The Road to Inflation The White Paper issued by the
Government on Tuesday on "Price Stabilisation" is already being criticised by trade unionists on the ground that it means wages-stabilisation for all but the more poorly paid workers. That, to be honest, is exactly what it does mean. All the arguments adduced for averting the evil of inflation by preventing a rise of prices due to a rise of costs are arguments against all-round increases of wages except in the case of the lowest-paid grades of labour, at The White Paper is mild enough in its expression of opinion.
It approves of the regulation of wages by the joint machinery for negotiation and, where necessary, arbitration, and freedom of the organisations to reach decisions in accordance with relevant facts. None the less, the conclusion is obvious. If wages go up all round, costs and prices will go up, and more money will be needed to buy the same amount of goods— the "vicious spiral" is on its way, leading to disastrous infla- tion. Before the Government's injunctions it must be able to demonstrate not only that it has done what it can to prevent over-spending by taxation, rationing and price-control, and that it has pegged the cost-of-living, but also that it has prevented profiteering and insisted on efficiency in war- industry. The T.U.C. is severely critical in the memorandum it has promptly issued, and protests against movements to control increases in wages. But the fact remains that wages A are the main item in the cost of production, and that there is no means of greatly increasing them except by better methods of production. True, it is the duty of the Government to watch other costs—those of management—and to eliminate waste. There is, of course, another way out—that of com- pulsory saving, or more taxation ; but, to work, it would have to fall upon all who have spending-power, including the wage- earner. That would simply mean taking away the excess wages that have been paid.
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