Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
It may now be objected that, if A is no longer in demand, the
laborers in that industry will be thrown out of employment. Out of
that employment certainly, but not out of every other. One
thousand of Z was able to purchase certain results of labor and
capital in industry A, when in the hands of its former owner; and
now when in the hands of the crew it will control, as purchasing
power, equivalent results of labor and capital. The crew may not
want the same articles as the former owner of Z, but they will
want the equivalents of 1,000 of Z in something, and that
something will be produced now instead of A. The whole process may
be represented by this diagram.
[Illustration, showing interrelationships between A, Z, and Crew.]
1. Z is exchanged against A, and the crew remain unemployed.
2. Here the crew possess Z, and they themselves exchange Z for
whatever A may produce in satisfaction of their wants, and the
crew are then employed.
It is possible that the intervention of money blinds some minds to
a proper understanding of the operations described above. The
supposition, as given, applies to a condition of barter, but is
equally true if money is used.(110) Imagine a display of all the
industries of the world, A, B, C, ... X, Y, Z, presented within
sight on one large field, and at the central spot the producer of
gold and silver. When Z is produced, it is taken to the
gold-counter, and exchanged for money; when A is produced, the
same is done. Then the former money is given for A, and the latter
for Z, so that in truth A is exchanged against Z through the
medium of money, just as before money was considered. Now, it may
be said by an objector, “If A is not wanted, after it is produced,
and can not be sold, because the demand from Z has been withdrawn,
then the capital used for A will not be returned, and the laborers
in A will be thrown out of employment.” The answer is, of course,
that the state of things here contemplated is a permanent and
normal one wherein production is correctly adapted to human
desires. If A is found not to be wanted, after the production of
it, an industrial blunder has been committed, and wealth is wasted
just as when burned up. It is ill-assorted production. The trouble
is not in a lack of demand for what A may produce (of something
else), but with the producers of A in not making that for which
there were desires, from ignorance or lack of early information of
the disposition of wealth Z. In practice, however, it will be
found that most goods are made upon “orders,” and, except under
peculiar circumstances, not actually produced unless a market is
foreseen. Indeed, as every man knows, the most important function
of a successful business man is the adaptation of production to
the market, that is, to the desires of consumers.