(1) To the invention, construction, and maintenance of machinery to make machines, the labour of machine-making being continually displaced by machines, and being thus driven to the production of machines more remote from the machines directly engaged in producing consumptive goods. The labour thus engaged must be in an ever-diminishing proportion to a given quantity of consumption. Nothing but a great increase in the quantity of consumption, or the opening of new varieties of consumption, can maintain or increase the demand for labour in these machine-making industries.
(2) To continual specialisation, subdivision, and refinement in the arts of distribution. The multiplication of merchants, agents, retailers, which, in spite of forces making for centralisation in distributive work, is so marked a feature in the English industry of the last forty years, is a natural result of the influence of machinery, in setting free from "making" processes an increased proportion of labour.
(3) To the supply of new forms of wealth, which are either (a) wholly non-material—i.e., intellectual, artistic, or other personal services; (b) partly non-material—e.g., works of art or skill, whose value consists chiefly in the embodiment of individual taste or spontaneous energy, or (c) too irregular or not sufficiently extended in demand to admit the application of machinery. The learned professions, art, science, and literature, and those branches of labour engaged in producing luxuries and luxurious services furnish a constantly increasing employment, though the supply of labour is so notoriously in excess of the demand in all such employments that a large percentage of unemployment is chronic.
So long then as a community grows in numbers, so long as individuals desire to satisfy more fully their present wants and continue to develop new wants, forming a higher or more intricate standard of consumption, there is no evidence to justify the conclusion that machinery has the effect of causing a net diminution in demand for labour, though it tends to diminish the proportion of employment in the "manufacturing" industries; but there is strong reason to believe that it tends to make employment more unstable, more precarious of tenure, and more fluctuating in market value.
FOOTNOTES:
[174] Against this we may set the possibility of a fall in the rate of interest at which manufacturers may be able to borrow capital in order to set up improved machinery. Where an economy can be effected in this direction, the displacement of labour due to the introduction of machinery may not be so large—i.e., it will pay a manufacturer to introduce a new machine which only "saves" a small amount of money, if he can effect the change at a cheap rate of borrowing. (Cf. Marshall, Principles of Economics, 2nd edit., pp. 569, 570.)
[175] Leone Levi, Work and Pay, p. 28.
[176] Statement by Mr. Shaftoe, President of the Trades Union Congress, 1888; cf. Carroll D. Wright, Report on Industrial Depressions, Washington, 1886, pp. 80-90.
[177] The merging of retail dealers with the "making" classes, the classification of merchants with those engaged in transport industries, and certain departures from precedent in the mode of classification, render a full use of the 1891 figures impossible at present.