ESSAYS IN PERSUASION

PART

98

factors which determine the distribution of thenational product between different classes? Orwas it due to some temporary and exhaustibleinfluence connected with Inflation and with theresulting disturbance in the standard of value?

The period of depression has exacted itspenalty from the working classes more in theform of unemployment than by a lowering ofreal wages, and State assistance to the unem-ployed has greatly moderated even this penalty.Money wages have followed prices downwards.But the depression of 1921-22 did not reverseor even greatly diminish the relative advantagegained by the working classes over the middleclass during the previous years. In 1923British wage rates stood at an appreciablyhigher level above the pre-war rates than didthe cost of living, if allowance is made for theshorter hours worked.

(b) changes in the value of money,

AS AFFECTING PRODUCTION

If, for any reason right or wrong, the businessworld expects that prices will fall, the processesof production tend to be inhibited; and if itexpects that prices will rise, they tend to be over-stimulated. A fluctuation in the measuring-rod of value does not alter in the least the wealthof the world, the needs of the world, or theproductive capacity of the world. It ought not,therefore, to affect the character or the volumeof what is produced. A movement of relative