Is Mechanization a Danger ?
BY DENNIS ROBERTSON.
I do not think any economist has denied that mechani- cal improvements might on the balance be " labour- robbing " in the sense that their effect, even when all readjustments are made, is to depress the economic worth of labour as a whole : but most of than have argued that in fact this i; very unlikely. One of the reasons which have been recently alleged for its unlikeli- hood is worth particular attention. In his book, The Theory Wages, Mr. J. R. Hicks has pointed out that many. labour-saving improvements are not made, so to speak, out of the blue : they are made simply because, in the ordinary course of economic • progress, capital becomes abundant and cheap relatively to labour, and there is therefore a natural inducement to the organizers of industry to substitute the one for the other. Now it can easily be shown that the increased- abundance of one " factor of production " is bound to benefit the others taken as a whole : hence, if we simplify the factors into " labour " and " capital," an increased abundance of " capital " is bound to increase the real reward of " labour," even though the increased abundance of capital naturally manifests itself in an increased use of mechanical equipment.
This argument is, I think, unconvincing, because the savings which, eve hypothesi, have become cheap .are, not the only factor of production besides labour. Both labour and savings are things which are hired in the market- by the class of business entrepreneurs : and the whole benefit of an increased abundance of savings might accrue not to labour at all. but to the class which hires them both. For the relation between labour and savings might : be predominantly that of rivalry : and where two factors among several are predominantly rival nothing to prevent an increased abundance of the one from depressing the reward of the other. This, as Professor Pigou points out, is exactly what would happen " if the only kind -of capital instruments which man had learnt how to make were a kind of Frankenstein's monster capable of exactly duplicating the labour of manual workers, and not capable of doing anything else." It is true -that, as Professor Pigou goes on to argue, - the majority of capital instruments created in the past have not been of this character. -" Railways; ships, factory buildings, machines, motor-cars and houses—taken broadly, are tools for, and not -rivals to, men:" But is there not a good deal of reason for sus- pecting that the tide of mechanical invention is now flowing fairly strongly in the Frankenstein direction ? But the very fact that the champions- of machinery can no longer plausibly attempt to base their case (as Senior did eighty years ago) on the probability that it will lead to increased employment at the point at which it is intro- duced seems to suggest that with the growing ingenuity of the inventor and the growing precision of his methods the relation of rivalry tends to grow at the expense of that of co-operation. .
This same fact—the decreasing likelihood that employ. ment will be increased at or near the point at which the new methods are introduced—leads us to ask whether, even granted that everything is bound to come right in the end, the problem of transfer and re-absorp- tion is not attaining wholly new dimensions. Too much attention, indeed, must not be paid to sensational accounts of the increase in- the powers of production of particular articles—which is the reason why I do not quote here any of the countless instances with which the recent literature of this subject teems. Such examples, as Professor Macgregor has lately. shown, can be paralleled from previous decades, in which they did- not prevent the maintenance or restoration of reasonably full employment. When we find the whole factory industry of a great country like the United States pro- ducing, over a period of active trade, a growing output with a diminishing number of employees, there is something more to make a fuss about. But this again, of course, is not conclusive, for it has been argued, first, that fortunately the powers of Nature cannot keep pace with those of the machine ; and secondly, that the release of a growing -proportion of the population for the rendering of skilled personal services is the very badge and index of a high standard of civilization. It is precisely in these two fields that. the whole scale of the problem seems to me to have altered in quite recent years. The mechanical and biological sciences have been conspiring to reduce the amount of labour required to furnish the world with its supplies of food and raw materials. And the mechanization of music and drama, of street-cleaning and . house-cleaning, proceeds there is apace, creating no doubt new industries on a certain scale to replace the old, but blocking the much-advertised avenues of non-industrial employment. There remains one harbour of refuge—the distributive trades ; but there, too, 'the nose of the rationalizer is getting busy, smelling out " waste," alias unnecessary labour, alias reducible employment.
But it will all come right in the end : man's stomach is small, but his desires are infinite : wait and see. Yes, in the end, perhaps ; but, as Professor Gregory has well written, " in the ceaseless combat -waged in the human mind between the desire for greater gratification on the one hand and the desire for greater security in the shape of holding free balances on the other, it is not at all times true that it is the former passion which gains the -upper hand." Whatever be true of " labour as a whole in the Long run," here is enough, in my judgement, to make it likely that in the next half-century the march of science and the growth of capital will continue to reduce large groups of workpeople to a state bordering on economic worthlessness for long periods of time ; and will thus subject a society based on the correspond- ence of reward with economic worth to greater strains than it has ever previously known.
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