Pretend I am a railroad owner in the 1800s how would I respond to the statement "alling prices are the fault of farmers?"

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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It would be relatively easy to make this argument, but it would probably not be particularly fair to do so.

In a market economy like our own, prices are largely determined by the forces of supply and demand.  When demand for a product drops, its price drops as well.  When the supply of a product increases, its price drops.  In the United States in the late 1800s (which is the time period I assume this question is meant to refer to), the demand for farm products was not dropping.  Therefore, you could argue, the decline in prices had to be due to increases in supply.

If an increase in supply was the cause of the falling prices, clearly (you can argue) the farmers are to blame.  It is the farmers who are producing too many crops and causing the prices to fall.  If farmers want the prices to rise, they need to stop producing so much.

This is, however, not really fair.  American farmers were not solely in control of how much got produced.  There were farmers overseas who were also producing and helping to increase supply (and thereby lower the prices).

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