The Evening Star THURSDAY, MARCH 24, 1887.

Evening Star, Issue 7169, 24 March 1887, Page 2

The Evening Star THURSDAY, MARCH 24, 1887.

"The displacement of labor and capital," say* Mr Avayswfi Mon&redien, " whence "flow so many evils to the traders and " workers of the -community, is the result of " a great variety of causes, operating either > " in combination or isolatedly." Whether . all these causes are controllable by man, or are some of them beyond his control, is the , question which he sets himself to solvo in a I .recently-published tractate on this " neg- ' tested chapter of political economy." He starts with the premise that no one has yet succeeded in fully accounting for those fluctuations of trado which are everywhere of periodical, though of uncertain, recurrence, and which so .vitally affect the con- ! ditions and fortunes of a vast number of human beings. Several of the causes which produce these fluctuations "are, from their ." very nature, independent of man's volition; j "and, as far as their operation goes, the| "'bad times' to which they give rise are; "not ascribable to any defect in man's " agency. Good legislation may, indeed,, " somewhat abridge the duration . or ' " alWiatc the severity of these evil phases! " of commerce; but' bad times,' as far as are i " due to the class of causes referred to, are • " the outcome of forces that lie outside the I " domain of man's energies." Mr Mongredien's investigations iu this region of poli- . tical science come apcly to hand during a, period of depression of unprecedented dura- j tion. Amongst the numerous items which I compose what he terms " remediable social' scourges," there are enumerated wars and preparations for war, international jealousies, protective taxes on imports, obstruction to the division of labor, bad government, insecurity of person or property, neglect in [ diffusing knowledge, and consequent igno- j •ranee and crime. '' These," he says, '' form j " a small though important part of the in- ■" numerable social devices by which man j •" contrives his own infelicity and contends " against his own well-being." Of those, causes of the displacement of labor and| capital over which the controlling power of ; human legislation can exercise very little j control, ho specifies seven. These are:— ] The progress of civilisation, climatic and, natural agencies, changes in taste and' fashion, changes in the channels of trade, i gluts and over-production, the diminished j prosperity of other nations, and the rise in, the value of gold. i That the evils of displacement should be. attributable to the progress of civilisation is' not so paradoxical a proposition as it may at: first appear to be. " We cannot have progress without improvement, nor improve- " ment without change, nor change without "displacement." Hence every scientific; discovery, every improvement in labor-' saving processes., every useful invention,' .every fresh application of mackinery, every acceleration in the means of intercommuni-. cation between distant regions, every.frcsh •conquest over the forces of Nature—each and every of these additions to man's creative and productive power is, on its primary introduction, a potent and immediate cause of temporary displacement of capital and labor.' This is so self-evident that it requires no argument. The adoption of steam as a motive power, and of the machinery which it set in motion as a substitute for human muscle and intelligence, displaced—that is, threw out of workhundreds of thousands of wage-receivers for a time; and with each fresh application of steam or electricity the displacement is still going on. Capital is similarly affected j Every novel arrangement of improvecl machinery lessens the value and oftep

renders useless the old, the capital invested in which is subjected to heavy depreciation or entire lobs. Thus the temporary and partial displacement of capital and labor is one of the inevitable consequences of prog' Climatic and natural agencies are beyond the power of man to resist or avert, though he may do something to lessen such evils as result from encroachments of the sea, the silting up of harbors, the deviation of natural water channels, and the overflowing of rivers. Changes in tastes and habits are a very frequent and serious cause of the displacement of labor and capital. These arise from the caprices and vagaries of fashion. | At one time silk wares are in great demand; presently they are discarded for velvets or other fabrics. A little .while ago furs were in favor; now they are not in much request. Each change displaces the labor specially affected, and renders unproductive the capital employed. " Thousands of barbers " and their journeymen, all over the civi- " lised world, were ruined by the monstrous "innovation of men wearing their own hair "instead of wigs." When shoe-strings came into vogue, the buckle-makers of Birmingham petitioned Parliament for protection against the new fashion; and the brass button makers went in procession to the King to request that the ÜBe of cloth buttons might be prohibited. No doubt many were thrown out of employment by these changes, but these are evils for which there is no possible remedy. Labor has to adapt itself to the changed conditions, and capital to seek other outlets for its use and investment. The changes in the channels of trade are another cause of displacement. The transfer of industrial and commercial enterprise from one locality to another is frequently productive of much temporary evil. When the woollen trade was transferred from the West of England to Yorkshire, thousands of hands were thrown out of work, and the capital invested in cloth mills and machinery was lost. " The discovery and adoption of "new and more convenient ocean routes, " the advantages offered by the construction "of new railways, the colonisation of new " and fertile regions, the tempting proximity "of some new and unexplored source of " mineral wealth "—such, for instance, as a new goldfield—" the chance settlement of "special industries in congenial spots, and " other similar incidents, exercise considerable influence in attracting labor and "capital to one place and displacing them "from another." The most extensive and prolific of these sources of displacement is undoubtedly that which is first named. We have only to consider the changes which have occurred in our time to realise :the effects thus brought about—as, for instance, the opening of the Suez Canal and the American continental railways. And when the Panama Canal becomes an accomplished fact, a yet more complete displacement of oceanic channels of trade must certainly take place. Another cause of the fluctuation in trade, and therefore of the displacement of labor and capital which accompany them, is the frequent occurrence of what is termed a "glut"—that is, the over-production of certain commodities as compared with the demand for them. It may be thought that this, at any rate, is a matter not beyond human control. But the answer is obvious. The producer or manufacturer has to provide for the prospective wants of the community ; and, as Mongredien urges, " it is "quite beyoud human ken accurately to "measure the extent of the impending "demand for any particular commodity." The most careful calculation may be upset by adverse and unforeseen circumstances, and cause a "glut" when least expected. Then the result follows that the producer ceases operations, or continues to produce on a diminished scale. In the one case, labor and capital are altogether displaced ; in the other, capital has to be content with a smaller profit, less hands are requisite, and the labor-sellers are stinted in pay. Until the balance between supply and demand is readjusted, both will continue to suffer. " The only practical mode of alleviating the " evil effects of gluts is by the adoption of free "commercial intercourse, ■. and thereby of " international division of labor, whjch " would diminish their frequency and " abridge their duration." In connection with this branch of his subject Mr Monokkdien quotes an extract from his work on "Wealth-Creation," as follows :—" With " perfect freedom of commerce, in place of "an over-supply of some commodities in " some countries, the balance would soon " and easily be redressed by the interchange "of the respective superfluous productions. " The whole world would be open to facili- " tate and equalise their distribution. "Innumerable markets would present them-, "selves to receive the commodities overproduced or to fill up the vacuum of " undersupply. The inequalities between " supply and demand would be far less per- " ceptiblo when spread over so vast an area; "just as the under-supply or over-supply of " rain, that makes the mountain stream " either a dry ravine or a devastating " torrent, produces but little effect on a " broad lake."

That the decay or diminishing prosperity of one country reacts upon others, by reducing the amount of interchange, is a proposition which requires no argument. It only goes to show that, despite hostile tariffs and vexations restrictions on trade and commerce, all the nations of the earth are but one family, with common wants and common interests. The wealthier they all are, the better for each ; for in proportion as they become poorer, and less able to exchange goods with goods, fewer dealings and less trade must he tibe result. The seventh and last cause of the displacement of labor and capital referred to is the rise in the value of gold—" eonve.nlently, " perhaps, but not either logically or ctymo"logically, termed its 'appreciation.'" This, the author says, is obviously tantamount to a continuous fall in prices, which is injurious for the time to the producers and distributors of commodities. We have not space to enter upon th,e ( conßiderftjlpii ojf this question now, hut we may quote a few figures from a paper by Mr A. Sauerbeck, which appeared in the ' Statistical Journal' of September last, in connection with the subject. From these it appears that prices are now 30 per cent, lower than the average of the years 1867 to 1877 ; and 36 per cent, lower than that of 187?. Since the latter year the drop lias been almost continuous; and if prices continue to feqecje in anything like the same proportion, a fall of 50 per cent will soon' be reached.