"The enormous development of steam communication and the spread of the telegraph over the whole globe have caused modern industry to develop from a gigantic star-fish, any of whose members might be destroyed without affecting the rest, into a μἑγα ζωον which is convulsed in agony by a slight injury in one part. A depression of trade is now felt as keenly in America and even in our colonies as it is here. Still, in the process of time, with the increase of organisation and decrease of unsound speculation, this extension of the market must lead to greater stability of prices; but at present the disturbing forces often outweigh altogether the supposed principal elements."[194]
The organisation of capital under the pressure of these forces is doubtless proceeding, and such organisation, when it has proceeded far enough, will indisputably lead to a decrease of unsound speculation. But these steps in organisation have been taken precisely in those industries which employ large quantities of fixed capital, and the admitted fact that severe fluctuations still take place in these industries is proof that the steadying influences of such organisation have not yet had time to assert themselves to much purpose. The competition of larger and larger masses of organised capital seems to induce heavier speculation and larger fluctuations. Not until a whole species of capital is organised into some form or degree of "combination" is the steadying influence of organisation able to predominate.
§ 6. But there is also another force which, in England at any rate, under the increased application of machinery, makes for an increase rather than a diminution of speculative production. It has been seen that the proportion of workers engaged in producing comforts and luxuries is growing, while the proportion of those producing the prime necessaries of life is declining. How far the operation of the law of diminishing returns will allow this tendency to proceed we cannot here discuss. But statistics show that this is the present tendency both in England and in the United States. Now the demand for comforts and luxuries is essentially more irregular and less amenable to commercial calculation than the demand for necessaries. The greatest economies of machine-production are found in industries where the demand is largest, steadiest, and most calculable. Hence the effect of machinery is to drive ever and ever larger numbers of workers from the less to the more unsteady employments. Moreover, there is a marked tendency for the demand for luxuries to become more irregular and less amenable to calculation, and a corresponding irregularity is imposed upon the trades engaged in producing them. Twenty years ago it was possible for Coventry ribbon-weavers to "make to stock" during the winter months, for though silk ribbons may always be classed as a luxury, certain patterns commanded a tolerably steady sale year after year. Now the fluctuations of fashion are much sharper and more frequent, and a far larger proportion of the consumers of ribbons are affected by fashion-changes. Hence it has become more and more difficult to forecast the market, less and less is made to stock, more and more to order, and orders are given at shorter and shorter notice. So looms and weavers kept idle during a large part of the year are driven into fevered activity of manufacture for short irregular periods. The same applies to many other season and fashion trades. The irregularity of demand prevents these trades from reaping the full advantages of the economies of machinery, though the partial application of machinery and power facilitates the execution of orders at short notice. Hence the increased proportion of the community's income spent on luxuries requires an increased proportion of the labour of the community to be expended in their production. This signifies a drifting of labour from the more steady forms of employment to those which are less steady and whose unsteadiness is constantly increasing. A larger proportion of town workers is constantly passing into trades connected with preparing and preserving animal and vegetable substances, to such industries as the hat and bonnet, confectionery, bookbinding, trades affected by weather, holiday and season trades, or those in which changes in taste and fashion are largely operative.
Thus it appears there are three modes in which modern capitalist methods of production cause temporary unemployment. (1) Continual increments of labour-saving machinery displace a number of workers, compelling them to remain wholly or partially unemployed, until they have "adjusted" themselves to the new economic conditions. (2) Miscalculation and temporary over-production, to which machine industries with a wide unstable market are particularly prone, bring about periodic deep depressions of "trade," temporarily throwing out of work large bodies of skilled and unskilled labour. (3) Economies of machine-production in the staple industries drive an increasing proportion of labour with trades which are engaged in supplying commodities, the demand for which is more irregular, and in which therefore the fluctuations in demand for labour must be greater.
Most economists, still deeply imbued with a belief in the admirable order and economy of "the play of economic forces," appear to regard all unemployment not assignable to individual vice or incapacity as the natural and necessary effect of the process of adjustment by which industrial progress is achieved, ignoring altogether the two latter classes of consideration. There is, however, reason to believe that in an average year a far larger number of the "unemployed" at any given time owe their unemployment to a temporary depression of the trade in which they are engaged, than to the fluctuations brought about by organic changes in the economic structure of the trade.
The size and importance of the "unemployment" due primarily to trade depressions is very imperfectly appreciated. The following statistics of the condition of the skilled labour market in the period 1886-92, based upon the reports of twenty-two trades unions, have an important bearing on this point:—
| Year. | Percentage out of work. |
| 1886 | 10.1 per cent.[195] |
| 1887 | 8.6 per cent. |
| 1888 | 4.4 per cent. |
| 1889 | 1.8 per cent. |
| 1890 | 2.6 per cent. |
| 1891 | 4.45 per cent. |
| 1892 | 7.33 per cent. |
| 1893 | 7.9[196] per cent. |
When it is remembered that these figures apply only to the well-organised trades unions, which, as a rule, comprise the best and most highly-skilled workers in the several trades, who are less likely than others to be thrown out in a "slack time," that the building and season trades are not included in the estimate, and that women's industries, notoriously more irregular than men's, are altogether ignored, it will be evident that these statistics very inadequately represent the proportion of unemployment for the aggregate of the working classes at the several periods. The Report on Principal and Minor Textile Trades deducts 10 per cent. from the normal wages to represent unemployment, though the year 1885, to which the figures refer, is spoken of as "fairly representative of a normal year."[197]
The injury inflicted upon the wages, working efficiency, and character of the working classes by irregular employment is, however, very inadequately represented by figures indicating the average of "unemployment" during a long period. In the first place, in such an estimate no allowance is made for the "short time," often worked for months together by large bodies of operatives. Secondly, in measuring the evil of "unemployment," we must look rather to the maximum than to the mean condition. If a man is liable to have his food supply cut off for a month at a time, no estimate showing that on the average he has more than enough to eat and drink will fairly represent the danger to which he is exposed. If once in every ten years we find that some 10 per cent. of the skilled workers, and a far larger percentage of unskilled workers, are out of employment for months together, these figures measure the economic malady of "unemployment," which is in no sense compensated by the full or excessive labour of periods of better trade.
§ 7. Our reasoning from the ascertained tendencies of machine-production points to the conclusion that, having regard to the two prime constituents in demand for labour, the number of those employed, and the regularity of employment, machinery does not, under present conditions, generally favour an increased steady demand for labour. It tends to drive an increased proportion of labour in three directions.