The second new feature is the sensibilisation>6f the
price-wage system, and its upward bias.
Formerly it was regarded as natural that/technical progress
in so far as it led to saving in cost/should tend to lower
prices, if the cost saving were passed on to the buyer,
which f -it is true^-was by no means always the case,
since it depended on effective competition which often
did not obtain.
In our times the savings due to technical progress are ”7 ^
less often passed on in lower prices than in higher wages:
Competition has shifted from the markets for goods to
the labour market, largely as a consequence of the long
period of full employment. The pattern established in the
/
times of high employment seems, however, to have been
carried over into the time of renewed unemployment,
perhaps contrary to the hopes or prejudices of those
who thought that unemployment would restore former
patterns of behaviour in the labour market. What has happened
is that the cost savings due to tec^hical progress have
more often been used not to lower prices but to protect
profits which are under pressure owing to low utilisation.
Thus we hear that considerable savings have been made in
overhead cost, and these have served to lower the break
even point and not the prices.
'vk W hlA. ^ ^
Kc pi v *^
f : i- 'to ^ ^ b .