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Susan Green

Price “Bulge” Is a Breakthrough

(22 April 1946)

From Labor Action, Vol. 10 No. 16, 22 April 1946, pp. 1 & 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Here’s a conundrum for you, reader, to solve: When does a bulge become a breakthrough? What bulge? What breakthrough? Why, that price bulge President Truman solemnly declared – in the middle of February when the Big Steel companies got their $5-a-ton price increase – would not, no never, become a breakthrough.

Since then there have been price advances in steel, oil, textiles, clothing, meat, sugar, wheat and grains, lumber, glass, builders’ materials, automobiles, and on industrial machinery all ceilings have been removed. Well, come now, has the bulge become a breakthrough? What is your answer, reader? Or shall we wire the President for an answer?

But wait a minute. Perhaps Mr. Chester Bowles, Stabilization Director, can solve the riddle. When the high-price balloon was set off with the unwarranted increase in steel prices, Mr. Bowles also had a great deal to say about bulges and breakthroughs. He crossed his heart and swore that only the prices of durable goods would show some small price advance, but the prices of food, clothing and rent – which account for seventy per cent of consumer expenditures – would not be affected.

But, alas, Mr. Bowles only makes life more complicated. For now we have more questions: are meat, sugar, wheat and grains foods? And textiles and clothing – are these clothing? And do the prices of lumber, glass and builders’ supplies in general affect the rent situation? Either Mr. Bowles was lying or food is not food, clothing is not clothing, and building materials do not affect rents – because these are the very items that have gone up in price, with more to come!

As a matter of fact here is another list of items whose prices the OPA has lifted: dinnerware, lamps, alarm clocks, flatware, garden trowels, lawn mowers and a number of other hard goods items. These are, to be sure, not as weighty items in our budgets as food, clothing and rent, but they help pull up the overall cost of living.

How Far Will Prices Rise?

How much of a boost in the cost of living can be expected? Here’s what the Kiplinger Washington Agency advised its businessmen clients, on March 16, as to OPA policy:

“OPA is talking out of both sides of its mouth simultaneously. Out of one side OPA is saying that the price line will be held. This is the theme of all loud publicity, but it’s only half true. Out of the other side OPA is telling its staff to raise prices and to hurry, make it snappy, get a lot of raises out within the next 30 days. But keep the price raises quiet – play down publicity on them – play up the publicity about holding the line – the breast-beating theme. Make the public believe that the price line is being held – while the retreat to a new higher line is actually under way.”

How far will the price balloon rise?

Mr. Eccles, head of the Federal Reserve Board, predicts a rise in living costs this year of ten per cent. Mr. Bowles pooh-poohed this figure and compromised at five per cent. Mr. Snyder, War Mobilization and Reconversion Director, thinks the rise in living costs “would not be substantial.” However, Kiplinger advises his business clients: “Ten per cent rise in average consumer prices by year end now seems sure.” United States News, which is a businessman’s magazine, wrote in its issue of March 29: “Prices are rising at a rate that will amount to about 12 per cent over all, if continued through 1946.”

But, of course, it’s those wicked workers who are responsible. They can’t content themselves with a lower standard of living due to the cuts in take-home pay. They have to go out on strike for wage increases. So can you blame the bosses for demanding price boosts on their products?

This myth has been exploded time and again, but never has it been so completely pulverized as today. The General Motors strikers have done yeoman service to educate the public on the question of wages, prices and profits. Before the strike the union showed that the company’s business in 1946 would warrant a thirty per cent wage increase and still leave enough profits to amount to fifty per cent more than in the pre-war years 1936–39 – AND PERMIT ALSO A DECREASE IN THE PRICE OF CARS FROM THE 1942 PRICE.

The GM strikers challenged the company to open its books. The company sidestepped this logical challenge – and thereby implied that the workers’ figures were correct. It was furthermore attested by government fact-finding boards that manufacturers could “afford to raise wages by around twenty-five per cent without boosting the prices of their products.” But a capitalist government by and large does what the capitalists want, and so Mr. Truman and Mr. Bowles came out with their wage-price policy – with the results sketched above.

But don’t think for one minute that the companies are getting in price increases ONLY the equivalent of the wage increases they will be paying! Big Steel got in the $5-a-ton price boost $140,000,000 over and above the total wage increase. Why suppose this an exceptional case. Also let it be known that many businesses that have not increased wages, have nonetheless been favored by OPA with higher ceilings.

GM Program Needed

What concerns the worker, and the housewife who meets these towering prices head-on, is what has already happened to the wage increases that the workers fought so militantly to attain. The fifteen, sixteen or eighteen cents an hour raises, on the basis of the forty-hour week, only partly made up the cut in take-home pay suffered at the end of the war. With OPA’s two-faced policy, with the farm bloc pressing for higher parity prices that will up the cost of food still further, what is becoming of that inadequate wage increase? It is rapidly melting away. The result? The standard of living of the working people will drop. This is the kind of progress capitalist production assures the class on whose labor the greatness of this country is predicated.

The situation calls for the adoption by the labor movement of the principles enunciated by the General Motors strikers. Wages must be increased to maintain and improve the people’s standard of living. Wage increases must come out of bulging business profits not out of the pockets of the consumers, who are the working people. And let the companies open their books and reveal the steal the profit system perpetrates on all of us.

How about price fixing and control? The OPA has demonstrated that an agency of the capitalist government cannot serve the needs of the people. Price fixing must be linked with the demand to open the companies’ books to committees of workers in the factories who are at the point of production, in a position to see and know what’s what. As to price enforcement, this has been a farce under OPA. The still-flourishing black market makes OPA look pretty silly. The people themselves, through neighborhood committees of organized labor and organized housewives, can enforce price ceilings and fight the black market.

Militant action along these lines will solve the conundrums about bulges and breakthroughs.

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