Economic essays

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Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: The static state and the technology of economic reform / Thomas Nixon Carver

Collection:: Economics Books

30 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK gigs. 2 a plantations of Cuba were effectively controlled with slight effort by introducing the Egyptian mongoose. A moderate expenditure of effort on a drainage canal may change the drainage system of a continent, transferring billions of tons of water, without further effort, from one ocean to another. The entire course of human history may likewise be changed by a shrewd diplomat who knows how to disturb the balance of power in the right way, and at the right time and place. However, it is not necessary to multiply illustrations, though thousands are available. Professor Marshall made a less general but more pointed use of the concept of a static state in his elaboration of the concept of an equilibrium of supply and demand, with the concept of an equilibrium price both as a result and a cause. The equilibrium price may be regarded as a cause in so far as it is a means of preserving the equilibrium of supply and demand, or in so far as the equilibrium may be disturbed by artificially changing the price. But the equilibrium, when thus disturbed, has a way of reasserting itself or, if it is to be continually disturbed, of requir- ing increasing effort, and the necessary effort increases in geo- metric ratio. If, for example, by some government decree or trade union rule, the price of a given commodity,—say a given kind of labor,—is raised above the equilibrium level (that is, above the level which will induce just as many men to seek employment as employers are willing to hire), the equilibrium is, of course, disturbed. But it tends to reassert itself, first, by tending to reduce the number of men whom employers are will- ing or able to hire, and, at the same time, tending to increase the number of laborers seeking employment in that particular kind of work. One of the first results of this disturbed equilibrium is unemployment,—more laborers seeking work in this kind of employment than can find it. This mass of unemployed laborers creates a long train of consequences which require increasingly drastic action on the part of the government or the trade union to overcome. Rather than remain unemployed, some of them 1 A somewhat diverting but impractical illustration could be made out of Darwin’s famous correlation between the number of cats and the price of clover seed. If the number of cats could be decreased in any one of several easy ways, say by starting a fad for fox terriers, or by marrying off spinsters, the resulting increase of field mice would thin out bumble bees and this would prevent the spread of pollen and reduce the supply of clover seed, which in turn would raise its price. Thus one problem in agricultural price fixing would be solved without congressional action.

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