reflected in income figures.

Subtracting $106 from the remainder of the increased per capita income gives $435 -$106 or $329 per annum per capita increase.

At this point, the pollyannas will cry "foul". They will say, "You are using an average. The rich have earned less and less." Not so. There has been very little change in the proportion of income and taxes that the upper income groups have received. Or the other income groups, for that matter. This will be shown below. So let us move on.

The loss of real income from the domestic services of family members has detracted from their earnings. No one has yet shown how much, if any, the personal product of the average dependent has increased when employed as opposed to working for the home "without compensation." One-third more women worked in 1966 than in 1947. They earned $621 on the average more then in 1947. The difference over the two decades amounts to $12.4 billions in current dollars or $7.45 billions in constant dollars. The $7.45 billion should be reduced by 30% (the loss of non-monetized prior income). The 30 % amounts to about $11 per capita which is to be subtracted from $329, leaving $318.[10]

It is doubtful that material improvements of the modern age have liberated women from housework. A single woman without children was shown in 1964 to pass twenty hours in house work, a married women with four or more children 39.7 hours.[11] Non-Kalotic liberation, liberation on paper and in form alone, only permits Parkinson's law to move in: work increases to fill the time allotted to it. There may actually have occurred since the Nineteenth Amendment gave the vote to women a decline in the productivity of women in American (and other societies) because so much of larger value that woman used do is now given over to the market without a compensatory freeing of female energies and abilities for kalotic tasks.

Non-monetary and non-recorded income from farming, gardening, hunting, and fishing has declined. Some 30 million people were involved in such changes in the two decades. The farm population dropped by 13 millions; about 16 millions moved from semi-rural homes and homes with gardens to landless, wholly urban sites; another million less that before were in direct contact with bartered, caught, or given supplies. If all of the efforts of the "breadwinners" among them brought in the equivalent of 60 cents per capita per day, a total value of $6.6 billions of $33 per capita would have been lost. 

Another group of costs of living have not yet been monetized by the pollyannas who prepare statistics on income. These include the need for medical aid as compared with the purchases of medical and health aids; purchases have gone up, but the unhealthy conditions of life today have increased much faster and these are not accounted for. At least 20 % or 3.9 billions of the increased annual medical and health spending should be regarded not as benefit but as a loss. [12] Assuming that medical and health care cancels out all of the pain and loss that requires it in the first place, which it does not, we must nevertheless deduct $20 per capita from the increase in per capita income. 

Nor are the nuisances of noise, pollution, and inability to find uncrowded recreation facilities within easy distances given a a cost basis in adjusting the improvement of living standards. The cost of soap is a little less and there is a choice of perfumes but the dirt that has to be washed out has increased. An unprovable but reasonable sum of this cost would be $75 per capita per year.[13] Subtracting $50 as the cost in 1947, we get a net cost of $25. The revised income change is now $240.

Some 2,820,000 units of housing became available in the U.S.A. in 1966 through construction or death. But a million units were destroyed or merged, and 2.27 million new households were created. Despite the huge volume of housing loans, the housing situation by at least this important criterion was deteriorating.[14] In one year, March 1966-March 1967, 18 % of the 58 million American families moved; neighbourhoods, as contrasted to units of housing are disappearing from the plutocracies. This is a human disaster of immense proportions.[15]

Thus a number of new social costs have not been translated into dollar equivalents: crowding; impersonalism of work; smaller apartments; etc. The increased pressures of work are not included in our estimates of costs, nor the increased uncompensated overtime of millions of executive employees. We have had to use mostly ingredients of a tangible and orthodox type in our calculations. On the other hand, some important discoveries during the twenty year period brought real advances in the quality of living without reflecting as costs: improved plastic and glues are one example; certain synthetic fibres are another. Some of the increase in electrification should be counted as net income gain. On the whole, however, many changes that appear on their face as gains(e.g., tranquillizers, pleasure boats) dissolve mostly into indirect costs of other activities or substitutes for other objects. Great piles of material are made up, too, that simply become choked in the channels from production to consumption, and bring further swelling as massive production occurs to disgorge the first type of blockage. And, of course, the economy was busy in 1947, certain surpluses of durable goods were stockpiling in stores and homes so that this accumulation was more obvious in 1967 than in 1947, and to that extent, people were better off. These phenomena helped build the illusion of rapid material progress.

But let us complete the estimate of emotic change between 1947 and 1967. The costs of compliance with new tax regulations is inadequately reflected by the payrolls of government, and may be included in the calculations. Opposite every internal revenue agent stand scores of citizens who must pay hours and days of time. One hundred dollars per capita per year does not seem too much to assign to these costs, but the difference between 1947 and 1966 would be perhaps only $40. The new real increase in income, calculated between 1947 and 1966, comes to $200.00.

Some new gain must be called for to rescue this miserable figure. And there is one, only one, that responds. A huge onetime pay increase has been given many persons through the consumer credit system and the home mortgage system, both of which expanded enormously between 1947 and 1966. Consumer credit rose from $11.6 billions to $94.8, billion or by $83.2 billions. The net unpaid balance of consumer debt at the end of 1947 was $8 billions and at the end of 1966 was $63 billions. All residential mortgages of commercial and mutual savings banks rose from $17.5 billions in 1950 to $72.5 billions in 1965. Many economists will question this procedure, but we are trying, in the face of the insuperable statistical odds of a ridiculous social accounting system, to get to the essence of the economy, the quality of life afforded by it. It is proper, then, to consider that money which is borrowed against the future and spent now does to a considerable degree constitute income. The use of appliances and houses that are not fully paid for in dollars are indeed real income. Therefore, we must add something in the order of $55 billions of consumer credit and $55 billions of residential mortgages ($76 billions in constant dollars) to the real income of 1966 Americans, by contrast with 1947 Americans. It adds $391 per capita. This reverses the declining income per capita and sends it upwards from $200 to $591.

The limits of this influx of income have been approached; the average person cannot borrow much more and pay it back from his slowly increasing annual wage. Only a jump in wages of unheard-of-proportions could enlarge greaty the credited increase in purchasing power. Note further that the credit influx has almost all been concentrated on automobiles, furniture, refrigerators, television sets, homes, and other material objects. (Mammon screams for material collateral). Most of these have high maintenance costs; increased maintenance spending does not contribute to the quality of life; but this factor is omitted, nor do we allow for it here. One should note, too, that this "raise" was no given to the poor, who lack credit. It went to the lower middle and middle income groups, and goes far to explain their acquiescence to what could otherwise be a more painful economic situation.

We have arrived as far as wished to go, now, in respect to real income. In 20 years, the average American soul is nourished materially by about $600 more than he could count on in the beginning. His real income rose by one-third. That comes to a $30 per year raise.[16] It has taken spectacular innovations in credit system to achieve over half of this. The idea that "every man has credit", which is not even yet fully realized or admitted, spurred the government and financial elites forward. Industry followed with productivity. The plutocratic society piled up the goods-irrationally (for it did not know what it was doing), uncoordinatedly, and taking a step backwards for every step forwards.

That, alas, must be the conclusion. The hullabaloo of the politicians, press,advertisers, and other exporters of phony statistics is celebrating a fraud. Considering what man has learned and man's potential, the true record of the past generation has proved a colossal failure of the American plutocracy.

By this time, given the great recent technological and organizational discoveries, the average American should be living in clean, well-constructed cities, enjoying extensive recreational opportunities, and working under pleasant conditions. He should feel uncrowded. The materially poor should have disappeared; the old should have adequate personal income; the uneducated blacks and dislocated whites should be equipped with the skills of modern life. A very large constructive activity should have been maintained in the developing world. Instead, the elaboration of this one set of figures has revealed what has happened.

The money has been inflated and the people fooled. Heavy tax burdens, mostly for military purposes, have brought only anti-kalotic dyspending in vast amounts. Transportation and traffic deficiencies between home and work have worsened. The uneconomic `faking' of outside work by women and the loss of home and family functions have lowered the gains from new machinery and more capital. The loss of rewarding non-monetary activities and dyspending for anomic activities such as mental disease, useless travel, and drugs, have again reduced the expected gains of the advancing industrial development. Many nuisances have been magnified and have added to the true cost of living. Environmental pollution has reached the stage when serious biologists doubt the survival of man, even without a nuclear war.[17] The bonus of "creditscript" that has permitted a vast increase in real income has done so in respect to certain commodities and not on the basis of kalotic choice.

The Gross National Product of the U.S.A. more than doubled between 1947 and 1966 and the National Income tripled; the estimated net National Wealth also more than doubled.[18] These rises paralled the rises in Personal Income that have been already analyzed. All such figures are to be taken seriously, but then must be seen for what they are. They indicate a modest rise in material emos and a much larger increase in sheer activity of a thousand kinds, including many types that are anti-kalotic in character and effect.

The damage that these deceptive statistical concepts wreak in public discussion and policy formation should inspire a prompt and radical swing over to the sample survey method of eliciting vital information on the kalotic condition of every population. The difference between the two sets of techniques is as great as the difference between feeling a person's forehead to judge his health and applying a battery of physiological and mental tests to do the same.[19]

In the interim, we should utilize and develop a modified concept of the GNP and related indicators. The kalotic GNP would be the conventionally calculated GNP less uncalculated costs (gains) and dissatisfactions (satisfactions). Or Kalotic GNP = total Kalotic money equivalent of all expenditures in a nation. Until a "Kaler" is used for all social accounting, money will have to remain the measuring unit of economic welfare, even non-monetized welfare.[20]

Kalotic accounting

Plutocracy will end in paradox and paroxyms. Proclamations of towering achievements in Gross National Product and personal income will resound even while mankind suspires agonizedly in neo-poverty. The tragedy results not from errors of bookkeeping but from a basically false philosophy which the bookkeeping reflects. That philosophy asserts the equal value of all effort and urges ever more effort. It asserts the equal value of all consumption and applauds all consumption.

As a result, between the high kalotic potential of modern genius and the low kalotic level of mankind stands a great desert of unkalotic economy. The desert is produced from four types of activities:

I. Production of Waste Products : includes military goods and services, lunar explorations, high forced pricing of many goods under monopoly or statist rules. Out of a trillion dollars of GNP $100 billions will go to this (10%).[21]

II. Production of Unaccounted Costs: includes costs of pollution, crowding, communication, and many other results of uninformed (and often unwitting) industrial policies.[22] Price: about $200 billions (20%).

III. Conspiratorial Dysproduction: includes planned obsolescence without compensatory efficiencies; post-minimal competitive advertising, fraudulent work and non-work of all kinds. Estimated cost" $100 billions (10%).

IV. Systematic Absorption of Production: includes elaborate energy-spending devices and services for doing simple or unnecessary jobs. Price: about $300 million (30%).

Thus we estimate that 70% of the GNP of plutocracies is cancelled out as worthless. All that is even remotely Kalotic in present-day plutocracies can be accomplished at one third the cost.

To show that it is worse than worthless, that it is harmful and will cause the demise of the system, we need only to move from the "cash-flow projections" to the "assets-and-liabilities" balance account.

"The "assets" of plutocracy rise each year, even per capita. The U.S.A. contained structures, inventories, and equipment valued in constant dollars at $123 billions in 1900, $330 billions in 1940, and $1022 billions in 1958.[23] "Assets" in land rose perhaps one thrid as fast. But the assets are appreciated by a logic which would be fraudulent if it were not so obviously a matter of stupidity. Land containing structures, for example, rises spectacularly in money value with the rise in population. In fact, it should rise only with productivity and Kalotic use. Machines rise buoyantly; but machines are probably 70% employed in, if not designed for, the above unkalotic categories. And so forth.

Since we have already etched out in some detail the case of the average person's real income, we can dispose of the assets paradox and paroxysm more briefly. The science of economics has never given us a proper statement of the assets of a country. Alfred Marshall, true, and many others, have spoken of land, labor, capital, and organization as the agents of production. These are not generally combined and summated in a useful form for Kalotics.

Suppose that what is known about a group's assets are calculated emotically -- that is, with reference to the total disposable and hence destructible basis for Kalotic work. Whatever can be emotically developed, used, and destroyed is an asset. Nobody yet owns the ocean; but it is an asset. No one owns the air; but it is also an asset.

No one owns a developed human mind, but it is the greatest asset of all. It is nonsense to say that these assets and other cannot be calculated. We see them born and occurring under our eyes; we see them destroyed continuously and now alarmingly; and we are told to leave them out of our computations. As soon as a usable thing can be destroyed, it becomes an asset and a Kalotic asset if its use is Kalotic.

The science of economics was sired by the ledgers of medieval Italian businessmen and has ever since been limited to their narrow notions."Wasting assets" then had a meaning restricted to what few things there were to waste. Nor could even the socialists and communists, once in power, revolutionize bourgeois accounting economies. But the present times are desperate ones for world resources.

Everything Kalotic in this world can be wasted. The foundations of the economics of all groups and countries must hereafter, therefore, be estimates of the assets upon which Kalos is based. They will accord with and match the terms in which Kalotic Input-Output Accounts are presented. The basis for estimating and inventorying capital assets of the world-if not at cost price (God bought them for us) or market (the greatest assets such as air or art are uncontrolled or held off from sale)-can be their "replacement" price. If it will cost $15 billions to cope with the heroin addiction problem in the U.S.A.,[24] $50 billions to cope with water pollution, $100 billions in cities to build housing to replace abandoned rural housing in the American plutocracy, etc.,etc., then obviously the United States has been running down its assets, not rushing forward as the statistics assert. Our "depreciated assets" indicate, too, how much the world's assets generally must be declining per capita.

The people of the world will truly appreciate the economic diseases that afflict them, the destruction that awaits them, and the directions in which the world must move, when Kalotic accounts are openly presented to them.

Notes IV

1. New York Times, November 18, 1968. [Back]

2. Cf. New York Times, March 23, 1969, for minimum standards and their costs.[Back]

3. When in 1968 a sample of American heads of families were asked to estimate their expected income for the year, 74% of the youngest group (under 25) said "higher," 69% of the 25-34 group, 59% of the 35-44 group, 55% of the 45-54 group, 38% of the 55-64 group, and 27% of the 65 and older group. (Page, in George Katona, W. Dunkerlberg, J. Schmiedskamp, and F. Stafford, 1968 Survey of Consumer Finances, Survey Research Centre, University of Michigan, Ann Arbor, Michigan, 1969.) Beltelheim, op. cit., noted the same phenomenon in India (op. cit., p.330). There even nominal wages lagged behind the rise in productivity of labor.[Back]

4. A.W. Sametz, "The Measurement of Economic Growth," (p.77 in E.B. Sheldon and W.E. Moore, Indicators of Social Change, New York: "Although the national income and product accounts for the U.S. are among the best known and reputable economic series, they are not very useful to measure economic growth and welfare. " He makes a noble efforts to use them. We use some of them here. William C. Mitchell, in "The American Polity and the Redistribution of Income," 13, American Behavioural Scientist (1969) pp. 210-13, 210, surveys various studies and concludes, "Some redistribution has taken place as a result of both expenditure and financing operations but....the overall gains toward equality have not been remarkable."[Back]

5. Ismail Abdel-Hamid Sivageldin has performed the service of monetizing (but in conventional GNP terms, not in Kalotic terms) family income. "The average value of a family's unpaid output was estimated at almost $ 4000 or about 50% of disposable income in 1964. (Non market Components of National Income, Ann Arbor: Institute for Social Research, 1969, p. 120). Cf. Alfred de Grazia and Ted Gurr, American Welfare (New York: New York University Press 1969), Chapter VIII on monetizing self-help and voluntary welfare.[Back]

6. The Bureau of Labor Statistics consumer price index uses the 1957-59 dollar as the norm of 100, and calculates the 1947 dollar at 128 and the 1966 dollar at 88. The decline was 31 to the dollar.[Back]

7. Cf. Robert Dorfman, ed., Measuring Benefits of Government Investments (Washington, D.C.: The Brookings Institution, 1965), which concludes generally that the benefits cannot presently be measured. Our position is that they can be and must be.[Back]

8. A.W. Sametz presents a technique of measuring the inflated costs of urban civilization in "The Measurement of Economic Growth." (Sheldon and Moore, op. cit., p.77)[Back]

9. One might ask why the father's increased cost of doing business should be reflected in a per capital loss of a child's income. Apart from the logical explanation that we are working with the per capita concept, which like other simple statistical indicators, has to be carried along from assumptions to assumption, there are experiential grounds: the child's no-income reduces the father's income generally; the child furthermore suffers from the parent's absence, etc. Cf.S.de Grazia,Time, Work and Leisure (New York: Twentieth Century Fund, 1960 and Doubleday Anchor Books, 1962) for valuable treatment of the economic sociology of work through history.[Back]

10. It is remarkable how slowly women have advanced economically in America, not to mention politically. Socially there has been a relatively marked change. The total increase of the working force in America by the addition of slightly over a third has increased the American per capita income by only $33![Back]

11. Sivageldin, op. cit.,p. 51[Back]

12. The distribution of the increase "care" bears watching too. Public health officials testifying before the Senate Select Committee on Nutrition and Human Needs declared from their personal survey of health care among the poor that "The crisis is not coming; it is here...We are shocked and still reeling." (Baltimore sun, November 4, 1969.)[Back]

13. Government economists at the National Air Pollution Control Administration in North Carolina have estimated that pollution costs U.S. citizens $14-$18 billions in direct economic loss annually. (See Tom Alexander, "Some Burning Questions About Combustion," Fortune, February, 1970, p. 130.)[Back]

14. John B. Lansing, C.W. Clifton, and J.N. Morgan, New Homes and 'Poor people (Survey Research Center, University of Michigan, Ann Arbor, 1969), p. 19.[Back]

15. Cf. New York Times October 12, 1969,page 1, "Troubles Beset Public Housing Across the Nation: Some Officials Voice Fears of Catastrophe..."etc. ad nauseam[Back]

16. A quick general check on the previous accounting may be made by comparing Disposable Personal Income per capita at constant (1956) prices in 1945 and 1965. (Cf. Statistical Abstract of the United States, 1966. Personal Disposable Income means roughly all wages and profits personally received, less taxes.) In 1945, the figure was $1642, in 1965 $2198, an increase of $556 for the twenty-one years. Without making most of the allowances we have made above, the increment of real income per year was $26.[Back]

17. Barry Commoner, Director of the Center for the Biology of Natural Systems of Washington University of St. Louis asks "Can We Survive?" I Washington Monthly (1969), pp. 12-21, especially pp. 19-20. See paul Shepard and David Mckinley, eds.,The Subversive Science (Boston: Houghton Mifflin, 1969), regarding current theories of ecology including in the words of Professor B. Commoner's first law: "Everything is related to everything else."[Back]

18. GNP rose from about $310 to $648 billions, the National Income (GNP-depreciation)rose from $199 to $610 billions. Estimated National Wealth rose from $1121.5 billions in 1950 to $2,250 billions (military assets included) in 1966.[Back]

19. An example may indicate some problems of the conventional GNP. If everyone in America over the age of 12 is given a personal copy of this book to read, the USA/GNP will tend to rise by .0001 percent. But since, in taking the time to read this book, they will lessen their normal rate of other expenditures, the GNP will go down by about .0002 percent.[Back]

20. Pigou helped to originate the practice, and the subsequent amnesia of non-monetizable value. Cf.Paul A. Samuelson, "Evaluation of Real National Income," Arrow, et al. cit., p. 423.[Back]

21. The U.S.A> GNP will soon reach this figure. The world will soon reach a figure of twice the sum. Scientists, the paragons of rationality, do not create enterprises of high "efficiency". An irate Britisher, J.D. Bernal, estimated the "efficiency of research" in 1939 at 2% "that is about 2 percent of what could have found out and been done with the resources and men available was in fact carried out." He implies (1964) that the situation hasn't changed much and urges a better "science of science," (The Social Function of Science [Cambridge, Mass: The M.I.T. Press, 1967] p. xxv.)[Back]

22. Consider the following: "Unfortunately, until very recently upstream mills were profoundly disinclined to spend anything to relieve downstream distress. They were accustomed to regarding the waste-disposal capacity of the stream as a free good. But wastes discharged upstream can impose costs of one kind of another downstream...because a paper mill, for example, can get by without cleaning up its wastes, its costs of production are artificially understated. Since in a competitive economy prices tend to reflect production costs, the mill's prices may also be understated. If so, the result is greater demand for paper than if prices reflected the full costs of paper production-both the costs borne internally by the mill and those borne externally, downstream. At the same time, some downstream producers, fisheries,perhaps may have higher costs and prices tending to depress demand. Society thus gets relatively too much paper and too little fish, and consumers of fish in effect subsidize consumers of paper." (Sanford Rose, "The Economics of Environmental Quality," Fortune Magazine [February, 1970]. p. 120).[Back]

23. See U.S. Statistical Abstract (1966), pp. 346-7[Back]

24. Statement by Senators Javitz and Goodell and Mayor Lindsay of New York City in the New York Times, October 3, 1969.[Back]