MUST SCIENCE RUIN ECONOMIC PROGRESS? 581 
costs against new capital costs in 1923, became well worth making by 1932, 
and indeed imperative, if any profits were to be preserved. Hence the 
almost artificial pressure which a rigid monetary system may bring to 
bear towards the over-rapid application of new methods and creation of 
unemployment. 
The second kind of balance which is vital to economic progress and which 
may be ruined by over-rapid innovation is that between obsolescence and 
depreciation. Nearly all scientific advance for economic progress has to 
be embodied in capital forms to be effective, more and more elaborate, 
large and costly. ‘The productivity of such apparatus and plant per man 
involved becomes greater, and, even allowing for the men employed in 
making the machinery or process, the total satisfaction is continually pro- 
duced with less and less human effort. Now it used to be said of British 
machinery that it was made good enough to last for ever and long after it 
became old-fashioned, whereas American machines were made to be worn 
out much earlier, and were thus cheaper, but could be immediately replaced 
by capital assets containing the latest devices. If the period of physical life 
and fashionable life can be made to correspond, there is greatest economy 
and security of capital. But if the expensive embodiment of the latest 
science can be outmoded and superseded long before it is worn out, there is 
waste of capital, loss of interest, and resultant insecurity of business and in- 
vestment. ‘The factor of physical safety alone means that each embodiment 
must be really durable, even if roughly finished, and, therefore, it is impos- 
sible wholly to reduce physical life to probable ‘ obsolescent ’ life. In this 
way an over-rapid series of innovations may mean the scrapping or unprofit- 
ability of much excellent capital for very small marginal gains. A responsible 
socialist community would see each time that the gain was worth while, 
but competitive individuals have no collective responsibility. Suppose the 
giant Cunarder attracts a profitable contingent for two years only, when 
a lucky invention in a new and rival vessel attracts all her passengers at 
a slightly lower fare. Here is progress in one typical sense, but the small 
net advantage to be secured by individuals as free-lance consumers may be 
dearly purchased by large dislocations or loss of capital, reacting even upon 
those same individuals as producers. 
Now, if the innovation were very striking, and were reflected in working 
costs, the margin of difference between the old working costs and new 
working costs may be large enough to pay interest on the new capital 
employed, and also to amortise the cost of the unrealised life of the asset 
displaced. A locomotive may have many years of useful life left, but a 
new type may provide a margin by lower working costs not only sufficient 
to make one adopt it on normal renewal, but also to pay for the premature 
scrapping of the old type. ‘The majority of modern innovation is, however, 
of the type which does not pay the costs of obsolescence and proceed by 
orderly and natural physical renewal or substitution. A similar type of 
argument applies to the capital expenditure generally on a district, which 
can be amortised over the economic activity of that area, such as a colliery 
area, but which is wasted if a dislocation occurs by the adoption of some 
innovation stimulating rival activity in another place. Similar but more 
poignant considerations apply to obsolescence in human skill and training, 
more rapid than the ordinary attrition through age retirement can accom- 
modate. Physical capital forms, human vocational training, and centring 
in geographical areas, are all essential features in the absorption of scientific 
innovation into economic progress. Each has its natural time span, and 
a narrower span of scientific change is bound to set up large economic debits 
to be set against the economic credits of the change. A man running a 
