229 standing idle in the market place because

229

UNEMPLOYMENT: ITS CAUSES AND THEIR

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

REMEDIES.

BY
J. C. M. EASON, B.A.

Read before the Society on Thursday, 11th February, 1926.

Is unemployment inevitable? If so, are there any remedies

which will mitigate its evil effect?

These are the questions which are on the lips of those who

are compelled to face one of the most vital of the many prob-

lems with which civilisation has to grapple.

The problem is not a new one; men have been found at all

times and in all countries standing idle in the market place

because there was no one to hire them. It is not a symptom

associated with any particular form of society, industry or

economic development. Countries which are wide apart as

regards their fiscal policies or their industrial conditions suffer

alike from this problem—countries which have been recently

opened up for development and old countries with established

civilisations are confronted with unemployment—though no

doubt in many varying degrees of intensity.

The factor which has made it particularly urgent and

pressing in these days is the world-wide dislocation of trade,

the inevitable sequence of the European war.

Within the area of the ,Saorstat we have had an additional

cause in the shape of civil disturbance during 1920-1923, which,

in so far as it led to a further dislocation of trade and a re-

moval of spending power, has superimposed many complica-

tions upon what in any event was bound to prove a sufficiently

troublesome matter.

The presence of an exceptionally large number of unem-

ployed makes it urgent. Whether the figure be taken at 30,000

or 60,000, and some say it is even higher than that, matters

little;
it is still most serious.

230 Unemployment: Its Causes
cvnd
their Remedies.

The contrast between the prosperity of the war (and the

immediate post-war) years and the present severe depression

of trade has led to an unparalleled intensity of feeling on the

subject. Not only has this contrast deepened the feelings of

the public, but there is a much wider diffusion of knowledge

as to the real facts of the situation, and the present position of

the unemployed seems worse when measured by the higher

standard of comfort then attained.

Unemployment may arise from a supply of labour in ex-

cess of demand or the physical inability or unwillingness of

a worker to accept work when offered. In the early stages of

civilisation the simplicity of human wants and therefore the

ease with which they could be supplied restricted unemploy-

ment to a small dimension. The highly developed and compli-

cated demands which arise from the variety of tastes now

shown by the consuming public have accentuated all the diffi-

culties which were present even in the most early developments

of society. An all-powerful and all-wise Providence, knowing

exactly what each member of the public would want, or (which

is even perhaps still more important to remember) able to deter-

mine what each person would want, could overcome some of

these. If such a Power could at the same time control the

elements of nature and ensure harvests adequate to meet all

our requirements another frequent cause of unemployment

would be removed.

OBJECTIVE CAUSES.

The demand for labour may be diminished as regards its

total quantity by such causes as pestilence, disease, war or civil

disturbances. And it will be noted that sometimes these visita-

tions of nature, etc., may occur in countries which are far re-

moved from that which is immediately affected—a famine in

India may cause unemployment in Lancashire. This is a posi-

tive reduction which arises from causes outside the industry

of the country, but whose effect upon it may be exceedingly

serious. Negatively fhere may arise a diminution of the de-

mand through an insufficient accumulation of wealth for in-

vestment purpqses—thus making it impossible to provide the

necessary capital for development and enterprise—and through

other reasons referred to in detail later on.

But in addition to those which affect all industries at the

same time there are certain causes peculiar to each industry

which are active at all times., even under the most stable con-

ditions. Their effect is (a) to vary the demand for a particular

kind of labour. The public form new tastes, they demand new

aptitudes and new enterprises on the part of the producer.

By /. C. M. Eason, B.A. 231

Changes in method of travelling or traction, now seen in the

competition between motors and the railways, lead to the

cessation of the demand for one class of labour and the

creation of a demand for another type; (b) to cause such de-

mand to be of an irregular character, although that irregularity

may be quite constant. Under the heading of irregularity must

be put all seasonal demands, and those changes which take

place in connection with trade booms, etc., movements which

may be spread over quite a long period, but which at the same

time manifest certain clear regularity.

SUBJECTIVE CAUSES.

From the standpoint of the worker these are all objective

causes, but he is open to the influence of what may be called

subjective causes in the shape of ill-health, accidents arising

from his occupation, his family circumstances, his defects

of character and ability, all of which must be carefully

considered and given their proper importance when reviewing

the general problem.

REMEDIAL MEASURES.

For each of these phases of unemployment appropriate

remedial measures have had to be designed. To meet a situa-

tion which has arisen from some cause affecting industry

as a whole and not a particular trade special action on a large

scale by the Government authorities and public bodies becomes

necessary. It is not possible to go into the details as to the

various kinds of relief work which can be set up, or the extent

to which public works of a useful character can be postponed

until they are necessary, or hastened forward earlier than would

otherwise be warranted. In practice the tendency has been to

spend money on public works when business is good and re-

strict expenditure when it is bad—the reverse of what should

take place. This method of dealing with unemployment is not

new; in fact, it is the oldest of all methods. Under certain

circumstances it is the only one available. Such schemes be-

come harmful, not helpful, if they withdraw from industry the

funds required to extend and develop it or if they retain in their

employment labour which is required elsewhere.

Both tendencies are inevitable. (1) The natural desire to

have something done to relieve distress calls for action by

Government, and the money is provided by the taxpayer—the

employer who should be extending his business activities. (2)

The natural reluctance of the worker to leave a job and sur-

render himself to the chances of the labour market to obtain a

232 Unemployment: Its Causes and their Remedies.

new one, even though it be a change from, temporary to per-

manent work, must be reckoned with. Above all the schemes

must take into consideration the type of labour disemployed.

To provide labouring, work for a skilled craftsman is to waste,

many years of careful training.

The purely modern remedy for unemployment, which, it

may be remarked, is really a remedy for its consequences rather

than for the evil
itself,
is State Insurance, on a contributory

basis,
covering all industry. Its wide scope ensures a measure

of stability which could not be attained by any scheme re-

stricted in its application. Its contributory basis establishes a

feeling of independence and self-respect. It is of course a

charge on industry, ,but experience will prove, and indeed I

think has already indicated, that in the long run it relieves in-

dustry from a burden which it would otherwise have to carry

in some more costly form.

As a means of dealing with cyclical or seasonal unemploy-

ment—normal unemployment—it has established itself per-

manently in all countries where it has been tried.

The labour exchanges which operate the scheme should

also in theory play a really useful part in overcoming the mal-

adjustment arising from want of fluidity in labour. In practice

they fail largely because of fixity of habits, personal ties, hous-

ing difficulties, etc., which prevent the free movement of the

worker.

There is, further, the unemployment which arises from

variations in the type of labour demanded. The remedy here

is not easy to discover. Modern progress makes new calls upon

the individual’s capacity. The response is determined by his

education, character and training, by Trade Union rules, with

their narrow and unyielding lines of demarcation of work, and

by a number of extraneous conditions.

The consideration of these hardly comes under the scope

of our paper this evening; they are of a very general character,

but with the pres’ent-day rapid developments in new and un-

expected directions they deserve consideration,

Following the order of causes detailed above, we come to

those which affect the individual and not the industry.

Insurance again comes to our assistance. Health and

accident schemes specially designed to tide over periods

of life, when earnings cannot be maintained, merely await

further useful development. There may be some differences of

opinion as to the comprehensiveness of such schemes and the

area within which the exigencies of economic circumstances,

would allow them to function usefully, but I think there is no

By J. C. M. Eason, B.A. 233

alternative to them as methods of meeting that portion of un-

employment which arises from individual circumstances and

not from those of the industry.

While, however, it is true that from one point of view the

individual circumstances can be isolated in this way and con-

sidered apart from the objective side of unemployment, the

real crux arises from the fact that in the last resort one is

dealing with a multitude of different individuals, and not a

collection of puppets who can be moved from place to place

or used from time to time regardless of their personalities.

Whether you are dealing with unemployment by relief

work or by insurance, the effect upon the individual determines

whether the scheme is sound or not. If a large number of in-

dividuals are affected by some definite and widespread general

depression over a prolonged period it becomes increasingly diffi-

cult to give employment relief without at the same time under-

mining the very qualities which it is vital should be maintained.

A man who at the beginning of the period could have taken up

his work after a short interval of unemployment is found after

a period of months to be a different man from every point of

view. His efficiency has been impaired; he has lost certain

aptitudes, or at least they are not preserved at the same pitch

of perfection as when he left off work. The very work offered

may be unsuitable for him and injure his peculiar skill. The

longer he is at such work the less inclination he may show to

return and look for a new job. These effects cannot be reduced

to statistics, and yet they are most important factors to be con-

sidered when arranging for
relief.

The man who is unemployed from purely seasonal and

temporary causes is in
“a
stronger position. He has probably al-

ready reckoned with this factor as part of his normal life; its

effect upon his character is therefore largely discounted, and

provided a scheme is in force which will tide him over the

intervening period he will resume with a minimum of loss.

Even under the most favourable circumstances the per-

centage of the unemployed in any particular trade or occupa-

tion will not fall to zero. There will remain a reserve of at

least 2 per cent, to 5 per cent, if one is to judge by what took

place in the past.

The character of this reserve is worth con-

sideration. When restriction in trade takes place and an em-

ployer has to consider whose services he has to dispense with

he will select those who are least productive—he must do so

if his business is to survive; those who are least productive,

are those who are deficient in education, training and general

character; the man who has been an irregular timekeeper, who

234 Unemployment: Its
Ccmses
and their Remedies.

perhaps has absented himself without reason, whose work has

been deficient, is the first to go. These “ins and outs” of the in-

dustrial world create the real problem of Unemployment Insur-

ance,
because these are the very men who are least able to with-

stand periods of unemployment, physically, mentally and

financially. Remuneration during a period of unemployment

must not exceed the average rate of earnings, otherwise there

would be an inducement to the individual to be more frequently

unemployed. These men’s average is low. Therefore the

standard weekly payment is low.

It has been suggested that some distinction could be drawn

as regards unemployment insurance payments which would pro-

vide a higher weekly sum for the superior skilled man who is

momentarily displaced. One answer to that suggestion is that

such a man will
himself,
by reason of his own superior habits of

thrift and prudence, put himself in a better position to stand the

stress of unemployment than those others of whom we are

speaking. No matter what our sympathies might dictate, our

reason will insist that individuals must be brought to realise that

they are, to a certain extent, masters of their own fate. Any

other course would be demoralising, and in fact I think anyone

with experience of workers as a whole would maintain that such

is their view. There is a strong spirit of independence. But the

most distressing phenomenon of unemployment in recent years

has been the extraordinarily large number of men unable to get

work, of none of whom could it be said that they were in the

slightest degree incompetent or unworthy of being retained.

They have been unemployed for long periods, and insurance

which normally might be expected in their case to tide over

the interval having failed completely, supplementary action has

become necessary. This is the justification for the ” dole.”

PREVENTIVE MEASURES.

These are the principal remedial measures which help to

cure unemployment when it has arisen. Are there any positive

steps which could be taken to prevent it? Here one finds a

difficulty which is in no sense new.

Unemployment arises from an imperfection in the relation

of supply to demand. In the last resort unemployment can

be attributed to ignorance : that is to say, it is to be assumed

that the manufacturer who makes or the farmer who produces

more than is required at a price which will yield him a profit

would have refrained from making so much if he could have

known that he could not effect sales. But of course in addition

to want of that knowledge, which in many cases would have

By J. C. M. Eason, B.A. 235

prevented certain plans of manufacture being carried out on a

scale larger than was necessary, there are difficulties which

arise on the speculative side of human nature.

Certain ideas must be put to the test before it is known or

can be proved what they are worth. The speculative character

of even the simplest operation of buying and selling is not ap-

preciated fully. Success, except in some few exceptional and

outstanding instances, is achieved as the result of a multitude of

wise decisions by many people. Failure, which leads to unem-

ployment, is the result of foolish or wrong decisions. Periods

of boom and depression are the result of mental processes ap-

plied to financial problems and dependent on moods of opti-

mism and pessimism.

It is generally accepted that a larger diffusion of informa-

tion in the form of statistics and a greater co-ordination of

statistics would prevent these. That hope has been often ex-

pressed. In the early 19th century Carlyle wrote : ” Bubble

periods with their panics and commercial crises will again be-

come infrequent, and steady modest industry will take the place

of gambling speculation.” The hope was vain. It may be

questioned whether the wider dissemination of facts regarding

industry, the effect of weather on crops, etc., and the better col-

lection and reproduction of statistics have done anything more

than keep pace with the more complicated processes now neces-

sary to carry on our industries^ which have made the adjust-

ments more difficult to accomplish. We must conclude that

the difficulties we are faced with largely arise from funda-

mental defects in human character and intelligence rather than

from the structure of industry
itself.

There are other influences., however, which tend to create

unemployment, the effect of which upon the industry of the

country is of vital importance. The instability of Governments,

by which I do not mean a simple change of control from one

party to another, but fundamental changes such as have been

taking place all over Europe, including this country, during re-

cent years, discourage the building up of industries which

would provide the necessary employment.

Again, high taxation, local and national, is a serious factor,

because it withdraws from investment in industry funds which,,

while they lie in the hands of the individual, must tend to come

into use, become remunerative, and yield some return. If

wealth is not being accumulated by those who have been in the

habit of saving, enterprise will not be given its main stimulus,

and little development will take place.

A sound policy as regards wages is also of very great im-

236 Unemployment: Its Causes and their Remedies.

portance. The narrower the margin of profit, the less the in-

ducement for enterprise. In the Statist of January 9th a re-

ference is made to a study of unemployment in Great Britain

by a Professor
Rueff,
of the University of Paris : ” An extra-

ordinarily close correspondence between changes in the level

of real wages and changes in unemployment is shown. When

prices fall more rapidly than money wages unemployment in-

creases. When money wages tend to fall relatively to price

movement the unemployment curve shows a corresponding

fall.”

The conclusion that follows is the necessity for a more

rapid adjustment than now takes place. That depends oh

forces in industry which are difficult to measure and to con-

trol and which require a very detailed examination for which

there is now no time. If it involves labour disputes it tends to

still greater uncertainty and loss of trade.

In considering the attitude of Labour towards unemploy-

ment, it may be remarked that a more important matter even

than the wages policy is its attitude as regards demar-

cation in the unions and the various regulative devices which

it insists upon in order to protect itself from influences

which it conceives to be against its interests. Some of these in

the long run achieve their object and overcome opposition, but

in the meantime much damage may be caused. When all

workers contribute no narrow view should be taken by any

section which would tend to aggravate unemployment. The

acceptance of a mutual basis of contribution creates a recipro-

cal obligation to make the burden as light as possible. We are

not in any case concerned with the matter to-day beyond noting

that if such regulative devices are applied in an unwise manner

a state of mind may be created which is harmful to enterprise

and development.

We now pass from this analysis of causes and remedies to

consider what lessons it has for us in regard to unemployment

as it presents itself to-day. How many are unemployed
?
Who

are they? In a matter which requires a knowledge of the in-

dividuals and their occupations we can obtain little informa-

tion, and such facts as are available require adjustment, calcu-

lation and qualification before they can be used.

At the same time certain points do stand out clearly.

Firstly, there is a general diminution in the demand for labour

affecting all industry. The external cause is bad trade in Eng-

land affecting our productive activities. The internal causes

are dislocation of normal business resulting from civil war and

the removal of a large population from our midst who kept the

distributive agencies busily employed supplying their wants.

By J. C. M. Eason, B.A. 237

Moreover, the effect of two successive bad harvests has

been to reduce the purchasing power of those who remain.

To meet the situation so created the Government has sub-

sidised the unemployment fund by upwards of £1,250,000.

Money has been voted for relief works which will not merely

help the immediate needs of the moments but ultimately tend

to increase the productive capacity of the country.

The main hopes for improvement lie in the greater poli-

tical stability, which will tend to security and confidence on the

part of investors; and the improved condition of English trade

leading to an increased demand, which gives the farmer his

opportunity for capturing the market.

Such unemployment as is due to seasonal and fluctuating

demand of a normal character cannot be measured, for figures

are not published showing how many are unemployed and in

what trades they are occupied. So far as it exists it must

be met by insurance schemes, and we note that enquiry is

proceeding at the moment as regards Health and Workmen’s

Compensation Schemes with a view to their greater efficiency.

The success with which industry will overcome the diffi-

culties created by the every varying demands of the public de-

pends on the enterprise of those conducting its businesses,

whether manufacturing or distributing, and the adaptability of

ihe available labour. Both depend to a very large degree on

education—commercial, economic, technical, agricultural, and

general. These are problems which affect a manufacturing

country in the highest degree. In the Saorstat the manufac-

turing piocesses are concerned with the more universal per-

manent wants of society, and so we largely escape, but not

entirely, and the past history of our industries suggest, I think,

that we have suffered from adhering too long to old processes

in the face of a clearly changing demand.

On the distributing side of our business activities we find

people who have money are spending it in new ways, and are

demanding new services—the cinema, the dancing hall, motor-

ing, etc. The direct effect of this is obvious. The indirect effect,

that is to say, the ultimate effect on employment in the country

created by the wider diffusion of spending power and its dif-

ferent use, is less easy to trace, and deserves a special enquiry.

The old-fashioned economists maintained that ” a demand for

commodities is not a demand for labour/7 that ” an individual

increases the capital of a country not by spending his wealth

on his own enjoyment but by devoting it to reproductive em-

ployment.” This has a bearing on the problem, but it cannot be

more than referred to in this paper.

238 Unemployment: Its Causes and their Remedies.

What are we to say in conclusion? Our two questions

have been partially answered, with much imperfection I fear

and in too brief a manner. Some unemployment is inevitable.

There are remedies, but each phase of unemployment must be

met by appropriate measures.

The potentialities to create employment are here. But he

was a wise man who said ; ” If there is to be a millenium man

must make it.” May we not adopt the saying and write : If

the Saorstat is to be prosperous its citizens alone can make it so.

The springs which feed the fountain of national prosperity

and well-being He in the minds and hearts of the individual. To

the extent that they are tainted the product will be impure.

Government action cannot precede individual knowledge

and understanding of the problem. Reason, not passion; argu-

ment, not force; generosity, not selfishness; national interest,

not class prejudice, must prevail if we are to solve the most

complicated and the most fundamental of all industrial

problems.

229

UNEMPLOYMENT: ITS CAUSES AND THEIR

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

REMEDIES.

BY
J. C. M. EASON, B.A.

Read before the Society on Thursday, 11th February, 1926.

Is unemployment inevitable? If so, are there any remedies

which will mitigate its evil effect?

These are the questions which are on the lips of those who

are compelled to face one of the most vital of the many prob-

lems with which civilisation has to grapple.

The problem is not a new one; men have been found at all

times and in all countries standing idle in the market place

because there was no one to hire them. It is not a symptom

associated with any particular form of society, industry or

economic development. Countries which are wide apart as

regards their fiscal policies or their industrial conditions suffer

alike from this problem—countries which have been recently

opened up for development and old countries with established

civilisations are confronted with unemployment—though no

doubt in many varying degrees of intensity.

The factor which has made it particularly urgent and

pressing in these days is the world-wide dislocation of trade,

the inevitable sequence of the European war.

Within the area of the ,Saorstat we have had an additional

cause in the shape of civil disturbance during 1920-1923, which,

in so far as it led to a further dislocation of trade and a re-

moval of spending power, has superimposed many complica-

tions upon what in any event was bound to prove a sufficiently

troublesome matter.

The presence of an exceptionally large number of unem-

ployed makes it urgent. Whether the figure be taken at 30,000

or 60,000, and some say it is even higher than that, matters

little;
it is still most serious.

230 Unemployment: Its Causes
cvnd
their Remedies.

The contrast between the prosperity of the war (and the

immediate post-war) years and the present severe depression

of trade has led to an unparalleled intensity of feeling on the

subject. Not only has this contrast deepened the feelings of

the public, but there is a much wider diffusion of knowledge

as to the real facts of the situation, and the present position of

the unemployed seems worse when measured by the higher

standard of comfort then attained.

Unemployment may arise from a supply of labour in ex-

cess of demand or the physical inability or unwillingness of

a worker to accept work when offered. In the early stages of

civilisation the simplicity of human wants and therefore the

ease with which they could be supplied restricted unemploy-

ment to a small dimension. The highly developed and compli-

cated demands which arise from the variety of tastes now

shown by the consuming public have accentuated all the diffi-

culties which were present even in the most early developments

of society. An all-powerful and all-wise Providence, knowing

exactly what each member of the public would want, or (which

is even perhaps still more important to remember) able to deter-

mine what each person would want, could overcome some of

these. If such a Power could at the same time control the

elements of nature and ensure harvests adequate to meet all

our requirements another frequent cause of unemployment

would be removed.

OBJECTIVE CAUSES.

The demand for labour may be diminished as regards its

total quantity by such causes as pestilence, disease, war or civil

disturbances. And it will be noted that sometimes these visita-

tions of nature, etc., may occur in countries which are far re-

moved from that which is immediately affected—a famine in

India may cause unemployment in Lancashire. This is a posi-

tive reduction which arises from causes outside the industry

of the country, but whose effect upon it may be exceedingly

serious. Negatively fhere may arise a diminution of the de-

mand through an insufficient accumulation of wealth for in-

vestment purpqses—thus making it impossible to provide the

necessary capital for development and enterprise—and through

other reasons referred to in detail later on.

But in addition to those which affect all industries at the

same time there are certain causes peculiar to each industry

which are active at all times., even under the most stable con-

ditions. Their effect is (a) to vary the demand for a particular

kind of labour. The public form new tastes, they demand new

aptitudes and new enterprises on the part of the producer.

By /. C. M. Eason, B.A. 231

Changes in method of travelling or traction, now seen in the

competition between motors and the railways, lead to the

cessation of the demand for one class of labour and the

creation of a demand for another type; (b) to cause such de-

mand to be of an irregular character, although that irregularity

may be quite constant. Under the heading of irregularity must

be put all seasonal demands, and those changes which take

place in connection with trade booms, etc., movements which

may be spread over quite a long period, but which at the same

time manifest certain clear regularity.

SUBJECTIVE CAUSES.

From the standpoint of the worker these are all objective

causes, but he is open to the influence of what may be called

subjective causes in the shape of ill-health, accidents arising

from his occupation, his family circumstances, his defects

of character and ability, all of which must be carefully

considered and given their proper importance when reviewing

the general problem.

REMEDIAL MEASURES.

For each of these phases of unemployment appropriate

remedial measures have had to be designed. To meet a situa-

tion which has arisen from some cause affecting industry

as a whole and not a particular trade special action on a large

scale by the Government authorities and public bodies becomes

necessary. It is not possible to go into the details as to the

various kinds of relief work which can be set up, or the extent

to which public works of a useful character can be postponed

until they are necessary, or hastened forward earlier than would

otherwise be warranted. In practice the tendency has been to

spend money on public works when business is good and re-

strict expenditure when it is bad—the reverse of what should

take place. This method of dealing with unemployment is not

new; in fact, it is the oldest of all methods. Under certain

circumstances it is the only one available. Such schemes be-

come harmful, not helpful, if they withdraw from industry the

funds required to extend and develop it or if they retain in their

employment labour which is required elsewhere.

Both tendencies are inevitable. (1) The natural desire to

have something done to relieve distress calls for action by

Government, and the money is provided by the taxpayer—the

employer who should be extending his business activities. (2)

The natural reluctance of the worker to leave a job and sur-

render himself to the chances of the labour market to obtain a

232 Unemployment: Its Causes and their Remedies.

new one, even though it be a change from, temporary to per-

manent work, must be reckoned with. Above all the schemes

must take into consideration the type of labour disemployed.

To provide labouring, work for a skilled craftsman is to waste,

many years of careful training.

The purely modern remedy for unemployment, which, it

may be remarked, is really a remedy for its consequences rather

than for the evil
itself,
is State Insurance, on a contributory

basis,
covering all industry. Its wide scope ensures a measure

of stability which could not be attained by any scheme re-

stricted in its application. Its contributory basis establishes a

feeling of independence and self-respect. It is of course a

charge on industry, ,but experience will prove, and indeed I

think has already indicated, that in the long run it relieves in-

dustry from a burden which it would otherwise have to carry

in some more costly form.

As a means of dealing with cyclical or seasonal unemploy-

ment—normal unemployment—it has established itself per-

manently in all countries where it has been tried.

The labour exchanges which operate the scheme should

also in theory play a really useful part in overcoming the mal-

adjustment arising from want of fluidity in labour. In practice

they fail largely because of fixity of habits, personal ties, hous-

ing difficulties, etc., which prevent the free movement of the

worker.

There is, further, the unemployment which arises from

variations in the type of labour demanded. The remedy here

is not easy to discover. Modern progress makes new calls upon

the individual’s capacity. The response is determined by his

education, character and training, by Trade Union rules, with

their narrow and unyielding lines of demarcation of work, and

by a number of extraneous conditions.

The consideration of these hardly comes under the scope

of our paper this evening; they are of a very general character,

but with the pres’ent-day rapid developments in new and un-

expected directions they deserve consideration,

Following the order of causes detailed above, we come to

those which affect the individual and not the industry.

Insurance again comes to our assistance. Health and

accident schemes specially designed to tide over periods

of life, when earnings cannot be maintained, merely await

further useful development. There may be some differences of

opinion as to the comprehensiveness of such schemes and the

area within which the exigencies of economic circumstances,

would allow them to function usefully, but I think there is no

By J. C. M. Eason, B.A. 233

alternative to them as methods of meeting that portion of un-

employment which arises from individual circumstances and

not from those of the industry.

While, however, it is true that from one point of view the

individual circumstances can be isolated in this way and con-

sidered apart from the objective side of unemployment, the

real crux arises from the fact that in the last resort one is

dealing with a multitude of different individuals, and not a

collection of puppets who can be moved from place to place

or used from time to time regardless of their personalities.

Whether you are dealing with unemployment by relief

work or by insurance, the effect upon the individual determines

whether the scheme is sound or not. If a large number of in-

dividuals are affected by some definite and widespread general

depression over a prolonged period it becomes increasingly diffi-

cult to give employment relief without at the same time under-

mining the very qualities which it is vital should be maintained.

A man who at the beginning of the period could have taken up

his work after a short interval of unemployment is found after

a period of months to be a different man from every point of

view. His efficiency has been impaired; he has lost certain

aptitudes, or at least they are not preserved at the same pitch

of perfection as when he left off work. The very work offered

may be unsuitable for him and injure his peculiar skill. The

longer he is at such work the less inclination he may show to

return and look for a new job. These effects cannot be reduced

to statistics, and yet they are most important factors to be con-

sidered when arranging for
relief.

The man who is unemployed from purely seasonal and

temporary causes is in
“a
stronger position. He has probably al-

ready reckoned with this factor as part of his normal life; its

effect upon his character is therefore largely discounted, and

provided a scheme is in force which will tide him over the

intervening period he will resume with a minimum of loss.

Even under the most favourable circumstances the per-

centage of the unemployed in any particular trade or occupa-

tion will not fall to zero. There will remain a reserve of at

least 2 per cent, to 5 per cent, if one is to judge by what took

place in the past.

The character of this reserve is worth con-

sideration. When restriction in trade takes place and an em-

ployer has to consider whose services he has to dispense with

he will select those who are least productive—he must do so

if his business is to survive; those who are least productive,

are those who are deficient in education, training and general

character; the man who has been an irregular timekeeper, who

234 Unemployment: Its
Ccmses
and their Remedies.

perhaps has absented himself without reason, whose work has

been deficient, is the first to go. These “ins and outs” of the in-

dustrial world create the real problem of Unemployment Insur-

ance,
because these are the very men who are least able to with-

stand periods of unemployment, physically, mentally and

financially. Remuneration during a period of unemployment

must not exceed the average rate of earnings, otherwise there

would be an inducement to the individual to be more frequently

unemployed. These men’s average is low. Therefore the

standard weekly payment is low.

It has been suggested that some distinction could be drawn

as regards unemployment insurance payments which would pro-

vide a higher weekly sum for the superior skilled man who is

momentarily displaced. One answer to that suggestion is that

such a man will
himself,
by reason of his own superior habits of

thrift and prudence, put himself in a better position to stand the

stress of unemployment than those others of whom we are

speaking. No matter what our sympathies might dictate, our

reason will insist that individuals must be brought to realise that

they are, to a certain extent, masters of their own fate. Any

other course would be demoralising, and in fact I think anyone

with experience of workers as a whole would maintain that such

is their view. There is a strong spirit of independence. But the

most distressing phenomenon of unemployment in recent years

has been the extraordinarily large number of men unable to get

work, of none of whom could it be said that they were in the

slightest degree incompetent or unworthy of being retained.

They have been unemployed for long periods, and insurance

which normally might be expected in their case to tide over

the interval having failed completely, supplementary action has

become necessary. This is the justification for the ” dole.”

PREVENTIVE MEASURES.

These are the principal remedial measures which help to

cure unemployment when it has arisen. Are there any positive

steps which could be taken to prevent it? Here one finds a

difficulty which is in no sense new.

Unemployment arises from an imperfection in the relation

of supply to demand. In the last resort unemployment can

be attributed to ignorance : that is to say, it is to be assumed

that the manufacturer who makes or the farmer who produces

more than is required at a price which will yield him a profit

would have refrained from making so much if he could have

known that he could not effect sales. But of course in addition

to want of that knowledge, which in many cases would have

By J. C. M. Eason, B.A. 235

prevented certain plans of manufacture being carried out on a

scale larger than was necessary, there are difficulties which

arise on the speculative side of human nature.

Certain ideas must be put to the test before it is known or

can be proved what they are worth. The speculative character

of even the simplest operation of buying and selling is not ap-

preciated fully. Success, except in some few exceptional and

outstanding instances, is achieved as the result of a multitude of

wise decisions by many people. Failure, which leads to unem-

ployment, is the result of foolish or wrong decisions. Periods

of boom and depression are the result of mental processes ap-

plied to financial problems and dependent on moods of opti-

mism and pessimism.

It is generally accepted that a larger diffusion of informa-

tion in the form of statistics and a greater co-ordination of

statistics would prevent these. That hope has been often ex-

pressed. In the early 19th century Carlyle wrote : ” Bubble

periods with their panics and commercial crises will again be-

come infrequent, and steady modest industry will take the place

of gambling speculation.” The hope was vain. It may be

questioned whether the wider dissemination of facts regarding

industry, the effect of weather on crops, etc., and the better col-

lection and reproduction of statistics have done anything more

than keep pace with the more complicated processes now neces-

sary to carry on our industries^ which have made the adjust-

ments more difficult to accomplish. We must conclude that

the difficulties we are faced with largely arise from funda-

mental defects in human character and intelligence rather than

from the structure of industry
itself.

There are other influences., however, which tend to create

unemployment, the effect of which upon the industry of the

country is of vital importance. The instability of Governments,

by which I do not mean a simple change of control from one

party to another, but fundamental changes such as have been

taking place all over Europe, including this country, during re-

cent years, discourage the building up of industries which

would provide the necessary employment.

Again, high taxation, local and national, is a serious factor,

because it withdraws from investment in industry funds which,,

while they lie in the hands of the individual, must tend to come

into use, become remunerative, and yield some return. If

wealth is not being accumulated by those who have been in the

habit of saving, enterprise will not be given its main stimulus,

and little development will take place.

A sound policy as regards wages is also of very great im-

236 Unemployment: Its Causes and their Remedies.

portance. The narrower the margin of profit, the less the in-

ducement for enterprise. In the Statist of January 9th a re-

ference is made to a study of unemployment in Great Britain

by a Professor
Rueff,
of the University of Paris : ” An extra-

ordinarily close correspondence between changes in the level

of real wages and changes in unemployment is shown. When

prices fall more rapidly than money wages unemployment in-

creases. When money wages tend to fall relatively to price

movement the unemployment curve shows a corresponding

fall.”

The conclusion that follows is the necessity for a more

rapid adjustment than now takes place. That depends oh

forces in industry which are difficult to measure and to con-

trol and which require a very detailed examination for which

there is now no time. If it involves labour disputes it tends to

still greater uncertainty and loss of trade.

In considering the attitude of Labour towards unemploy-

ment, it may be remarked that a more important matter even

than the wages policy is its attitude as regards demar-

cation in the unions and the various regulative devices which

it insists upon in order to protect itself from influences

which it conceives to be against its interests. Some of these in

the long run achieve their object and overcome opposition, but

in the meantime much damage may be caused. When all

workers contribute no narrow view should be taken by any

section which would tend to aggravate unemployment. The

acceptance of a mutual basis of contribution creates a recipro-

cal obligation to make the burden as light as possible. We are

not in any case concerned with the matter to-day beyond noting

that if such regulative devices are applied in an unwise manner

a state of mind may be created which is harmful to enterprise

and development.

We now pass from this analysis of causes and remedies to

consider what lessons it has for us in regard to unemployment

as it presents itself to-day. How many are unemployed
?
Who

are they? In a matter which requires a knowledge of the in-

dividuals and their occupations we can obtain little informa-

tion, and such facts as are available require adjustment, calcu-

lation and qualification before they can be used.

At the same time certain points do stand out clearly.

Firstly, there is a general diminution in the demand for labour

affecting all industry. The external cause is bad trade in Eng-

land affecting our productive activities. The internal causes

are dislocation of normal business resulting from civil war and

the removal of a large population from our midst who kept the

distributive agencies busily employed supplying their wants.

By J. C. M. Eason, B.A. 237

Moreover, the effect of two successive bad harvests has

been to reduce the purchasing power of those who remain.

To meet the situation so created the Government has sub-

sidised the unemployment fund by upwards of £1,250,000.

Money has been voted for relief works which will not merely

help the immediate needs of the moments but ultimately tend

to increase the productive capacity of the country.

The main hopes for improvement lie in the greater poli-

tical stability, which will tend to security and confidence on the

part of investors; and the improved condition of English trade

leading to an increased demand, which gives the farmer his

opportunity for capturing the market.

Such unemployment as is due to seasonal and fluctuating

demand of a normal character cannot be measured, for figures

are not published showing how many are unemployed and in

what trades they are occupied. So far as it exists it must

be met by insurance schemes, and we note that enquiry is

proceeding at the moment as regards Health and Workmen’s

Compensation Schemes with a view to their greater efficiency.

The success with which industry will overcome the diffi-

culties created by the every varying demands of the public de-

pends on the enterprise of those conducting its businesses,

whether manufacturing or distributing, and the adaptability of

ihe available labour. Both depend to a very large degree on

education—commercial, economic, technical, agricultural, and

general. These are problems which affect a manufacturing

country in the highest degree. In the Saorstat the manufac-

turing piocesses are concerned with the more universal per-

manent wants of society, and so we largely escape, but not

entirely, and the past history of our industries suggest, I think,

that we have suffered from adhering too long to old processes

in the face of a clearly changing demand.

On the distributing side of our business activities we find

people who have money are spending it in new ways, and are

demanding new services—the cinema, the dancing hall, motor-

ing, etc. The direct effect of this is obvious. The indirect effect,

that is to say, the ultimate effect on employment in the country

created by the wider diffusion of spending power and its dif-

ferent use, is less easy to trace, and deserves a special enquiry.

The old-fashioned economists maintained that ” a demand for

commodities is not a demand for labour/7 that ” an individual

increases the capital of a country not by spending his wealth

on his own enjoyment but by devoting it to reproductive em-

ployment.” This has a bearing on the problem, but it cannot be

more than referred to in this paper.

238 Unemployment: Its Causes and their Remedies.

What are we to say in conclusion? Our two questions

have been partially answered, with much imperfection I fear

and in too brief a manner. Some unemployment is inevitable.

There are remedies, but each phase of unemployment must be

met by appropriate measures.

The potentialities to create employment are here. But he

was a wise man who said ; ” If there is to be a millenium man

must make it.” May we not adopt the saying and write : If

the Saorstat is to be prosperous its citizens alone can make it so.

The springs which feed the fountain of national prosperity

and well-being He in the minds and hearts of the individual. To

the extent that they are tainted the product will be impure.

Government action cannot precede individual knowledge

and understanding of the problem. Reason, not passion; argu-

ment, not force; generosity, not selfishness; national interest,

not class prejudice, must prevail if we are to solve the most

complicated and the most fundamental of all industrial

problems.

x

Hi!
I'm Mary!

Would you like to get a custom essay? How about receiving a customized one?

Check it out