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Hobson, John A., 1858-1940

"Problems of Poverty"

for matches which they
formerly bought for 21/2d., will diminish their expenditure upon other
commodities, and the result will be to diminish employment in those
industries engaged in supplying these commodities. Here is another
"unseen" result of fallacious philanthropy.
The inevitable result of the Salvation Army placing goods in the open
market is to increase the supply relatively to the demand; in order that
the larger supply may be sold prices must fall, and it makes no
difference whether or no the Salvation Army takes the lead in reducing
the price. If the fall of price enables the whole of the increased
supply to be taken off at the lower price, then an increase of
employment has been obtained in this trade, though, in this case, it
should be remembered that in all probability the lower level of prices
means a reduction of wages in the outside labour market. If the
increased supply is not taken off at the lower prices, then the
Salvation goods can only be sold on condition that some others remain
unsold, employment of Salvationists thus displacing employment of other
workers. The roundabout nature of much of this competition does not
impair one whit the inevitability of this result.
This objection is applicable not only to the method of the Salvation
Army, but to many other industrial experiments conducted on a
philanthropic basis. Directly or indirectly bounty-fed labour is brought
into competition with self-supporting labour to the detriment of the
latter.


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