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Thus compensation rqquires an expansion in both departments.
Department II must invest in order to enable department I
to increase its output which in turn is necessary for
realisation in departmentll. This only illustrates what
has been said earlier on: In the aftermath of innovation
new innovations are necessary to keep the economy going.
The increase in consumption, based on the rise in wage
per man in department II and on the increase in output
in department I may raise a question of the structure of
demand. In former times there was no such problem:
You needed more shoes, trousers etc. But when a high
standard of life is reached the structure of demand is
bound to change drastically. As long as you can copy
existing models, for example the american way of life
you can follow a given pattern. But once you have
yourself reached a high standard on national income
you have to become a pioneer in consumption. It has become
an economic problem that we do not very well know how
to build our lives, that we do not have a vision of
a desirable culture. An analogous and related question
arises in the case of investment goods where the rapid
technical change causes great uncertainty and perplexity.
It will therefore not do simply to use the displaced labour
in order to increase the output of existing industries.
It has to be shifted to new industries (products ) for
which the capacity has to be created.
And now a decisive point: The new industries have to be there
ready to absorb the labour as soon as it becomes redundant