Economic productivity

“ The mass of means of production which he thus transforms, increases with the productiveness of his labour. But those means of production play a double part. The increase of some is a consequence, that of the others a condition of the increasing productivity of labour. E.g., with the division of labour in manufacture, and with the use of machinery, more raw material is worked up in the same time and, therefore, a greater mass of raw material and auxiliary substances enter into the labour-process. That is the consequence of the increasing productivity of labour. ”

“ After such complete reversal of the chronological order, the assumption, that is, of first the existence of private property with wage labour, and then, at a later stage, such level of labour productivity as makes exploitation possible at all, he now assumes [Pg 197] labour productivity to progress with equal speed in all spheres, the surplus product to contain precisely the same amount of value in all branches of industry, and to be divided among precisely the same number of people. ”

“ If invention and improvement still go on, the efficiency of labour will be still further increased, and the amount of labour and capital necessary to produce a given result will be further diminished. The same causes will lead to the utilization of this new gain in productive power for the production of more wealth; the margin of cultivation will be again extended, and rent will increase, both in proportion and amount. ”

“ But there is a distinction to be made between industrial efficiency and business prosperity. Americans have hitherto identified prosperity with a furious economic activity, and an ever-increasing economic product—regardless of genuine economy of production and any proper distribution of the fruits. ”

“ In mining, railway transportation and building we have positive evidence of diminished efficiency of labor, which in the aggregate is not offset by the improvements of management, or but barely. There remains but manufacturing as the other great branch of producing industry, apart from agriculture. ”

“ Men may compute the probable profits of labour employed in manufacturing, by computing the cost of raw material with the expense of manufacturing it, and what it sold for. But the enormous wealth that has accrued to America,—by the increase of population incident to manufacturing, by the development of its resources, and the gigantic improvements that have followed it—would be utterly out of the reach of all human industry to compute. ”

“ With progressing labour productivity and an expanding volume of production, this mass increases not only absolutely but also [Pg 356] relatively to the part which is consumed in production in every case, together with a corresponding increase in the efficiency of the constant capital. It is the more intensive exploitation of this part of the constant capital, irrespective of its increase in value, which is of paramount importance for the expansion of production. ”

“ The efficiency of the new manufacturing processes has provided a large surplus of goods that must be taken somewhere, exchanged for food and raw materials, which must, in turn, be brought to the producers of manufactured goods. In the course of these transactions, a generous share of the values produced goes, in the form of profit, to the owners of the industry, another considerable portion goes into reinvestment, thus swelling the volume of productive capital.
The increased wealth, the larger capital and the greater amount of surplus all make possible the maintenance of a larger population. ”

“ There are other commodities where saturation has not been reached. Increasing efficiency not only releases labor and direction for greater production of these things but enables their wider diffusion over the population. A selection of such industries shows a growth of 60 per cent in the last decade. ”

“ The situation will be best understood if we contrast for a moment the different modes in which the improvements in production have been brought about in manufacturing industries on the one hand, in agriculture on the other hand. In manufactures the improvements have been better machinery, new processes, labor-saving inventions, the conduct of business on a larger scale, and so the greater and more effective division of labor. In agriculture the main cause of cheaper production has been different: it has been the opening up of new lands and new sources of supply. ”

“ The tendency, then, being to a perpetual increase of the productive power of labour in manufactures, while in agriculture and mining there is a conflict between two tendencies, the one towards an increase of productive power, the other towards a diminution of it, the cost of production being lessened by every improvement in the processes, and augmented by every addition to population; it follows that the exchange values of manufactured articles, compared with the products of agriculture and of mines, have, as population and industry advance, a certain and decided tendency to fall. ”

“ The continually growing productivity of industry makes necessary a corresponding growth of the market, if disaster is to be avoided. But to enable producers to sell their growing output promptly prices must be reduced and wages must be raised in proportion as the supply of goods increases. For it is only by combining an increase in the money income of the mass of the population with a decrease in the cost of commodities that a country's home markets can be kept expanding with the progress of industrial methods. ”

“ But the increasing power which mankind are constantly acquiring over nature, increases more and more the efficiency of human exertion, or in other words, diminishes cost of production. All inventions by which a greater quantity of any commodity can be produced with the same labour, or the same quantity with less labour, or which abridge the process, so that the capital employed needs not be advanced for so long a time, lessen the cost of production of the commodity. ”

“ Where the increased productivity of labour is largely due to the improved machinery or methods of production which are stimulated by high wages without a corresponding intensification of the labour itself, the gain to labour is clear. But the possibility that short hours and high wages may stimulate an injurious compression of the output of productive effort is one which must not be overlooked in considering the influence of new industrial methods upon labour. ”

“ In practice, consumption, or purchasing power, must be maintained on the level of production, which latter can be controlled and stabilized by a progressive decrease in the number of labor hours as invention and improvements increase the output per labor hour. But this remedy will be effective to maintain purchasing power on a level with production only if wages are kept on a level that will give the worker, per year, a sufficient income for his reasonable needs. ”

“ While we believe that labor in the aggregate naturally obtains the whole of the produce of industry after the deduction of the fair shares of capital and management (which are limited by competition) and that the benefit of improvements effected by virtue of invention, engineering and organization inevitably accrue mainly to labor, there may be delay of the natural result through imperfection of competition and temporary opportunities for employers to take advantage of labor. ”

“ The general effect of improved machinery has been several times referred to already. Its advantages come to the wage-earner directly in multiplying employments and in multiplying the demand by cheapening products. Indirectly, the benefits are still greater, because these cheaper products form the bulk of living for the workers. It is probable that even the better living thus provided has raised the efficiency of labor so as to command better wages. ”

“ High prices, whether caused by depreciation of money or by difficulty of production, are not a public benefit; in the first case, they are a cause of distress, especially to the working classes; in the second, they are a sign but not a cause of prosperity (XXXIII, XXXIV) .
13. Facility of production includes skill and appliances as well as fertility of soil, and in that sense, when suddenly introduced in a fertile country, it would for some time extinguish rent (XXXVI) .
14. There is no real distinction between productiveness of industry and productiveness of capital ”

“ They would fall, because a less quantity of labour was necessary to their production, and would therefore exchange for a smaller quantity of those things in which no such abridgment of labour had been made.
Economy in the use of labour never fails to reduce the relative value of a commodity, whether the saving be in the labour necessary to the manufacture of the commodity itself, or in that necessary to the formation of the capital, by the aid of which it is produced. ”

“ The materials of manufacture being all drawn from the land, and many of them from agriculture, which supplies in particular the entire material of clothing; the general law of production from the land, the law of diminishing return, must in the last resort be applicable to manufacturing as well as to agricultural history. As population increases, and the power of the land to yield increased produce is strained harder and harder, any additional supply of material, as well as of food, must be obtained by a more than proportionally increasing expenditure of labour. ”

“ When the rapid growth of the country required greater productiveness, and the enlargement of territory made necessary a change in the distribution of the products of labor, the factory system was introduced, whereby capital, or unproductive labor, was joined with productive labor to accomplish greater results than had heretofore been attained by individual labor. ”

“ We shall see why such a general enlargement of the output of all the shops creates no displacements of labor which entail hardships. If the power is used more in the upper subgroups than in the lower ones,—if it is more frequently available for fashioning raw materials than for producing them through agriculture or mining,—the development of it checks in some degree the drift of labor from the lower subgroups toward the upper ones, which has been referred to in an earlier chapter. ”

“ Production does not merely mean the making of things, but includes the increase of value gained by transporting or exchanging things. There is a produce of wealth in a purely commercial community, as there is in a purely agricultural or manufacturing community; and in the one case as in the others, some part of this produce will go to capital, some part to labour and some part, if land has any value, to the owners of land. ”

“ Thus the limit of wealth is never deficiency of consumers, but of producers and productive power. Every addition to capital gives to labour either additional employment, or additional remuneration; enriches either the country, or the labouring class. If it finds additional hands to set to work, it increases the aggregate produce: if only the same hands, it gives them a larger share of it; and perhaps even in this case, by stimulating them to greater exertion, augments the produce itself. ”

“ In manufactures, accordingly, the causes tending to increase the productiveness of industry, preponderate greatly over the one cause which tends to diminish it: and the increase of production, called forth by the progress of society, takes place, not at an increasing, but at a continually diminishing proportional cost. ”

“ The production of the commodities for actual public consumption does not, of course, require by any means all the national force of workers. After the necessary contingents have been detailed for the various industries, the amount of labor left for other employment is expended in creating fixed capital, such as buildings, machinery, engineering works, and so forth. ”

“ And, so, where production is carried on by the division of labor between individuals, an increase in the power of producing one of the things sought by production in the aggregate adds to the power of obtaining others, and will increase the production of the others, to an extent determined by the proportion which the saving of labor bears to the total amount of labor expended, and by the relative strength of desires. I am unable to think of any form of wealth, the demand for which would not be increased by a saving in the labor required to produce the others. ”

“ It means more output accompanied with increased efficiency and therefore lower cost of production. It is on cheapness of output that the demands of the home and the foreign consumer for commodities largely depend. ”

“ Who can say to what infinite powers the wealth-producing capacity of labor may not be raised by social adjustments which will give to the producers of wealth their fair proportion of its advantages and enjoyments! With present processes the gain would be simply incalculable, but just as wages are high, so do the invention and utilization of improved processes and machinery go on with greater rapidity and ease. ”

“ Accumulation necessarily increases production and as necessarily increases consumption. Accumulation of produce, if properly selected, may always be accumulation of capital, and it cannot fail to be worth more than it cost, estimated in corn or labour,—and this I think would be true although all our soldiers, sailors, and menial servants were employed in productive labour. ”

“ The power of permanently underselling can only, generally speaking, be derived from increased effectiveness of labour; and this, when obtained by a more extended division of employment, or by a classification tending to a better economy of skill, always implies a greater produce from the same labour, and not merely the same produce from less labour: it increases not the surplus only, but the gross produce of industry. ”

“ And we began manufacturing in our country at the time we began robbing our soil. The last half-century we have built up our manufactories at an astonishing rate. Why have we built them up so fast; why have they risen to such tremendous figures? Because our people were fed cheaper and better than the people who worked in factories in any other country. But what is the condition now? Are our people still better fed and more cheaply that work in the factories, that work for the railroads, that work in the mines? ”