From International Socialism (1st series), No. 6, Autumn 1961, p. 33.
Thanks to Ted Crawford & the late Will Fancy.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The Problem of Rising Prices
W. Fellner, M. Gilbert, B. Hansen, R. Kahn, F. Lutz, P. de Wolff
Organisation for European Economic Co-operation. (Paris)
HMSO. London. 1961. 491 pp. 21s.
A society built around the ‘cash nexus’, as ours is, cannot contain too violent fluctuations in the purchasing power of its currency without injury to itself. This has always been true of capitalism and price stability has always been one of its golden calfs. It is even more important an aim today as the multiplicity of national monetary authorities face the growing ‘oneness’ of the world economy.
The Problem of Rising Prices is an attempt to separate its causes with a view to recommending a common policy for the many governments. Its authors are not unrealistic: it might be no more than coincidence that they recommended governments take powers to change tax rates without recourse to normal parliamentary procedure while Selwyn Lloyd was doing just that in his 1961 Finance Bill, but it is a coincidence in the line of current history and one which makes their other prescriptions more important than academic exercises.
Some of the most noxious proposals from the labour movement’s point of view are these: in order to offset the effect of government policy on prices – examples such as decontrol of rents or removal of subsidies are given – it is proposed simply to exclude such ‘special prices’ from general ‘consumer price indices’; in order to dampen overall ‘excess demand’ which, as is admitted, derives largely from unplanned private investment, government should take powers, in addition to those already mentioned, to ‘restrain consumer credit’ (emphasis added – MK) and to ‘influence the rate of housing construction’; in order to control ‘excessive wage increases’ – an important factor in Britain’s inflation according to our authors – the majority are prepared to substitute a national wages policy and government wage norms for collective bargaining while the minority are willing to go no farther than regulating and modifying ‘the size and the functions of the organizational units on both sides of the bargaining table’.
The lines of attack are clearly drawn; one’s only wish is for the defence to be as prepared.
Last updated on 18 February 2017