“The declared object of deflation was the restoration of the gold standard at pre-war parity. Its actual effect has been to create unemployment by the restriction of industrial credit. By the lever of unemployment it has forced down wages and has thus facilitated the return to gold through the reduction of prices. An incidental effect has been to transfer purchasing power from the workers, whose wages have been reduced, to the bondholders, whose interest has remained the same. It has also doubled the real burden of Debt since 1920, and was largely responsible for the mining lock-out last year, by the reduction in terms of sterling of the money which we receive for coal sold abroad. Deflation, in fact, has been responsible for a sinister catalogue of disasters which can be substantiated in detailed argument that has never yet been rebutted.”

— Oswald Mosley

New Leader (20 September 1927), quoted in Robert Skidelsky, Oswald Mosley (Papermacs, 1981), pp. 152-153.

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Oswald Mosley 20

British politician; founder of the British Union of Fascists 1896–1980

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“It has been my endeavour to show in this work that a fall of wages would have no other effect than to raise profits.”

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In other words, lower wages were believed to enhance worker productivity.
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Source: The Wealth of Nations (1776), Book IV, Chapter VIII, p. 721.

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