tion of industry the antithetical terms,
over-production and under-production, may be both correctly applied,
according as one regards production as a state or as a process. The
state of trade in a depression is one of over-production--the
industrial body is congested with goods which are not drawn out for
consumption fast enough. This plethora debilitates the industrial
body, its functional activities are weakened. The slackness of trade
thus induced is rightly described as under-production.

It is commonly said by English writers upon economics that the state
of over-production, the redundancy of capital and labour, though found
in one or two or several trades at the same time, cannot be of general
application. If too much capital and labour is engaged in one industry
there is, they argue, too little in another, there cannot be at the
same time a general state of over-production. Now if by general
over-production is meant not that every single industry is supplied
with an excess of capital, but that there exists a net over-supply,
taking into account the plethora in some trades and the deficiency in
others, this assertion of English economists is not in accordance with
ascertained facts or with the authority of economists outside of
England.

Sec. 3. If a depression of trade signified a misapplication of capital
and labour, so that too much was applied in some industries, too
little in others, there would be a rise of prices in as many cases as
there was a fall of prices, and the admitted symptom of depression,
the simultaneous fall of price in all or nearly all the staple
industries, would not occur. The most careful students of the
phenomena of depressed trade agree in describing the condition as one
of general or net excess of the forms of capital. They are also agreed
in regarding the enormous growth of modern machinery as the embodiment
of a general excess of producing power over that required to maintain
current consumption.

Lord Playfair, writing on this subject in 1888, says, "It matters not
whether the countries were devastated by war or remained in the
enjoyment of peace; whether they were isolated by barriers of
Protection or conducted these industries under Free Trade; whether
they abounded in the raw materials of industry or had to import them
from other lands; under all these varying conditions the machine-using
countries of the world have felt the fifteen years of depression in
the same way, though