chapter  IV
47 Pages

Economic Warfare

This chapter traces the measureable quantities that enter into the considerations of the parties, including the estimated cost of conflict, but within the limits just discussed everything seems to be indefinite and economically indeterminate. It deals with those cases in which for a short period in the future the volume of production was absolutely independent of the height of the rate of wages, at least within certain limits. The chapter focuses on a number of important practical problems which are closely connected with the interests of workers and employers in changes in the rate of wages, as for instance, the effects of the elasticity of demand on the volume of employment and thereby its influence on prices. It determines if one party is much more strongly organised than the other, the competitive point of equilibrium may be found outside the range of practicable bargains, and consequently, far from the point of equilibrium of the readiness of the parties to fight.