Surplus labor and the social wage in Great Britain

Contraction or comparative inelasticity of demand in recent years was accompanied by notable increases in the average output of British workers and by large labor surpluses. The major economic problem affecting unemployment is not increased productivity of labor but restricted production. A point of view which has found favor among many economists and public men in Great Britain is to the effect that restricted production is largely due to failure to achieve a suitable allocation of income to consumption and investment. The British government traditionally restricted its rôle largely to the attempt to maintain the monetary and credit system in proper balance with volume of production. More recent policies have influence the allocation of income by means of taxation, socialization of investment (especially municipal), and the social wage; and there is evidence to support the view that this policy has had a vital bearing on elasticity of demand.