Disorderly Production

THE distinction btween price reduction as a re-sult of lowering of production cost and price re-duction through unrestricted competition cannot be made too clear, because they are often interwoven in actual experience. Take the whole population of a town whose principal industry is shoe manufacturing as a concrete example. If the manufacturer is able to cut his price per pair in half because he has found out how to make a pair at half the cost, he will com-monly let a number of his men go, because reduction in production cost usually results from substituting cheap mechanical energy for expensive human energy. These people will normally find other employment. The workmen who remain employed usually earn more in dollars than they did before, and in spending it give employment where there was less before. Mining companies that initiate considerable enter-prises in foreign lands where the economic level is low, and where most of the people are busily but in-efficiently engaged in raising enough food to support themselves and their families, often find themselves confronted with an acute labor problem. If any con-siderable number of workers leave the land to work in and about the mines, those left on the land cannot raise enough food to keep them all unless they are taught better methods of agriculture and provided with equipment that will enable them to produce more with less expenditure of effort. Add to this the fact that managers commonly find that the "natives," as our British cousins designate them, usually need more food and a better balanced diet than they have been accustomed to in order to show anything above the lowest order of efficiency in industrial work,. and it is clear that to make a new industry possible in what may be termed an economic province involves increas-ing the productivity, not only of those who are em-ployed in it, but of the whole social group. It has already been pointed out that the employ-ment of large numbers of men in automobile manu-facture is only possible because the others have in-creased their productivity enough to turn out every-thing else that is needed without the help of the auto-mobile workers.