In his theory, Hazlitt gives the discussion related to the general theory and explains each and every line of the same. He finds that there are a number of errors in each and every page of the theory. According to the critical analysis of Hazlitt, the general wage level cannot be very high if compared to the level of price. But, if someone looks around the 1930’s a large number of wages which were to be given to the labors were out of balance while the prices related to the good were sold in the market. In such a scenario the primary need was to have the restoration of the employment by making the adjustment in such a way that the wages of the workers should be available easily (Hazlitt, 2010). He explained that due to an inflationary policy there has been balancing for the price wage based relationship into balancing by the process of pushing the prices throughout the entire economy (Haberler, 1961).
In addition to this, Hazlitt also pointed the fact that the worker and the labor unions are completely aware of the fact that how is the overall rise of the price have an effect in the real value of the wages (Robinson,1961). He explained that in the upward direction, there should not be any illusion based on money. Whenever there is an increase in the cost of day to day living due to the rise of prices, it calls for the demand in the rise of the wages of the workers and the unions.
This case is certainly true. Let us take the examples of the workers who are working in a company. The company has been into profits but there isn’t a significant rise in the wages of the people. Also, with the passage of time there is an overall increase in the living style of the people.