Profiteering at heart UR brief sets out to prove that profiteering is at the heart of the rising cost of living. We place this in opposi- tion to those who have sought to cast doubt on the consumer, the wage earner and the far- mer: <. Today, as a result of the great scientific and technological ad- vances in the last 20 years, most wage earners are asking for a | larger share in the abundance they create. Hunger, poor hous- — ing and’ clothing, inadequate medicine—all these are anoma- lies in a modern society that has the scientific and_ technical know-how to overcome these problems. Therefore, we consider the present upsurge in the strike movement is part of the prices protest movement, sometimes involving the self-same people. In addition, because of the technological transformation of our agricultural industry, farm- ers are more and more the vic- tims of profiteering and price- gouging and, in one way or an- other, are also part of this pro- test movement which is stirring the nation . We notice there is little if any questioning of whether or not prices are too high—most peo- ple agree they are—but what’s going to be done about it? Most often we are told that it is because of high wages, that high wages are inflationary. Any school pupil knows that inflation is caused by. too much money chasing too few commo- dities, to risk some oversimpli- fication. When you have such a Situation, it actually means a decline in purchasing power. And, since wages, unlike profits, are usually a fixed item, it means hardships for wage earn- ers. - : The heavy demand for war materials, ‘particularly during this period of the war against Vietnam, tends to reduce the volume of consumer goods, while it provides full employ- ment thus putting more money in the hands of the consumer. This is one of the root causes of inflation, not wages. Labor, as a factor in produc- tion, has been declining, both in the production of food on the farm and in the food processing industries. The productivity of labor in all these areas has risen greatly, According to the D.B.S. the annual average increase in out- put per man-hour in Canada be tween 1949 and 1964 was up by more than.81 percent. The aver- age annual increases were 5.4 percent for agriculture, 3.1 per- cent for manufacturing and 2.9 percent for all commercial in- dustries. The effort has been to turn workers and farmers against each other in order to divert of rising prices Excerpts from submission of the Saskatchewan Com- mittee, Communist Party, to the Prairie Provinces Price-Cost Commission. pressure from the big mono- polies. In 1949 the farmer received 58 cents of the retail food dollar. In 1964 he received 41 cents. The value of raw food sold by Canadian farmers rose in 1964 to $2 billion from $1.2 billion in 1949—a rise of about 40 per- cent. But in the same period, the retail value of food sold in Canada rose to $5 billion from $2.1 billion—about 140 percent —almost double. Agriculture has been trans- formed to a machine-based in- dustry. As a result, productivity has increased enormously. Tak- ing 1949 as 100, production in- dexes of -output per person em- ployed in manufacturing rose from 130 in 1956 to 177 in 1965; in. agriculture it rose from 198 to 276 in the same period. When ‘a comparison of output per man hour is made, it has increased by 50 percent in agriculture as compared to 30 percent in com- mercial industries. All sorts of well-substantiat- - ed statistics have been given these hearings to indicate the growing gap between the pay- ments made to the farmers and the retail price charged. Evi- dence has been brought forward which shows beyond all doubt that when prices farmers were getting for hogs and beef had declined, retail prices for pork and beef products had gone up. The Economic. Council of Canada, in its third annual re- view, refers to the exceptionally rapid increase in food prices. Non-food items, it says, have increased at the rate of about 2.5 percent annually in 1966. But during the first nine months of 1966, food prices rose by seven percent above the 1965 average. It was the opinion of the Economic Council of Can- ada that wages were not respon- sible:.... 3. We believe that the real rea- sons why food prices have risen so steeply and in such a short period of time is. because the giant chains, which now domi nate about 80 percent of the food industry, took full advan- tage of the disappearance of world food surpluses, war in- duced inflation primarily creat- ed by our satellite relationship to the U.S. economy, and the monopoly domination of agri- culture and the food processing industry, to engage in outright profiteering: The small and medium sized business man has only 20-20 percent of the mar- ket left to him, so that the talk of free enterprise competition is a fiction. The charge that wages deter- mine prices is a defense of the sacred cow of our society: Pro- fits. Wages mustn’t go up, wage increases are harmful, and so on. But no one dares say profits are too high or mustn’t be al- lowed to go up. If General Motors had paid $100 in safety costs on every one of the five million cars it : produced in 1965, it would still have a 24.6 percent return on investment. ‘ Actually we are dealing with the amount of the mark up — that’s profiteering. Our contention is that the growth of monopoly has modi- fied the competitive effect . of free enterprise so that we are now witnessing the taking of super profits by these giant con- cerns. Their owners and spokesmen claim they are making money. All big companies say that . : Here are some very revealing figures that seem to deny the complaints of these big food concerns that they are losing money. And these figures are always open to question since it is almost impossible to trace ~ how some financial transactions are hidden away. Weston’s food empire sets up companies to lease buildings to other compa- nies all owned by Westons. The Safeway interests own land, run herds of cattle numbering tens of thousands of animals, and so on. It is claimed they have meat reserves to last them two years, and that they can affect market fluctuations with their stock of cattle. Be that as it may, the figures in the table below clearly reveal that the food chains are making . more money than ever, and that price increases were generally . unjustified. Net profits: Company 1963 1964 1965 Canada eway Lid. $ 7,373,620 $ 9,323,256 $10,274,493 Loblaw Gro- ceterias Co. Ltd. 13,027,930 14,202,945 16,010,468 Dominion ' Stores Ltd. 10,655,576 Hudson’ n's Bay Co.10,728,000 11,277,000 12,309,000 9,326,127 10,077,827 Another area that needs in- vestigating is the entire adver- tising field. The ordinary house- wife has no defense against high pressure Madison Avenue salesmanship. The best brains in the country are used to hood- wink the public. It’s “the thing” to make a fast buck. A new kind no of morality has been developed. ~ It’s not called lying, stealing or cheating — but good salesman- ship. All you need to do is to have the victim agree to the plunder. Methods bordering on hypnosis are used. And the gold- plated carrot dangled before everyone is the status symbol. It’s strictly a spectator sport in which we consumers are blasted to the backs of our chairs every: few minutes by the TV or radio when an announcer, or a team of top actors or promi- nent announcers, convince you during one hour that the pro- duct of this particular company is superior to any other, and that you are just a nobody un- less you buy it. Then, during the next hour a battery of ex- perts produce irrefutable proof accompanied by histrionics which defy the imagination, that the product of an opposi- tion monopoly is much superior. All this acting and high-priced TV time is charged to the inno- _ cent victim—the consumer. In the final analysis even though one does not buy a particular ‘product, they are paid for by everyone. Some “experts” claim that they know mothers, with large families, and a low income, who rush from chain to chain buying nothing but loss leaders and, as a result live well on a ridic- ulously low sum of money. One certainly gets the impression that such a woman would be good international Olympics material. We could take members of this commission to working wo- men, who have family responsi- bilities, who have to work all day long and then, after work, face cleaning, cooking and mending. Their earnings amount to less than $40 a week. And it’s less than that if you work - for a company that will only hire you on a part-time basis, - which is what happens to many working women. ... Testimony has been given by - the heads of chain stores which ° indicate that advertising costs, stamps, gimmicks to out-sell other monopolies—in which the - housewife only figures as the holder of the family purse, do cause price increases. Fantastic sums -of money are spent on advertising. It is a form of blackmail, for it uses children to pressure parents into buying products. Kellogg’s which » has pressured more parents into buying noise and air, makes 23 percent on the dollar on sales. - unionists are sent They spend 14 percell total sales dollar 1 INBeeu.s Another factor is thé distortion of our economy brought aboul opoly domination ane” dependence upon States. A report PI G. A. MacEachern of cultural Economics Council of Canada * food production pel 4 Canada has actually 9 since the early 195 we have boosted ou! ports, particularly ficiently to maintain ? trade advantage im ducts, but our food im to over $1 billion 0 max a 10 percent Ti during the past six ¥ while the U.S.A. dollar value of fal! from Canada by half} 10 years. On the Canada now impo “much food as it did the U.S. supplies alm this. Finally, we believ Vietnam has an a@y on prices in Canada. on that war. , it spends $300 millio® ada. This has an inflat on our economy, 48 stated. A worker, wit! al income of $6.0 have to work for 59% make an amount eq what it costs the Ut to kill one Vietnames s In conclusion, we Pi 1. The establish | Prices Review Boal” would compel any ©° siring to raise its pri before the board to § fication. Other sectl0 ciety, such as the i movement, are comp SO. cot 2. Establish @ iq Affairs Department Wid be responsible for me ing, and which woul | quantity and costS © | shown. q 3. Strengthen af legislation. There 4% in this legislation. have been impose is to Py violating injunctions: 4 an instance in Cal anyone has been jail ating the anti-trust 1" ¥ 4, Legislation t0 ¢ amount of money af spent on advertising: “¢ trol misleading 7% | This could be done amendments to tax 5, Limit profits by P cess-profits legislation 6. Information ab0 fi of credit should b@ he odically through media. : et March 10, 1967—PACIFIC TRIBUNE