(by the price and other competition involved). The 
macro-economic process of distribution is conceived 
as resulting from the steady interaction of simultaneous 
innovation and diffusion processes which to some extent 
balance out. 
Now in post-war conditions of prolonged full employment 
and labour scarcity an alternative version of the process 
became relevant and perhaps dominant. The differential 
rent of the favoured firm came under pressure from the 
side of labour which asked for a proportionate share in 
the extra profit. Their success was guaranteed by the 
firm's strong interest in a stable well adapted and 
trained labour force. 
The firm will still expand capacity (even if perhaps less 
quickly than under the pre-war version); the elimination 
of the weaker competitors and their capacity will come 
through loosing their labour to the favoured firm. The 
tendency for an increase in mark-up in the industry in 
this version of the process is nipped in the bud. 
I think the story fits fairly well the conditions in 
several countries up to 1974. It compares favorably to 
the pre-war conditions, because then the extra profits 
of the innovation were often not passed on at all. The