7  2

THE  PROBLEM  OF  THE  UNEMPLOYED

In  other  words,  an  increased  proportion  of  the  prices
paid  by  consumers  goes  to  support  agents,  middle-men,
shopkeepers,  and  their  dependents,  who  thus  receive  a
growing  share  of  the  national  income  paid  for  services  of
distribution.  Without  seeking  to  disparage  the  value  of
genuine  services  of  necessary  distribution,  I  may  point
out  that  this  diseased  swelling  of  labour  and  capital  in
distributive  trade  represents  from  the  social  standpoint  a
waste  of  power  strictly  analogous  to  the  “  unemployment  ”
in  manufacture,  though  different  in  the  concrete  aspect  it
assumes.  In  distribution,  the  waste  does  not  for  the
most  part  show  itself  as  “unemployed”  and  “unpaid”
capital  and  labour,  but  as  unnecessary  reduplication  of
distributive  machinery.  In  any  scientific  treatment  of  the
“  unemployed  ”  question,  this  form  of  waste  must  rank
as  an  important  aspect  of  the  social  malady.
§  ij.  False  Assumption  that  all  Power  to
Consume  Must  be  Exercised.
The  business  man  readily  admits  the  existence  of  an
excess  of  general  producing-power  in  forms  of  capital  and
labour  which  are  either  unemployed  or  wastefully  employed.
But  many  economic  theorists,  misled  by  loose  deductive
reasoning,  still  persist  in  their  denial  of  a  phenomenon
which  stares  the  practical  man  in  the  face.  It  is  not
possible,  they  urge,  that  a  general  excess  of  capital  and
labour  could  exist,  for  these  are  the  sole  requisites  of
production,  and  since  everything  that  is  produced  can  find
a  market  at  a  price,  whatever  can  be  produced  will  be
produced,  and  whatever  is  produced  will  be  consumed.
Now,  this  line  of  reasoning  is  thoroughly  fallacious.  Since
all  business  is  the  exchange  of  commodities  for  commodities,