"Enough to buy back the product"

Functional prices are those that encourages the largest volume of production and the largest volume of sales. Functional wages are those that tend to bring about the highest volume of employment and the largest real payrolls.

Everyone's income is his purchasing power for buying what others have to sell. Every increase in hourly wages is an increase in costs of production. Besides, if wages are pushed up above the point of marginal productivity, the decrease in employment would normally be from three to four times as great as the increase in hourly rates.


The national product is neither created nor bought by manufacturing labor alone. It is bought by everyone who contributes toward making the product.

The best wage rates for labor are the wage rates that permit full production, full employment and largest sustained payrolls. The best profits are the one that can encourage most people to become employers or to provide more employment than before.

The function of profits
Corporate profits average less than 6 percent of the national income.Some eminent economists believe that after a long period of time no net profit at all may be left over, and that there may even be a net loss. This is not at all because entrepreneurs are intentional philanthropists, but because their optimism and self-confidence too often lead them into ventures that do not succeed. In any period in which there has been net capital accumulation, however, the presumption is strong that there must also have been overall net profits from previous investment. 


(1) profits guide and channel the factors of production so as to allocate / apportion the relative output of commodities in accordance with demand.
(2) put constant and unremitting pressure on the head of every competitive business to introduce further economics and efficiencies.
What to produce  and   how to produce


The assault on saving
Saving is only another form of spending.
Consumer spend less currently (1)partly because they fear they may lose their jobs and they wish to make sure that their power to consume will be extended over a longer period if they do lose their jobs. (2)Expectation of future price.

Unsettlement will be caused in the capital goods industries by a sudden and substantial decrease in savings. If money that is previously used to invest in the capital goods is now shifted into consumer goods, it will increase the price of goods(decrease of purchasing power) and unemployment in the long run (less capital goods)

Similarly, if a huge amount of money used to invest in the consumer goods is now used in the capital goods, the price of goods will decrease and there will be fewer suppliers. (No incentive to produce)