The equilibrium between supply and demand is achieved only through a reaction against the upsetting of the equilibrium.

Biologically, life is not maintenance or restoration of equilibrium but is essentially maintenance of disequilibria, as the doctrine of the organism as open system reveals. Reaching equilibrium means death and consequent decay. Psychologically, behaviour not only tends to release tensions but also builds up tensions; if this stops, the patient is a decaying mental corpse in the same way a living organism becomes a body in decay when tensions and forces keeping it from equilibrium have stopped.

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.

Some years ago I found myself in discussion with a friend who entertained the notion that the general tendency of things in this world is towards equilibrium, the result of which would be peace and blessedness to the human race. My notion, was that equilibrium meant... death. No motive power is to be got from heat, save during its fall from a higher to a lower temperature, as no power is to be got from water save during its descent from a higher to a lower level. Thus also life consists, not in equilibrium, but in the passage towards equilibrium. In man it is the leap from the potential through the actual to repose.

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. ... [I]f 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.

The obsession with equilibrium has imposed enormous costs on economics.

To try to cure unemployment by inflation rather than by adjustment of specific wage-rates is like trying to adjust the piano to the stool rather than the stool to the piano.

Peace demands solutions, but we never reach living solutions; we only work toward them. A fixed solution is, by definition, a dead solution. The trouble with peace is that it tends to punish mistakes instead of rewarding brilliance.

Rise the minimum wage is the best way of hurting the poor.

...we must recognise that the greatest threat to the cohesion of our society today is the still increasing rate of inflation. ... We are approaching a new threshold...which is a rate with which hardly any democratic system in the world has so far survived. ... No country can accept this rate of inflation for more than a very short period. ... Its effects will be unfair, divisive, unsettling and in the last resort destructive. ... No one will be able to plan ahead. The country will not for long put up with it. If we cannot solve it by tolerable and civilized methods, then someone within a few years will solve it by intolerable and uncivilized ones.

This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance.

You know, as I do, that we face two deep-seated problems, inflation and unemployment. Both of them are still too high. ... I have to emphasize to you that if we fail to bring down inflation, we shall never succeed in overcoming unemployment. We cannot have a prosperous industry in this country if we are unable to sell our goods overseas. No one owes Britain a living, and may I say to you quite bluntly that despite the measures of the last 12 months, we are still not earning the standard of living we are enjoying. We are only keeping up our standards by borrowing, and this cannot go on indefinitely. There is no soft option. I do not promise you any real easement for some time to come. There can be no lasting improvement in your own living standards until we can achieve it without going deeper and deeper into debt as a nation.

The central problem of our economy for more than a generation has been that, although our productivity has grown more slowly than that of our competitors, we have seen annual wage increases of the same order as theirs. So our inflation has risen faster than in other countries and we have been able to maintain price competitiveness and full employment only by a series of devaluations which have further added to inflation and increased the pressure for excessive wage increases. In the era of North Sea oil it will be more difficult to devalue our currency to maintain price competitiveness. So unless we can keep wage increases close to the level of productivity increase we shall face rising unemployment and a further erosion of our industrial base.

Equilibrium is dead.