M.A.; Fellow of Clare College, Cambridge; Lecturer in Economics;
Secretary to the Cotton Control Board from 1917-1919.
Mr. Henderson said:--From one point of view the existence of an
unemployment problem is an enigma and a paradox. In a world, where even
before the war the standard of living that prevailed among the mass of
the people was only what it was, even in those countries which we termed
wealthy, it seems at first sight an utterly astonishing anomaly that at
frequent intervals large numbers of competent and industrious
work-people should find no work to do. The irony of the situation cannot
be more tersely expressed than in the words, which a man is supposed to
have uttered as he watched a procession of unemployed men: "No work to
do. Set them to rebuild their own houses."
But, if we reflect just a shade more deeply, nothing should surprise us
less than unemployment. We have more reason for surprise that it is
usually upon so small a scale. The economic system under which we live
in the modern world is very peculiar and only our familiarity with it
keeps us from perceiving how peculiar it is. In one sense it is highly
organised; in another sense it is not organised at all. There is an
elaborate differentiation of functions--the "division of labour," to
give it its time-honoured name, under which innumerable men and women
perform each small specialised tasks, which fit into one another with
the complexity of a jig-saw puzzle, to form an integral whole. Some men
dig coal from the depths of the earth, others move that coal over land
by rail and over the seas in ships, others are working in factories, at
home and abroad, which consume that coal, or in shipyards which build
the ships; and it is obvious, not to multiply examples further, that the
numbers of men engaged on those various tasks must somehow be adjusted,
_in due proportions_ to one another. It is no use, for instance,
building more ships than are required to carry the stuff there is to
carry.
Adjustment, co-ordination, must somehow be secured. Well, how is it
secured? Who is it that ordains that, say, a million men shall work in
the coal-mines, and 600,000 on the railways, and 200,000 in the
shipyards, and so on? Who apportions the nation's labour power between
the innumerable different occupations, so as to secure that there are
not too many and not too few engaged in any one of them relatively to
the others? Is it the Prime Minister, or the Cabinet, or Parliament, or
the Civil Service? Is it the Trade Union Congress, or the Federation of
British Industries, or does any one suppose that it is some hidden cabal
of big business interests? No, there is no co-ordinator. There is no
human brain or organisation responsible for fitting together this vast
jig-saw puzzle; and, that being so, I say that what should really excite
our wonder is the fact that that puzzle should somehow get fitted
together, usually with so few gaps left unfilled and with so few pieces
left unplaced.
It would, indeed, be a miracle, if it were not for the fact that those
old economic laws, whose impersonal forces of supply and demand, whose
existence some people nowadays are inclined to dispute, or to regard as
being in extremely bad taste, really do work in a manner after all. They
are our co-ordinators, the only ones we have; and they do their work
with much friction and waste, only by correcting a maladjustment after
it has taken place, by slow and often cruel devices, of which one of the
most cruel is, precisely, unemployment and all the misery it entails.