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
_Why Substitutions reduce the Displacements of Labor._--The question
will, indeed, arise why the burden caused by the change may not be
merely transferred to men in industries the products of which are
displaced by the substitution. Something of this kind would occur if,
in consequence of the cheapening of one article, any one other were
generally discarded. The important fact is that it is not any one
thing, but a wide range of things which are consumed in smaller
quantities in consequence of the change; and the effect on the makers
of any one of them is small. If a thousand men begin to buy the _A'''_
of the table we have frequently used, some of them will forego _B'''_,
some _C'''_, and so on through the list; and the market for no one of
these things will be much affected. Moreover, the nearly universal
fact is that a man who begins to buy one article that he never before
used will save the price of it by contenting himself with a slightly
cheaper quality of a number of others. He will give up a dozen
utilities in as many entire commodities in order to be able to buy the
one entire commodity that he adds to his purchasing list. The
reduction of demand is so extensively subdivided that it causes
relatively few displacements of labor.
_Substitution a Prominent Cause of Varying Sales of
Goods._--Substitution is, then, the general rule whenever the
cheapening of a commodity wins new purchasers of it. This practice is
not indeed universal in the case of those who formerly consumed these
goods. Former purchasers of an article which has become cheaper may
make no change except to buy more of it or a better quality of it for
the same amount which they have been accustomed to spend for the
inferior quality. They are not then obliged to economize in any other
direction, and the change does not trench on their consumption of
other goods. On the other hand, it is sometimes the case that they
continue to use the original amount of the article that has become
cheaper and use the liberated means of purchase--the "money," as it
would ordinarily be termed--in buying other goods. The cheapening of
_A'''_ thus even enlarges the demand for _B'''_, _C'''_, etc. There
are thus two cases in which a reduction in the cost of one thing would
not decrease the use of other things.
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