§ 9. Dependence on abstinence. The gain to the general welfare, however, can result only when the new inventions are actually embodied in machines. An invention is only an im material idea, and the machines in which inventions are in corporated are wealth which has a capital value. Further, a gain can result only when the usance of the machines is not so high as to absorb the larger part of the gain in efficiency. Not all labor-saving inventions call for more elaborate or more costly machines. Some are merely better methods, and re quire no more equipment—or even less. Some of them are simpler and less costly than the forms they displace. These (unless patented) are free goods, uplifting the efficiency of production "without money and without price." But some inventions call for a larger and longer investment. Unless the rate of time-preference is low enough the new invention will not be embodied in machines that will displace the old, less-efficient forms. (See Chapter 21.) Labor-saving inven tions thus simply enlarge the range of choice of means of production among which enterprisers and investors may choose, within the limits of their rates of time-preference. The gain in product by the new method as compared with the old may be so small that it only suffices to recompense the abstinence required for the larger investment. (The new method will not be used if it produces less than the old for a given outlay.) Thus as machines call for larger and longer investments, unless the gain in productive efficiency is large, a larger proportion of the total product must go to capital, while larger absolute amounts go both to labor and to capital. (But see below, on opposing tendencies.) § 10. Grades of labor, and gains from machinery. The general, or average, gain is not to be judged by comparing the conditions of the lowest grade of labor with those of fifty years ago, for while that grade may have been bettered only a little, it has been possible for large numbers to rise to higher grades because of the use of machinery. The physical tasks are to-day much lighter than ever before, and a larger pro portion of society is engaged in industries that require skill and thought rather than physical labor. That portion of the
work is being more and more shifted upon machines. A ma chine is "an iron man," it has been said, and comes into com petition with other men to lower their wages by outworking and underbidding them. But this iron man can do only auto matic tasks; it is not capable of exercising judgment. Every intelligent laborer who can adjust, adapt, fit himself for more intelligent action, will rise above the machine and profit by its presence. But crude physical labor which can compete only on the plane of automatic machines must find its field of employment more and more hedged in. If, however, even a portion of the workers (or of their children) are able to change to new or to rise to more skilled occupations, they reduce by so much the presence of competition below, and make possible a rise of wages there also. (See the doctrine of non-competing classes.) § 11. Opposing tendencies. It appears from this survey, that the logical effect of labor-saving machinery is to lift the level of efficiency and productiveness on which labor operates. A richer world relative to population means a higher income to the average man. The benefits are unequally distributed, but nearly all share to some degree.
But it must not be overlooked that certain conditions are assumed and if they are curtailed or absent the general bene fits which machinery in itself tends to create may be reduced and be more unequally distributed. These conditions are: (a) Competition among the owners of machines. So far as machines favor large industry, and large industry widens the scope of monopoly power (Chapter 31), prices may be raised to the benefit of the monopolist so as to cancel a large part of the general gain.
(b) A population increasing but slowly, so as not to neu tralize the gain from machinery. An increase in population driving the cultivation of the soil to lower levels, may in crease food prices enough to offset the gain from lower prices in manufacturing and transportation.
(c) Natural resources not decreasing through consumptive use. The waste, destruction, and inevitable using up of basic material resources is a change which, like the preceding, operates to offset the gain from improving machinery.