Population changesEmigration, immigration and movements in birth and death rates bring about changes in both the size and age composition of the population. Such population changes call for changes in the allocation of resources to different industries. A rapidly increasing population will have a large proportion of younger people and there will be increasing demands for schools, school schoolteachers, and those commodities consumed mainly by the young. A declining population will have an increasing proportion of older people. There will be a decreasing demand for social capital such as houses and schools and increasing demands for those things which meet the needs of older people. Technological changes Man's ingenuity produces a constant stream of technological innovations, and these in turn call for new methods of production, new types of capital equipment and changes in the skills required of the labour force. A good example is provided by recent developments in the ports where the container revolution based on the use of new types of capital equipment demanded a new range of skills from the dockers. Political changes The economy of a country is affected by political changes both at home and abroad. Changes in the structure of taxation and in the volume and distribution of government spending are important.instruments of government policy which affect all sectors of the economy. Where industries are nationalised, the government, by varying the development programmes of these industries, can directly influence the allocation of resources. External political changes are also important, especially where a country is very dependent upon expert markets. Changes in taste and fashion Changes in taste and fashion can influence the demands for most consumer goods to some extent, but they are par- ticularly important to producers of such things as clothing, furniture, footwear, and domestic appliances. Advertising, of course, is a powerful agent in stimulating changes in demand of this type. Changes in income too play an important part. Rising incomes tend to brings about different patterns of consumption. A typical example would be the movement from public to private transport in recent years. Occupational and geographical mobility Changes in the character of the national output can only take place if the factors of production are mobile. There are two aspects of mobility: occupational and geographical. Occupational mobility concerns the movement of a factor of production from one occupation to another. Most of the examples considered so far have referred to occupational mobility. Geographical mobility describes the movement of a factor from one location to another. This is an important matter when new industries establish themselves in locations different from those in which the older industries were established. Land Land, quite obviously, is not mobile in the geographical sense, but a great deal of land has a high degree of occupational mobility. In the UK, for example, a large proportion of the land has many alternative uses. It might be used for farmland, for roads, railways, airports, parks, residential housing, industrial development, and so on. Some of the land, for example, the mountainous areas, has an extremely limited degree of occupational mobility, being useful perhaps for sheep grazing, or as a centre for tourism. 141
Capital Capital is mobile in both senses, although some types of capital are extremely immobile. Such things as railway networks, blast furnaces, and shipyards are virtually immobile in the geographical sense. It may be physically possible to dismantle them and move them to different sites, but the cost of doing so will almost certainly outweigh any advantages of the new location. Neither is such equipment mobile in the occupational sense; it can only be used for a specific purpose. Many buildings, however, can be effectively adapted to other uses. Many of the former cotton mills in Lancashire are now housing a variety of industrial activities. Some capital equipment is mobile both geographically and occupationally. Electric motors, machine tools, hand tools, and lorries, for example, can be used effectively in a wide variety of industries and are capable of movement from one location to another without great cost. Labour Theoretically we should expect labour to be the most mobile of the factors of production both occupationally and geographically. Economic history does indeed provide abundant evidence of great movements of labour from one industry to another and from one region to another. During the nineteenth century and the early years of this century, millions of people left Europe to settle in North America and in the British Dominions. In the second half of the nineteenth century there was the great westward movement in the United States, when large numbers of people left the eastern states to settle the interior and the western seaboard. The last quarter of the eighteenth century saw the beginnings of the great migration of the British people from the country to the town, a movement which is still taking place. More recent times have seen a large-scale movement of labour from the Mediterranean lands to the industrial nations in north-west Europe. In spite of all this evidence of labour's mobility, we must bear in mind that most of these movements took place over fairly long periods of time, and in most cases there were severe political, economic, and social pressures stimulating the movements. There is plenty of evidence that labour is not very mobile geographically. Regions no more than 100 miles apart often record unemployment rates which are widely dissimilar. In the 1930s some areas of the UK experienced rates as high as 60 per cent while others had rates well below 10 per cent. If labour had been geographically mobile such divergencies would surely have been greatly reduced. Occupationally, too, labour is relatively immobile. The evidence here lies in the large differentials in salaries and wages as between different occupations. A high degree of occupational mobility would certainly lead to a much narrower range of differentials.
|
