Page 2, 30th August 1957

30th August 1957
Page 2
Page 2, 30th August 1957 — RELIGION AND INFLATION

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Ultimate Responsibilities

S1R,—Fr, Paul Crane's indecisive letter as to whether or not the provincial busmen's striko was, on balance, justified. seems to have encouraged Mr. Cammack to make an abusive attack on Trade Union policy in general, and on Fr. Holloway's defence of a living wage.

M an active member of the Catholic Social Guild for the past twenty years may I say that inflation will not be cured, nor will justice be attained. by placing the bulk of the blame for inflation on Trade Unions.

The provincial busmen's basic wage rate at the time of their strike was £7 I9s. for a conductor, and a 3s. for a driver. How does any Christian expect a married man to bring up a family on so small an amount? Speaking as a married man myself, 1 say that food alone for a family with only two children amounts to £4 10s. Add to that clothea, rent, etc. and one knows why the busmen went on strike. in these days of rising prices.

Fr. Crane writes: " I agree with Mr. O'Neill that the provincial busman had a just cause. I would remind Mr. O'Neill that a just Cause /2 only one of the conditions . . . " The implications seems to be that Fr. Crane condemned the strike, on balance, as unjust. Mr. Cammack definitely condemns the busmen, and he draws a distinction between their basic wage rate and actual earnings i.e. between their normal wages, and what those men get who in addition do overtime. But even to achieve their normal weges, busmen have to work split shifts i.e. a very long day, and if they do too much overtime. they cannot live a human life--they cannot give the time to God, to home and family, and to their duties as citizenx, that as human beings, they should do.

The enigma of how married men manage on eight or nine pounds a i week s answered by overtime, but that in turn is a contributory answer to the enigma of Catholic Apathy instead of Catholie Action. Fr. Crane calls his Catholic Social Guild Action Groups (in a recent issue of the "Christian Democrat ") "dozy and inert." If their members had a living wage and less overtime, he would find they had the energy to he more active,

Mr. Mark Fawdry sneers at what he calls " tinkering economists," and he thinks that Catholics can cure inflation by mutual exhortation. But abusing economists will produce no better result than abusing Trade Unions. Disinflation by exhortation would be a nice solution If it worked-but the trouble is that exhortation olone is not enough. It is especially not enough under conditions of over-full employment and a ,toissee-faire, mainly private enterprise, economy.

From 1921 to 1939 unemployment was virtually never lower than 10%. The average '.vas 14%. If inflation leads to the dollar gap widening too far, and we cannot pay for imports of raw materiels, we will hove a slump, and mass unemployment again. Unemployment today is 1.1%, and most economists are arced the' such a low level is inflationary. Beveridge has defined "Full Employment" as 2-4% unemployment. Alan Day has called for 2% to 3% of unemployment. A measure of short term unemployment is needed: (1) to feeilitate mobility of labour, (2) to But if, by stricter monetary control, the government restored confidence in the pound, and produced a small increase in unemployment, then to compensate the temporarily unemployed a higher rate of benefit should be paid.

The ultimate responsibility for inflation rests with the government: if Britain is to survive it mast act and not merely exhort. The "Observer" has rightly said "The danger is that the Government is turning more and more to reliance on moral pressure to stop inflation."

The Trade Union reply has been given by Mr. Carron of the A.E.U.: "ln a deliberately created free-forall we must make It perfectly clear that we are not going to he persuaded or bludgeoned into a position of unilateral restraint."

The " Observer " comments: "After a long spell of inflation, some incomes and prices are bound to have lagged far behind others, and economic efficiency demands that they should be allowed to catch up--even at the cost of giving a further push to the inflation."

What then should be done?

(1) Cuts in government expenditure on such unproductive activities as the H-Bomb. (2) a severe curtailing of hire-purchase by a stricter monetary and fiscal policy. (3) the Government Shralld either stop its over-issue of Treasury Bills, or as Alan Day suggests in the "Observer " the Government should raise the minimum liquidity ratio of the banks (only 8% at present). For the Banks have a tendency to take up Government short term debt and treat it as an addition to their liquid reserves, which in turn allows them to increase bank deposits, and thus to virtually create new money, and so add to .he inflation. (For more on this see Jackson in the "Christian Democrat " 'A.B.C. Of Inflation %) (4) If the government made a real attempt to control an economy bursting at the seams: by monetary, fiscal and selective physical controls, and so kept dawn the price rise, then a realistic and worthwhile appeal could be made to the T.U.C, to co-operate in the matter of wage restraint.

But if Catholic Actionists are to ho effective they must learn a little about economics, and realise that the wage-price spiral is a symptom and not a sole cause of inflation.

We must urge the government to act, and we must work for the increase of Joint Industrial Councils, and the ideas put forward by Bishop Beck, A.A.. in the Catholic Social Guild booklet "Towards Industrial Co-operation," If this government will not act. then we muet get together another one that will. But in any case, abusive and negative criticism of trade unions and economists, which seems to he the line of thought pursued by some of your correspondents, will not cure inflation, nor will it bring justice to anyone, John Ignatius Gaffney, "St, Michael's,"

2, Prestwich Ave.,

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