The above pictures taken at the height of the socalled ‘terror’ in Prague, Czechoslovakia as depicted by the
news media of the Western powers show no evidence of a people living in fear of their lives. On the
contrary they seem more tranquil than a lot of people in our own country.

Soviet-Czech communique

‘Carry out mutual decisions’

The following is the text of the
communique issued after the
Soviet-Czechoslovak talks which
were held in Moscow Aug. 24-26.

During the talks in a free
comradely discussion the two
sides considered questions
relating to the present
development of the international
situation, the activization of
imperialism’s machinations
against the socialist countries,
the situation in Czechoslovakia
in the recent period and the
temporary entry of troops of the
five socialist countries into
Czechoslovakian territory. The
sides expressed their mutual

firm belief that the main thing in
the present situation is to carry
out the mutual decisions adopted
in Cierna-Nad-Tisou and the
provisions and principles
formulated by the Bratislava
Conference, as well as_ to
implement consistently the
practical steps following from
the agreement reached during
the talks. The Soviet side stated
its understanding of and support
for the position of the leadership
of the Czechoslovak Communist
Party and the Czechoslovak
Socialist Republic which intends
to proceed from the decisions
passed by the January and May
plenary meetings of the Central

Committee of the Czechoslovak
Communist Party with a view to
improving the methods of
guiding society, developing
socialist democracy and
strengthening the socialist
system on the basis of Marxism
Leninism.

Agreement was reached on
measures aimed at the speediest
normalization of the situation in
the Czechoslovak Socialist
Republic. Czechoslovak leaders
informed the Soviet side on the
planned immediate measures

Cont. on Pg. 8
See Decisions

Tribune

VOL. 29, NO. 35

oe

Belt-tightening

| Thoughts
on the high |
c-o-l spiral

BY EMIL BJARNASON

The authorities assure us that
the cost of living is up about 50
percent since -1949 and perhaps
125% from pre-war years. This is
supposed to conform to the
experience of the statistically
average person, but it would be
hard indeed to find a person
whose individual experience
confirmed it.

Those who are old enough can
test the credibility of the
Consumer Price Index in a
simple way. Could you live as
well on $225 today as you did on
$100 in 1949? The answer, I think,
would invariably be no. A man of
the same age, with the same size
of family, in the same kind of
job, would find it very much
harder to live on $300 today than
on $200 in 1949 or $100 in 1939.

There is more than one reason

for this.

First is the fact that the
consumer price index does not
measure increasing needs, but
only the cost of needs which are
assumed to be unchanging. But
in fact, what we call progress is
constantly imposing new needs.
For example, a worker who
could find a reasonably priced
home in the city in an age when
there was ample, cheap public
transportation did not need a
car. Today, in the typical case,
he has no choice but to live in the
suburbs and drive to work.
Again, with the simpler
educational requirements of
thirty years ago, he could get
away with supporting his
children through grade eight.
Today they are on his hands
through grade thirteen if he is
lucky.

In short, part of the rise in
living costs is due to increased
needs which would impose a
higher cost of living even if there
had been no change in prices.

But if we make due allowance
for increased needs, and if we
were to adjust the consumer

price index for this factor, we
would still find that the index
understates the actual change in
living costs.

For the fact is, that some of
the D.B.S. methods of
determining price increases are
faulty and will not give the
correct answer no matter how
accurately the data are
collected. This is particularly
true of the cost of housing.

The Consumer Price Index
tells us that shelter costs in
Vancouver are less than 50%
higher than in 1949 and only a
little more than twice pre-war.
The experience of every citizen
who has lived here over the
relevant years refutes this
statistic. Thus houses which sold
for $1000 in 1939 and $10,000 today
(or, if you like, $2000 in 1939 and
$20,000 today) are the rule, not
the exception.

The shelter index itself is an
average of several components,
such as rent, prices of new
homes, mortgage interest,
taxes, utilities, etc. When one
examines these details, one
immediately encounters such
absurdities as the following.

According to the index, the
cost of buying a house today is
twice what it was in 1949. But we
are told, mortgage interest is
only 45% higher.

Now the amount of mortgage
interest that is included in a
worker’s budget has increased in
two ways. In the first place, if
his house costs twice as much,
his mortgage will be twice as
high. This in itself means a 100%
increase in interest.

But in addition, the interest
rate has risen. Whereas in 1949,
the N.H.A. mortgage rate was
five percent, today it is nine
percent. Thus today’s interest

Cont. on pg. 2
see COST

—_ ~