i 4 THE PRESIDENTIAL ADDRESS 



treated as a frustration in itself. Thus it has been said ' the danger 

 of obsolescence is a great preventative of fundamental applications 

 to science. Large firms tend to be excessively rigid in the structures 

 of production.' Supposing that the obsolescence in question is a 

 real factor of cost, it would fall to be reckoned with in the computa- 

 tion for transition, whatever the form of society, and even if the 

 personal ' profit ' incentive were inoperative. It cannot be spirited 

 away. A customary or compulsory loading of costs for short life 

 obsolescence would retard uneconomically rapid competition of 

 novelties and could be scientifically explored. 



Now let us look at displaced labour and the costs of it. If the 

 effect of diversion of demand through invention is to reduce the 

 scope or output of particular industries or concerns in private 

 management, they have no option but to reduce staff. If the pressure 

 is not too great, or the change too rapid, this does not necessarily 

 result in dismissals, for the contraction of numbers may be made 

 by not filling up, with young people, the vacancies caused by natural 

 wastage, through death and retirement. But where dismissals are 

 inevitable, re-engagements may take place quickly in the competing 

 industries, otherwise unemployment ensues. Any resulting burden 

 does not fall upon the contracting and unprofitable industry — it has 

 troubles enough of its own already. Nor is it put upon the new 

 and rising industry, which is attracting to itself the transferred 

 profits. In the abstract, it might be deemed proper that before the 

 net gains of such an industry are computed or enjoyed it should 

 bear the burdens of the social dislocation it causes by its intrusion 

 into society. In practice, it would be difficult to assess its liability 

 under this head, and in fact even if it could be determined, new 

 industries have so many pioneer efforts and losses, so many failures, 

 so many superseded beginnings, that it might well be bad social 

 policy to put this burden upon them, for they would be discouraged 

 from starting at all, if they had to face the prospect of such an 

 overhead cost whatever their results. It would, of course, be 

 theoretically possible to put a special levy on those new industries 

 that turned out to be profitable, and to use it to relieve the social 

 charges of dislocation of labour. But much the same argument 

 could be used for the relief of obsoletism of capital. The distinction 

 would, however, be that in the case of the capital it could be urged 

 that the investor should have been wide enough awake to see the 

 possibilities of the rival, whereas the worker, induced to take up 

 employment in such a superseded industry, was a victim, and could 

 not be expected to avoid it by prevision. In any case, the prevailing 

 sentiment is rather to encourage developing industries, than to put 

 special burdens upon them, in order that the fruits of science may 

 be effectively enjoyed by society with as little delay as possible. 



