Essentials of Economic Theory / As Applied to Modern Problems of Industry and Public Policy

by John Bates Clark

Alternations in the Direction of Movements caused by Improved Methods.—In a dynamic state this standard shape itself—the approximately static one—is forever changing. At one time, for example, conditions exist which call for a certain amount of labor at A, another amount at B, etc. A little later these respective quantities at A, B, etc., are no longer the natural or standard quantities; for something has occurred that calls for less labor at A, more at B, etc. If A represents wheat farming, the amount of labor that it required when grain was gathered with sickles is more than is necessary when it is gathered with self-binding reapers, always provided that there has been no increase in population, which would require an increase in the food supply. The society therefore will not be in what has now become its standard shape till men have been moved from the wheat-raising subgroup to others.

If the invention of the reaper were not followed by any others and if no other disturbing changes took place, labor would move from the one group, distribute itself among others, and bring the system to a new equilibrium; but it has not time to do this. It begins to move in the way that the new condition occasioned by the introduction of the reaping machine impels it to move; but before the transfer is at all complete there is a new invention somewhere else in the system that starts a movement in some other direction. Before the labor from A is duly distributed in B, C, etc., there is an invention in B which starts some of it toward other points.

Why Movements are Perpetual as well as Changeful.—Such improvements are perpetual, and the dynamic society is not for an instant at rest. If the disturbing causes would cease, the elements of the social body would find their abiding place; and the important fact is that at any one instant there is such a resting place for each laborer and each bit of capital in the whole system. As we have seen, the men and the productive funds would go to these points but for the fact that before they have time to reach them new disturbances occur that call them in new directions. Again and again the same thing occurs, and there is no opportunity for placing labor and capital at exactly the points to which recent changes call them before still further improvements begin to call them elsewhere.

Why Technical Changes are more disturbing than a General Influx or Efflux of Population.—When the moving of labor is gradual, it is effected, not so much by transferring particular men from one occupation to another, as by diverting the young men who are about entering the field of employment to the places where labor is most needed. When the son of a shoemaker, instead of learning his father's trade, becomes a carpenter, no laborer has abandoned an accustomed occupation and betaken himself to another; but labor has gone from the shoemaking trade to that of carpentering. A man often stays where he is to the end of his life, although during that life labor has moved freely out of his occupation to others. If we represent the facts by a diagram, they will stand thus:—

A, B, C, and D represent different occupations or subgroups in the table we have before used. At one date a static adjustment called for fifty units of labor at A, forty at B, seventy at C, and one hundred at D. A half decade later, after improvements had taken place at A, B, and D, static forces, if they were allowed to have their full effect, would leave only forty-five men at A, and thirty-five at B, but they would place ninety at C and at D. The first movements that would tend to bring this about are in the direction indicated by the dotted lines. The transfers are made, not by forcing men from A, B, and D to C, but chiefly by diverting to C young laborers who would otherwise have gone to A, B, and D to replace men who are leaving in these groups.

Now, before the transfers are completed something happens that calls for a different movement. Let us say that only three units of labor have as yet gone from A to C instead of five, leaving forty-seven at A; only two have gone from B, leaving thirty-eight; and only five have gone from D, leaving ninety-five at that point. Eighty would then be at C, and the static adjustment would not have been perfectly attained. It is at this point that a new change of conditions occurs, which calls for fifty-two units at A, forty-one at B, sixty-five at C, and a hundred and two at D. C now contributes something to A and B, but it gives more to D; and the fluctuations go on forever. Particular men may, more often than otherwise, stay in their places, since the incoming stream of new labor, by going where it is needed, may suffice to make the adjustments, in so far as they are gradually made; but labor, in the sense of the quantum of energy embodied in a succession of generations of men, is never at rest. It is a veritable Wandering Jew for restlessness and in a perpetual quest of places where it can remain. Moreover, there are to be taken into account changes so sudden that they thrust particular workers from one group to another.

A Perpetual Effort to conform to a Standard Shape which is itself Changing.—We think, then, of society as striving toward an endless series of ideal shapes, never reaching any one of them and never holding for any length of time any one actual shape. One movement is not completed before another begins, and at no one time is the labor apportioned among the groups exactly in the proportions that static law calls for. Men are vitally interested to know what they have to hope for or to fear from this perpetual necessity that some labor should move from point to point.

Questions concerning the Effects of these Transformations.—These changes of shape involve costs as well as benefits. The gains are permanent and the costs are transient, but are not for that reason unimportant. They may fall on persons who do not get the full measure of the offsetting gains. What we wish to know about any economic change is how it will affect humanity, and especially working humanity. Will it make laboring men better off or worse off? If it benefits them in the end, will it impose on them an immediate hardship? Will it even make certain ones pay heavily for a gain that is shared by all classes? Are there some who are thus the especial martyrs of progress, suffering for the general good?

Natural Transformations of Society increase its Productive Power.—There is no doubt that the changes of shape through which the social organism is going cause it to grow in strength and efficiency. More and more power to produce is coming, as we have seen, in consequence of these transmutations. They always involve shifting labor about within the organization and often involve shifting laborers, taking some of them out of the subgroups in which they are now working and putting them into others, something that cannot be done without cost.