no more unemployed than are firemen who wait in fire-houses for the alarm to sound, or the reserve police force ready to meet the riot call, or the officers and privates of an army which is on a peace footing. Moreover, the personnel of the "army" is constantly changing; practically every wage-earner is in it sometime, and its members are more often employed than unemployed. Shall we say they do not serve when they only stand and wait?

The doctrine that was substituted for the theory of overpopulation, namely, that labor-saving machinery and improved processes create a surplus labor force that has no place in industry, has also been exploded by recent scientific study. No one denies that particular laborers are thrown into the unemployed reserve army by industrial invention, but that such displaced labor cannot be absorbed by the industrial system is disproved by the enormous increase in the number of wageearners employed in almost all our industries. From 1900 to 1910 our population increased twenty-one per cent, but the average number of wage-earners who found employment in manufacturing and mechanical industries increased forty per cent. And although the decade was marked by a marvelous development of labor-saving machinery and processes, the amount earned by the wage-earners employed increased seventy per cent. In mining, agriculture, trade and transportation the same expansion and increase in the number of wage-earners employed can be seen. If labor were becoming redundant, the effect would show itself in lower earnings.3

It is a matter of common experience that new machines are labor displacers. At its introduction an economical device often forces some men to seek new occupations, but it never reduces the general demand for labor. As progress closes one field of employment it opens others, and it has come about that after a century and a quarter of brilliant invention and of rapid and general substitution of machine work for

1 Abstract, Thirteenth Census, pp. 438-439.

'Thirteenth Census, Population, vol. iv, Occupation Statistics, table 15, pp. 54-56. 3 Compare S. J. Chapman, Work and Wages-in continuation of Lord Brassey's Foreign Work and English Wages, London, Longmans, 1908, pp. 304-384; Beveridge, Unemployment, p. 8.

handwork, there is no larger proportion of the laboring population in idleness now than there was at the beginning of the period.*

It is even contended that the total amount of unemployment and particularly the distress from want of employment has been smaller in our generation than in the past.

Unemployment is, of course, in the United Kingdom, as elsewhere, no new thing; and there is no reason to suppose even that it prevails to any greater extent, or in any more extreme form, than throughout the past hundred years. . . . Our own impression, indeed, derived from wide and prolonged study of all the facts, is that such years of acute crisis of 1816, 1841, and 1879, witnessed a considerably larger proportion of men out of work, and certainly more widespread destitution and misery than anything that this generation has suffered."

It is doubtful, too, if the United States has ever had such a large proportion of its workers unemployed or such a prolonged period of depression as that which followed the panic of 1837. But reliable statistics are not available to establish this contention conclusively. Sufficient is known, however, to disprove the idea that the progress of industry brings a proportionately greater problem of unemployment or makes its solution more difficult.

It is true that increase of population, invention of machinery and improvements in industrial process and efficiency do make the adjustment of the supply of particular forms of labor to the demand a most difficult problem-even though they do not create an absolutely unusable surplus. But the same inventions, particularly in the field of transportion and in the progressive elimination of skill as a requirement of industry, have increased the mobility of labor to a degree unknown one hundred years ago, while improved efficiency in the conduct of business, scientific management, and the organization of labor has brought also improved methods of adjusting labor supply to demand.

No doubt there are parts of the country which are over

J. B. Clark, Essentials of Economic Theory, Macmillan, 1907, p. 257. 1 S. and B. Webb, The Prevention of Destitution, p. 94.

supplied with labor, particularly ports of entry for immigrants. and certain occupations, especially unskilled and clerical employments, which are overcrowded; but there are other parts of the country and other occupations which are capable of using more labor than they have. There are times of the year when many industries are slack and cannot use all their working forces, and there are years, like 1908 and 1914, when most industries lay off a large part of their labor; but busy seasons and prosperous years absorb the surplus and for a time even show a shortage of help. Many state and city employment offices have been reporting lack of labor in certain lines during the last few months. To adjust these fluctuations, to distribute labor more evenly over the country, and in better proportions among the occupations, to equalize the amount of work among the seasons and the years, is the very essence of our problem.

Finally the conclusion to be drawn from all the recent studies of reported unemployment is that the unemployed man is an industrial factor, not a parasite upon industry, that the unemployed at any particular time are but a sample of irregular reserves of labor. "It is not true that there exists in all states of trade a permanent army of capable unemployed people whose personnel over a short period remains comparatively unvaried." 3 "The principal factor in maintaining the irreducible minimum of unemployment is not the chronic idleness of a few but the incessant loss of time, now by some, now by others, of a comparatively large body of men, most of whom are more often in employment than out of it." This conclusion was anticipated by Marx.5 And we may quote a report to the

1 This was the finding of the New York Commission on Employers' Liability and Unemployment; and Reports of the New York State Department of Labor and the Chicago City Club on Vocational Training testify to the same effect.

In August and September, 1915, the Ohio Public Employment Offices reported a general shortage of labor throughout the state. See Monthly Review of the United States Bureau of Labor Statistics.

3 Chapman, Work and Wages, cited above, p. 351.

'Beveridge, Unemployment, p. 72.

See page 8 above.

United States Commission on Industrial Relations which expresses the same view as a result of a recent study of unemployment throughout the United States.

Our whole problem arises, not because we have too many people in the country but because demand for labor does not remain at the maximum. It fluctuates from day to day, week to week, month to month, season to season, and year to year. Sparsely settled states have just as acute problems of unemployment as the states with very large populations. It is the irregularity of employment and unsteadiness of income that gives us our problem, not the size of population. Instead of a permanent "army of the unemployed " we have shifting, intermittently employed reserve labor forces, whose members are constantly changing, so that fully half the wage-earners are in the reserve for part of the year. Unemployment is a constant and inevitable risk for almost all working people, and not a problem of a permanent surplus of workers beyond the country's needs.

If we have an army of the unemployed at all it is a citizen army in which practically all serve, and not a standing army, wholly detached from industry.

It must not be assumed from this summary of the nature of the unemployment problem as established by recent scientific studies that there is no dispute as to the causes of irregularity of employment. The disputed points, however, concern ultimate explanations. Some explain reductions in demand for labor by a theory of over-production. Others ascribe it to under-consumption—the "fallacy of saving" causes the consumptive powers of the country to lag behind its productive. powers. Still others explain it by competition and by speculation and over-capitalization; while some advance a theory of social psychology, that it is imitation and the mob mind which causes general over-confidence in investments at certain times, and lack of confidence resulting in depression at other times."

J. A. Hobson, The Problem of the Unemployed (1896), and The Industrial System, Longmans, 1910, chapter xviii.

* Beveridge, Unemployment, p. 59 ff.; Seligman, Principles of Economics, Longmans, chapter xxix, sec. 198; Pigou, Unemployment, chap. viii; Georg Adler, in article in Handwörterbuch cited above.

"Political Economy in ascribing it [causes of fluctuation] to anything from oversaving to sun-spots, has vindicated its oftdisputed claim to imagination."

This discussion may be compared to the disputes as to whether God or some natural force causes gravitation. Scientific handling of the problem of unemployment is possible without accepting any of these explanations, just as the laws of physics may be established and used without final conclusions as to how the laws came to be.

Busy and slack seasons, years of prosperity and depression, are now accepted as the characteristic course of modern industry. Accepting the fluctuating movement as a fact, modern students hold that it may be measured, its fluctuations to some extent prevented, and its evil effects removed by paying the labor reserves during the waiting periods. This is the basis of the demand for legislative and administrative action. In the words of the New York Commission on Unemployment: "We must not go on ignoring a fact of such vital importance. It is sufficient for us to know that there is a world-wide movement of trade which affects the industries of our state, causing a great amount of work during some years and a great amount of idleness during others." 3

V. Measures to be Adopted in Solving the Problem

Not only is there general agreement as to the nature and causes of unemployment, but the practical remedies that must be applied have also been established by scientific students. It is here that modern students, including socialist scholars, part

1

1 Poyntz, Seasonal Trades, cited above, p. 3.

Marx described it as "a decennial cycle (interrupted by smaller oscillations) of periods of average activity, production at high pressure, crisis, and stagnation." Capital, vol. i, p. 694, Kerr Edition. And a bankers' guide, The Financial Graphic (1911), explains the movements thus: "Starting with a period of depres sion, this is followed by a period of initiation and activity developing a feeling of confidence coincidently with what is called good business. This finally reaches its maximum and is followed by declining markets ultimately resulting in a period of readjustment and sometimes panic with subsequent dullness and depression."

Third Report of the New York Commission on Employers' Liability and Unemployment, p. 43.