XIII. The Limits of an Economic Society
THE LIMITS OF AN ECONOMIC SOCIETY
When we try to establish a standard to which wages generally tend to conform, the question arises how much of the earth we have in view. Is there a rate at which the pay of labor in Europe, Asia, Africa, Australia, and America tends to settle and remain? Is there a common rate of interest that is normal in all these grand divisions, and are there also general standards of value for goods which govern their prices in all the markets of the world?
XIV. Effects of Dynamic Influences Within The Limited Economic Society
EFFECTS OF DYNAMIC INFLUENCES WITHIN THE LIMITED ECONOMIC SOCIETY
How the General Unification of Methods of Production Calls at First for an Increased Exportation of Capital from the Central Area and Checks the Immigration of Laborers.—A study of the causes of the interchanges which take place between the economic center and its environment shows that the movement of goods, the diffusion of modern methods of making goods, and the movements of capital and labor across the border of the economic society we are studying are interdependent.
XV. Perpetual Change of the Social Structure
PERPETUAL CHANGE OF THE SOCIAL STRUCTURE
Perpetual Change of the Social Structure.—We confine ourselves to that economic society par excellence which we have called the industrial center of the world. In this region economic influences are forever changing the very structure of the society itself. They move labor from place to place in the system and they transfer capital to and fro in the same way.
XVI. Effect of Improvements in Methods of Production
EFFECT OF IMPROVEMENTS IN METHODS OF PRODUCTION
Displacement of Labor and Capital by Inventions.—Inventions are “labor-saving.” Employers are engaged in a race with each other in reducing the outlays involved in producing goods, and a common way of doing this is to devise machinery that will do what laborers have heretofore done. The same thing is accomplished by developing cheap sources of motive power or introducing new commodities which are good substitutes for dearer ones.
XVII. Further Influences Which Reduce the Hardships Entailed By Dynamic Changes
FURTHER INFLUENCES WHICH REDUCE THE HARDSHIPS ENTAILED BY DYNAMIC CHANGES
In the absence of an unusually great increase in the consumption of an article the improvement which reduces the cost of it tends to displace labor. The first thing that will occur to any one who looks for influences which mitigate this evil is the fact that economical changes are going on at nearly all points in the system, and that this cancels out most of the displacing influence.
XVIII. Capital as Affected by Changes of Method
CAPITAL AS AFFECTED BY CHANGES OF METHOD
Labor Saving and Capital Concentrating.—There is a common impression that whatever saves labor usually requires an increase of capital in the industry where the economy is secured, and this impression is justified by the experience of the century following the invention of the steam engine and the early textile machinery. Hand spinning and weaving require small amounts of fixed capital, while the mills in which spinning and weaving are done by steam or water power require a great deal.
XIX. The Law of Population
THE LAW OF POPULATION
Since the optimistic conclusion reached in the preceding chapter is contingent on an increase of wealth which is not neutralized by an increase of population, it remains to be seen whether the population tends to grow at a rate that gives reason to fear such a neutralizing. Does progress in method and in wealth tend to stimulate that enlarging of the number of working people which, in so far as they are concerned, would bring progress to an end? Is the dynamic movement self-retarding and will it necessarily halt?
XX. The Law of Accumulation of Capital
THE LAW OF ACCUMULATION OF CAPITAL
Adam Smith and many others have noticed that the growth of capital varies with the intelligence and the foresight of a population. It should therefore increase in rapidity as intelligence increases. A high valuation of the future is a mark of intelligence, and there is no reason why an entirely rational being should value a benefit accruing to himself in the future any less than he does a benefit accruing at once.
XXI. Conditions Insuring Progress in Method and Organization
CONDITIONS INSURING PROGRESS IN METHOD AND ORGANIZATION
The Possibility of a Law of Technical Progress.—It might seem that inventions were not subject to any influence that can be described under the head of a law. Genius certainly follows its own devices, and inventive power that has in it any touch of genius may be supposed to do the same. It is, however, a fact of experience that some circumstances favor and increase the actual exercise of this faculty, while other influences deter it.
XXII. Influences Which Pervert the Forces of Progress
INFLUENCES WHICH PERVERT THE FORCES OF PROGRESS
Thus far we have been dealing with what we have called natural forces. The phenomena which we have studied have not been caused by any conscious and purposeful action of the people as a whole. They have not been brought about by the power of governments nor by anything which savors of what is called collectivism.
