al 
F.—ECONOMICS, 139 
of 1922 appears worse than that of 1879. The experience of 1879, 
however, the record year of unemployment, heralded, not over- 
population and the downfall of British industry, but a period of ex- 
pansion and prosperity which itself reached, if it did not pass, all 
previous records. ‘ Real wages,’ which had risen thirty per cent. in 
the twenty years to 1880, rose even more rapidly in the next twenty 
years to 1900. Anyone who in 1879, looking at the half or three- 
quarter million unemployed, had argued that the existing population 
of the United Kingdom (then about thirty-four millions) was all that 
the country could support without lowering its standards, would have 
been lamentably discredited at once. ‘Ten years later he would have 
found a population nearly three millions more, enjoying a real income 
per head that was a fifth greater, with the unemployment percentage 
reduced to two. Ten years later still the population had grown further 
in size and in prosperity; those trades had grown most rapidly in 
which there had been and continued to be the largest percentages of 
unemployment. 
The problems of unemployment and of over-population are distinct ; 
they are two problems, not one. Severe unemployment has occurred 
in the past without over-population, as a function of the organisation 
and methods of industry, not of its size. On the other hand, it is very 
doubtful if excessive growth of population has ever shown itself or 
would naturally show itself by causing unemployment. A more pro- 
bable effect would be pressure to work more than before in order to 
obtain the same comforts; a fall of real wages per hour, by increase 
either of hours or of prices. 
The same dependence of unemployment on the organisation and 
methods of industry, rather than on its size, appears if we look, not 
backwards in time, but round us in space. It has been pointed out 
by Professor Cannan that one of the few groups of economists whe 
from our post-war sufferings can at least obtain the high intellectual 
satisfaction of saying ‘I told you so,’ is that which maintains that 
changes in the purchasing power of money are the most potent causes 
of the fluctuations in prosperity known as cycles of trade or booms and 
depressions. ‘In the pre-war period booms and depressions swept 
over the whole western world at once and left their causes obscure. 
In 1922 we have been treated to a sharp contrast between two groups 
of countries, one group having boom and full employment, the other 
depression and unemployment, the difference being quite clearly due 
to the first group having continued the process of currency inflation, 
the other group having dropped it.’ To bring this generalisation down 
to particular instances, we see in Central Europe a nation which 
assuredly should be suffering from over-population if any nation is; 
Germany, defeated in war, has been compressed within narrower limits 
has lost its shipping and foreign investments, its outlets for emigration 
and trade, and now by high birth-rates is repairing with exceptiona! 
speed the human losses of the war. Germany may or may not be 
suffering from over-population. She certainly has not suffered from 
unemployment; she has had a boom stimulated by inflation of the 
currency. We see on the other hand Britain, victorious in war, with 
