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This is prosperity?
(This is the text of a leaflet distributed in the 1970s
by the Socialist Labor Party of America.)
Your dollar wages as an average American worker have reached an all-time high. Judging by them, you should be in clover. Actually, you've never had it so bad.
Crazy? lt sure is!
What's the explanation?
One word sums it up: inflation.
Inflation is pushing the prices of everything you need up toward the sky.
Inflation is shrinking your purchasing power from week to week, wiping out the "fat" pay boosts -- and then some.
Inflation is driving down your living standards to where they stood thirty years ago.
Naturally, you're mad. Who wouldn't be when year after year you've stepped up your output in the belief this would get you a bigger slice of economic pie, and instead you find your slice growing rapidly smaller.
Hold on, though. Maybe you have no right to be mad. To hear the employers' mouthpieces tell it, you really have only yourself to blame. They claim you have been "fueling an inflationary price spiral" by being too "greedy", by "extorting pay raises that outstripped productivity gains."
Is their claim correct? Or are they cutely trying to pass the buck?
We say they're passing the buck! The workers are nohow responsible for the stiff price rises of which they are the victims. The rises are due chiefly to a calculated inflation of the dollar supply by U.S. capitalism's money managers.
Everybody knows that for years the government has been stimulating the capitalist economy by deliberately spending more than it took in. Few people, however, know that the whopping deficits thus run up have been largely funded by financial juggling that amounts to printing dollar bills.
The Monetary Juggling Act
Here's how the juggling was described by a former Secretary of the U.S. Treasury, Robert B. Anderson:
"Suppose I wanted to write checks of $100 million starting tomorrow morning, but the Treasury was out of money. If I should call up a bank and say, 'Will you loan me $100 million at 3 1/2 per cent [today he'd have to offer 7 per cent] for six months if I send you over a note to that effect,' the banker would probably say, 'Yes, I will.'
"But when I send him the note, where would he get the $100 million with which to credit the account of the United States Treasury? Would he take it from your account...? Certainly not. He would merely create that much money, subject to reserve requirements, by crediting the government's note as an asset. And when I had finished writing checks for $100 million, the operation would have added that sum effectively to the money supply. Now certainly that approaches the same degree of monetization as if I had called down to the Bureau of Engraving and Printing and said, 'Please print me up $100 million worth of greenbacks ...'"
This virtual printing of greenbacks has totalled billions of dollars. A Wall Street Journal editorial (9/24/65) noted that "since the end of 1960 the Government has been inflating the supply of spendable money almost twice as fast as the economy has been adding to the supply of things to buy." And the January 1969 Monthly Economic Letter of the First National City Bank of New York reported an acceleration of the inflationary trend, stating: ". . . it is evident that growth of money supply and bank deposits was much more volatile in 1966, 1967 and 1968 than in the earlier Sixties."
Money Supply Up, Buying Power Down
Such huge increases in the money supply in excess of the volume of goods being offered for sale necessarily cause the buying power of the currency to depreciate. And you, the worker, learn how much it has depreciated when you go to the stores and see how much more money is being demanded for the merchandise on display there.
Now, what is your reaction when you have to spend more to get by? when you realize that your present wages can't be stretched any further to make ends meet? You properly decide to go after a wage increase, and to strike, if necessary, to get it.
The Endless Struggle to Catch Up
If and when you win a pay boost, it merely helps you to catch up somewhat with previous price increases. It could not possibly have "fueled" those past increases.
Nor do your pay boosts "fuel" the subsequent price increases which quickly cancel them out!
It is not true that prices go up because wages have gone up. Prices go up either because the "value" of the money in which they are paid has gone down, or because there are too many buyers for the supply of goods available.
Besides -- every capitalist is always out to pocket the highest prices he can get no matter how little he pays his workers.
Don't the capitalists and their mouthpieces know all this? You can bet your last depreciating dollar that they do. But they're smart. They figure that if they can hold your wages down while inflation jacks up the prices of the products they sell, their profit take will be so much the greater.
Occasionally, some capitalists tell the truth about rising prices and inflation. The late presiident of Equitable Life Assurance, Thomas I. Parkinson, was one of these. A number of years ago, he said:
"Rises in prices are not inflation. Consequent demands for increased wages are not inflation. The inflation is in the debasement of the currency. The increase of this vast amount of what the people in this country use for money creates the pressure under which prices are bound to rise and, when they rise, labor is bound to demand increased means of meeting the higher price level."
Labor may be certain that, as long as capitalism remains, it will have to keep on demanding increased means of meeting a climbing price level! For while the capitalists and their government are at last scared by the prospect of a runaway inflation and are striving to apply the brakes, there is no perceptible slowdown. What's more, any of several likely developments -- another war or a sharp recession, for example -- will compel a resumption of large-scale inflation.
More of the Same Unless...
Does this mean that the workers' outlook is hopeless? Yes and no. Yes, if they continue to tolerate the capitalist system since in that case their wages will be increasingly outdistanced by a rising cost of living. No, the moment they decide they've had enough of capitalism and its loaded economic dice.
The seventy-odd million Americans who run this nation's industries and services do not forever have to be satisfied with the short end of the capitalist stick. They can set up a far better society the day they collectively make up their minds to do so. They can establish a society where everyone will enjoy the full measure of America's abundant output and where each increase in productivity will bring corresponding gains in affluence and leisure time for all.
A New Basis of Government
In the new society, production and distribution will be socially controlled. There will, accordingly, be no further need for the tricky means of exchange, inflatable money, required by the capitalist system of private control over production and distribution. A basically simple and entirely feasible method of national accounting will deliver to every person the full social equivalent in goods and services of the work he or she has performed. And there won't be any danger of chiseling or shortchanging because social control of the economy will be democratically exercised by the workers themselves through a government based on industrial representation.
Whether or not this better society will be achieved depends on you. Don't look so surprised. You're a very important individual. You have a political and economic power that, intelligently used, can make short work of peacefully abolishing capitalism and establishing a socially-owned economy administered by the working citizens for the benefit of all.
You lack just one thing: a program that will enable you and your fellow-workers to employ your united political and economic power effectively. The program you need exists. You can learn about it by filling in the coupon and mailing it to the indicated address.
Is the information you will receive worth the little effort involved? Well, isn't the possibility of winning a real and secure prosperity for your family and your fellowmen worth even a lot of effort on your part?
Socialist Labor Party
The Socialist Labor Party, founded in 1890, advocates an industrial representative government based on social ownership of industry and production for social use. It has no ties whatsoever with other parties or groups calling themselves Socialist or Communist.
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