Firms might exert an influence on spending by exhorting employees to obtain good food, housing, and medical care, or even by requiring purchases of specified items in company stores. Indeed, the company store or truck system in nineteenth-century Great Britain has been interpreted as partly designed to prevent an excessive consumption of liquor and other debilitating commodities.3° The prevalence of employer paternalism 'in underdeveloped countries has frequently been accepted as evidence of a difference in temperament between East and West. An alternative interpretation suggested by our study is that an increase in consumption has a greater effect on productivity in underdeveloped countries, and that a productivity advance raises profits more there either because firms have more monopsony power, or because the advance is less delayed. In other words, "paternalism" may simply be a way of investing in the health and welfare of employees in underdeveloped countries.