Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_Perpetual Change of the Social Structure._--We confine ourselves to
that economic society _par excellence_ which we have called the
industrial center of the world. In this region economic influences are
forever changing the very structure of the society itself. They move
labor from place to place in the system and they transfer capital to
and fro in the same way. If we think of our table of groups and
subgroups as representing the whole of this great industrial world, we
must think of labor and capital as in a perpetual flow from subgroup
to subgroup, making some industries larger and others smaller by
reason of every such movement. The great force of labor and the fund
of capital are like restless seas whose currents carry the water
composing them now hither and now yon as the direction and force of
the moving influences change.
_Movements of Labor within the Group System caused by Increasing
Population._--If the population were to increase while the amount of
capital and the mode of using it remained the same, the effect would
be a downward movement of both labor and capital in the series of
subgroups by which we represent industrial society. Labor and capital
would tend to desert the subgroups _A'''_, _B'''_, and _C'''_ in our
table and to move to _A_, _B_, and _C_:--
_A'''_ _B'''_ _C'''_
_A''_ _B''_ _C''_
_A'_ _B'_ _C'_
_A_ _B_ _C_
_Causes of Downward Flow of Labor in the Group System._--A larger
population means, of course, not merely an increase in the amount of
labor performed, but also an increase in the number of consumers. It
means more mouths to feed and more bodies to clothe. It entails also,
according to principles that we have already studied, a lower earning
power and a lower rate of pay for labor. This means that simple food,
cheap clothing, inexpensive houses, furnishings, etc., constitute a
larger element in the consumers' wealth of society than they have
heretofore done. Society uses fewer luxuries and more necessaries, and
the necessaries of life are products in which raw materials
predominate and costly form utilities are wanting. This makes a
heavier draft upon the land than does the production of highly wrought
articles of the same value.
Luxurious articles are fashioned with a great amount of artisan's or
artist's labor and a relatively small amount of the labor of
cultivators and miners. The subgroups _A_, _B_, and _C_ are the ones
that furnish the rawest materials, and it is they, therefore, that
receive the largest portions of the new labor that enters the field.
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