HAT in its simplest terms,

is the real meaning of de-
valuation? It is this. American,
British and Canadian politicians,
conferring in Washington, have
connived to produce a cut in real
wages which begins with Britain
is spreading like a chain reaction
through all “westelta Europe, has

already affected Canada and is

‘bound finally to affect American

workers too. They have produced
an Atlantic wage pact.

British. workers did not have
to wait for explanations. Only a
couple of weeks after their right-
wing union leaders had used the
power of their bloc voting system
to commit them formally for a
wage freeze and against stiikes,
following a government pledge to

hold down prices, Sir Stafford

‘Cripps informed them of the gift

he had brought back from Wash-
ington.

Starting with the bromide that
“your savings, wages and salaries
will buy you just as much ag they
did befcre,” of everything except
imports, he went on to say that
“the 4% penny loaf of bread will
go up to sixpence,” or 33 per
cent. Then he warmed them not

to ask for more pay because “we

cannot avoid large-scale unem-
ployment unless we put a stop
on any wage, salary or other
personal income increases.”

Production costs such as those
Sir Safford is so anxious to de-
crease, as everyone knows, are
composed of wages, profits, raw
materials and wear and tear on
plant. Assuming raw materials
and plant deterioration as con-
stant, which he did, that leaves
room for trimming profits and, or
wages.

Sir Stafford, elected by he
votes of working people, under
the Labor party banner, had no
world about holding down corpor-
ation profits. He did not threaten

corporate directors with “unem-
ployment” if they were greedy.

How do profits stand in “So-
eialist” Britain? The Oxford In-
stitute of Statistics, Britain’s

North Atlantic
‘wage cut’ pact

By ISRAEL
EPSTEIN

Britaim’s chancellor of the
exchequer, Sir Stafford
Cripps (left), has given the
British people another taste
of the “austerity” which
earned him his nickname by
devaluing the pound—slash-
ing living standards by in-
creasing prices and freezing
wages. British cars like the
roadster at right will now
be cheaper for Camadians
and Americans who can still
afford them, but they will be
more of a luxury than ever
in Britain itself.

-leading group of university econ-

omists, said early this month that
they totalled $11.4 billion in 1948
as compared to $4.7 billion ten
years earlier, when private inter-
ests frankly ran the government.

es

Sir Stafford tried to allay the
people’s anxiety by pledging that
Social security, state-paid medi-
cal care and other reforms for
which they had voted would re-
main.

Time will prove otherwise. Bri-
tish social reforms are bound to
wither ag real wages already have
done. Sir Stafford may not have
wanted to devalue the pound but
the U.S. forced him ‘to do it.
Whatever else the U.S. cares to
insist on, the Labor government
will have to do also.

What do controlling forces in
the U.S. have in mind on Brit-
ain’s social services? The New
York Times, which generally an-

\

to bring “recovery”

European “cooperation,”

Italian newspapers
secret and deceptive”
that France has

mic pact) union altogether.”

standards.

people.

organized workers . .

Western Dis)union

rN the third year of the Marshall plan, which was supposed
to Europe, every country the plan
affects is in crisis and seeking to make its workers pay the price.
Under the same plan, which was supposed to bring inter-
the Marshallized nations are embark-
ing on a trade war powered by wage cuts.

accuse the
tactics by devaluing first.
“assailed Britain’s devaluation as an unfriendly
act” and that Dutch devaluation may result’ in having to
““write off the Benelux’ (Belgium-Netherland-Luxemburg econo-
This is the same Benelux that was
hailed, in and out of season, as an example of how European
lands could get together for the common improvement” oof

In the Netherlands, devaluation brought this reaction.
of lowered living standards was shared generally by the Dutch
As the reward for the ‘hard work’ and sober living
to which they have been exhorted by, the government for the
last two years, the possibility came as a blow. . . .
Netherlands Trade Union Organization, representing 800,000
. Indicated that wage increases would be
sought if prices were allowed to rise.”

In Denmark, devaluation was “
of all imports from the U.S.”
instalments on Denmark’s loan from the U.S.”
be one reason why Studebaker’s Paul G. Hoffman, U.S.
Marshall plan administrator, has hailed
of the general monetary adjustment.”

Bnitish of

JS eee
nationalistic,
It is stated

“Fear

The

expected to increase prices
and “an increase of interest
That may

“the beneficial effects

ticipates what the state depart-

ment later enforces, editorialized
that devaluation was not “a sub-
stitute for the drastic re-orienta-
tion of financial and economic
policy.” The New York Herald
Tribune observed: “These modest
gains (of devaluation) may either
be expanded or cancelled during
the coming months, depending
upon the course taken by British
domestic policy.”

The Wall Street Journal exult-
ed: “The event may also make it
difficult for the Labor govern-
ment to long continue its other

fictions. ... The rest of the non-
sense of something-for-nothing
economics may come tumbling
after.”

Walter Lippmann, widely dis-
tributed columnist, pointed to an-
other devaluation consequence:
speedup. He wrote that British
workers “must make and sell
more ... and still must not ex-
pect more pay for the increased
work.”

Siu Stafford Cripps, speaking in
London, confirmed that this too
would have to be done: “We real-
ize that conditions have changed
in the matter of capital invest-
ment and that we must study the
problem of incentive and suitable
environment to capital invest-
ment.”

Here the matter touches Cana-
dian and American workers too.
The capital investment that Bri-
tain wants to attract must come
largely from U.S. monopolies.
Wall Street opposed a previous
British devaluation ‘in the nine-
teen-thirties because it would
make British goods moie of a
competitor with U.S. exports. But
Wall Street is all-out for devalu-
ation today.

The reason is that it seeks pro- :

fits in Britain itself—and while
all businessmen hate a competitor
to cut costs, they insist on lower
costs in plants they want to buy
into. When that investment is
made, British sales will add to
not compete with, U.S. big em-
ployer _ profits.

But they will affect wages and
employment in the U.S. and Can-
ada in a big way. If General Mo-
tors, let us say, buys into the
Nuffield auto interests of Britain,
it can reply to United Auto Work-

elts’ wage demands by simply lay-
ing off American. workers and
making cars in Britain,
e

The whole picture of the dollar-
pound crisis: shows that capitalist
(private enterprise) economy can

no longer seek solutions other

than increased monopoly and low-
er wages. This general trend is
further aggravated by “cold war”
foreign policies.

Let’s see how: “cold war” re
strictions affect Britain. Britain
makes machinery and other in-
dustrial -goods which countries
like the USSR, the east European
nations and the new China need.
These countries have plenty of
food, coal and other things Bri-
tain needs and are willing to
take her machines in exchange.

Due to the “cold war”, how-
evel, Britain’s rulers are afraid
to strengthen those countries

even by mutually fair peacetime
tradg, and the U.S. absolutely
forbids it. So Britain attempts the
impossible: to pay for food and
other necessities from dollar coun-
tries, which do not want her in-
dustrial goods because they make
enough themselves.

The socialist non-Marshall plan
economies would like to trada
with both the U.S. and Britain.
They do not seem afraid of
strengthening their
At the same time, unlike Britain
they don’t have to abandon so-
cialism under the threat of U.S,
“aid” being cut off.

The Soviet currency reform
last year, unlike Britain’s, doub-
led real wages instead of cutting
them. Both production and wages
are up in eastern European coun-
tries.

The United Nations 1948 Eco-

nomic Report, a neutral source,
gave the following figures. fon in-
dustrial production in Marshall
plan countries as compared with
1937: Britain, 11 percent; France.
10 percent; Belgium, 93 percent;
Without the Marshall plan and
after repairing vast war dam-
age, the Soviet Union reached
171 percent; Bulgaria, 179 per-
cent; and Poland, 141 percent.
This proves that the Marshall
plan and wage cuts are neither
“the only way” nor the best for
Europe.

s

at a shop run by a young

competitors, —

) thing else reflects the rising

Moscow
Letter .

By RALPH PARKER

—MOSCOW

HE “Victory” shoe-factory
is, on the face of things,
doing well. It is running well
ahead of schedule, production
costs are dropping, Stakhano-
vite methods are being applied.

There is only one thing
wrong, but it is important
enough to worry the local

Communist party branch more
than a little,

“Victory” shoes are not sell-
ing. They are well-made,
Strong, durable. Yet people
don’t like them and_ stocks
have piled up in the shops,
unsold. Who is to blame?

To find that out the party
forms a commission. It calls

woman who used to work in
the “Victory” works.

Nothing wrong with the
shop, obviously. Brightly-lit,
goods well displayed, cheerful
music playing, smart girls”
serving, or rather, waiting to
serve.

Though he doesn’t like say-
ing it, the factory director
Suggests there is something
wrong with the salesmanship.

But—and she is loathe to say
it, too—the shopkeeper thinks
the shoes are at fault.

The only thing wrong with
“Victory” shoes is that they
are old-fashioned.

Of course, the factory direc-
tor protests, and underlying
his protest is the assumption
that the public should take
what is offered.

But this is not good enough
for the party Secretary. Per-
sonally, he prefers a pair of
stout ‘old-fashioned shoes, but
all the same he thinks there
is something in the shop-
keeper’s point of view, and he
Suggests a simple but radical
remedy,

Let the factory director run
the shop for a while, and let
the shopkeeper return to the
factory and supervise putting
new styles into mass produc-
tion The director has visions
of falling production, of the
factory losing the coveted Red
Banner,

Even the Stakhanovites have
serious qualms about the effect
of the re-tooling process, The
young woman hesitates before
her new responsibilities, while
the ministry official thinks the
whole scheme “terrible un-
orthodox. fate

But in the long run all goes
well and the public gets the
shoes it likes.

Such, in its barest lines, is
the plot of Mdivani’s new
comedy Who is to Blame? now |
running successfully in a num-
ber of Moscow and provincial
theaters,

This play is typical of a
school of contemporary drama.
unpretentious but highly topi-
cal, that is bearing its share |
of the campaign for quality
‘and variety in consumer goods
which perhaps more than any-

standards of
Soviet Union.

Gradually over the past
twelve months the emphasis in
propaganda for successful pro-
duction has shifted from quan-
titative to qualitative stand-
ards. Especially in the textile
and light industries.

The days of “take it or leave
it” are over and industry has
to be on its toes to satisfy 2
public whose taste is changing
with quite startling speed.

living in the

—t

PACIFIC TRIBUNE — SEPTEMBER 30, 1949 — PAGE 4