Full text: What is New Since Keynes?

4 
While the passing on of productivity gains to the consumer 
has taken new forms, the wage conflicts between different 
industries and different qualifications or types of labour 
have in a similar way contributed to thq^up^ard bias of 
the general wage level, simply because- actual reductions 
of money wages have hardly ever been accepted by labour, 
so that all corrections and adjustments involved an 
upward movement , 
The basis of all this is the relative ease of passing on 
wage increases,especially those of a general kind, 
to prices, This may be favorsured by oligopolistic 
structures but they are by no means necessary for it. 
What seems essential is the organisation of the labour 
market which makes wage ,changes extend over large fields. 
The tendency to shift wage increases is restrained by 
the international competition; flexible exchange rates 
tend to remove also this restraint. 
While the above elements impose a relatively mild inflation 
on an economy of full employment, additional stimuli may 
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be carried <|n from the outside as it were ^by increase in 
food raw material and energy prices which via cost of 
/ ’ /■" 
living lead to compensatory wage increases. The aim of 
getting compensation for cost of living increases ensures 
that inflation inherited from the past is passed on to the 
future. 
Great instability may arise if the government succeeds in 
obtaining wage restraint for a time after which, either 
owing to the lifting of the restraint or to the accumulation 
of resentment owing to cost of living increases etc 
large wage claims are put forward in one lump. This may 
act strongly as a destabiliser.
	        

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