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
_General Consumption as affected by a Specific Increase of Productive
Power._--Consumption in the generic--the use of consumers' goods of
every kind--grows as the power to make the good increases; but a point
that is of great importance is that any _specific_ increase of
productive power brings about a _general_ increase of consumption. It
brings about a greater all-round creating and using of commodity. If
we can hereafter make the _A'''_ of our table with the expenditure of
half as much labor and capital as we have heretofore used in creating
it, the liberated agents of production become available for making
whatever is most needed, and they will, in fact, be used for
increasing the supply of all three types of consumers' goods
represented in the table. They will give us more of _A'''_, _B'''_,
and _C'''_ in quantities adjusted by the laws of value. The outcome of
this is that an economy in making _A'''_ actually gives us more of
_A'''_, _B'''_, and _C'''_. We become larger consumers of everything
because of the cheapening of anything which enters into our list of
articles for personal use. This presents a further aspect of the
process of moving labor and capital from group to group, in which the
possibility of hardship for particular persons inheres. The conclusion
to which a fair weighing of the effects of mechanical progress has
already led us is that there are very few, even of the workers who
suffer displacements of this kind, who do not during their lives gain
far more than they lose by general progress; and the effects of
cheapening capital goods at one point, and so liberating capital for
use at other points, increases this beneficent effect. The special
costs of making the new kinds of machinery have been large in the
earlier stages of the process, but have afterward grown smaller; and
as machinery has come into general use the liberating of capital by
the cheapening of the machines has become a more and more important
factor. Some of the capital liberated at _A_ goes to assist labor in
furnishing the additional amount of _B'''_ and _C'''_ which enlarged
consumption requires.
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