HIGHER WAGES, HIGHER PRICES
THERE is nothing heroic about the statement in which the General Council of the Trades Union Congress has given its blessing to the new campaign for wage increases. It represents neither a bold bid for effective leadership of the trade -union movement in its traditional fight for the interests of its members nor an attempt—which would have to be even bolder— to establish the supremacy of reason in the field of industrial relations, where reason is normally only a subsidiary factor. The key sentence of the whole report of the General Council says " It is apparent that in the present situation trade unions must endeavour to maintain the real wages of their members by demanding wage increases." That sentence is simply an acknowledgement of an existing state of affairs. It is not the signal for the abandonment of the policy of wage restraint. It is a flat acceptance of the fact that that policy is already in ruins. The solemn recognition of this situation by the T.U.C., long after the individual unions and the public at large had come to take it for granted, only serves to confirm that the three, years' attempt by. Transport House to lead the whole trade union movement towards a realistic national economic policy is over. The T.U.C. General Council was never happy about assuming so dashing a role. It now goes back to its routine business of settling inter-union disputes, providing representatives at international gatherings and making representations to the Government on a variety of general subjects. It is far removed from the rank and file, for whom even the leaders of their individual ' unions are remote figures. The General Council has formally resumed its old function of leading the trade union army from behind.
In these circumstances even the more reasonable pronounce- ments of the T.U.C. General Council are of limited importance. In any case there has been a tendency in the daily Press, and most remarkably in the Tory Press, to make this week's report sound more reasonable than it is in fact. • Odd flashes of reason may indeed be detected in it. There is the recognition first that a heavy defence expenditure it not easy to square with the maintenance of the standard of living, second that the policy of " soaking the rich " has no great future, and third that there is a need for more efficient production. But such recognition requires neither the genius of a Keynes nor the moral courage of a Cripps. In fact it is not much more than common sense. And, most unfortunately, in the report of the T.U.C. General Council it is accompanied by a number of other statements so contrary to common sense, that the total effect is profoundly discouraging. For what is the point of the General Council's talking of a reduced standard of living, of a realistic taxation policy, and of higher production, if at the same time it is feeling its way towards still stricter control of profits, a capital gains tax, and more physical controls on the war-time model, if it fails to call for-an increased effort from the workers in return for higher wages, and if, by a supreme acrobatic contortion, it can actually persuade itself that food subsidies " can be regarded as. an anti-inflationary weapon " ?
The T.U.C. and the Labour Party generally are caught in the grip of the same contradiction. They want—the phrase was once used with telling effect by Sir Stafford Cripps—to have their cake and eat it. Subsidies-provide the perfect test case. They are, obViously inflationary, for they encourage demand and the root cause of inflation is an excessive money demand. This time it is another Socialist leader, Mr. Dalton, who supplies the revealing catch phrase—too much money chasing, too few goods. The attempt to represent subsidies for all as a social necessity breaks down on the simple fact that an expenditure on direct aid to the really needy of one tenth of the £410 million a year that the Government now spends on subsidies would avert all danger of hardship to consumers. The rich would not miss the subsidies at all, and nobody but the very poorest—who would be assisted in any case—would suffer any worse consequence from their withdrawal than transfer of expenditure from non-necessities- drink, tobacco and betting in particular—to necessities. The total result would undoubtedly be a reduction of consumers' demand, and that is precisely what is needed to combat an inflationary- situation. But that is what the T.U.C. refuses to face, except verbally. Instead it produces a tortuous argument to the effect that subsidies may be an anti-inflationary weapon because they may provide an alternative to demands for higher incomes. There is no evidence that they would do anything of the sort—any more than there is any evidence that the Govern- ment's new proposals for the limitation of dividends will dissuade the unions from presenting new wage claims. The argument that the average trade unionist wants subsidies or wage increases is nonsense. He wants subsidies and wage increases. He has obviously never been convinced that if he has both these things then, in present circumstances, he will certainly get inflation as • well ; and the General Council of the T.U.C. has done nothing in this report to bring the truth home to him.
The General Council does nothing to remove the pathetic fallacy that the workers can have it both ways without working any harder. Instead it pins its faith on more and more controls. But controls, particularly of the direct physical kind which the General Council is inclined to advocate, are more likely to hinder than to help production, and more likely to increase rather than decrease the present rigidity of the British economy. They could even offset some of the anti-inflationary effect of a removal of subsidies, for controls hinder the downward as well -as the upward movement of prices.
The fact is that the economics of the T.U.C. statement are utterly confused, and the confusion is if anything rendered worse by the reasonable' air with which its wildly unreasonable argu- ments are presented. It would probably be better for all concerned If the T.U.C., and the individual unions with it, would drop the pretence that they are speaking in the best ihterests of the whole community. When trade unions fight simply and openly for the wage rates and the welfare of their members the rest of the world at least knows where it stands. It is when the sectional interests of the unions become entangled with the policy of the Govern- ment that the worst confusion arises, and the argument gains ground that if industry cannot afford to meet the wage claims of the unions then the taxpayers should meet them instead. That is of course precisely the argument which lies behind the latest Flak' of the railway unions for a 10 per cent. rise. It ignores the possibility of meeting the claim by means of greater working efficiency. It treats the suggestion that earnings may be expanded by more and harder work as rather indecent. And the whole unrealistic process is encouraged by the incorrigible habit of the T.U.C. of assuming that its constant access to Ministers is its right, whereas it is really a dangerous privilege granted to the very indirect representatives of about 40 per cent. of the total labour force. There are passages in the General Council's Report in which this assumption is paraded in the most scandalous way. Their advocacy of dividend control is a case in point. There is little doubt that if the General Council .had pursued a national wages policy with the vigour that it has pursued a national profits policy they would have fallen foul of the constituent unions long ago. As it is they have pressed upon the Government a new and drastic restriction of the incomes of a whole class of persons who, far from being represented by the T.U.C., are treated as its natural enemies.
And this is the body whose report is described in a leading Conservative daily as -" realistic." What can possibly be gained by such an abuse of words ? It is hardly believable that the Conservative Party leaders have decided that they will accept arguments they know to be wrong for the sake of trade union votes that they are most unlikely to get. Even the near approach of a General Election would not justify such an empty sacrifice of principle as that. It is more likely that the insidious and very dangerous belief that Socialist economic policy is something that can be compromised with has given rise to a habit of only listening to what is reasonable in statements of that policy, and passing over what is unreasonable. But in the T.U.C.'s statement on wages, prices and profits, unreason outweighs reason, and the total effect of the policy outlined would undoubtedly be to encourage inflation. At the moment the rise in prices is not quite out of hand. But if the main points of the trade union case were conceded it would very soon become so.
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