WAGES AND PRICES "Excessive wage increases are wrecking the economy

Inflation once an economic Jargon term, heen now become « household word. And little wonder! Last year prices incremsed on ower (00 different products, The more alarming increases wert on: general groceries, up (7%; meal, op 11%: bus fares, up 38%; gas, up 16%, electricity, op 9; feel ofl, up 20%: newspapers up 34%; Postings, Up 49%. On average prices were infated by 8.5%, But as the above figures show, thig. average conceals a substantial tise in the cost of essential and every day items and a pamlfel rise in the cost of living for the ordinary worker, DEMAND THEORY The weual explanation offered for inflation, by the government and professional economists io that increased wages add to production costa, ond that these production costs have to be recovered by imcreasing prices, Profoundity is bestowed opon this explanation by entitling it the Deewead Tavory. However, this “theory” in he the old edie about the ben and the cgg. The question which comes first: che rise in wap, which thes puah prices op, of the rar in tons which through increasing the cost of ire agar sages op. Obwouly, pow ampwer wil te ction by pour clam mitered! Employ. re eee ey het thee Eee ee eth ec Minister of Labour, put thei angurment in a nuthell wht be seid: “Tf wages rise the price of Or exports will aloo rise and make them bees competitive. This will make fretand less attrac tive fo investors, and industry and employmen fail to expand,” The natural conclusion is that workers, in their own interests, should top demanding more pay—a very gralilying conclusion a far as any employer is concored!

PLOUGH Published by the Fevolutiqnary Marsiat Group, beh supporters of the Fourth Intermetional, New, dacuslion and analysis of the current situation in Ireland wath histories! prince on the brish working clasand national liberation movement. Alico includes features and reports (on the interna teornal strugeple eget capliaaim, For a suisoription toa THE PLOUGH fill in the form Below, Please send me THE PLOUGH for ie reat 346/12 months, | enclose THE PLOUGH, 58 North Great Charles Street, Gublin, iretand.

SUBS:

J mongha litalared Britain 6 manths | year Schad Africa Qustratiell. & S. Americn Suet imal : £2.60 |per voor)

Ordinary: £1.50 |per yaar)

Westeo-Europe: £1.00 per year! Of course workers may be flattered to learn that they have such control and influence over the economy, Indeed, they might even begin to ask if Fianna Fail and the F.ULE. are really needed at all! However, the matter needs to be considered further, PECULIAR CONDITIONS OF IRELAND Inflation in Ireland last year pose almost 9%. in Britain it rose by 12%; the United Slates by 11,9, and in Europe aa a whole, 11.9%. As most Irish exports go to these three areas it cae be-aaid that not alone did Irish products nol hecome les competitive, but in fact became, more competitive. These figures show that foreign goods became about 3% dearer than home produced goods. So in Lhis event, even if we accept the “Demand Theory” it does not, in the case of [reland, justily any call for wage restraints.

Bat apart from this the nature of the Irish economy should be examined. For instance, while in countries like France imports account for only 14% of the Gross National Product, in ireland imports comprise more than 4% of the GSP_ This means that the gowornment has ao efinctre way of controlling a huge portaan af the prodact: which appear on the market ted goods are inflated already and prices will rime accordingly.

Again, even if we accept the “Demand Theory", ht lreland! if proves more than useless. DEMAND THEORY REFUTED Tut even a cursory glance af statistice mpphed by the government 6 enough to refute the “Demand Theory” as such, if we calculate the rise in wages over a period we will see that this nse has been paralleled by on increase in output, and cannot therefore be considered as a contributing factor to inflation, from the point of view of “Demand Theory” of any other theory.

(Below we reprint a section of Connolly's Pamphlet Socialism Made Easy, The pamphilet is published by usin Plough Book Service and haa a valuable introduction by Cde DF, Lysaght, Price 15 p). But iit thelr property, Why should Social.

is confine it? om Their property, eh? Let os see: Hete is cutting fromthe New York World giving asynopeis of the Annual Report of the Coats Thread Company of Pawtucket, Rhode Island, for (907. Now let ug examine it, amd bear in mand that this company is the basis of the Thread Trust, with branchea in Paisley (Scotland) and on the continent of Europe.

Algo bear in mind thet it ia nota “borrible txample” but simply a normal¢ype of a normally conducted industry. and therefore what applies to it will apply in greater of lee degree 60 all others.

This report gives the dividend forthe year at 20 percent. perannuo. Twenty per cent.

divident means four shillings in the pound Zip. profit: Now, what isa profit? 42p.

According ta Socialists, profit onty existe Bp.

when all other items of production are paid for, The workers by their labour must create enough wealth ta pay for certain items before proltt appears, They must pay for the onst of raw monterial, the wear and tear of meachimery, buildings, ete, {the depreciation of capitall, the wages of superintendancs, ther own 1960-1970. . Grow money income . Met money mcome ib-3-3)

Real gras income dat 1940 prices) . Real pel moome (at 1960 prices)

10. Consumer peice index 22.6 VL. Gros earnings (1) 41.3 12. Grogs money income 13. Met money income 14.Alea! gross Income (4) 615.6 15. Heal net ingame (14.2 Notes.

portable goods meustries.

children. Hewever this figure is more than slightly exaggerated and cannot be tuken al its face value.

TABLE 1, Weekly Money Income and Real Income of Adult Male Industrial Workers Oeeio Oct.65 Oct. i £ f » (anes comings STH 13B2 624,408 Social insurance O14 - Quay O.78 . inoome tox (FAYE) - - 173 Met earnings (1-2-3) 9.04 (345 2a?

. Childinns allowances 0.12 029 tad (1 +35) 9.96 Ml 23.4 9.82 LiT4 22.83 9.95 1LS1 15.34 982 102) 14.00 PP60-65 64-70 [OaO-TO Percentage imcréasé if & & 334) fa] Si} 1544 (6h 41.7 73.6: [S44 (7h 49.9 66.2 L325 35.0 46,0 24.9 aZ.o |. Average weekly comings of men | A years and ower in October 190 and 1065 and male worker on adult rates in December 1970 engaged in trans 2, Ordinary rate payable by mak cinpheyees.

3. Amount payable by married man aith two §. Amount payable in rapeet af two children.

Fram Trodz Union Injormarion Sullerin, A number of deductions are necessary. Over this decode Social Inaumnce contributions, inunder PAVE. All told, today £47 million of the mid remember, that in the period between Oct. 0 and Dec, 68 prices rose by 62%. Al in all, when these deductions are made we find that the real increase in wages has been onky 475, On the other hand, accompanying this increase in wager has been the relative growth in industry During che 40's expansion was sustained at on average mie of 6% each year which odds upto an overall growth of approximately 60%.

living!

This menns thit the rise in real wages (437 was well below the rise in productiviry (0%)

fraud." claim that wages push up prooces as the rise in wages didn’t even cover the expansion of output (see Table 1).

SIX COUNTIES The same is true of the Six Co's: Thus, the “Northern Ireland Economic Repert on 1970" shows that while wager rose by 13% in the previous year, productivity increased by 7% (indeed in the big important textile industry. it tocreased by 14% However; the reoaining #% wae not char “profit” for the worker sinos in the same period prices rose by 7.5%, This showa that the increase in inoome Ln workers whove and beyond productivity accure only to meet the rising cost of living. In view of the above fipures the Unionists claim that the workers are robbing the couptry is nidiculous.

HOW TO FIGHT INFLATION Inflation resulta not, fram wage demande but because of an inherent contradiction in the present system of production, Due-to the competitive nature of capitaliam cach employer is forced to expand and inbersily his we of machinery if he isto aurvive. Therefore the amount of capital investeal in machinery and plane tocreseea relatively to-capital invested in labour. But asthe Labour Theory of Value (which was originated not by the Socialists but by the employers them elves) explains, profit occurs only. on the capital invested in Isbour. Consequently, the contradiction arises, that the more developed the capitalist system becomes, the lest profit the einployers make. But of course, the em Ployers ore not satisfied with this and at every turn attempt to force up prices in order to compensate for declining profits, This is the only weapons the workers have af their disposal in the fight againat inflation ate wages demands. When prices tise the only wayof correcting the resulting imbalance is through demanding more pay. Inthe light of this the blindness and treachery of the trade union leaders in signing the National’

poverish the workers even further. It & noi surprising that the trade mnion leaders dida’t dare pul these proposals before the rank and file of the unions.

Trade unionists must begin te fight back mow, Having regard to the real nature of inflation they should demand an agreement which allows for an automatic increase in wages linked to the tise of prices.

FIGHT INFLATION - Por a Wape Agreement linked to the cost of Ii, Markin wages, and a certain amount to be left aside asa reserve fund to mecet all posible comtinpencies, After, and only after, all these ineme have been paid for by cheir labour, all that is left is profit.

With this company the profit amounted to four shillings on every pound invested, What does this mean? [ft ease that in the course of five years—five times four shillings equals ane pound—the workers in the induatry had created enough profit to buy the whole industry fram its present owners. It meang that after poying all the expenses of the factory, including thelr own wages, they created enotgh profit toeboy the whole building, from the poof to the basement, ull the offiess and agencies, ond everything in the shape of capital. All this in five yeurs, And after they had so bought it from the capitaliats it still belonged to the capttalists, lt means that if a -cupitulist hail invested £17000 in that industry, in the course of five years be would draw out s thousand pounds, dnd still have a thousand pounds lying there untouched: in the courses of ten yeara be would draw two thaasind pounds, in fifteen years he weuld draw three thousand pounds, And still his firel thousand pounds would be ag viTgIn O85 ever.

You understand that this has been going on ever since the capitalist system came into being: all the capital in the world has been paid for by the working class over and over again, and we are sll creating it, and recreating it. And the oftener we buy it the leas ir belongs to ua.

The capital of the master clags is not their property; it is the unpaid labour of the working clage—“the hire of the labourer kept back by

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the employers and the government is a myth and argues that workers

Sepa io by the use the Federsted Union of Employers maker of if, Recently, Mr. Paoudge Brennan,

In this article N. Markin shows that this claim by have no interest in accepting ‘wage agreements’.

aa ont a doiey tien to comes asia litte dillermmce whether of not noes is a National Wage Agreement in existence, since these impor-

OUR REVOLUTIONARY HERITAGE

average cucnings, fora male adult employed in the transportable goods industries, tose from

creaecd from [4 pio 78 p Le. 6008 (Although. pay income tux, nuw be ie lieble to £1.

£67 milion collected in income tax comes from the workers pocket, leaving him one of the most heavily taxed workers in Europe. Finally we

hin pep ames can be seen Inflation cam do is — the eager purses and eo