ECONOMICAL PROSPECTS OF PROTECTED CULTIVATION

A large tension exists between the inflatory rise of costs on one side and on the other side the price setting in an open market, where in the present situation prices don't follow this inflation.

The increase of costs, which strongly affects our branch of industry, is the result of inflation and of a scarcity of goods. Inflation is created when the flow of money in the society grows faster than the flow of goods. This can be brought about when the level of consumption or investment is too high or when prices and wages rise too fast.

Scarcity of certain basic goods is caused by the fast economic growth of the passed period, which used up large quantities of these goods. Of course nowadays there are political factors as well.

Most branches of industry are able to include rising costs in the final price. Moreover large groups of the population are nowadays, thanks to their social position, able to get the increase in costs of living back in their wage packet. In this way one factor strengthens the other and inflation rolls on. In the past the upward movement of prices was followed and smoothed off by a slump. The production deminished, wages and prices went down and a new equilibrium came about. Be it that this process did not actually elapse noiselessly.

In the prosperous society of today the personal income is kept intact at a high level, even if a man becomes unemployed or has to work short hours. Because of this, prices don't drop and rising costs are passed onto society as a whole. Inflation goes on.

This is the picture in all prosperous European countries, more in one, less in the other.

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