Page:The Economics of Unemployment.djvu/74

the incentive of business men to borrow and of bankers to lend. So less credit would be manufactured, prices would not rise as much or as fast, and the whole process of reviving trade would take place more slowly. This slower recovery would be the price paid for the greater security of the recovered trade. The removal of the wage-lag would thus certainly reduce the fluctuation, by making the recovery of trade more gradual and preventing the level of prices rising so high. As soon as production and employment attained their full dimensions, the tendency to congestion of markets would be checked by the existence of a larger demand for commodities on the part of labour. So, even supposing that the adjustment between production and consumption were not kept true by the removal of the wage-lag, and a glut of goods took place, followed by a decline of trade and of employment, that glut would be smaller and the depression would be shallower.