The rise of fringe benefits such as vacations, pensions, sick pay, medical services, guaranteed pay, or co-partnership has been one of the most dramatic changes in industrial relations in this generation. In a number of countries fringe benefits today make up 40-50 per cent of the total cost of labor to employees (Table 1). In countries, such as the Anglo-Scandinavian group, where this proportion is lower, the reason often is that similar or better benefits are provided through taxation. The scale of State benefits in Britain is illustrated in Table 2. But though fringe benefits are now big and accepted, it is not at all clear on what principles they are paid. How much, in cash or kind, and who is to pay ? A married man on the average wage in British in? dustrywhen out of work gets 30-35 per cent of his normal earnings: his Dutch opposite number gets 80 per cent. The Englishman gets a very large part of his fringes in kind, whereas many other European countries pay high family allowances, which add to families' spendable resources in cash. Some countries (Table 3) charge most of their fringes direct to industry, and very little to the State: others, including a country as anti-socialist as Ireland, do it the other way around. Can we extract from this confusion clear answers at lease to two questions: (1) how much ought to be paid? and (2) by whom, and in cash or kind? How Much Ought To Be Paid? The end of all human activity is the development of personality, which depends on full employment, understood in a wide sense. It means ensuring to everyone, as producer and consumer, the role and status and degree of security that he needs to develop his potentialities to the full. When the manager and the worker meet in the labor mar? ket, each is pursuing full employment in this wide sense. The worker wants to reach and maintain an expected role, status, and security not only as a consumer, or furnisher of consumer resources to others (his family), but also as a producer. He wants to see his work capacity, his potential for creative activity, fully used and recognized by the grant of an appropriately high status, expressed among other things in pay. The manager also wants to reach and maintain the highest role, status, and security of which he is capable as a producer, as a furnisher of consumer resources to others ? employees or owners ? and, of course, as a consumer himself. The formula that satisfies both