out employment? What will be the effect on employment two
years hence?

Looked at in this light, the skepticism of trade union groups in regard
to appeals for an increase of effort is easy to understand. It arises
from the simple desire of the group to protect their position in
industry by the only means they possess. It is an attitude strengthened
in many cases by the memory of weeks without work and efforts ignored.
It is a bitterness, like to others, which men inherit from experience.

Yet it can be stated with emphasis, that from the point of view of the
wage earners as a whole, and of all of society, that any consistent
adherence to this group demand theory of wages would be mistaken and
unsound. The use of improved methods of production by any group, the
more efficient performance of their work, may not result in a quick fall
in the price of the product they are engaged upon, though sooner or
later it usually does. The fall in price may or may not lead to rapid
increase in the demand for the product of the group sufficiently great
to give employment to all its members, or increased employment; although
that result has usually appeared in the long run also.

The fundamental fact is that the demand for the product of labor is
ordinarily subject to indefinite increase. If labor is economized in one
direction, the power dispensed with will be utilized in another
direction. The community income of economic goods is a flow. Under our
present system of division of labor each individual uses his share of
the product (which he measures in terms of money) to buy the particular
commodities, or to make the particular investments he desires. If he
gets some commodities cheaper than formerly, he will buy more, or buy
commodities he had not been able to buy hitherto or increase his
investments. The demand of the community for the product of labor in
general will ultimately keep pace with the supply of the product.
Economies in production throughout the whole industrial field mean that
there will be more commodities to be shared out.

Thus, in spite of the fact that there may be, and often are, serious
breaches of interest between particular groups of wage earners and
society as a whole on the matter of increased production, there can be
but one sound policy for labor as a whole. That is to strive to increase
production up to a point where further effort would entail a sacrifice
of welfare more important than that which the ex