Full text: What is New Since Keynes?

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4 V 
2. An obvious new feature of our times is the sensibilisation 
(or destabilisation ) and the upward bias of the price- wage 
Formerly it was regarded as natural that technical progress 
should lead to a decrease in prices in so far as it saved costs. 
The cost saving was passed on to the buyer unless as it 
indeed often occurred the innovator or imitator 
kept it for himself. The conditions of competition which 
make a swift passing on of the increased productivity in 
form of price reductions likely have become more rare 
in consequence of the oligopolistic structure of the 
economiy which has expanded and become more rigid. 
Thus At the same time in the period of full employment 
and scarcity of labour the market power of)the unions has 
increased ( or rather, jcf the workers in general) and 
the pressure for wage increases has followed visible 
increases of producivity in individual industries or 
individual firms. * Competition has to some extent shifted 
from the markets of goods to the labour market. 
C The reasons for this: A.that competition in the products /Wi&ikutu 
did not bring about quickly enough an adjustment to change 
in productivity and B.j thai workers organisation had become 
The consequence has been on the one hand a stabilisation of 
consumption fiavorable to full employment, on the other 
hand an inflationary bias in the economy described by 
the theory of structural inflation: The tendency f>f 
industries not favored by peoductivily gains, or 
of categories of labour which remained behind, to draw level 
with the forerunners and cause their gains to be shifted 
to prices.

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