outrages and robberies committed by a sordid world. The butcher is amazed
at the profiteering of the man who sells him shoes; the shoe salesman is
astounded at the effrontery of the theatre ticket speculator; the theatre ticket
speculator is staggered at the high-handedness of his landlord; the landlord
raises his hands to high heaven at the demands of his coal man, and the coal
man collapses at the prices of the butcher.13
We might ask: Did these people deserve to be called profiteers? It seems that
their only crime was selling at higher prices in an inflationary period. In 1922,
Irving Fisher visited Germany, where the post–World War I inflation continued
longer and developed into a hyperinflation. He recalls the conversation he had
with a “very intelligent” woman who ran a clothing store and who offered him
an abnormally low price on a shirt, given the extremely rapid inflation:
Fearing to be thought a profiteer, she said: “That shirt I sold you will cost me
just as much to replace as I am charging you.” Before I could ask her why,
then, she sold it at so low a price, she continued: “But I have made a profit on
that shirt because I bought it for less.”14
Fisher then energetically argued that there was nothing moral or special about
prewar prices or the “dollar of 1913.” German complaints against profiteering
were similar to those expressed in the United States in 1920, which saw 28%
consumer price inflation over the nineteen months between the World War I
armistice and June 1920:
Syracuse (N. Y.) June 2—The John A. Roberts Corporation of Utica, dealers
in wearing apparel, was today fined $55,000 by Federal Judge Harland B.
Howe, following its conviction of profiteering on eleven counts.… The sales,
as explained by the government, were: A dress bought for $16.75, sold for
$35 … a scarf bought for $6.50 sold for $25.00.15
The massive inflation created an illusion of high profits for this seller of
apparel. Economists tried to explain some of the mechanisms at work:
But there is injustice of another kind caused by high prices, and that is the
excessive profits which business men of all kinds—manufacturers, jobbers,
wholesalers and retailers—are able to reap, indeed almost compelled to take
in a period of swiftly rising prices. In these last five years a business man

could grow rich by merely keeping his goods on the shelf while the market
price continued to rise. This is the real story of “profiteering.” It is not a
vicious habit which has suddenly come over the business world and which
can be stopped by putting men in jail. It is a symptom of the disease, not the
disease itself.16
This argument probably convinced only a few people who hadn’t the faintest
idea of inflation’s true impact on corporate profits. Instead, most people were
likely caught in the profiteer epidemic that business had developed a “vicious
habit” of price gouging. The concern with profiteering began to recede only after
consumer prices started to fall, but the concern’s ebb was not exactly
coterminous with that fall, for the epidemic of anger had its own internal
dynamics.
In the United States, the inflation ended by June 1920, and although
consumer prices never got back to 1913 levels, prices dropped rapidly. Until
then, emotions ran very high on the matter. One 1920 letter to the editor stated:
Excess profit is just what its name indicates—the fruits of profiteering, usury;
and if there is anything in the world that should be taxed it is that very thing.
In fact, it should be punishable by prison sentence or even more severely
still.17
The government took these emotions seriously. In 1917, during World War I,
the United States imposed a 60% excess profits tax on profits above the prewar
1911–13 level. The excess profits tax was not revoked until October 1921,
because anger at corporations lingered long after the war was over. The tax
contributed to the 1920–21 depression by encouraging companies to postpone
profits until after the tax was revoked. Meanwhile, people held off buying, not
only because of their anger at selfish profiteers but also because of the perceived
opportunity to profit from postponing their purchases during a time of falling
prices.
Perhaps the 1920–21 depression is better thought of as the 1920–21
consumer-boycott-induced depression. In January 1920, US senator Arthur
Capper said, “Profiteers are more dangerous than Reds,” urging consumers to
“boycott the profit hogs by refusing to buy goods offered at extortionate
prices.”18 To use another term of that time, perhaps the depression was truly “the
1920–21 buyers’ strike,” as captured by the word boycott.