MICHIGAN ACADEMY OF SCIENCE. 51 



crease in uiiemplojmeut in the trade are often cited as proof of 

 tlieir liypothesis. Tlieir wage slogans, ''high wages breed high 

 ^^ages/' ''no wage reductions," "cheap wages make cheap men," and 

 ''get more now," have their origin in this group of facts. 



Their fixed group demand theory explains the union's defense for 

 limiting the output. The public press has frequently denounced 

 trade unions for limit^ing the output. Employer's have made most 

 bitter attacks upon the union for those rules and practices which 

 result in limiting the output. The opponents of trade unions on this 

 point usually argue that prices to the consumer are thus raised, 

 and charge tlie union with a breach of good faith with society. The 

 business man, the entrepreneur, and the classical economist would 

 usually undertake to solve the problem of unemployment by re- 

 (huing wages with the hope that the demand for labor would be in- 

 creased by reason of the decrease in wages. Not so with the trade 

 unionist. He has a different theory of business. The former groups 

 think that prices and demand vary inversel}', the latter group thinks 

 that "there is a certain amount of work to be done and a certain 

 number of men to do it. Each should be given a chance to do 

 some of it." (*157.) In a few words, their theory is that there is a 

 fixed demand for commodities regardless of price, within a reason- 

 able limit. According to this latter theory, a man does not buy 

 a straw hat because it is cheap, but because it is the custom of 

 certain classes to wear a certain kind of hat on certain occasions. 

 The increase in wages for the makers of high hats would probably 

 not decrease the demand for that particular kind of hat. On the 

 other hand the author of the foregoing reasoning admitted that he 

 would buy an automobile if the price dropped to one hundred dol- 

 lars and unwillingly admitted that his demand in the automobile 

 market would increase the demand -for mechanics. Neither of the 

 above theories are valid if applied to the extreme, and are contra- 

 dictory when so applied. The carpenters observe from experience 

 that a change in wages is not followed by a corresponding change in 

 demand for labor. They try to take advantage of this slowness of 

 '"demanders" to adjust themselves to a changed condition of supply. 

 The union theory operates in these cases where the demand for an 

 article does not fall when the price is raised, or in technical lan- 

 guage, where the demand is inelastic, and the opponents' theory 

 c^perates in those cases where the demand for an article falls off 

 rapidly as the price is increased, or in technical language, where 

 the demand is elastic. The demand for salt and carpenter work is 

 almost fixed or "inelastic," and the demand for automobiles is quite 

 elastic. Therefore the carpenters' and the employers' theories are 



