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
_Substitution More General in the Case of New Consumers._--The
substitution of a cheapened article for others is the dominant fact in
the case of new consumers of such an article, while an increased
consumption of other things sometimes occurs in the case of old
consumers. This does not have as large commercial effects as the other
change. If we produce cheaper shoes, we make it easier to acquire
good ones, and those who formerly contented themselves with an
inferior kind take a better one. That means that they add to their
purchase lists the higher utility which is present in the one grade
and absent in the other. They buy a new element in goods rather than
more of those goods, and while they may not always change their
consumption of articles of other kinds they more frequently do so.
Those who begin to use something which formerly they went without
altogether usually give up the use of some good or some quality in it,
or get on with a smaller quantity of it in order to make the new
indulgence practicable. The man who, when bicycles became cheap,
bought the first one he ever owned probably gave up some other
gratification.
_How the Sale of Goods which wear out in the Using increases as the
Price Falls._--When goods deteriorate as they grow older, users have
to buy new ones often if they are not willing to use those which are
worn out and inferior. If we want always to wear clothes of good
quality, we refrain from wearing a suit too long. We discard many
things when they have somewhat deteriorated, and this forces us to
buy, in a term of years, a larger number of them than we should
otherwise do. We discard carpets and upholstery early when they are so
cheap that we can afford to do so. We thus improve our goods
qualitatively by adding to them quantitatively.
_Substitutions a Protection for Labor against Undue
Displacements._--Now, not only are the substitutions we have cited of
commercial importance, but they act in the direction of retaining
labor in a group where "labor saving" has been effected. They help to
prevent this process from being equivalent to labor expelling in so
far as either a general group or a subgroup is concerned, since they
increase the social demand for the products of the group in question
and cause a relative diminution of the demand for other things. Quite
evidently there is, for these reasons, the more need for labor within
this group and less need of it elsewhere. Cheap shoes may thus never
mean fewer shoemakers and cheap watches may not ever mean fewer
watchmakers.
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