“We want to keep prices stable for two reasons—to hold on to our share of world markets, and to avoid strains and dislocations at home. We are probably entering a period when it will be more difficult to keep prices from rising. It is a matter for both sides of industry to see that increased money returns, either dividends or wages, are matched by increased output.”

— Rab Butler

Speech to the quarterly meeting of the National Production Advisory Council on Industry (28 May 1954), quoted in The Times (29 May 1954), p. 3
Chancellor of the Exchequer

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Rab Butler18

British politician 1902–1982

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“I do not mean to suggest that all those who call themselves monetarists make this unconscious assumption that an inflation involves this uniform rise of prices. But we may distinguish two schools of monetarism. The first would prescribe a monthly or annual increase in the stock of money just sufficient, in their judgment, to keep prices stable. The second school (which the first might dismiss as mere inflationists) wants a continuous increase in the stock of money sufficient to raise prices steadily by a "small" amount—2 or 3 per cent a year. These are the advocates of a "creeping" inflation. … I made a distinction earlier between the monetarists strictly so called and the "creeping inflationists." This distinction applies to the intent of their recommended policies rather than to the result. The intent of the monetarists is not to keep raising the price "level" but simply to keep it from falling, i. e., simply to keep it "stable." But it is impossible to know in advance precisely what uniform rate of money-supply increase would in fact do this. The monetarists are right in assuming that in a prospering economy, if the stock of money were not increased, there would probably be a mild long-run tendency for prices to decline. But they are wrong in assuming that this would necessarily threaten employment or production. For in a free and flexible economy prices would be falling because productivity was increasing, that is, because costs of production were falling. There would be no necessary reduction in real profit margins. The American economy has often been prosperous in the past over periods when prices were declining. Though money wage-rates may not increase in such periods, their purchasing power does increase. So there is no need to keep increasing the stock of money to prevent prices from declining. A fixed arbitrary annual increase in the money stock "to keep prices stable" could easily lead to a "creeping inflation" of prices.”

Henry Hazlitt (1894–1993) American journalist

Where the Monetarists Go Wrong (1976)

“Meantime I say to both sides of industry, 'Please don't support us with general expressions of good will and kind words, and then undermine us through unjustified wage increases or price increases. Either back us or sack us.”

James Callaghan (1912–2005) Prime Minister of the United Kingdom; 1976-1979

Speech to the Labour Party Conference in Brighton (5 October 1977), quoted in Labour Party Annual Conference Report 1977, p. 217
Prime Minister

“If the economy today were operating close to capacity levels with little unemployment, or if a sudden change in our military requirements should cause a scramble for men and resources, then I would oppose tax reductions as irresponsible and inflationary; and I would not hesitate to recommend a tax increase, if that were necessary. But our resources and manpower are not being fully utilized; the general level of prices has been remarkably stable; and increased competition, both at home and abroad, along with increased productivity will help keep both prices and wages within appropriate limits.”

John F. Kennedy (1917–1963) 35th president of the United States of America

Source: 1962, Address and Question and Answer Period at the Economic Club of New York

“Conditions have greatly changed in Great Britain since the end of the war owing to the existence of full employment. Negotiations about wages between the two sides of industry now take place in entirely different circumstances. There is no reserve of labour to compete for jobs. … If wages rise faster than productivity the increases in cost can usually be passed on in increased selling prices. There is thus in the economic system very much less check on the upward movement of money wages. …if wages at home rise unchecked, it is more likely in general that exports will gradually cease to be competitive and there will be balance of payments difficulties. These can be met, in the end, by devaluation. A succession of devaluations completely undermines confidence in any currency. … It is clear that a very difficult problem faces a country such as ours, which wishes to maintain full employment and yet to avoid the undoubted evils of rising prices and balance of payments difficulties abroad.”

Hugh Gaitskell (1906–1963) British politician

Memorandum, 'Wages and Prices and Full Employment' (1 December 1950), quoted in Correlli Barnett, The Lost Victory: British Dreams, British Realities: 1945–1950 (London: Pan, 1996), pp. 350–352
Chancellor of the Exchequer

“When the international prices rise, we expect the government to cut its share of profit and its revenue earnings and share the burden of the increase with the common man.”

Arun Jaitley (1952–2019) Indian politician

Responding to fuel price raise by the UPA government, as quoted in " India announces fuel price rise http://news.bbc.co.uk/2/hi/south_asia/4219582.stm", BBC News (6 September 2005)

“To unstable money are to be traced nearly all our economic troubles since 1918: the unemployment of the inter-war period; the over-employment and scarcity of labour since the Second World War; the labour unrest incidental to perpetual wage demands; the hardships and dislocation caused by the declining value of small savings, annuities and endowments; the vexation of continual price rises even for those whose incomes on the whole keep pace with them; the collapse of the prices of Government securities through distrust of the unit in which they are valued.”

Ralph George Hawtrey (1879–1975) British economist

‘Foreword’ (1961) to A Century of Bank Rate (1962, 2nd ed.), p. xxii.
A Century of Bank Rate (1938)

“Though we have achieved considerable success in our policy of increasing production and maintaining full employment, this has been accompanied by constant pressure for higher wages resulting in higher prices. We have not yet found out how we can maintain full employment in combination with stable or decreasing costs and prices.”

Stafford Cripps (1889–1952) British politician

Memorandum, 'The Dollar Situation: Forthcoming Discussions with U.S.A. and Canada' (4 July 1949), quoted in Correlli Barnett, The Lost Victory: British Dreams, British Realities: 1945–1950 (London: Pan, 1996), p. 353
Chancellor of the Exchequer

“The growth in money and credit has outpaced both savings and economic growth. These inflationary pressures have been concentrated in asset prices, not consumer price inflation--keeping monetary policy too easy. This increase in asset prices has fueled domestic borrowing and spending. Government policy and the increase in securitization are largely responsible for this bubble. In addition to loose monetary policies by the Federal Reserve, government-sponsored enterprises Fannie Mae and Freddie Mac have contributed to the problem. The fourfold increases in their balance sheets from 1997 to 1998 boosted new home borrowings to more than $1.5 trillion in 1998, two-thirds of which were refinances which put an extra $15,000 in the pockets of consumers on average--and reduce risk for individual institutions while increasing risk for the system as a whole.”

Ron Paul (1935) American politician and physician

CONFERENCE REPORT ON S. 900, GRAMM-LEACH-BLILEY ACT, November 8, 1999 http://www.house.gov/paul/congrec/congrec99/cr110899-glb.htm <br class="br">1990s

“LABOUR, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price. The natural price of labour is that price which is necessary to enable the labourers, on with another, to subsist and to perpetuate their race, without either increase or diminution.”

David Ricardo (1772–1823) British political economist, broker and politician

Source: The Principles of Political Economy and Taxation (1821) (Third Edition), Chapter V, On Wages, p. 52

“Labor is like any other commodity in the market — increase the demand for it and you increase the price of it. Reduce the supply of black labor by colonizing the black laborer out of the country, and by precisely so much you increase the demand for and wages of white labor.”

Abraham Lincoln (1809–1865) 16th President of the United States

Source: 1860s, Second State of the Union address (1862)

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