It is now time to return from this historical digression to the general issues of theory with which we are more directly concerned. We have examined the conditions which make it possible for Trade Unions to secure at any time the payment of wages higher than would have been paid in a competitive market. We may now assume that such wages are being paid, whether as the result of Trade Union pressure or because they have simply been imposed by the State; and we may proceed to enquire what the consequences of such a situation are likely to be.
KeywordsTrade Union High Wage Stationary Community Heavy Industry Consumption Good
Unable to display preview. Download preview PDF.
- 1.Up to this point, my analysis of the effects of a general rise in wages is largely based upon the classic study of Böhm-Bawerk (Macht oder ökonomisches Gesetz in Gesammelte Schriften, vol. i.; see particularly pp. 270 ff). What follows owes a great debt to Dr. F. A. Hayek. (See his article, “Kapitalaufzehrung,” Weltwirtschaftliches Archiv, July, 1932.)Google Scholar