Inflation and the unions
b.om Lt. Commander Noel Paulley Sir: The trade unions cannot reasonably be held responsible for an inflation which has got progressively worse during a period when wages were initially frozen and have subsequently been subjected to statutory control. Indeed, inflation is always and everywhere a monetary phenomenon. inflation is an excess of money which reduces its value, and therefore raises the price of everything for which aloney is exchanged. Alterations in Wages and prices do not affect the total quantity of money. The GovernWe nt alone controls this. Past inflations have occurred when r'inns have been strong, when they 'Lave been weak, and before unions even existed: but only, and always, When there was a surfeit of money. However, whereas some past inflations have resulted from the discovery of aeW money (e.g. gold and silver), the Present inflation results from the creation of new money by a GovernWent which, since July, 1971, has spent Wore and taxed less and has used its Printing press to bridge the gap oetween receipts and expenditure. The Present inflation will come to an end ,a_Oly when this flood of new money is ii,alted: only when the Government ciecides to balance its budget.
Noel Paulley CcIrkl, Cardiff Road, Creigiau, Cardiff
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