risk-bearing and knowledge of technical processes, etc.,
which happens to exist), and given on the other hand the supply of
labor (i.e. both the numbers of workpeople and their efficiency), the
wage-level in the long run is fairly rigidly determined. The
introduction of the phrase "in the long run" in this connection is apt
to provoke comment which may be pertinent, but may be misconceived.
The worker, it is pointed out, is deeply concerned with "the short
run" in which he has to live. It is very true; and it is this that
supplies one of the many justifications of trade unionism. To secure
for the workers advances of wages, which economic conditions justify,
sooner than would otherwise have been obtained, is certainly no
trivial or contemptible function. But it is none the less an illusion
to suppose that the general wage-level can be appreciably and
permanently raised by trade union action, except in so far as it
increases the efficiency of the workers or incidentally stimulates the
efficiency of the employers.

Sec.4. _The Supply of Labor in General_. The efficiency of labor may be
regarded as affecting either the demand for labor on the one hand or
the supply of it on the other, according as we look at the matter from
the worker's or the employer's standpoint. The employer is concerned
with the labor costs per unit of his output, the worker is concerned
with the wages he receives. An increase in the efficiency of labor
may, and usually will, mean both a decrease in labor costs to the
employer and an increase in the earnings of the worker. It is thus
wholly to the good. But the effects of an increase in the supply of
labor in the sense of a growth in the numbers of the population are
far more dubious. Unaccompanied by an increase in the _demand_ for
labor, it _must_ result in a diminished remuneration for the
individual worker. To some extent indeed the demand for labor would
almost certainly be increased. The supply of Capital may expand,
perhaps proportionately, perhaps more than proportionately to the
increase in population. But one factor of production, as we have seen,
is not capable of such expansion. This is the factor of Land, or
Natural Resources. It is the limitation of this factor which gives
rise to what we have most of us heard of as The Law of Diminishing
Returns. It is this that is the essence of the problem of Population,
portrayed in somber hues more than a hundred years ago by Malthus.

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