“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.”

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

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Oswald Mosley20

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.”

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

Source: The Principles of Political Economy and Taxation (1821) (Third Edition), Chapter XXXII, Malthus on Rent, p. 281

“I have… instituted systematic, voluntary measures of cooperation with the business institutions and with State and municipal authorities to make certain that fundamental businesses of the country shall continue as usual, that wages and therefore consuming power shall not be reduced, and that a special effort shall be made to expand construction work in order to assist in equalizing other deficits in employment… I am convinced that through these measures we have reestablished confidence. Wages should remain stable. A very large degree of industrial unemployment and suffering which would otherwise have occurred has been prevented. Agricultural prices have reflected the returning confidence. The measures taken must be vigorously pursued until normal conditions are restored.”

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“The time has come to speak out. Britain is now locked in a vicious spiralling interest rates…The net result of completing the vicious circle is that prices have increased, the rate of inflation has gone up, the money supply has increased, unemployment has gone up, the rate of bankruptcies has increased, the industrial base has been further eroded, the Government's borrowing requirement has increased and as a result there is more pressure to raise interest rates yet again, to be followed inevitably by the same vicious circle. It is this that must be broken.”

Edward Heath (1916–2005) Prime Minister of the United Kingdom (1970–1974)

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“Wages have increased, the cost of living has decreased. The job of every man and woman has been made more secure. We have in this short period decreased the fear of poverty, the fear of unemployment, the fear of old age; and these fears that are the greatest calamities of human kind.”

Herbert Hoover (1874–1964) 31st President of the United States of America

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“Owing to the incapacity of the higher price-rate to appeal to the "acquisitive sense," it would appear altogether plausible to attempt to do so by utilizing the opposite strategy: by decreasing piece-rates, to force workers to produce more in order to maintain their accustomed earnings. Moreover, two simple observations seem to have held true in the past, as they do today: a lower wage and higher profit are directly related, and all that is paid out in higher wages must imply a corresponding reduction of profits.
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In other words, lower wages were believed to enhance worker productivity.
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Joseph E. Stiglitz (1943) American economist and professor, born 1943.

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Source: The Wealth of Nations (1776), Book IV, Chapter VIII, p. 721.

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