103 SECTIONAL ADDRESSES. 



unemployment due to the technological alterations involved ? If an affir- 

 mative answer is given, then part of the existing volume of unemployment 

 in Germany, the United States and Great Britain is not due to causes local 

 to the area concerned, such as the popular explanations that unemploy- 

 ment is due respectively to the Gold Standard or the pressure of Repara- 

 tions or the Wall Street slump, nor even to such general factors as the 

 present fall in world prices, but must be directly ascribed to the techno- 

 logical or structural alterations which are taking place. Undoubtedly, if 

 unemployment is resulting from technological changes, the social problem 

 of dealing with it is greatly aggravated by the existence of other local and 

 general causes of unemployment. But we are not entitled to assume that 

 when the local causes making for unemployment have disappeared we shall 

 then find ourselves with unemployment reduced to some pre-war ' normal,' 

 for there is no reason to suppose that in the immediate future, the rational- 

 isation process will come to an end. If rationalisation does cause unem- 

 ployment, the post-war ' normal ' may be higher, perhaps considerably 

 higher, than the pre-war one. Thus, in the final analysis, we are face to 

 face with the curious result that one of the most popular of all remedies 

 for unemployment may in itself be one of the causes producing the evil 

 for which a remedy is to be found. 



S. 3. The first requisite in attempting to analyse the relationships 

 between technical improvements and the volume of unemployment is an 

 historical standpoint. The resistance to change is a permanent element 

 in human society : no alteration in the structure of society or in its detailed 

 economic arrangements can be made without some interference with vested 

 interests. All abstract reason may teach that without mechanical inven- 

 tion and discovery and without improved organisation, the greater part of 

 the world's present population would never have been born : all experience 

 may prove that without economy of effort no increase in the standard of 

 life is possible — nevertheless, change and improvement may be resisted, 

 and upon grounds which deserve serious consideration. The problem, 

 from this point of view, is one of the distribution of the gains and the 

 sacrifices. No one will expect the farmer to rejoice at so bountiful a crop 

 that it does not pay to cart it to market : to appreciate the significance 

 of the law of diminishing returns is as important as to understand that the 

 practice all round of the principle of restriction of output means lessened 

 material welfare. Neither Robinson Crusoe nor a purely Communistic 

 State would be distressed by the problem which we have to discuss here. 

 Under Crusoe economics, mechanical invention and improved organisation 

 would allow of increased consumption or increased leisure, or both, to the 

 sole person interested : under a purely communistic regime improved 

 organisation and technical progress (assuming them to be possible) would 

 increase the national di\adend or diminish the national expenditure of 

 energy, or both, without necessarily making things worse for anyone con- 

 cerned, for, ex hypothesi, goods would be still shared in common. In the 

 Communistic State rationalisation might result in unemployment, but it 

 would not mean, what it may mean under a regime of private property, 

 a very unequal distribution of the gains and losses from the changes 

 taking place — though even in a Communistic State some difference 

 would in practice have to be made between the employed and the 



