SECTION F.— ECONOMIC SCIENCE AND STATISTICS. 



RATIONALISATION AND 

 TECHNOLOGICAL UNEMPLOYMENT 



ADDRESS BY 



PROF. T. E. GREGORY, D.Sc. 



PRESIDENT OF THE SECTION. 



S. 1. In recent years British economic science has been enriched by the 

 incorporation into its phraseology of two new terms of art : an incorpora- 

 tion which is significant on more than one ground. One German, the other 

 American in origin, their adoption points to the international character of 

 the social and economic problems of the age and to the directions whence 

 we are accustoming ourselves to find inspiration ; vague and uncertain as 

 their content is, their use indicates a shift in the centre of gravity of econo- 

 mic discussion, for they relate to problems of production, and their use is 

 thus a sign that that preoccupation with distributional problems, beginning 

 with Ricardo, but especially characteristic of the last quarter century of 

 British economic thought, has taken a new turn. Lastly, the circumstance 

 that widespread currency has been given to those new and alien terms in 

 connection with the public discussion of the questions to which they relate 

 has created an unfortunate impression that the economic life of the world 

 is being confronted by novel, vast and mysterious problems, of a kind 

 hitherto unknown. The problems involved are indeed of the utmost 

 importance, but when their character is analysed, it will be found that they 

 derive their importance more from a change of scale than from the novelty 

 of their nature. 



S. 2. The phenomena to be discussed are capable, if not of exact, at 

 least of fairly definite statement. Throughout the world a conscious 

 process of reorganisation is taking place, involving both the structure of 

 industry and the methods of production. To this process the name of 

 rationalisation has been given. It is many-sided, but among the charac- 

 teristic results of the rationalisation process are : a growing control over 

 the market, a growing standardisation of process and output, and an 

 increasing^ — in some cases, a very largely increasing — output per worker. 

 These associated organisational and mechanical changes have, therefore, 

 the result of economising the amount of labour directly required per unit 

 of output, and — in so far as the distribution of goods over space and time 

 is itself rationalised — of involving also a net reduction in the amount of 

 labour required to place a unit of output in the hands of the final consumer. 

 Given this trend the question arises : will not the opportunity for finding 

 employment in industries subject to these processes of change also undergo 

 a change 1 In other words, does rationalisation inevitably bring with it 



