A False Remedy; H. Hazlitt

So the government rushes to the rescue. The rescue almost invari ably consists of added doses of in flation. The government increases old spending programs and adds nevv ones. Never mind if govern ment spending has risen in every Copyright 1967, Los AnBeles Times, Reprinted by permission. 414 one of the last eight years and is novv at record levels. Never mind if there have been budget deficits in everyone of the last seven years. The spending and the deficits must be pushed still higher. Interest rates must be forced dovvn. The supply of money and credit must be increased. All this is done on the assump tion that vve cannot have continu ous full employment and prosperity vvithout at least a little continuous inflation-and maybe, at times, a big shot of it. The truth is that inflation is neither necessary for full employ ment nor sufficient to secure it. What is necessary is a vvorkable coordination of the price system.

This entails a coordination of vvages and prices. Individual vvage rates must be at the levels at vvhich the full labor force can be profit ably employed. Prices must be high J,VU7 A FALSE REMEDY 415 enough to keep a profit incentive, but low enough to permit the op timum volume of goods and serv ices to be sold. Wages and prices are always tending to reach these levels in free markets. The half-truth in the Keynesian or inflationary theory is that if wages and other costs of prod uc tion have got too high in relation to final prices, so that profit mar gins have shrunk or disappeared, an inj ection of new money or credit into the economy may sometimes raise final prices before it again raises wage rates and so tempo rarilyrestore profit incentives and production and employment. But this kind of prosperity can be kept going only as long as prices and profits can be kept at least one jump ahead of wage rates. It be comes a constant race between the printing press and the demands of the labor unions. It is a race that can only end in gross distortions of income distribution, incentives, and production, in a balance-of payments crisis, and in falling con fidence in the dollar.

This disastrous inflationary race can be prevented only if the government has the will and the wis dom to prevent the continuous im position of extortionate union wage demands. This does not mean a wage freeze as in England. It does not mean antistrike legislation. But it does mean the repeal or thorough revi sion of our present one-sided Fed erallaws. It means the removal of the spe cial compulsions put on employers and the special immunities granted to unions. The employer must not be forced to bargain exclusively with one government-certified union. The unions must not con tinue to enjoy a special license to keep a plant closed by intimidatory mass picketing until their demands are met. The right to strike does not include the right to prevent anybody else from being offered or taking the job that the striker has voluntarily vacated. Until we restore balanced labor laws, even continuous injections of more money and credit are not go ing to assure full employment be cause irresponsible unions will con tinue disruptive strikes and unrea sonable wage demands. ~ 416 JACK SCHREIBER How MUCH is it worth? How much is your personal freedom worth to you? How much would you be will ing to sacrifice today, just to keep your freedom to worship God as you see fit? What price would you pay just to maintain your right to work at the business or profession of your choice; or your right to speak freely without fear of im prisonment? Have you ever stopped to think that men haven't always been this free? Since the begin ning of time, most men through the centuries have been slaves or serfs. Personal freedom was granted as a gift by kings, or ty rants, only to a chosen few. Occa sionally, history records, there were brief periods of personal freedom, but it finally took America for the world to realize the dream of all men - the inherent right of a man to be free.