IX. Enforced Idleness

CHAPTER IX

ENFORCED IDLENESS

(1) Resources excluded from or withheld from monopolized employments must, if they remain idle, be idle in some other sense also

THERE IS another aspect of all resources which are in a state of “participating idleness” and of some which are idle in other senses. As any increment of resources which is in “participating idleness” could secure employment at any moment in the monopolized field by the process of under-cutting, it must either be “forced” into idleness or be voluntarily “withheld.” We can distinguish, therefore, two broad aspects of “participating idleness”; it is either “enforced idleness” or it is “withheld capacity.” These self-explanatory terms have already been used, but must now be further considered. They indicate causes of idleness just as the term “participating” does. If the enforcement is removed, or the motive to withhold is dissolved, the idleness disappears; and, on the other side, the loss of the “participating” rights or their conferment in other ways, will also cause the resources to be utilized, through scrapping or otherwise, in new fields. “Participating idleness” is not, however, the only form of idleness which results from coercion or the withholding of capacity. In the case of labor, the excluded or withheld resources may be left in a state of “preferred idleness”; and in the case of all excluded or withheld resources, they may be left in a state of “valuelessness” in respect of any alternative employments (absence of net scrap value when equipment is concerned), or in a state of “pseudoidleness” in respect of any alternative employments. It is clear, therefore, that the exclusion or withholding of resources is never a complete explanation of their idleness. They must either be “valueless” for all other uses or be left idle in some other sense.

(2) Enforced idleness is caused by the exclusion of resources during the monopolization of production; but the term has a limited meaning

Enforced idleness exists when specialized resources have (a) been driven out of one productive employment by legal enactments (fixing prices, or fixing output directly), by physical violence, by threats, by “moral suasion,” by strikes, by boycotts, or by the use or threatened use of discriminatory charges (as under “aggressive selling”) and yet (b) have not taken other employments because of some “participating” rights conferred by idleness, or for one of the other reasons we have mentioned. Hence the notion of “enforced idleness” has a limited meaning. It does not refer to resources which have been diverted from any employment by restrictionism, unless they are then idle for one of these additional reasons. Thus, workers who have been deprived of their customary jobs (for which they have acquired specialized skill) through the raising of wage-rates, or the maintenance of wage-rates in times of depression, do not come into this category unless they refuse to accept alternative employments. And plants which are forced to shut down because of charges imposed on their economy through restrictive industrial legislation¹ can only be reckoned as examples of “enforced idleness” if they remain in existence. We cannot usefully think of their scrap materials (directed to, the next best employment) as “idle.”

(3) Enforced idleness must be distinguished from two other forms of “waste”: (a) specialized “diverted resources” which happen to find inferior employments, and (b) the hypothetical resources which might have become specialized in the monopolized field but for powers of exclusion

Although, in a sense, those who have been prevented from acquiring skill in any trade because of apprenticeship regulations or irrelevant educational requirements may be thought of as “excluded,” we cannot regard them as in “enforced idleness.” Nor can we bring into this category those who are kept from a trade, for which they could acquire competence, by some trade-union demarcation, or sex bar or color bar, unless they had at some time enjoyed employment in it. Similarly, we cannot regard physical resources which would have become specialized for a particular employment in the absence of restrictive legislation or private coercion as representing a sort of hypothetical “enforced idleness.” When we think of “idleness” in one of the senses in which the condition can be deplored, it is simply a conception which enables us to distinguish the most conspicuous (certainly not the most serious) forms of waste from others. It helps us to envisage the nature of a particular set of symptoms of waste. Capital equipment, driven into subsidiary, makeshift uses under “planning” and suchlike policies designed to secure “prosperity” represents what may be called “diverted resources”; but resources which become specialized to inferior productive fields because of the power of exclusion cannot be called “diverted.” They represent waste in yet another sense. All monopolies—in other words, all contrived scarcities—involve enforced waste; but the different forms of idleness can only be indications of its presence. The absence of idleness does not imply the absence of waste. In searching for the reasons which result in the manifestation of waste in idleness, it is appropriate to connect the causes with the immediate acts of public or private policy that precipitate it. Hence it is profitable to distinguish between (a) “enforced idleness,” and (b) (i) “diverted resources “which (whilst specialized) find fields of utilization, and (ii) hypothetical resources (including those whose original specialization might have been appropriate but has been destroyed by scrapping) which might have become specialized in the monopolized field but for coercive or voluntary powers of exclusion. At what point the process of despecialization causes resources to pass from class (i) to class (ii) is not important. But the main distinction—between (a) and (b)—is important because “factional unemployment” and “technological unemployment” are commonly regarded as due in part to demarcations and rigid wage-rates which restrict mobility between not greatly dissimilar occupations. But whilst these things cause the diversion of resources, and deter otherwise profitable specialization, they need not, in themselves, precipitate “enforced idleness.” And the most serious productive developments which are deterred through the exercise of monopoly power find no manifestation either as “diverted resources” whose specialization remains, or as resources in “enforced idleness.”

(4) “Diverted labor resources” may be described as in “disguised unemployment,” but the condition is unimportant in relation to other forms of waste which are not expressed in idleness

Now Mrs. Robinson² has suggested that it is desirable to describe as “unemployed” certain resources which fall into the “diverted resources” category. She suggests that we should say that those workers are in “disguised unemployment” who have lost their main occupation and, although in jobs which produce some earnings, are virtually unemployed from a realistic standpoint. If we have correctly understood her point, it is that their meager incomes merely hide or disguise what is most important in their condition. For conceivable practical problems, her term is, perhaps, serviceable and graphic. There is waste of capacity and a distributive injustice in such a situation, and statistical and empirical studies of “unemployment” can easily ignore this aspect of the condition of the “employed” population. But the evil in this case is not idleness, and doubts as to the appropriateness of the term “disguised unemployment” arise therefore. Nevertheless, if we confine the notion to “diverted labor resources” which have been driven into some inferior occupation it may have some usefulness. The inferior occupation must involve the non-utilization of specialization (i.e., natural or acquired skill relevant to a particular task) which would still have value under free exchange in the original occupation. The conception connects the excluded workers with an employment into which they could immediately slip back if the coercion were broken down or (as we shall see in the following chapter) if the motive to withhold their labor disappeared. It cannot helpfully apply to wasted productive power which has not been “diverted,” however. There is no “disguised idleness” in the non-utilization of the potential capacities of the labor force in trades to which they have never been allowed to “become attached”; and it is this last effect which really constitutes the serious waste under restrictive wage and recruitment policies. Thus, working-class women may have become specialized to household duties largely through the exclusiveness of men’s labor organization. But although excluded from well-paid employments, there is no waste of specialized capacity; they have not been “diverted” in our sense. Hence they could not be regarded as in “disguised unemployment.” Even if many such women could be immediately employed as interlopers at cut rates in unskilled jobs now monopolized by men, they would not be in “disguised unemployment”; for they would never have become “attached to” those trades. Their existing powers would be wasted but not “diverted.” The essence of “diverted resources,” which we may call “disguised unemployment” in the case of labor, is that a reversal of policy would enable the specialized resources to slip back into their first use. But we must repeat that such cases of wasteful utilization are not important in relation to the aggregate wastefulness in the application of, and the process of specialization of, productive power. Just as wasteful idleness indicates the presence of, but by no means expresses the burden of, the curbing of productive power, so “diverted resources” must form a very small, if perceptible, proportion of all wasted resources.

(5) Enforced idleness may be caused by the monopolization of cooperant stages of production

We must also regard as falling into “enforced idleness” those specialized resources in “participating idleness,” or those which are “valueless,” the original demand for which has declined subsequently to the investment owing to some contrived scarcity in respect of cooperant resources. In other words, not only may collusion among competitors enforce idleness, but the monopolization of a cooperant stage of production may have the same result. Thus, if there is a small gas-works which earns just enough to pay for prime costs, a rise in the price of coal owing to a cooperative coal marketing policy may force it to cease operations. Idleness in that sense is “enforced” also. The position becomes very complicated in this type of case, however (i.e., when it is cooperant and not competing resources which are excluded by monopolistic policy). For the entrepreneur’s decisions in the process affected may also be giving effect to some new withholding of capacity which he judges to be profitable because of the contrived scarcity in the cooperant stages of production. Or the idleness may be in the nature of a strike (although not popularly recognizable as such) due to a quarrel about the division of revenues obtained by joint restrictionism. But monopoly in respect of one process (which may or may not involve “enforced idleness” or “withheld capacity” in the resources specialized for it³) may undoubtedly enforce idleness in specialized resources devoted to cooperant processes. As Professor Knoop has pointed out, “because wages are forced up in some sheltered industry, it does not follow that that industry will be the one to experience unemployment; the prejudicial consequences may affect other industries. For example, high wages in the railway industry, by helping to keep up railway rates, may react unfavorably on the coal industry and the iron and steel industry, in both of which cost of carriage is an important item among the expenses.”⁴

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1 Industrial legislation preserving some collective good obviously does not fall under the heading of “restrictive,” e.g., laws preventing the pollution of rivers or the atmosphere.

2 J. Robinson, “Disguised Unemployment,” in Essays in the Theory of Employment (London: Macmillan, 1937), p. 82.

3 Obviously monopoly does not involve “idleness” when resources have been deterred from specializing themselves for the monopolized production.

4 Knoop, Riddle of Unemployment, p. 128.