But still, I am of the opinion that this leads us back to labour costs. Yet economic progress means labour producing more and better goods per unit of time. Rising productivity, which is caused by increasing per capita investment, raises individual purchasing power. It is this process that raises demand. The suggestion that social welfare payments have actually helped keep supermarkets afloat simply does not hold water.
Welfare payments are transfer payments.
That is to say they involve the transfer of purchasing power from one group to another group, leaving total purchasing power unchanged. In plain English, the government takes money from A and gives it to B to spend. This clearly reduces A's spending power while raising B's. Also overlooked is that supermarket competition is mainly responsible for real grocery prices falling during the past 20 years by about 40 per. Moreover, critics should bear in mind that only companies protected against market processes can ignore their customers for very long periods.