involve a net diminution of employment. The fact
that the new machinery is introduced is a proof that there is a net
diminution of employment as regards a given output; for otherwise no
economy would be effected.

What then is meant by the statement so generally made, that machinery
gives more employment than it takes away--that its wider and ultimate
effect is not to diminish the demand for labour?

The usual answer is that the economy effected by labour-saving
machinery in the expenses of production will, through competition of
producers, be reflected in a lower scale of prices, and this fall of
prices will stimulate consumption. Thus, it is urged, the output must
be greatly increased. When we add together the labour spent in
producing the machinery to assist the enlarged production, the labour
spent in maintaining and working the same, and the labour of conveying
and distributing the enlarged production, it will be found that more
labour is required under the new than under the old conditions of
industry. So runs the familiar argument.

The whole argument in favour of the gain which machinery brings to the
working classes hinges upon the contention that it increases rather
than decreases the amount of employment. Now, though we shall find
reason to believe that machinery has not caused any net diminution of
employment, there is nothing to support the rough-and-ready rule by
which the optimism of English economists argues the case in its
application to a single trade.

The following is a fair example of the argument which has passed
current, drawn from the pages of a competent economic writer:--

"The first introduction of machinery may indeed displace and diminish
for a while the employment of labour, may perchance take labour out of
the hands of persons otherwise not able to take another employment,
and create the need of another class of labourers altogether; but if
it has taken labour from ten persons, it has provided labour for a
thousand. How does it work? A yard of calico made by hand costs two
shillings, made by machinery it may cost fourpence. At two shillings a
yard few buy it; at fourpence a yard, multitudes are glad to avail
themselves of it. Cheapness promotes consumption; the article which
hitherto was used by the higher classes only is now to be seen in the
hand of the labouring classes as well. As the demand increases, so
production increases, and to such an extent that, although the number
of la