UnemploymentIS THERE A REMEDY ?
Recently a number of financial and commercial experts, after discussing unemployment, came to the conclusion that there was no remedy. Mr. Arthur Kitson, who was present, demurred, with the result that he was challenged to publish a solution of the problem. The challenge was promptly accepted, and as we can conceive so subject likely to be of greater interest to our readers we gladly acceded to a request to give publicity to his views.Editor of The Times Trade Supplement.
IS there a remedy for unemployment, or is the problem, as stated by the Government and its experts, insoluble ? My answer is that not only is there a practical remedy, but the problem itself, when properly understood, is so ridiculously simple that the average schoolboy ought to be able to furnish a satisfactory answer.
There are many obstacles to human progress arising from natural causes over which man has little or no control. There are others which are by far the more numerous, and entirely the result of mans stupidity, superstition, ignorance, prejudice, and greed. These obstacles can be removed as soon as the causes are generally knownprovided the majority of the people are determined to remove them. Of all these evils the most unnecessary, those which any free and intelligent Government could, if it really desired, most easily avoid, are poverty and unemployment.
That the Government of a country which has had more than two centuries experience in industrialism should have the temerity to admit that they know of no method by which the national industrial machine can be kept busy when myriads are perishing for lack of goods is one of the most disgraceful confessions any body of intelligent men could possibly make ! Yet, during the past few weeks, we find the leaders of every political partystatesmen, financiers, Labour members, economic professors, journalists, and divinespublicly acknowledging that in their judgment unemployment is beyond human controlan acknowledgment of ignorance and stupidity which ought to brand them as utterly unfitted to hold any public office !
If it were true that, in spite of the enormous development in invention which has increased mans productive resources a thousand fold, poverty and starvationthe attendants of unemploymentare unavoidable, one could only pray, as the late Professor Huxley once said, that some friendly comet might speedily collide with our planet and put an end to all this misery !
Fortunately the problem is not only capable of solution, but is so simple that future generations will read the writings and speeches of present day authorities with the same amusement and astonishment as that with which schoolboys read the essays of a certain doctor of science of 50 years ago in which he sought to prove that no vessel built of steel or iron could possibly float !
Considered as a branch of the science of a statesman or legislator, political economy; wrote Adam Smith, proposes two distinct objects : First, to supply a plentiful subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves ; secondly, to supply the State or Commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the Sovereign.
How happens it then, asked Proudhon, the French iconoclast, that in spite of so many miracles of industry, science, and art, comfort and culture have not become the inheritance of all ? How happens it that in Paris and London, centres of social wealth, poverty is as hideous as in the days of Caesar and Agricola ?
For the hundredth time or more the social Sphinx propounds the self-same riddle, and cries, Answer or perish !
One is naturally inclined to ask why, if the riddle is so easy, no answer has been given throughout all these years ? My reply is, firstly, that answers to the problem have already been made, but as these can only become effective through their adoption by the Government, it rests with our rulers to say whether unemployment shall or shall not continue. Secondly, there is reason to believe that Governments are not, and have never been, particularly eager to find a remedy. Had they been really in earnest, one would have expected that every possible avenue which promised salvation would have been explored and that substantial rewards would have been offered to the discoverer of the great secret. If it pays private firms to offer prizes for inventions for overcoming certain technical difficulties encountered in their businesses, surely it would pay any Government to discover a panacea for the evils of trade depression. Yet since remedies have been offered and remain neglected, the inference is plain that so far as Governments are concerned either they do not wish to try them, or else they imagine the remedies may prove worse than the disease.
Of one thing we may feel assured. Since our Government experts have stated that the problem is incapable of solution, they are not likely to allow themselves to be persuaded to swallow their own words, no matter how plausible a remedy may be offered. Our experts are not of the type who would ever acknowledge fallibility in their economic pronouncements. Hence, no matter how serious our industrial affairs may become, it is quite certain that no remedy will be permitted to interfere with the present order of things so long as we are governed by the present set of permanent officials.
Let us state the problem in simple terms. The industrial world, comprising agriculture, mining, and manufacture, is engaged in producing goods necessary for human existence and comfort, andthanks to inventions and discoveriesis able to produce goods of every description in such abundance and with such comparatively little effort that periodically the markets and warehouses are glutted and the channels of trade become so congested as to cause a slowing down of the whole machinery of production and the consequent wholesale discharge of operatives. Meanwhile, the vast masses of the population are in want of those very goods, the apparent over-production of which clogs and retards the wheels of industry. At all times wealthproducers find greater difficulty in disposing of goods than in producing them.
The real problem is, therefore, to discover some method of selling goods as fast as they are created. It is in search of an answer to this problem that all nations are ransacking the earth for fresh markets. It is for this reason that international commercial competition has of late years become so keen and so dangerous. Unless a correct solution is found and adopted the result will be endless future wars.
The problem can be made very simple by means of the following illustration :
Imagine an engine operating a pump connected to an oil well raising the liquid from the well to an overhead reservoir for supplying the public. The engine is supplied with oil by a tube from the reservoir. This tube has a valve fitted at the top which closes automatically with the weight of oil in the reservoir, to prevent overflowing. Another pipe runs from the reservoir to the main and supplies the public demand. Now it is quite evident that so long as the engine and pump remain in good working order, the continuous running of the plant will depend upon two things(1) the supply of oil in the well ; (2) the consumption of oil by the public at the same rate at least as the reservoir is supplied. Any slackening in the rate of consumption would soon tend to slacken the speed of the plant and finally stop the pump. Further, any increase in the efficiency of the plant by which the supply of oil to the reservoir is increased would also tend to stop the plant unless the public consumption be increased in the same proportion.
Let us translate this illustration into the terms of our present economic condition. Our oil well corresponds to the earthnature and raw material, the mines, fields, and forests. The engine and pump correspond to labour and capital engaged in converting the raw material into finished products. The reservoir indicates our markets and warehouses where finished goods are sent. The public oil main represents our transportation system. The supply tube from the reservoir to the engine represents the proportion of the products which must be continually supplied to labour and capital to keep our wage-earners and maintain our factories and plants in working order. By an unbiassed person the following truths will scarcely be questioned :
1. The employment of labour and capital is dependent upon (a) constant supplies of raw material ; (b) the ability of the public to purchase commodities as fast as they are produced.
2. Any curtailment of consumption by the public below the rate of production (whether by reason of saving or for any other cause) must necessarily tend to check production and cause unemployment.
3. Since the public power to purchase goods depends chiefly upon the wages, salaries, and dividends paid in the process of producing commodities, any slackening in the rate of production must tend to reduce the effective demand for goods.