To speak of an insufficiency of the supply of p is empty rhetoric if it does not indicate the various products m which were produced in too large quantities with the effect that their production appears now, i.e., after the event, as a waste of scarce factors of production.
DBx: When stated, the point made here by Mises is obvious. Yet many discussions of the state of the economy are conducted in ignorance of this point. If we really do have, for example, too little urban mass transit, what goods and services do we have too much of? We really might have too little urban mass transit, but getting more of it will cost some people something.
Mises’s point also implies that those who assert that “too much” production occurs of some goods or services must acknowledge that too little production occurs of some other goods or services. If, for example, the Chinese government really does arrange for Chinese steel producers to produce “too much” steel, then it is necessarily the case that the Chinese government directs Chinese workers and other inputs in China away from the production of other outputs. Every atom of input used in Chinese steel mills is an input that could be used in other Chinese production facilities – other Chinese production facilities whose quantities of outputs are made artificially low by Beijing’s policy of making the production of steel in China artificially high. (Of course, protectionist groups in the U.S. and other countries never mention this underproduction.)