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( T H I S D O C U M E N T IS T H E P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S
CP.(56)
83
19th M a r c h ,
GOVERNMENT)
COPY NO.
1956.
CABINET
THE ECONOMIC IMPLICATIONS OF F U L L
EMPLOYMENT
N o t e b y t h e C h a n c e l l o r of t h e E x c h e q u e r
A t t a c h e d i s t h e t e x t of t h e p o p u l a r v e r s i o n of t h e W h i t e P a p e r
o n t h e E c o n o m i c I m p l i c a t i o n s of F u l l E m p l o y m e n t .
It i s n o w w i t h t h e
p r i n t e r a n d s o m e p a g e p r o o f s m a y b e a v a i l a b l e f o r t h e m e e t i n g of t h e
C a b i n e t on W e d n e s d a y .
T h e t e x t w i l l b e a c c o m p a n i e d b y a n u m b e r of
d e s c r i p t i v e c h a r t s a n d d i a g r a m s w h i c h a d d a g o o d d e a l to t h e c l a r i t y
a n d f o r c e of t h e d o c u m e n t .
Unfortunately these a r e not yet available
for c i r c u l a t i o n .
2.
B e c a u s e of t h e p r i n t i n g s t r i k e t h e e a r l i e s t p o s s i b l e d a t e of
publication will b e in the week beginning 9th A p r i l .
This is rather a
long t i m e a f t e r t h e p u b l i c a t i o n of t h e W h i t e P a p e r , b u t I a t t a c h s o m u c h
i m p o r t a n c e t o a c h i e v i n g w i d e s p r e a d p u b l i c c o m p r e h e n s i o n of t h e i d e a s
in the p a r e n t d o c u m e n t that I r e g a r d it as e s s e n t i a l to p r o d u c e t h i s
p o p u l a r v e r s i o n a t t h e e a r l i e s t p o s s i b l e d a t e , to g i v e it a l l t h e p u b l i c i t y
w e c a n , a n d to d i s t r i b u t e it a s w i d e l y a s p o s s i b l e .
3.
A n y a l t e r a t i o n s n o w m a d e to t h e t e x t m u s t i n v o l v e s o m e d e l a y
i n t h e p r i n t i n g s c h e d u l e a n d I s h a l l t h e r e f o r e b e g r a t e f u l to m y c o l l e a g u e s
if t h e y w i l l b e a s s p a r i n g a s p o s s i b l e w i t h t h e b l u e p e n c i l .
H.M.
Treasury Chambers,
19th M a r c h ,
1956.
S.W.1.
SECRET
REVISED
DRAFT
MUST FULL EMPLOYMENT MEAN E V E R - K I S I N G
(A P o p u l a r
The
version
greatest
need.,
and
employment.
anything
we h a v e
This
had
Full
Since
the
the
booklet
to
help
the
be
overcome.
is
the
the
country
It
we c a n
end
hare
White
has
country before
war
all
to
prices.
to
the
But
in
full
its
causes
is
danger
based)
is
a nation,
are
issued
it
prices
that
rise
in the
H I G H EMPLOYMENT,
HIGH
OUTPUT...
and
itself.
and how
make
on
place
worry
employment
it
war
agreed
unemployment,
It
full
the
have
maintain
returned.
as
stopping
parties
successful:
on w h i c h
what
how we,
do t o w a r d s
Implications
necesary
danger
Paper
this
the
not
rising
understand
SECTION I :
of
been
serious
explains
in
policies
scale,
a
"The
Employment")
problem;
also
(and
White Paper
problem
broad
old
another
It
and what
of
The p o l i c i e s
like
anxiety.
the
economic
was u n e m p l o y m e n t .
on t h e
of
PRICES?
can
rise
future.
S i n c e t h e war, t h e r e has been enough work for n e a r l y
e v e r y o n e i n t h e c o u n t r y who w a n t e d i t .
With n e a r l y
e v e r y o n e w o r k i n g we h a v e e a c h y e a r t u r n e d o u t o n
a v e r a g e , 5 p e r cent" m o r e goods and s e r v i c e s t h a n i n
the year before.
Such a r a t e of p r o g r e s s
should
s t e a d i l y b r i n g t o us more w e a l t h and l e i s u r e
The C o n q u e s t
Just
country
l i
per
to
have
of
people
so
7
number
war
over
of
work
few p e o p l e
people
So h a s
and w i t h
risen
10
Since
a percentage
war.
output ^ has
/
Very
low
the
the
unemployed.
cent.
at
Unemployment
before
were
. The
end
of
by
an
in
tho
per
cent,
19U8,
the
before
of
has
average
average
the
war
gone
has
believed
as
year
1
output.
productivity,
the
cent,
in
this
been
it
possible
this.
up
workers s
of 3 p e r
workers
average
unemployment
jobs
higher
the
of
a
by y e a r
whole
With
since
the
more
country'c
year.
T h i s i n c l u d e s e v e r y t h i n g produced f o r money - s e r v i c e s
(things
l i k e b u s r i d e s a n d c i n e m a s h o w s and t h e w o r k of t h e
professions)
as w e l l as g o o d s .
It
street
3 per
is
true
has
that
not
cento
gone
the
increase
to
get
a very b i g
the
machines
had
to
be
had
to
be b u i l t
part
the
the
Hopes
for
If
the
of
living.
more
It
we
on
better
that
production
plenty
do
are
of
new
up
a
look
forms
for
homes;
partly
perhaps,
a
number
over
the
as b i g
ideas
of
as
for
did
a l t h o u g h we
ahead
promise
1950
we h a d
although
last
two
go t o
the
to
or
three
the
we
factories,
rearm
e a c h y e a r we
improve
have
on
have
again,
.
increased
years
that
standard
of
a s we
choices:
and
might
better
more
choices
reasons
a
out
large
of
living
can
see
power.
food
our
standard
would
depend
and
clothes;
interesting
being
be
than
as
a
holidays.
community
ways
need
the
optimistic,
able
in
machines,
In
in
in
­
roads.
shall
-
production
take
we made
for
finding
in
improvement
improvement
certainly
atomic
Increase
done "before.
to
shall
of
steady
"better
they
the
goods
so
or b i g g e r
than
is
of
and
y e a r s we
attention
far
had
refineries
and b e t t e r
never
as
we h a v e
factories,
on t h e
have
for
claim
war
longer
they
-
first
the
a
that
things
And
in
as
throughout
good r a t e
own p e r s o n a l
schools,
thinking
in
can
depend
There
could
had
amount
the
fast
first:
Then,
in
Future
The
our
the
as
p
needs
the
imports.
man
home,
comfortable
would
in
period
Exports,
in
the
on w o r k i n g
reasons,
can keep
we
gone
1
of
other
increase
our
a n d new
increase
the
future
partly
for
had
living
post-war
production,,
pay
only
of
was b e c a u s e
rapid
these
average
the
Thirdly,.after
a
was
over
and
which
all
it
of
our
replaced,
output,
of
to
standard
This
in
abroad
For
up,
a year,,
on
shipped
the
to
the
Firms
all
an
past.
and f o r
of
get
are
making
more
distant
are
machines
giving
coal
for
increase
There
increasing
the
and
more
productivity.
we
can
future
produce
there
Other
Nations
is
That
to
country
are
Expanding
not
all.
go on p r o d u c i n g
o t h e r "big i n d u s t r i a l
depend
so much
industrial
United
Nations
avoid
Charter
They
and
economic
economy
their
trade.
not
more
the
all
the
and,
us,
looking
now a h o u t
on t h e w a y .
co-operation
organisations
economic
3 6
the
going
to
There
much
is
in
a world which
is
the
same w a y :
it
is
t o "be o p t i m i s t i c .
the
economic
get
it
of
and
more
the war.
trying
if
we
to steady
nations
We a r e
plans.
for
under
haw "best
than before
this
o t h e r "big
employment
are
in
goods
same,
to full
like
us
a n d more
doing
But nearly
for
committed
setbacks
international
discuss
were
know much m o r e
disastrous
international
various
are
difficult
and consuming
countries
world
on
nations
expansion.
to
I t w o u l d "be v e r y
In
the world
to expand
and t h a t
meet
our
makes
it
easier.
So
the
problems
economic
reasonable
of w r e s t l i n g
with
economic
Our p r o b l e m s
depression,
but
are
of
not
keeping
prosperity
SECTION I I :
BUT P R I C E S GO ON R I S I N G . . .
B u t s o f a r we h a v e f a i l e d t o f i n d a w a y t o p r e v e n t p r i c e s r i s i n g ,
Compared w i t h t h e previous" hundred y e a r s t h e r i s e s i n c e t h e war
has be^n startling.
What e x p l a i n s m o s t of t h e p r i c e i n c r e a s e
is
not r i s i n g import p r i c e s or ,changes in t a x e s and s u b s i d i e s :
it
i s c o s t s of p r o d u c t i o n a t home.
P r i c e s have r i s e n m a i n l y "because
incomes - wages and s a l a r i e s and p r o f i t s - have r i s e n f a s t e r
than
output
An U n p r e c e d e n t e d
Rise
On a v e r a g e
the prices
each year
than
sometimes
a lot.
£1 1 0 s .
about
it
is
the
the year before,
in
Some p e o p l e
assume
of
in
A basket
of
goods
we "buy h a v e b e e n
sometimes
goods
which
a little
cost
higher
higher,
£1
i r : 19^6
cost
1955.^
have
the
now b e c o m e
natural
order
so u s e d
of
to rising
things,
that
prices
it
has
that
they
always
J
3
x For i n s t a n c e , t h e O r g a n i s a t i o n f o r European Economic C o - o p e r a t i o n
( O . E . E . C . ) , t h e I n t e r n a t i o n a l Monetary Fund ( I . M . F . ) , the
U n i t e d N a t i o n s Economic and S o c i a l C o u n c i l
(E.C.0.S.0.C.).
/
Throughout the white Paper
and s e r v i c e s i s used.
s
the price
index
of
all
consumer
goods
happened.
This
something
quite
shop
prices
1850;
and
in
this
direct
Import
nine
tax,
effect
There
enough
in
are
t o make
19U6
from
peace-time
about
prices
in
prices
index
-
it
the
has
been
numbers
g o i n g "back
possible
1955
to
years
petrol
prices
last
one-fifth
big
does
one
this
for
employers
take
for
to
to
draw
rose
faster
hundred.
and
That
is
the
between
half
as
high
per
more
per
then
cent,
same
turning
cent,
30
out
30
more
per
goods,
goods
are
but
the
have
and
gone
up.
the
per
cent,
driven
goods,
then with
Suppose
for
not
of
price
money
30
30
only
influence.
people
workers
and
cost
they
in
that
the
more
more
only
going up"?
- both
cent,
it,
money,
home
production
cent,
doing
indeed;
rise
at
had
influence.
the
per
more
one
of
and p r i c e s
money f o r
do
and
producing
more
up.
But
they
take
per
cent,
producing
more
each
prices.
what
took
big
of
They
thirds
production
"costs
have
second
goods
.Between u s ,
services
of
one.
is
we
indirect
the
those
the
is
two
in
be
and
subsidies
small
fast
up,
is
out
stay
This
this:
in
to
That
turning
costs
so
rise.
more
money,
and
the
prices
That
very
cent,
Changes
a
rise.
cent,
30
rises,
only
per
with
90
been.
30
Then,
and
is
mean,
them.
still
of
costs
produces
cent,
- but
per
sent
e t c . ) and
times
responsible
per
tax,
at
risen,
have
has
have
happened because
suppose,
each
50
about
things
the
has
-
of
of
really
country
prices
one-seventh
the
What
in
on p r i c e s
But
1955.
rise
some u n o f f i c i a l
good
important
about
goods
and
different
explain
90
are
rise
how
(purchase
explain
the
Britain.
conclusion:
Three
roughly
some
for
post-war
Happened
explained?
taxes
The
official
figures
other
How i s
know
so.
unusual
general
any
Why; i t
not
some
the
one "broad,
then
-
is
exactly
we p r o d u c e d
90
per
reason
again
happened
as
cent,
why
nine
30
in
per
Britain
cent,
more money
prices
years
k
have
ago.
between
more
for
reached
1946
goods
producing
a
figure
and
and
them.
about
item
This
happened
country,
the
industries
going up
same
faster
are' r i s i n g
sort
faster
And,
settled,
extra
rising
if
Note
it
It
is
The Wrong
to
them t o
link
the
we h a d
to
of
for
rose
part
money
were
is
cut
pass
i s why
hack:
on i n c r e a s e s
any
and
rise
it
sales
every
are
helps
to
This
is
not
incomes
spent
demands
it
are
on,
keeps
comes
easy
to
te
to
stop
so
easy,
pass
prices
and
consumers.
rise
in
faster,than
When
about.
fixed,
This
on.
they
to he
more
for
to
have
goods
incomes which
s e n d s i*p
output,.that^prices,
fall
someone
to
everyone
see
of
else
1
one s
else
rise
the
outbreak
in
and
incomes
u p "by m o r e
cost
living
import
than
still
no
of
keep up,
increase
ahout
But
however
tempting
output,
further.
that
it
these
to
it
the
method
will
is
drive
import
Then
goods
Secondly;,
natural
in
to
cost
in
industry,
and,
results
out
try
of
in
up p r i c e s
when
relative
for
profits
set
to
desire
his
doing,
are
is
national
fewer
especially
partner
on a n
a
link
solution hut
to preserve
figures
if
was
people,
other
sound
to
Korea.
and
living.
there
and
getting,
less,
have
the
after
i n c o m e "by r e f e r e n c e
is
when
when
"based a w a g e - c l a i m
facts
times
tried
example,
people,
the
they
for
standard,
to
people
fall,
Thirdly,
how w e l l
were
There was
the
because
First,
there
abroad
one g r o u p
booklet.)
of
But
fast,
in
output
else.
home m a r k e t .
end. of
this
than
something
very
(The
amount
faster
differential.
looked
of
spending
goods
come
living.
dividends.
what
the
together
go
margins
not
rose
the
of
or
instance,
the
the
to
of w a g e
was hound
temporary
position
have
send
left
on t h e
of
of
tends
round
to
to
living
suddenly
incomes
over
individual
profits
next
risen
them
cost
of
a
for
the
power
is
have
prices
accept
all
Link
standard
were
because,
and
it
output
when Incomes
Incomes
tried
it
the
consumer.
harder
that
started,
when
the
spending
find
prices.
to
salaries
plenty
or p r o f i t
on t h e
a whole
t h i n g was happening
has
than
s a l e s "booming.
as
output.
process
to he
firms
of
wages,
than
hound
he
is
Britain
and f i r m s :
Once' t h e
there
for
to
or
at
the
settle
living,
putting
and
the
or
to
SECTION I I I .
WHY DOES I T MATTER,
I F PRICES
RISE?,
I f p r i c e s go o n r i s i n g , a n d t h e v a l u e of m o n e y g o e n o n
f a l l i n g , , i"t l e a d s t o " s o c i a l u r d ^ a i r n e s s ^ a n d a l l k i n d s o f
economic -di^f j j t ^ t
s , ' . - S a v i n g s a r e ' d i s c our a g e d .
Some"
p e o p l e g e t l e f t "behind I n t n e r a c e t o k e e p i n c o m e s j i n
s t e p " w i t h p r i c e s i a n d i t i s noF t h e l e a s t d e s e r v i n g w h o
g e t l e f t "behind.
Most I m p o r t a n t of a l l d u s t how, "raniess
p r i c e s i n c o m p e t i n g c o u n t r i e s a r e rising'jgJLftO?JLX^ll""
t h e y a r e not") we a r e l i k e l y t o l o s e e x p o r t m a r k e t s . /
If
w e do n o t s e l l e n o u g h e x p o r t s . i ? e - s h a l l n o t " ' b e " a ^ l e t o
p a y f o r e n o u g h i m p o r t s t o k e e p our e c o n o m i c m a c h i n e . ­
g o i n g ; a n d o u r h o p e s o f a r i s i n g standard7"of T f v i n g w i l l
£ r o w l e s s " b r i g h t % f u l l erop 1 o y m e h t i t fieIf w i l l "be"
threatened
Inconvenient,
If
prices
number
it
Unfair. . .
rise,
of e v i l s
the value
spring
is inconvenient:
is a
of w h a t
"fair
to be adjusted,
is
there
threat
not
price"
deal
from
But
of
get
they
telephone
call
ideas
boxes
have
and so on.
B u t of
course
inconvenience.
There
is the
lend
i n time
their
of w h a t
a go-ahead
All this
are less willing
their
first,
people will
monsy,
it will
they
be
will
a c t u a l l y "buy,
hack.
f o r we need
and so on.
to adjust
than
i n terms
i f we a r e t o have
savings;
houses,
people
of i t ,
eventually
having
printed,
if
A
of them
g o on r i s i n g ,
for,
falls.
the least
keep
to i t
If prices
of c o u r s e ,
To t a k e
i n the shops,
more
saving;
know how much
deal
housewives
t o savings.
they w i l l
this.
new b u s t i c k e t s
a great
discouraged
from
of money,
economy,
new f a c t o r i e s ,
investment
t o save
i t will
we n e e d
machines,
needs
a
great
roads,
savings,
be impossible
schools
and if
to get
enough
investment.
Then t h e r e
have more
(though
than
there
1955* w h i l e
wage
are
earners
average
period very
sufferer
great
than
i s the unfairness.
kept
pace with
were years
prices
rose
employed
earnings,
when
It
prices
over
earnings
that
rose
and f o r industry
have beer
left
average
t h e whole
fell
from
in fact
"behind.
i s t h e man who h a d saved up f o r h i s o l d a g e .
many p e o p l e
prices
like
this,
or do not r i s e
whose
at a l l .
incomes
either
rise
to
for
But
in the
The most
period
19I46
earnings
by 17s. in the £1.
only;
earnings
post-war
behind):
"by 1 0 s . i n t h e £ 1 , a v e r a g e
in industry
many p e o p l e
is true
these
post-war
obvious
There
more
are a
slowly
i n i\
1 £ 'i
A Dig r i s e
it
was "before,
Some p e o p l e
through
i
and
2
of
rising
our
the
incomes
specially
own.
unrest
never
have
Rising
and had
everything
risen
just
to.
prices
as
much.
Others
make
for
as
lose
nagging
feeling.
argument
prices
of
can
all,
do
to
espcially
our
export
and
payments
with
figures
for
the
gold
and
dollar
year,
and
have
a
year.
They
trouble
quarter
is
Why
markets
are
to
are
for
last
much
too
increase
we n o t
low.
our
goods
has been
still
is
trouble
The
falling.
This
exporting
nations
1951
and
Per
table
the
cent,
shows
had
in
trade.
All
is
risen
9 months
the
fast
that
our
shares
United
months
hefore
the
war.
1950.
Our
share
has
hefore
the
war
2 per
1950.
2 per
£2U0 m i l l i o n .
The
-
cent,
6 per
is
German
of
well
shows
up
"by
this
the
cent,
in
in
deal
trade
from
in
the
-
that
world
it.
World
years
this
three
s
and
trade
is
biggest
manufactures
in
1937,
manufactures
ILK.
W. G e r m a n y /
22
26
22
20
23
7
10
15
1937bigger
than
h a s "been r i s i n g
Now i t
smaller
world
is
a good
not
1955:
Germany
share
come down.
cent,
not
fell
of
recent
20
27
26
25
All
share
of
out
is
share
for
trade
. . . . . .
States
the
little
far
in
which
markets
in world
/
The
a
It
shrinking:
...
1st
this
They
good way
QJLA'
1937
1950
1951
1955
world:
reserves.
only
rising
is
nine
shares
is
exports?
are
world
first
now,
outside
only
enough
in manufactures
rising.
just
exports.
getting
manufactured
the
The
trade
in
leaves
deserving
trade
nearly
1950,
living
average
their
injustice,
of
Dangerous
damage
in
if
cost
gain without
The "biggest
with
the
even
no f a u l t
anxiety,
i
in
is
and
in
worth £720
very
smaller
than
six
cent,
per
manufactures
million.
is
it
was
fast
it
since
was
less
than
worth
some
1^
1 6
There
share
are
has
a number
fallen
handicapped by
markets
in
Europe,
But
in
our
in
these
share,
result
of
and
they
home
is
the
direct
Then p r i c e s
have
risen.
exports
lost
is
There
and
prices
to
compare.
this
country
have
West
Germany.
uncompetitive;
enough
to buy
to
rising
the
that
faster
we
on,
shall
imports
is
than
get
One
0
sell
enough
matter
toe-
boo
reason
export
of
prices
­
much.
why
are
different
that
wage
United
States
our
export
prices
are
find
that
and f a l l i n g
of
high.
evidence
have;
to
taking
single
prices
in
root
to
the
we m u s t
SECTION I V :
our
more
fall
output
easy
deliveries
too
export
There
goes
unemployment
the
are
the
given
biggest
difficult
become
Delayed
not
the
than
it
the
But
this
found
of
at
faster
have
1950,
grown
failure
Probably
line.
If
our
home m a r k e t
because
risen
is
the
of
are
have
have
all
of
evidence
out
of
inevitable.
speciality.
for
risen
so
our
which
root
hare
no d i r e c t
seriously
is
the
was
our
Since
outlet,
are
trouble
abroad.
result
main
account
manufacturers
them
e x p l a i n why
1950.
after
which
at
home m a r k e t ,
selling
are
also
incomes
this:
on t h e
are
the
abroad:
is
to
Commonwealth,
same
exports
attention
?
Germany s
In fact,
enough
goods
rearm
cannot
prices.at
their
to
explanations
rising
it
is
to
Some G e r m a n r e c o v e r y
having
which
the
possible, reasons
1950.
since
We w e r e
than markets
of
'tl
J
we
and
living
are
this
not
countrie
costs
and
bound
to
selling
could
in
abroad
easily
lead
standards.
WHAT CAN BE DOME
Price, r i s e s can be checked if three t h i n g s are done.
First,
if
t h e G o v e r n m e n t h e l p s t o k e e p a b a l a n c e b e t w e e n t h e s u p p l y of
g o o d s and t h e s u p p l y of s p e n d i n g money.
Second, if
employers
and w o r k e r s t o g e t h e r a g r e e t h a t the most important t h i n g to do
is to raise productivity.
T h i r d , if a l l d e c i s i o n s about incomes ­
about w a g e - i n c r e a s e s , p r o f i t - m a r g i n s and d i v i d e n d d i s t r i b u t i o n
­
a r e made i n t h e l i g h t of t h e l e s s o n of t h e p o s t - w a r y e a r s so f a r :
t h a t when t h e t o t a l cf c u r i n c o m e s g o e s u p f a s t e r t h a n o u r o u t p u t
p r i c e s are v i r t u a l l y c e r t a i n to r i s e
"
n
Holding
the
The
Balance
Government,
harder
or
amount
the
easier
nation
by
raising
to borrow
has
to
or
money,
spend.
lowering
and
It
in
has
taxation,
other
to
try
ways,
to
by
can
keep
making
alter
that
it
the
amount
in balance
with
that.there
is
can be
not
supplied
export),
the
the
then
nation's
reduce
are
to
can,for
If,
taken
away
from
amount
is
in,
and t h e
at
home.
of
spending
high
is
the
buy
on.
all
hand,
If
the
it
and
there
seems
goods
leaving
taxation
export
so
is
the
markets,
must
goes
on
make s u r e
to
too
will
raise
many
the
to
aim
sure
rising.
that
much
to
too
make
for
increase
do s o m e t h i n g
Government
enough
that
enough
much t e m p t a t i o n
Government
production
it
s t i l l
too
money h i g h
bo und. t o
to
other
Of c o u r s e ,
and
equally
spend
(while
on t h e
are
brought
to
reduce
there
Government
that
But
nation
to
the
pays
its
abroad.
Rising
Output
The problem
there
is
this
salaries
and
speeded
up,
them
or
speeding
new m e t h o d s
rigid
This
and
these
of
But
in
on t h e
a mixture
of
in
equipment.
course.
manning
scales,
working
times
a fully-employed
if
will
or
only be
there
shop f l o o r
redeployment
must
resistance
in
0
is
of
full
incomes
production,
-
in
wages
output
be moderated,
the
and
or,
management,
Higher
must
or
both;
higher
ready
to
productivity
practices
to
or
dilution
heavy
fixed
to
-
the
the
stints
unemployment,
try
needs
Restrictive
arbitrary
be
two.
output;
co-operation
confidence
system
rising
and
-
all
are
out
economy.
Some f i r m s
a new
increase
incomes
duties,
grew up
because
enterprising
of
and
output.
the
increase
new
too,
than
of
there
productivity
in
the
rise
either
in
demands
co-operation
practices
place
up
install
demarcation
^reduction
increase
employment
to
faster
line
lies
full
costs
rise
into
the
with
for
-
probably
productivity.
workers'
that,
profits
solution
First,
is
tendency
To b r i n g
of
example^
then
stays
the
home m a r k e t
home,
employment
way
goods
at
spending
keep t h e
the
of
s p e n d i n g money
spending.
goods
imports
enough
it
s p e n d i n g money
-prices,
supply
of
can
in
raising
between management
introduce
payments
and
new w o r k i n g
without
workers
methods,
difficulty.
Others
meet
opposition.
their
profits
try.
Confidence
a full
in
and
and
prospects
between workers
frank
exchange
Incomes
Secondly,
for
future
succeed
of
in
to
and
explaining
their
and
costs,
employers.
employers
opinion
their
will
Some d o
only
information
come
at
all
not
from
levels
industry.
Keeping
rise
Some f i r m s
in
each
in
Line
the
output.
rise
This
individual
in
is
incomes
a rule
industry
must
be kept
in
line
the
country
as
a whole,
for
or
firm.
Here
are
some
with
the
not
points
about
it!
(1)
In
some
than
and
in
others.
fast,
stable
for
cuts
are
spreading
not
from
profit
are
Trade
Unions.
by
. Nor
keep the
needs
to
remember
the
than
u p 50
output.
per
new
where
will
country
income
productivity
be
as
a
increases
the
only
whole.
as
a
productivity.
profits
t h e y may n e e d
from
faster
machines
higher
cannot
give
it
negotiation
can the
It
the
bigger
way
to
sales,
an o p i n i o n
on
any
justified
or
not;
is
between
Government
can
only
country
experience
cent,
the
whether
free
of
that
much
margins.
distribution.
to
for
industries
and e x p a n s i o n
obviously
fixed
raised
scope
cut:
of
extra
wage-demand,
wages
driven
bhe
investment
higher
individual
than
benefits
earn
The Government
dividend
better
the
should
new
these
be
Price
Firms
In
should
prices
can be
may b e m o r e
prices
keep
finance
(3)
There
way t o
of
productivity
new t e c h n i q u e s .
rises
(2)
industries
of
mainly
as
give
employees
a view
ask t h o s e
a whole
19^6-55,
because
in
each
concerned
mind,
when p r i c e s
incomes
on
and
rose
and
were
faster
jL & 0
CONCLUSION
Everyone
prices:
have
but
so
far,
failed
to
get
explain,
as
in the
a nation
sum t o t a l
it
wants
is
which
constantly
spend
it
price
rising
goods
we c a n
buy
for
our
on
for
c a n do much
to
and
with
can be
of
of
to
rather
that
prices
rise
up
we
than
living
along
in
in the
first
set
out
earn,
and
the
rising.
with
pay
If
full
past;
future.
off
on
are
the
individuals
Itself
all
press
to
we
costs
employment
been
we
produce
if
we
to
we
on k e e p i n g
we h a v e
*he
But
and
hut
as
how much.we
and
stable
the
.......
of
go on
wants
"How w e l l
we p r o d u c e ;
productivity,
achieved
has
that
incomes
regardless
bound
getting
booklet
money
pay
in
l i v i n g ^ Between us,
sending
stop
our
everyone
Paper,
services
standard
are
This
White
on t h e
increasing
stability
standard
the
more money,
prices
responsible
s . 5 8 - 5 6
not
and
succeeded
second.
of
the
on,
concentrate
the
words
determines
employment,
we h a v e
depends
of
what
full
down,
and
a
mainly
and b e t w e e n
us,
we
WAGES,
Before
I n what
setting
follows
reckoned
PROFITS,
tax
replacement
of
These
profits
-part
is
saved
and p l a n t ) ;
dividends
loans
machines
fact
and
F r o m 1938
Profits
and
part
of
personal
are
to
wages
1955,
in
of
So from
1938
with
3's
times
19U8
that
F r o m 19^-8
real
been
their
dividends;
a big
1955
21
to
1955,
for
1955
­
(from
60 p e r
cent,
and
depreciation).
The
and
building
third
(-that
for
largest
of
last
the
come
interest
on
is,
the
money
dividends
are
all
times
salaries
as
big
as
profits.*
rose
3i
times.
Gross
way
in
which
companies
about
percent,
Taxes
and
in
reserves
are
taking
did
before
the
dividends
rose
about
if
times,
compared
and
salaries,
much
of
5 per
less
(it
than
was f r o m
wages
rose
about
what
money w i l l
1955)
about
total
hi
they
terms
to
1938,
cent.
they both
in
the
than
rose
1938
of
In
in
profits
wages
D i v i d e n d s have f a l l e n
are
per
companies'
terms
Dividends
taxes;
for
tax.
change
profits.
dividends
to
salaries
(called
salaries
three
and
e.g.
times,
there:has
distribute
about
profits
replacement
in
earners)
is,
four.
shares;
and
explanations.
aside,
into
goes
income
salaries
rose
much more
salary
some
that
money f o r
wages
2.
s
the
for
Wages
/
divided
The f i g u r e s
wage
are
and b u i l d i n g s
ordinary
1,
6.
are
largest
here
FACTS/
any money put
and
deduction
In
or
THE
profits;
on p r e f e r e n c e
before
5.
paid
gross
includes
next
by a l l
h.
in
(this
the
etc.
But
is
figures,
mean
worn-out
earned
3.
the
profits
before
gross
out
AND D I V I D E N D S :
the
have i n c r e a s e d
30
per
cent,
and
same
buy ­
about
1938
war.
to
salaries.
amount.)
wages
UO p e r .
and
cent.
cent.
and
wages
and
salaries
about
the
sources,
are
incomes.
The f u l l d e f i n i t i o n s of a l l
itself.
' in t h e White Paper
the
This includes the gross trading
as w e l l a s t h o s e of c o m p a n i e s .
figures,
profits
and
of
nationalised
given
industries
Excludes a l l the companies which have been n a t i o n a l i s e d since
1938.
O t h e r w i s e the. f i g u r e s would f l u c t u a t e up and down a s c o m p a n i e s
were n a t i o n a l i s e d and d e n a t i o n a l i s e d .
Set
1.
of
Unemployment
Since
of
Charts
the
pointer
14- i n
to
average
has
been
of
"So
that
30/-
in
2
.
£1
retail
prices,
of
The
of
basket
Od.
in
this
had
1920
goods
goods
explains
in
1955,
'between
with
the
jobs
steadily
rising
to
with
which
which
1955,
cost
cost
the
Taxes
extra
and
"World
Depression
Wars,
on
Since
194-8
average,
the
£1
prices
the
in
words
194b" c o s t
in
Increase
i n Home C o s t s
of
This
is
what
When
this
(Worker
Home
a
Import
about
rise
in
home
home
manager
say
w h e n THIS
and
so do
and
taken
194-6
cost
about
Britain.
:-
manager
^
1/6
-
2/-
s
6/6
stay
"We've
for
means:the
same
produced
doing
the
30% m o r e
it
home
goods
)
cost
per
article
prices.
say
"We've
money
194-6 a n d
costs
costs
happens,
the
90% m o r e
And b e t w e e n
10/-
Costs
happens,
and
but
(Worker
in
Prices
t a k e n 3Q/o m o r e m o n e y
rises,
£1
Subsidies
Increase
Meaning
in
to
(Graph
1955.
Change
and
no
unemployment
1955' .)
Rose
and
1920
had
we h a v e
a basket
And
3.
Paper
1-g-.)
Why P r i c e s
10s.
no
and w o r d s :
workers
But
(Graph
had
percentage,
100
White
Prices
we h a v e
1930-33?
every
accompany Popular
and
war
unemployment
to
1955
for
produced
doing
this
is
30% m o r e
it
exactly
goods
)
what
did
happen
1
Aj...
Wages
and
Comparing
3i
Salaries,
and
1938
1955
with
Profits
­
wages
and
salaries
have
times.......
Gross
profits
But
the
times
.......
division
of
profits
has
changed:
%
1955
Dividends
47
21
Interest
15
12
Savings
29
h.3
9
Wages
So
And
and
these
dividends
are
these
are
(Chart
Shares
the
of
1950
and
our
in
wages
and
salaries
(Chart
of
"both,
changes
in
what
they
to
1955,
in
both,
2k
Dividends
changes
i n World
1938
from
1938
would
real
and
to
1955).
buy
(at
terras.)
Trade
share
1950
to
1955
share
in world
in world
1st
nine
first
....
and b e t w e e n
the
both
Germany
U.S.A.
markets
of
manufactures
and
market
of
manufactures,
of
1954
1937*
months.)
nine
months
increased
their
exports
and
of
of
1955?
manufactures
faster:
Germany
4-18%
U.S.A.
United
7.
rising
fallen......
(Percentage
and
the
out
Since
has
Salaries,
paid
prices).
6.
%
1938
Tax
5.
increased
Wage C o s t s
Average
industry,
in
U.S.A..
earnings
1950-55,
1st
and
9
United
-1- 3%
Kingdom
U.K.,
Germany
output-per-man
in
Manufacturing
months:
Kingdom E a r n i n g s
Output­
per-man
-t-
L0jh
+
10%
Earnings
labour
costs
have
per
risen
article
U.S.A.
Earnings
So
labour
have
costs
W.
Earnings
labour
costs
and
per
have
than
risen
output
about
4-29%
Output- per-man
4-12%
rather
article
Germany
have
than
risen
output-per-man
ahout
15%.
Earnings
4- i+0
Output-per-man
-t-
o u t p u t .per
article
more
have
man h a v e
hardly
37i"
risen
risen
man.
30%.
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