Page:The Economics of Unemployment.djvu/27

must the skill, energy, managerial capacity and business enterprise of the captain of industry.

The reason why all these factors of production, the labour, the capital, the business ability, have got to stand idle for so long is that all the goods they could produce could not get sold at any price that would cover cost of production. The fact of these trade fluctuations, with their waste of productive power, is taken so much as a 'natural law' by business men that they seldom pause to question the nature or necessity of the 'law.' But, when pressed upon the matter, they will admit the central truth, that the industrial system contains more productive power than can be used all the time, or, in other words, that the effective demand of purchasers does not keep pace with the expanding power of production.

The amount of productive power that is 'superfluous' is far larger than is indicated by any figures for unemployment. The Board of Trade statistics for this country give an average rate of unemployment amounting to little over 4 per cent. for the trades brought under survey, and varying from somewhat below 2 per cent. in 'boom' years to 10 per cent. and over in depressions. But we have here no even approximate measure of the real waste of productive power. For, quite apart from the fact that unskilled labour, women's labour, and in general casual labour, where the wastes are greatest, do not count in their true proportions in the basis of the official figure, there are two wastes of immense and immeasurable magnitude of which no account is taken. To one I have already made allusion, the waste of capital, skill and labour normally