ECONOMIC THEORY IN A NEW RELATION 



to this theoretical growth, and its fruit the chart-making. It will 

 be found, as this study of modern changes goes on, that men have 

 their fate more in their own hands than has been supposed. A 

 government can create conditions in which technical advances will 

 be made, new capital accumulated, and rising wages insured. It 

 can do much to save from suppression the vital force of competition, 

 and in this and in other ways it can avert disaster and insure a nor- 

 mal development. It can do this by respecting the principles of 

 economic dynamics as they shall come to be known through the work 

 of many theoretical students, whose conclusions shall be tested by 

 the work of many more statisticians. The economists of the future 

 have their work cut out for them and the plan of it determined. 

 The results will be as valuable as the work is extensive and difficult. 



Squarely in the way of the realization of this effect appears to 

 stand the Malthusian law as originally understood; for it appeared 

 to show that whenever wages rise, a quick increase of population 

 takes place and brings down the pay of labor to its former level. 

 Rising wages would thus start an influence that would shortly in- 

 duce falling wages, and any gain which labor might make would be 

 transient. This is the essence of that dismalness which has been 

 attributed to economic theory. 



On the other hand, it is possible to state theoretical conditions 

 in which the gains of laborers tend to perpetuate themselves. In 

 these assumed circumstances the enlarged income of the laborers 

 would not stimulate, but would retard, the growth of population. 

 Instead of causing something to ensue which soon neutralizes 

 transient improvement in the workers' condition, a rise in the earn- 

 ings of labor may thus have an effect which induces a further rise. 

 The workers' gains would be self-perpetuating. 



The studies of Malthus constitute the most valuable work in 

 economic d} 7 namics that was done by the early economists. Though 

 they were prosecuted with no reference to incorporating their results 

 into a systematic science of economic change, they furnished an 

 important fragment of such a science, and illustrate both its value 

 and its practical character. In their developed form Malthusian 

 doctrines do not afford for the laboring class an outlook that is quite 

 hopeless, for they do not lead one to predict a necessarily disastrous 

 world-crowding. They open a possibility of checks on the growth 

 of population which may .operate more vigorously as laborers attain 

 a higher mental and moral level. Yet they leave small reason for 

 concluding that, in a merely economic way, a check on the growth 

 of population can give a permanent benefit to workers, since they 

 do not afford any ground for believing that such a check on the 

 growth of numbers tends itself to cause a further check. With no 

 allowance for psychic gains it may be expected that workers, by 



