Controlling inflation
Sir: Inflation seems to be the grea,l issue of this election. All parties a' against the monster, but the wea,P°dlic they have chosen to fight it WO not impress me. Orthodox political thinking calls Oh control of wages, or prices, or batr and it is true that these weapons cae, overcome inflation if they are Puraptid with sufficient vigour. In Eastviol; Europe it has been found very llelP;d1 to shoot those who try to avoid WP; j and price controls, and by and lalaoi they have succeeded. Frankly, I don e see our present leaders as being th firing squad type, so that road ia 11 open to us. So many countries have tried I. control wages by law since the 1301 war, that there is a good deal ri evidence as to the result. Worl'he a given new titles and paid at a bent or they get backhand parne; or they change their jobs or sap. other dodge is used, but the resn"o that pay goes up and the law is Ilia to look foolish. A good case-studY the experience of the Netherlandsti, Controlling prices is only P°5$1,1 provided you are determined na`tp succeed. If you do succeed, then e manufacturers have a profit srltlehoil and do not invest, merchants Witt'," supplies and farmers do not raiseil ei Typical results are that manufaetara goods sell at the same price but, cheapened, and the manufacturer t1;01 introduces a new line, which is illriel. the old product, at a higher Cnrid healthy blackck Really vigorous enforcement controls of Pe) lawillm At this point I should set lr),„fliti at) devastatingly original cure for —0 tion, but I won't. There is no cure.. are not going to have runawaY lad tion on the German model after„
help
it to stimu lat First World War, for that was Ca": by the government printing ThonetYro, order to pay workers to stay in protest at the French occuPet'ol the Ruhr. Most of our inflation et)frof. from rising world prices, sorne 00 the decline in the value of the against other currencies, and 5 pa from an over-reaction to ttle.0 million unemployed we had teat!tc much deficit Government poured ratheiuch deficit financing in economy, but you will have tn 7.net that they cured the uneMP problem.I° There is no cure for inflatiertiatte that is not the end of the ote People must learn how Ott Pr 0 p, t themselves, which is basicallY tooda their money into property. Plant'Dfro and shares, and to stay 0.73,n,oil' fixed interest bonds, banks ariu ing societies. In an uncertain world the fact that you have saved money in any Particular way does not mean that you are safe, for there will come a time When you should get out of property, Shares and so on, and back into fixed Interest savings. There is no such thing as security in a changing world and the first lesson for all of us is to realise we rnust face up to eternal impermanence.
N. J. Mustoe 10 Byng Road, Barnet, Herts.
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