ABSTRACT
As has been pointed out already in Chapter II, repressed inflation can be viewed as a conflict between government policy and consumer wishes as to the distribution of factor services. If the government succeeds in pursuing its investment policy, it must control not only the volume of savings but also the distribution of factors within the economy. If the price system determines the distribution of raw materials and labour, the government’s planned investment programme could likely not eventuate. Labour would tend to move toward better-paying industries, and the raw materials would be sold to the highest bidder. In many instances it would only be coincidence if the industry which could and would pay the better wages and raw materials prices was also one favoured by the government. As pointed out in Chapter II, the ineffectual labour controls in Great Britain did not promote the desired distribution of that factor.
