3.26 
i 
] 
profitability of expansion is immediate and certain, the consequent threat 
of wage demands is remote and uncertain. That seems to tilt the balance in 
favor of expansion, to judge by Japan's excellent employment record, labor's 
many fringe benefits and harmonious labor relations. 
* I 
In lieu of a summary, let me close by stating the theme on which | 
I elaborated and played variations. The theme was that in a 
capitalist economy, the capitalists' profits serve as a buffer that 
absorbs shocks to the economy and cushionstheir effect on the 
employment and incomes of the economy's other members. The larger 
the profits, the more effective they are as a buffer; and the limitation 
of profits as a source of income also diminishes their effectiveness 
as a buffer. The compromise solution that limits capital's share 
in income while maintaining the cushioning effect of profits is 
profit sharing between labor and capital. 
Oxford, November 1983 
Tibor Scitovsky