"After the First World War the economic problem was no longer one of production. It was the problem of finding markets to get the output of industry and agriculture dispersed and consumed"
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After the First World War, factories and farms could produce far more than before. Wartime mobilization had accelerated assembly-line methods, electrification, chemistry, and mechanized farming. Once the armies demobilized and government procurement dried up, the bottleneck shifted. The problem was not how to make more steel, wheat, or cloth, but how to find buyers with the purchasing power to absorb them.
Prices tumbled in the early 1920s, farmers fell into crisis, and inventories piled up. Milk was dumped while children went underfed, a stark symbol of abundance without access. John Boyd Orr, a physician and nutrition pioneer who later led the FAO, saw that hunger persisted not because fields failed but because markets and incomes failed. He reframed economics as a problem of distribution and effective demand. Production is pointless if the flow of goods stalls between producer and consumer.
He anticipated an insight Keynes would formalize: insufficient aggregate demand can paralyze a productive economy. Raising wages, spreading income more evenly, and building public services expand the market that industry and agriculture need. Internationally, the 1920s and 1930s moved in the opposite direction. Tariffs, quotas, and imperial preferences fractured global markets. Smoot-Hawley invited retaliation. Farmers and factories, deprived of outlets, cut output and jobs, reinforcing the downward spiral.
Boyd Orr favored practical remedies: buffer stocks to stabilize prices, marketing boards, school meals, and coordinated international action to match food surpluses with human needs. His proposed World Food Board would have managed supplies and purchasing power across borders. Though not adopted, the post-1945 system echoed his logic, pairing domestic demand management with institutions like GATT to keep markets open.
The lesson is blunt. When capacity outruns purchasing power, the result is glut, waste, and instability. Prosperity depends less on squeezing more from machines and soil than on building the incomes, policies, and channels that move output into the hands of people who need it.
Prices tumbled in the early 1920s, farmers fell into crisis, and inventories piled up. Milk was dumped while children went underfed, a stark symbol of abundance without access. John Boyd Orr, a physician and nutrition pioneer who later led the FAO, saw that hunger persisted not because fields failed but because markets and incomes failed. He reframed economics as a problem of distribution and effective demand. Production is pointless if the flow of goods stalls between producer and consumer.
He anticipated an insight Keynes would formalize: insufficient aggregate demand can paralyze a productive economy. Raising wages, spreading income more evenly, and building public services expand the market that industry and agriculture need. Internationally, the 1920s and 1930s moved in the opposite direction. Tariffs, quotas, and imperial preferences fractured global markets. Smoot-Hawley invited retaliation. Farmers and factories, deprived of outlets, cut output and jobs, reinforcing the downward spiral.
Boyd Orr favored practical remedies: buffer stocks to stabilize prices, marketing boards, school meals, and coordinated international action to match food surpluses with human needs. His proposed World Food Board would have managed supplies and purchasing power across borders. Though not adopted, the post-1945 system echoed his logic, pairing domestic demand management with institutions like GATT to keep markets open.
The lesson is blunt. When capacity outruns purchasing power, the result is glut, waste, and instability. Prosperity depends less on squeezing more from machines and soil than on building the incomes, policies, and channels that move output into the hands of people who need it.
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| Topic | Marketing |
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