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