§8. Opportunity to Change the Application of Labor

The best example of the choice between those uses of capital instruments affording immediate and those affording remote returns is found in the case of human capital, commonly called labor. Man is the most versatile of all forms of capital, and among the wide range of choices as to the disposition of his energies is the choice between using them for immediate or for remote returns. This choice usually carries with it a choice between corresponding uses of other instruments than man, such as land or machines. But the existence of optional employments of labor, however inextricably bound up with optional employments of other instruments, deserves separate mention here both because of its importance and because it usually supplies the basis for the optional employments of other forms of capital.

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It is almost exclusively through varying the employment of labor that the income stream of society, as a whole, is capable of changing its time shape. The individual may modify the time shape of his particular income stream through exchange, but in this case some other person must modify his income stream in the opposite manner, and the two sorts of modifications, some plus and others minus, offset each other in the total of the world's income. On the other hand, if an income is modified in time shape merely through a change in the exertions of laborers, there is no such offset, and the total social income is actually modified thereby.

The labor of a community is exerted in numerous ways, some of which bring about enjoyable income quickly, others slowly. The labor of domestic servants is of the former variety. The cook's and waitress' efforts result in the enjoyment of food within a day. Within almost as short a time, the chambermaid and the laundress promote the enjoyment of house, furniture, and clothing. The baker, the grocer, the tailor are but one step behind the cook and laundress; their efforts mature in enjoyments within a few days or weeks. And so we may pass back to labor increasingly more remote from enjoyable income, until we reach the miner whose work comes to fruition years later, or the laborer on the Panama Canal or the vehicular tunnels, whose work was in the service of coming generations.

The proportions in which these various kinds of labor may be assorted vary greatly, and it is largely through varying this assortment that the income stream of the community changes its time shape. If there are at any time relatively few persons employed as cooks, bakers, and tailors, and relatively many employed as builders, Edition: current; Page: [202] miners, canal and tunnel diggers, there will tend to be less immediately enjoyable income and correspondingly more enjoyable income in later years. Thus, by withdrawing labor from one employment and transferring it to another, it is in the power of society to determine the character of its income stream in time shape, and also in size, composition, and uncertainty. This power is exerted through the "enterpriser," to use Professor Fetter's term, according to the enterpriser's estimate of what return will come from each particular employment taken in connection with the cost involved and the ruling rate of interest.