Full text: What is New Since Keynes?

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. 
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