This section is from the "Elementary Principles of Economics" book, by Richard T. Ely and George Ray Wicker. Also available from Amazon: Elementary Principles Of Economics: Together With A Short Sketch Of Economic History
Definition. The second of the primary or original factors in production is labor. Labor is human exertion of mind or body undergone with the object of creating utilities.
A common classification distinguishes mental from physical labor. In making this distinction it is important to bear in mind that from the purest instance of mental labor to the purest instance of physical labor there is always some mixing of both forms. The philosopher must labor with hand or tongue if he would give the results of his thought to the world, and, on the other hand, even the ditch digger can by no means do his work without the exercise of intelligence.
We must never forget that labor is not an end in itself, but is only a means to an end, the satisfaction of wants. With this thought firmly fixed in mind, it will not be difficult to understand that increase of labor, unless it means increase of human satisfactions, is not socially desirable. Breaking window panes makes a chance for labor, but it does not increase human satisfactions as a result of that labor. On the other hand, labor-saving devices, while they may injure individual laborers, are beneficial to society as a whole, since they enable it to secure greater satisfactions by the same exertion.
The Supply of Labor. A question of prime importance in connection with labor is that of the conditions affecting its supply. What is the supply of labor ? Evidently it is not mere numbers, since a hundred laborers in one country often furnish much more labor to production than do a hundred laborers in another. Analysis of the subject shows that the two main elements determining supply are (I) efficiency and (II) quantity. The efficiency of labor depends in turn first of all upon (1) the efficiency of the laborers themselves upon their characteristics, mental, physical, and moral. Temperance, trustworthiness, skill, alertness, quick perception, comprehensive mental grasp; all these good qualities minister to the efficiency of laborers, and hence of labor. In the formation of these qualities the physical and social envi--ronment in which the laborers are reared and do their work are of the greatest importance.
(2) The second influence conditioning the efficiency of labor is the manner in which it is organized and directed. As we are to discuss this separately and at some length, we need note here only that when labor is carefully organized and directed, so that each laborer can do continuously the work for which he is best fitted, the labor by that means becomes indefinitely more efficient.
(II) The second element in the supply of labor is its amount or quantity. This again depends partly (1) upon the aggregate number of hours during which laborers work, varying with the length of the working day, the number of holidays in the year, etc. A ten-hour working day means a greater quantity of labor than an eight-hour day, and therefore a greater supply of labor, provided the efficiency is not proportionately impaired by the long hours of work.
The Growth of Population. The supply of labor un doubtedly increases, other things being equal, (2) with the growth of population, which means a possible increase in the number of laborers. Now, to the growth of population there is no absolute limit save in the means of subsistence which can be secured. Thoughout recorded history we again and again find the population of one country and another increasing to the starvation point; i.e., increasing until the means of subsistence were less than sufficient for all who had been born. From this fact has arisen a fear lest this over-population shall always repeat itself in the future as it has in the past. Those who are much moved by such a fear have often on their lips the theory of an English economist, Malthus, called from his name, Malthusianism. According to this theory, population, when not checked, tends to increase in geometrical progression, while the best that we can hope for in the case of food is that it may increase in arithmetical progression. Consequently, if there were no other checks upon the increase of population, men would soon reach the point of starvation. It is admitted by the theory that such checks exist. These are of two kinds, positive and preventive. Positive checks are those which act through the death of the living checks which increase the death-rate, such as plagues, pestilence, intemperance, infanticide, cannibalism, and war. Preventive checks are those which act through a lowering of the birth-rate. These are in the main checks of a moral character, including what Malthus called prudential restraint, consisting in the postponement or avoidance of marriage, or of the upbringing of a family. Conscientious men will be slow to marry unless they can support a wife and rear their children worthily. As population becomes denser, such men find the burden of rearing a family heavier, and therefore postpone marriage or avoid it altogether. With every increase of the average age at marriage, the number of children born decreases more than in the same proportion. Innumerable customs exist all over the world which have grown up from the social need of checking marriage and population, as, for instance, the custom which obtains in some peasant communities of marrying only when a cottage becomes vacant by the death of its former occupant. Malthus himself formally deduced only this lesson : let no man marry until he has a reasonable prospect that he will be able to support a family of the average size. He wished to intensify in Englishmen the feeling of parental responsibility. But Malthus himself often forgot the hope contained in man's gradual enlightenment, and took a gloomy view of the future. Others, following Malthus in his gloomy reasoning, have thought that there is no escape for the race from repeated over-population with all its resulting vice and misery. Modern civilization, however, gives much cause for hope that as prosperity becomes diffused among the people, the problem of overpopulation may lose its serious aspect. Statistics show conclusively that everywhere advancing civilization has been accompanied by a decline in the birth-rate. At the present time, nothing more in the way of restraint upon population seems necessary in the United States than to keep from our shores the lowest classes of foreigners and to exercise in contracting marriage that prudence which has long characterized the really best classes of American society.
Population and the Standard of Living. In another place we shall study at some length the influence exerted upon population by the standard of living, the amount of necessaries, comforts, and conveniences which people are accustomed to enjoy. Here we may just pause to note that where the standard of living is a high one and is firmly maintained, anything that threatens it will set in operation the preventive checks to which we have referred. But the standard of living is not absolutely fixed, and changes in population through the action of preventive checks come about only slowly. It may therefore happen that when the standard is assailed by continued national adversity, the rising generation may be brought up to accept a lower standard, according to which a greater increase of population will be possible and natural.
The Two Sources of Increased Population. The population of any country, as distinguished from the whole world, has two sources of growth, natural increase and immigration. Natural increase comes about in any country through a continued excess of births over deaths; in other words, through having a birth-rate which on the average exceeds the death-rate. Such an excess, however, may result from any one of several widely differing conditions. Thus some countries, e.g., Russia, have a very high death-rate with a still higher birth-rate, while in other countries, e.g., England, the increase results from an excess of a low birth-rate over a still lower death-rate. It is evident that the proportion of persons capable of labor, i.e., the supply of labor, will be greater where the death-rate is low. Manifestly, too, it makes a great difference in the real happiness of a country whether the increase in population is due to the one condition or the other. In our own country population has increased with wonderful rapidity for over a century both through immigration and natural growth. Immigration on a vast scale has continued down to the present day, when it is greater than ever before; and though the birth-rate has been gradually falling, the death-rate has fallen almost as steadily, with the result that natural increase of the population has been uninterrupted.