16 THE PRESIDENTIAL ADDRESS 



isms to minimise the losses due to the impact of new invention — 

 and this was clearly a specialised case of keeping the burdens off 

 society. In the case of the electricity supply amalgamation of 1933, 

 brought about for positive advantages rather than in defence against 

 competition, similar provision was made, and parliamentary powers 

 for transfers to gas and water undertakings, also not defensive 

 against innovation, have been accompanied by this obligation. In 

 the case of such uncontrolled businesses as Imperial Chemicals and 

 Shell Mex, rationalising to secure greater profits, rather than fighting 

 rearguard actions to prevent losses, obligations to deal with re- 

 dundancies had been voluntarily assumed. In such cases the public 

 obloquy of big business operations inimical to society can be a 

 negative inducement, but some freedom from radical competition 

 in prices provides a positive power to assume the burden initially, 

 and pass it forward through price to consumers, rather than back 

 against shareholders. The third case, however, of making it a net 

 charge on the improved profits, is quite an adequate outlet. If the 

 principle of putting this particular obstacle in the way of adjust- 

 ments to meet new competition (as distinct from increasing profits) 

 is socially and ethically correct, it is doubtful whether it is wisely 

 confined to cases where there is quite fortuitously a strategic control 

 by public will. 



It will be clear that the difference between the introduction by 

 purely competitive elements involving premature obsolescence and 

 unemployment, and by delayed action, is a cost to society for a 

 greater promptness of accessibility to novelty. The two elements 

 of capital and labour put out of action, would have supplied society 

 with an extra quantity of existing classes of goods, but society prefers 

 to forgo that for the privilege of an earlier anticipation of new 

 things. I estimate this price to be of the order of three per cent, 

 of the annual national income. But when we speak of social 

 advantage, on balance, outweighing social cost, we dare not be so 

 simple in practice. If the aggregate individual advantage of adopt- 

 ing some novelty is ioox and the social cost in sustaining the 

 consequential unemployed is 90X, it does not follow that it is a 

 justifiable bargain for society. The money cost is based on an 

 economic minimum for important reasons of social repercussions. 

 But the moral effects of unemployment upon the character and happi- 

 ness of the individual escape this equation altogether, and are so great 

 that we must pause upon the figures. What shall it profit a civilisa- 

 tion if it gain the whole world of innovation and its victims lose 

 their souls ? 



So far I have treated the problem of innovation as one of un- 

 economic rapidity. But there is another side — that of improvident 

 tardiness. Enormous potentialities are seen by scientists waiting 



