THEORY OF TRADE CYCLES.

Dominion, Volume 3, Issue 622, 27 September 1909, Page 8

THEORY OF TRADE CYCLES.

.?■:>;■ '■;■ ;-y.. :.*:'.'''' ',''"v^''-'''',^. : ' HOW THE SUN:;AFFECTS fTJNE»IPLOY- ;■'-.'"'. : -. i :''!.\'" ; ira£''''' i '.;--'"i r "i'' ; ' ... Mr. H., Stanley .Jevons,,son 'of the distinguished economist, discusses in the "Contemporary , Review" -.'The - Causes; of.' tJnemployrment." '■--,• .- - :.-/■"',-./■/ -■: /-, ■•■,.'} -, ■-: •- _Jhe late Professor. Jevbns, '.as' long'"ago?ns 1 '1875, pointed out in a brilliant' generalisation 'hi' P«"odic variations of 'the sun's, conditions affected meteorological disturbances,/.and also the harvest, as dependent on the weather. "If," ■he said, 'tho weather depends in any degree upon the solar period.:it follows that the harvest'and the price of'grain will depend more or, less, upon' the. solar periods, and will go through periodic fluctuations in periods of time' e? ir t tnose °f'tbe sun-spots." ■':" ... Mr. -Jevons examines his father's' theory and t the statistics which affect them, 'and"comes to ■the conclusion that the trade oyole runs gen|erally to .sevon or ten'years'though on the average the t barometric, period is three'and a half years m length,-and individual''periods |'vary. /Harvests fluctuate considerably from I 7a t r ii? y ear .-in.a period generally of three and a half years;-with a longer period superposed,' ™i$ flncta closely" <W nepted With the- barometric ■ period, of about ! ..three and a half - years in length.'!.-'';-''"-" Now, observation of the sun-spots'has' been made continuously.since 1825, and these spots indicate changes -. in- solar activity, • and are used in default of direct knowledge of the suns heat. The sun's heat affects the weather /and Mr.,Jevons shows how this, again'; affects the harvests,/ He then points out thatAcceptance of the solar theory of the trade cycle carries with it some important conSu-sums-in-regard to> unemployment;- - It is difficult to, imagine that variations of the harvests ■can ever be avo.ded; hence there will always : LHvif CaUS ? - fluctuations in ,t£e activity of industry.-. This • would operate under every form.bf social, slructure, TndividiS A free - tr or protSHorJst At the same tunc,-various measures might be ducers; to .anticipate them and free-trad? ■%ftr* f C .T I€SS 'induttriaUy onthe result of-its own/crops, will assist I certain amount of Government interference in the shape of insurance would" also"hihelping but I: am not in-favour of the State, enterine' -the difficulties .experienced by Brazil with her "One m °fh S 3'm D ■ WMI *?■■ One method there is, however, which would be efficacious in. preventing Wodio.-imiK ado n iinT P „ 1 f oyrae fl nt ; in »:»«V -all ■ adoption of a .fluctuating/ wage-rate. After a year or two of very bad" return to of .agricultural.producers there is less wealth ft™ amongst the whole communi y' than when tho harvests are .good,'.and it is therefore impossible that '.the-greater number -the manual -workers-should;have fixed incomes. If fluctuations are t'o be borne entirely by employers, -wages must be much lower than ■Aw... wouldbe on theaverage if they vaxiel with industrial- activity.. . ' ■ Vfe^fllT* 11 ' fl " ctu f tion ? of. income are borne S ty merchants, employers, and certain classes of workmen, such as containers and engineers. A much smaller variation than that now borne by miners would probably be all.that is necessary proportionately to distribute every year's production of wealth, and thus to avoid any appreciable fluctuation of employment in .the great majority of trades. H,°» am \;u hls c ,s i\ T6rr "heroic solution of the difficulty, for there are many valid objections, to / It.seems to mo, however, .that having regard to-the natural origin of • the fluctuations, .there is no option but to accopt-the-lesser of two evilsl"