CHAPTER XII THE PROMOTIVE EFFECTS OF MACHINERY

New machines, scientific improvements and the like, often referred to as “technological development,” have received more than their share of unwarranted abuse. Curiously enough, much of this abuse has originated with the laboring man, the very one whom the machine has helped the most. But, like a lot of other problems in the economic field, the answer in the case of shallow reasoning is the direct opposite of the answer in the case of thorough reasoning.

For instance, a laboring man seeing a huge machine doing the work of several hundred men, is all too likely to regard the machine solely from its labor-displacement angle. “What chance has a laboring man in competition with such contraptions?” he asks. All sorts of schemes have been suggested to keep out the introduction of new labor-saving devices. As an example, labor, today, is pressing with all its political ability for a law limiting the number of cars on a freight train on the theory that more trains will require more train crews. Better roadbeds and higher powered locomotives will be of little use if this idea should be embodied into the law of the land. It is one thing for government to repress bad practices and criminals but it is quite another to repress invention and technological progress.

The shallow thinker asks only the question, “Do not machines displace labor?” The obvious answer is, “Yes, most assuredly they do.” The thorough thinker asks a second question, “Is it possible machines create more jobs than they displace?” We can really get some place with the second question whereas, with the first, we were stymied by a lot of contradictory evidence.

Machines have been introduced in greater profusion in the manufacturing, construction and service industries than in any other branch of our productive and distributive processes. In 1820 the United States had a population of 9,638,000 and we had 439,000 people employed in these industries. In other words, one out of twenty-two of our population was employed in these industries. In 1930, we had a population of 122,775,000 and 14,111,000 people were employed in these industries. It can thus be seen that in 1930 we had one out of nine of our population employed in these industries. Quite a remarkable change and all the evidence supporting the machine as the creator of greater employment!

In the Cleveland Trust Company bulletin for March, 1935, Colonel Leonard Ayres shows that the number of people in this country, above 15 years of age, who are gainfully employed, has increased faster than the total population since 1870. While the population increased 319 per cent, the gainfully employed above 15 years of age increased 409 per cent. Again, according to the censuses of 1910 and 1930, the number of people above 20 years of age gainfully employed was 30.6 per cent of the total population in 1900. In 1910 the percentage had risen to 33.4; in 1920 to 34.6 and in 1930 to 35.9. This increase in the percentage of people gainfully employed does not indicate that machines had destroyed more jobs than they had created.

The reason for this sometimes-regarded phenomenon is apparent with but little examination. Take the San Francisco-Oakland Bay Bridge or the Hoover Dam, for instance. Neither one of these projects, supplying labor to thousands over a period of several years, could have been built without the aid of machines. The automobile is another of hundreds of excellent examples. While it might be possible to make an automobile with only hand tools, it is readily evident to anyone that the cost of such a car would be so high that none but the very wealthy could afford it and probably none would buy it. Few, if any, would be employed in the automotive industries without the economies of machinery.

The question, “Is the machine the friend or the enemy of the laboring man?” finds no better answer than in a perusal of immigration records. Does American labor tend to drift to other countries with fewer machines or do we in this country, with more machines per capita than any of the others, find it necessary to erect barriers to keep foreign labor from sharing our superior labor markets? The answer is self-evident.

We want to find employment for our unemployed, do we not? How can that be done? By making more goods. But how can we make more goods when there is no market? Simply by creating a market. How do we create a market? By reducing the cost of goods so that they will be within the purchasing range of constantly smaller incomes, that is to say, so more people can satisfy their desires by being able to purchase these goods. How can we reduce costs? By introducing efficiencies, such as a mechanical device, that will produce a given product with less man energy, with less labor.

Shallow reasoning concludes that less labor per unit product means less labor for the manufacture and distribution of that product in the aggregate. Thorough reasoning and all the available evidence conclude that lower costs of a needed and desired product so greatly multiply the demand for the product that more labor is required in spite of less labor per unit product, which was responsible for the lower cost in the first place.[1]

After all, in dealing with the problem of impoverishment, employment is not the ultimate objective in and of itself. The ultimate objective is the supplying need, the creation of a national plenty. Employment is only an incident, although a mighty important one, to that objective. Most of us work not merely because we want to work. We work because it is the means we use to satisfy our desires, to supply ourselves with necessities, and luxuries, if possible. Therefore (to reduce the proposition to an absurdity), if machines could produce for us everything we desire, there are not very many of us who would kick or find fault because of no work to be done.

When laboring men and their organizations or politicians or any other groups place the blame for impoverishment and unemployment on machines they are confessing their ignorance. They are pointing their finger at the wrong cause. They are diagnosing the problem entirely incorrectly. Technological unemployment is a myth beyond relatively minor and temporary displacements. Of course, the buggy worker was forced out of buggy making when the automobile developed, but there are many more employed today in the manufacture of vehicles than there were then, in which group the buggy worker was no doubt absorbed.

The machine is the laboring man’s best friend because it materially assists in the reduction of costs of the necessities which the laboring man has to buy. That these reductions in cost have not always reflected themselves in a lower selling price of the products, in other words, that the benefits of the machine have not always been passed on to the consumer, is quite another problem. But that is not the fault of the machine!

What or where or who are the parasites that are sapping these benefits? These points are being developed and will be summarized later. Let it suffice here to shame the animate men who will blame the inanimate machine for man’s shortcomings. The machine is one of the greatest promotive instruments to the “X” factor.

[1] The automobile is an excellent example. As labor-saving devices were introduced, costs were lowered. The lower costs have always stimulated new demands requiring more labor than was used previously. To a very large extent the undermining of this principle, i. e., the absorption of the savings before they reach the consumer, has caused poverty and progress to march hand in hand.