F.— ECONOMIC SCIENCE AND STATISTICS. 117 



unemployment will be higher in the future than in the past : in which case, 

 unemployment will cease to serve as an index of material well-being. The 

 paradox of a rising standard of life with a higher level of unemployment 

 may well be the result of the present tendency in industry. 



(6) On the other hand, there are not wanting examples to show that 

 demands for new products and services can be stimulated very quickly, 

 provided they are sufficiently cheap : and there is therefore no reason to 

 fear that we shall all " starve in the midst of plenty.' What has been true 

 of the motor cycle, the motor-car, the gramophone, the radio, artificial 

 silk, the cinema, the popular press, books, travel facilities, greyhound 

 racing and the rest will surely also be true of the future. No doubt we 

 shall have to give up the belief that ' national power ' is to be measured 

 by a high percentage of occupied persons in a few ' staple industries ' : but 

 just as we no longer think of measuring our " national power ' in terms of 

 agricultural output, so we shall gradually see that those countries which 

 have the highest standards of life ought to be those employing the largest 

 proportion of their populations in the supply of ' luxuries.' All that stands 

 in the way are economic and ethical standards no longer appropriate to 

 the tendencies at work. 



(7) There is an obvious relationship between the progress of rationalisa- 

 tion on the one hand, and the possibilities of a shorter working day and 

 higher earnings from labour on the other. The rise in the standard of 

 living and the shorter working hours which have characterised the progress 

 of industry in the last hundred years were both conditioned by increased 

 productivity : though it may be true that unless Labour's demands had 

 been made, the spur to further invention and discovery might have been 

 in part lacking. But at any given moment a balance must be struck 

 between the demand for higher earnings and the demand for more leisure, 

 for, if both demands are pushed to such an extreme that, if either were 

 granted, the whole benefit of increased productive power would be ex- 

 hausted, then the grant of the one excludes the grant of the other : and if 

 both were, under these conditions, simultaneously asked for and granted, 

 a new disequilibrium of costs and prices would be set up, which would 

 inevitably cause a new wave of unemployment until further advances in 

 technique and organisation had been achieved. 



A shorter working day and higher wage rates are, of course, frequently 

 defended, not on the legitimate ground that society can afford them with 

 increasing productive powers, but on the ground that they are direct means 

 for reducing unemployment, because they ' spread work ' and stabilise 

 ' working class purchasing power.' Unless accompanied by increasing 

 productivity, however, they are incapable of achieving these results : for 

 a shorter working day Avithout a larger output would either involve lower 

 wages or rising costs per unit : and rising money wages without increasing 

 productivity would also result in disequilibrium. But given increasing 

 productive powers, it is possible to lower prices to the consumer and pav 

 the same wages as before for a shorter day or, with the same lower cost to 

 the consumer, pay a higher wage for the same working day. Growing 

 productivity, in fact, gives society a margin to ' play with,' and this 

 margin is the source out of which unemployment can be relieved. But 

 we have no right to assume that the process works without friction or that 



