general output of goods tends
thus to increase the demand for all kinds of goods as well as the
supply. If you make clothes and I provide food, and we exchange
products, but do not satisfy each other's wants to the point of
repletion, it is well for both of us that you should become able to
make more clothes and I to furnish more food. We can then go on with
our original occupations and both live better. In this there is
involved no displacement of labor at all; and neither would there need
to be any disturbance caused by multiplying in well-adjusted
proportions the output of each group and subgroup in the system of
industry. Where formerly a unit of _A'''_ was exchanged for one of
_B'''_ or _C'''_, there are now two units of _A'''_ given for two of
either _B'''_ or _C'''_, and every one has more things to consume than
he formerly had.[3]

[3] It will be seen that the maintenance of the present
exchange ratios between _A'''_, _B'''_, _C'''_, etc., when
costs of all of them are reducing, would require that these
costs be reduced in exactly the same degree in each case, and
that the quantities sold at the new cost prices should be
increased in unequal degrees, so as to bring the different
prices to cost levels. The demand for one article is more
elastic than is the demand for another. A slight increase in
the supply of _A'''_ may cause a large reduction of the
selling price, while it may require a great addition to the
supply of _B'''_ to produce this effect. There must,
therefore, be some changes in the relative quantities of
labor in the different subgroups, even though there has
been an equal amount of "labor saving" or cost reducing in
all of them. This change is so slight in amount as compared
with what would be caused by improvements confined to one
subgroup, that it is effected with relatively little hardship
and mainly by disposing the constant inflow of new labor at
the points where it is needed.

_Labor attracted toward a Subgroup as a Result of Improvements which
are made Elsewhere._--The fact that the demand of consumers for
different goods is not uniformly elastic has to be taken into account.
There are two distinct kinds of movements in the group system, brought
about by improvements in method. Each improvement in and of itself
has, as a rule, a labor-expelling effect, but this effect is partly
neutralized by general growth in co