“at the end of this year. Given that Irish…”

at the end of this year. Given that Irish industry is increasingly export orientated, the government and employers are anxious to keep the economy ticking over till then so that advantage can be taken of the earliest opportunities offered by a revival of the world markets. A serious worsening of the recession here in Ireland would mean that valuable time will be lost in revamping the economy while in the meantime other competitors will have seized potential markets.

But the problem of keeping the economy on its feet in the next few months will be a difficult one.

The politicians and businessmen have put their necks in a noose of their own making. In order to keep industry competitive their strategy has been to minimise wage increases. To achieve this objective they have had to make some gesture at curbing prices. Although the fruits of this latter policy have been negligable as far as workers living standards are concerned, it has had a crippling effect on many sections of industry.

Since 1967 for example, it has been a generally established procedure that goods must be sold at prices which cover the cost of producing them.

Of course, in the meantime inflation drives up the prices of raw materials etc. By the time the employer actually sells his goods he finds that the proportion of the selling price he had originally marked off to replenish his raw materials and other inputs is now not sufficient. He is therefore faced with a “liquidity crisis”, i.e. a lack of cash This crisis could be overcome by eating into profits but that would be against the whole logic of capitalism. The only alternative is to borrow money. This the employers have already been doing to the tune of £75—£100 million last year. But in the long run such a course offers no solution because it increases inflation even more (by increasing the circulation of money faster than output) plus the fact that the borrowed money must be paid back sometime.

The Budget The “‘liquidity crisis” of Irish industry is now reaching a stage where something drastic must be done to alleviate it. The January Budget offers an\interesting clue as to how the government and employers intend to go about doing this. Initially it was expected that the Minister for Finance would introduce an unprecedented expansionary budget and that this would permit measures S.P.S. Lays off Galway Workers Standard Press Steel Ltd., Mervue, Co. Galway, which employs approx 100 people has placed it’s workers on a three day week from mid December and made 11 workers redundant. So what’s new? You might. ask, the budget to increase the amount of cash available to industry. In the event, the budget was only moderately expansionary (many economists thought that the Minister for Finance should have borrowed twice as much as he did to increase spending). The alleviation of the “liquidity crisis” was even less dramatic with the provision of £12 million in the form of tax concessions. And this concession was more than offset by an increase of £19 million in the employers contribution to social welfare benefits.

The governments decision not to make cash directly available to industry can only be interpreted to mean that they and the employers intend to solve the liquidity crisis by a three pronged attack on the working class which would involved 1) more severe wage restraint; 2) relaxation of price control 3) further unemployment.

New attacks The framework for keeping down wages is already in existence in the form of the national wage agreements which may be developed into a more comprehensive “social-contract”. The employers are determined to use this framework more ness in the bolt market by doing just this. Eventhough it would mean selling nuts at cost price, _ the improvement in bolt sales brought about by this convenient service to it’s customers would make this a profitable venture indeed. Then in what, might appear to be a great bungle by a commented:

national agreement as they were in the effectively than in previous years. In both its Autumn and Winter reports the Central Bank has warned that wages must be kept below the rise in cost of living i.e. that there must be a cut in teal wages. And the ‘Irish Times’ reporting on the decision of the Irish Congress of Trade Unions to open talks for a new national wage agreement, “The employers are not as keen on another negotiations preceding those of 1970, and 1974. They have found that the current agreement is more costly than they had anticipated. . .

In addition to the growing intransigence on the wages front there are definite moves afoot to weaken price controls. About six months ago when reports of this were “‘leaked’’ to the Press there was such an out-cry that the government had to retreat. But now the employers and the government are again mentioning the need for price relaxation and this time Donal Nevin, the I.C.T.U. economist and member of the National Prices Commission has publicly accepted the need for such relaxation. The impact that such a move will have on workers’ living standards can be judged from the fact tnat the National Prices Commission estimates that last year, it save the consumer about £30 million. Put another way this means that it stopped the consumer price index from jumping at least another 5%. So while it is obvious that the N.P.C. isn’t very effective in stopping inflation any relaxation in price control will result in consumer prices shooting forward still more, Finally to offset any detremental effects that further inflation could have on profits (though not on the consumer!) the government and employers intend to allow unemployment increase to at least the 10% mark. This is having and will continue to have, the effect of reducing the “volume of dentand” in the economy ie the amount of wages available to buy things. By this it is hoped to reduce imports, improve the balance of payments situation and minimise inflation which is mostly introduced from outside. In accordance with this plan the budget deficit for 1975 was only £60 million whereas economics professor Martin O’ Donoghue, in the ‘Irish Times’ (16th of January) estimated that a deficit of up to £120 million would have been necessary to expand industrial production sufficiently to begin reducing unemployment.

Under these conditions, another national wage agreement would be detremental to’ the interests of workers. What is needed instead is an independent trade union campaign for substantial increases in real wages, safeguarded by a sliding scale of wages, to fight inflation, rank and file consumer protection committees to control prices through militant action; and a campaign to reduce working hours without loss of pay, and provide a project of useful public works at ~ nominal rates of pay, to reduce unemployment.