Economic prospects 68

By PHYLLIS CLARKE

HE year-end economic pic-

ture in Canada and in the
capitalist world as a whole, is
murky. Devaluation of the pound
in Britain was more a symptom
of than a cause of the growing
illness of the economic situa-
tion.

There is a growing pressure
on that much vaunted giant of
the capitalist economic world,
the United States, and the possi-
bility of devaluation of the dol-
lar looms,

An article in the New York
Times asked, “What more can
the United States do to reduce
or eliminate the gnawing deficit
in its balance of international
payments?” And the conclusion
they come to, after surveying a
number of possibilities is this:

“What the government will
do, if anything, is unknown.
New measures may or may not
be under consideration. But in
the back of some minds is a
tantalizing thought. The problem
would be greatly helped, if not
solved, if the war in Vietnam
with its big outpouring of dol-
lars into Asia, were to end.”

The year end reports on the
Canadian -economy were all
about the halt in expansion. Do-
minion Bureau of Statistics’ esti-
mates of the output of goods

and services in July, August and,

September showed a drop from
the previous three months. The
increase of gross national prod-
uct was shown as one-half of
one percent.

A projection for gross national
product for the last quarter
showed a continuing lag. The
D&S report said that while GNP
may be up 6.4 to 6.6 percent

alf dewhurst

for the year, about 4.5 percent
is represented by price increases.

This would mean that in
terms of real growth of the
Canadian economy in 1967 the
figure will be around 2 percent.
When this is compared with the
5.9 percent in 1966 and 6.9 per-
cent in 1965, or with the Eco-
nomic Council of Canada’s mini-
mum necessary growth rate of 5
percent, the extent of the slow-
down is obvious.

Along with a slowing of ex-
pansion of GNP has been the
slowdown in trade. Based on
already published figures it looks
like Canada’s trade in 1967 grew
at a rate exactly half of that for
1966. One of the big drops has
come in wheat and flour ship-
ments, down $350 million this
year.

It is this drop that has been
the cause, according to the man-
agers of the two railway lines,
for the big layoffs that have al-
ready taken place. And the lay-
offs on the railways are far from
being the only cut backs in em-
ployment at the end of the year.
As a matter of fact unemploy-
ment is at least 30 percent high-
er than the figure set by the
Economic Council as acceptable.

A welter of predictions for
1968 are coming from bank pre-
sidents, economists, and govern-
ment “experts.” One, the presi-
dent of the Canadian-Imperial
Bank of Commerce says the fol-
lowing:

“_, . there is reason to believe
that the increase in real output
next year may quite possibly be
less than that achieved in 1967.
This would mean, for the sec-
ond consecutive year, a rate of
growth considerably below that
required to attain the full poten-

tial output of the Canadian eco-
nomy. A slower rate of growth,
induced in part by measures de-
signed to reduce inflationary
pressures, will tend to slow
down the rate of increase in em-
ployment. It is accordingly clear
that the adjustments required to
increase efficiency and reduce
cost pressures in both the pub-
lic and private sectors of the
economy will have to be given
high priority.”

And what are these “adjust-
ments”? They are the same thing
that Finance Minister’ Sharp re-
fers to when he calls upon labor
and management to restrict wage
and price increases in 1968 not
to mention the further postpone-
ment of medicare.

In other words, faced with a
slowdown in economic’ growth,
a reduction in trade, an increase
in unemployment, the attack is
launched upon the workers to
restrict their wage demands as
well as to pay the higher taxes
for which the year-end mini-
budget provided.

But the side of the coin that
is not attacked, is that with all
the slowdown one thing that has
still increased is profits. And the
concern of the monopolists to
maintain their high profits and
to avoid any policy of taxation
that could cut into these big
gains, lies at the heart of the
keep wages down, postpone me-
dicare drive.

In order for the needed expan-
sion of the Canadian economy
in 1968, rather than the expect-
ed further downward trend, a
number of things have to be
done. Foremost is still the need
for steps to decrease the inte-
gration of the Canadian econo-

SEE a __

(AKLESS |

Who said capital punishment is ended?

my with that of the U.S. There’s
no way out for us if we continue
to be so deeply entangled with
an economy that is itself in-
creasingly frought with prob-
lems—intensified by the expect-
ed escalation of.the war in Viet-
nam.

In addition there is need of
expanded not contracting gov-
ernment programs such as medi-
care, home building, etc. which
will not only provide these much
needed services but assist the

growth of the economy.

Also the need is increasingly
present for a trade policy which
would include expansion in im
ports and -exports with the s
cialist part of the world and thé
new independent countries which
were formerly colonies.

Without this, the prospect will
be for greater unemployment
higher prices and taxes, and it
creased -pressure from the gov
ernments and the bosses to kee?
down wages.

The way

to a prosperous

ew Year

aaaeall

IHE press for December 28

reports that the federal

government is quietly pur-
Suing its aim to impose wage
restraint in 1968. But rather
than use the already discredited
term “wage guidelines” the gov-
ernment, for reason of political
expediency, is planning infor-
mal meetings with union and
business leaders in attempts to
reach an understanding as to
how best to effect wage and
price restraint. The reported
figure desired by the govern-
ment is in the neighborhood of
five percent.

, The proposed restraints are
imply a continuation of the
top and go policy which the
overnment has been pursuing
or the past five years. It is a
policy that has given record
profits to the monopolists. But
it has not been able to maintain
high employment, stabilize pric-
es, or provide steadily rising in-
comes for working people com-
mensurate with productive cap-
acity.

Now, under the pretense of
fighting inflation, the govern-
ment has the unmitigated gall to
ask working people to voluntar-
ily accept wage restraint, more-
over, a wage restraint coupled
with increased regulation of the
trade unions, more. speed-up

(politely termed stepping-up the
rationalization process) and
more unemployment.

The government’s economic
policies fly in the face of work-
ing peoples’ interests. Unions
seeking to improve the econo-
mic well-being of their members
in 1968 are demanding wage in-
creases that run around 10-20
percent. For instance, Ontario
teachers are reported to be go-
ing for 10 percent. Municipal
employees in B.C. are asking 12
percent and the removal of wage
differential existing between
municipalities. Woodworkers in
the southern interior of B.C.
have been on strike for some
months for wage parity with
coast lumberworkers. Autowork-
ers in Ontario could well be on
strike early in the new year for
wage parity with their fellow-
workers in the USA. Ontario
teamsters have signified their
intention of winning wage par-
ity with the US. too.

These few examples of a re-
cord number of wage demands in
the hopper for 1968 serve to il-
lustrate that the government’s
proposed five percent ceiling on
wage increases would mean
keeping possible wage gains
made in 1968 down by at least
50 percent of the demand. This
is government intervention with
a vengeance on behalf of the
employers.

To help put this unpopular
policy across: the. government

< - JANUARY 12, 1968-—PACIFIC TRIBUNE—Page 4

attempts to create an illusion in
the public mind that workers
are conspiring with employers

to milk the public for all the.

traffic will bear. This trick is
done by linking wage restraint
with price restraint on the basis
of the erroneous position that
high wages are the cause of
high prices. When in reality
wages are not high in compar-
ison with prices. The real cause
of high prices is big business
profiteering. Monopoly price
rigging leaves workers with no
choice but to demand wage in-
creases.

Furthermore, the government
proposition for a five percent in-
crease ceiling serves to create
a public climate for the imposi-
tion of unjustified price increas-
es. Also, it can be safely as-
sumed that price increases will
likely amount to more than five
percent to the consumer. For
each given price rise will be
pyramided upon previous price
increases as given materials and
products pass through the var-
ious stages of manufacturing
and marketing.

According to the press many
prominent economists are pre-
dicting prosperity for Canada
in 1968 if the government can
make wage and price restraint
work. This assumption raises
the question of prosperity for
whom. It is safe to predict that
it will be prosperity only for big

-business -unless: the‘trade union: :

movement mounts a stubborn
struggle for economic measures
which put the needs of the peo-
ple first.

Such measures entail the to-
tal rejection by the unions of
any conception of wage re-
straint, be it voluntary or other-
wise. Rather, the need of the
times is for substantial wage in-
creases for all workers; higher
unemployment insurance pay-
ments, adequate severance pay
and supplementary unemploy-
ment benefits for those laid off;
and pension increases for all re-
tired or disabled workers.

Such measures must include
also the immediate establish-
ment by the government of a
prices review board . invested
with the power to veto all price
and rental increases which can-
not be justified on a real cost
basis. This board must: have
adequate representation on it
from unions, consumer and far-
mer organizations.

These democratic wage and
income measures coupled with
an anti-profiteering price policy
should be supplemented by a
just taxation reform based on
the principle of ability to pay
and the implementation of a
capital gains tax.

They should be accompanied
also by a substantial cut in the
defense budget sufficient at
least to finance the Canada
Medicare Plan which must be

made “operative by: ‘July 1\’as °

provided for by the law of thé
land.

They should be supplemented
also by a substantial reductiof
of interest rates on NHA loans:
the removal of the sales tax of
building materials for housing:
and the public construction 0
rental housing on a scale com
mensurate with the need, with!
rents related to income bracket§
and family budget needs.

Finally, all of the foregoing
needs to be beefed-up by activé
participation to end the shame
ful aggression in Vietnam. Thal
dirty U.S. war is the maifl
source of inflationary tended’
cies presently operating in Can’
ada. This is so because U.S. do
mination of the Canadian ecom
omy subjects Canada to the ec0’
nomic consequences of the wal
on the U.S. economy. To put af
end to these inflationary pres
sures requires that an end mus!
be put to that war.

The implementation of thesé
measures and other like propos
als would add up to a consider
able easing of present financi
pressures on the people and gow
ernments alike. They would als?
lay the basis for the introdu@
tion of longer term measures 1
stabilize prices, maintain ful
employment and provide stead!’
ly rising incomes for all work
ing people.

In this way 1968 can be #
prosperous year for Canada ar
‘her’ working: people.» — "s° 4