Italy in international com petition, The economic policy of the "oenter left," already inaugurated by the Fanfani government, and measures like the nationalization of the electrical industries and certain forms of taxation on stooks, did-the rest.
The argument of the employers is based on one single objective fact: .since 1961, wages have inereased more than productivity, But from 1953 to 1961 it was just the opposite on the whole, How did it happen: that in that period there was no substantial drop in prices, but,;.on the contrary, even an increase in prices to consumers?
The answer is very clear and very simple, although the capitalists pretend not to know it. In Italy, as in every capitalist sooi-~ ety like it, prices are determined in the final analysis by a largely monopolist structure extending from production to distribution, When it is possible to lower prices that is precisely when the monopolists are rigid; in the opposite case, they are very flexible. In other words, when productivity increases more than wages, the capitalists press for an inorease’ in profits, avoiding a reduction in prices that would benefit consumers. When wages rise more than productivity, the capitalists pass the costs on to the consumers, increasing prices without taking into consideration the possibility of limiting their sacrosanct profits, It's an old familiar process which is not held to be outmoded among the innovators of Italian neocapitalism (they still say that those who recall these elementary truths are demagogic and simplistic). .
Still another consideration of a general kind, The inflationary tendencies at work in the Italian economy, despite their rather salient. character, are still comparable to the analogous tendencies widely typical of the advanced capitalist countries in the postwar period ("oreeping inflation"), This type ofsinflation is induced, in the final analysis, by the unrestrained expansion of government expenses and public and private debt (private. debt, as is known, is broadly linked to the now universal forms of consumers credit, that is, installment buying), It is impossible to understand what is happening in Italy today without taking into account this more general tendency, which, we repeat, should not be viewed as strictly conjunctural but rather as something that will continue for an indefinite period,
In attempting to come to grips with the problem, certain economists have asked whether the Italian inflation has been provoked by costs or by demand, They have been correctly answered that at bottom
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this is beside the point, since it concerns economic morphology instead of the concrete determination of the causes, In fact, it is clear that we are confronted at one and the same time with an increase in certain costs and an expansion of demand in relation to supply, particularly in certain sectors, But what is the status of affairs more concretely?
Letts take a sector that has undergone considerable expansion in the past decade -- manufacturing, The buying power of the workers in this sector has unquestionably grown: (1) because the pay has .. increased; (2) because the number of workers has mounted appreciably (through a shift of workers either from the unemployed or underem~ ployed, mainly of ‘peasant origin).
This: buying power is directed primarily in two directions: improvement in diet (for example, increased: consumption of meat), better. housing. This happens to be exactly where the bottlenecks are located, Italian agriculture, in fact, has developed insufficiently. Animal husbandry, above all, despite the programs and the projects, has failed to follow the rise in demand (paradoxically, it has been. deliberately slowed down, aside from unusual conjunotural factors, particularly in the recent period), With regard to housing, despite the impetus given to construction, working-class needs have not been met because builders have aimed at luxury projects or middle-class demands much more:.than homes for workers (the government housing program ‘is quite insufficient). - Under these csconditions, the rise in prices (especially prices of food products and rent) was inevitable.
Is this due simply to con junetural, ‘causes?
‘The oonjunctural phenomena are directly linked to structural causes. The increase in the prices of consumers goods was not deter= mined merely by an increase in wages, but by the fact that the irra tional and unbalanced development of agriculture makes it impossible to adequately satisfy the increasing demand, . Everything that. occurs in the‘ sector of distribution -- where powerful groups..of. capitalists and genuine gangsters operate in determining the well-known distor=— tions and hiatuses -- acts in turn as a brake on production (the low prices paid to the producers do not assure a profit except under. con= ditions open only to highly developed enterprises linked in some way with distribution) and as a stimulant for raising prices (multiple middlemen and a swarm of parasitic elements), With regard to housing, the present situation is due to a. whole course of bad investments (bad from the viewpoint of the interests of the collectivity and of economic rationality) and the existence of taxation which weighs heavily in the net cost of apartments,
To this must be added two more factors which have contributed to the rise in prices and hence the inflationary pressure:
“-(1). The production of plant equipment goods has not correspon-
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ded to the growing demands of technological expansion and renewal, thus heightening the demand in relation to supply.
(2) Among services, the rise in productivity has been limited -it is below the growth of the mass of income going to the side of labor in the same sector. Even if it is a questionable thesis that the essential cause of the inflationary pressure lies here, it is in any case an. element to consider,
Let us turn now to the money market, We repeat -- it is nota problem of difficulties caused by an absolute lack of funds. But, first of all, the credit policy has operated in a very debatable fashion in two directions, For a whole period, a line of easy oredit was followed, even speculative operations and fictitious or excessive expansion were encouraged, Then engines were reversed, with restrictions that placed in jeopardy the normal operation and even the solvency of a whole series of enterprises, primarily small and middle businesses, Secondly, funds have a tendency to be invested in areas considered to be safe and profitable, even speculative (real estate, flight of capital abroad), to the detriment of more necessary and longer range economic investments,
.., These phenomena became accentuated due to political reasons (struggle by the employers. against certain measures of the Fanfani . government), as was clearly apparent above all in the genuine sabo~ tage of the stock market. It is necessary to state, however, that the critical situation of the stock market also had economic and financial causes, The lopsided and largely fictitious boom of the preceding period could not last forever; it was necessary to drop. back to more realistic dimensions; and, following the restriction of credit, the. narrowing of the possibility of self-financing for a series of big enterprises, and the alarming flight of capital, ready cash on the market became actually deficient,
~: We will not dwell -on the dulling effect of the government budge-= tary situation which is due to generally known reasons, It is sufficient to recall here that the government as well as local administrations (and indirectly the government here once again) is compelled to underwrite an unplanned type of economic development, stimulated. by private capital (for example, the cost of an infrastructure flowing from insane urbanization, from the growing concentration in the big cities, the cost of highways for automobiles, etc.),
Finally the growth of imports is linked to certain dificioncies and imbalances which we have already stressed; it is due especially to the need to import food products and plant equipment. There is also a growth in automobile imports, for example, stimulated by...the circulation of commodities within the Common Market and by the offorts of several big American and British firms (particularly of expensive, luxury automobiles),
Thus it is to be seen that the causes of the current difficul-
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ties are not so simple as the traditional attorneys of capitalism make out. What is involved in reality is an ensemble of multiple factors, in which, we repeat, the conjunctural causes are intimately fused with strustural causes, It can.be admitted that the dynamio of new wage increases in the past two years has had certain consequences, But, aside from the fact that in the final analysis this dynamic is due to changes in the labor market (the very marked decrease, and, in certain sectors, disappearance of unemployment), if one wishes to understand what has happened and what is occurring, it is necessary to take into consideration such factors as the monopolistic struoture of production, the organic deficiencies of agriculture, the dis~ tortions of the money market, the existence of interest requirements, that weigh heavily in crucial sectors, the hackward character of the commercial and services sector, particularly the distribution net~ work, me
‘In other words, the bottlenecks and current difficulties are consequences of the disorder of the capitalist economy, of a disorder which is not ~~ at least at this stage -- the classic disorder of crises of overproduction with all their absurd by-products, but which is nonetheless a disorder that hinders and even makes impossible a balanced development at a high rate of expansion, The lesson to be drawn, very concretely and directly, is ‘that far from being a costly luxury which cannot. be permitted and which represents a vestige of obsolete concepts, as.the adversaries of the workers movement .and the "modern" Social Democrats claim,: a new anticapitalist structure is an objective necessity even for the so#called advanced economies} their fundamental problems were not at all. resolved by the miraculous boom of the fiftios.
The measures taken by the Leone regime last September-October and by the Moro regime during recent weeks are, of course, not within that framework and the Moro regime holds that noteven timid program ming can actually be undertaken before recovery from the conjunctural situation, As the international press has reported, these measures are, briefly, as follows: . 7
(a) Reatrictions on credits (b) pressure to. reduce consumption of certain products (new tax on automobiles, increase. in the ‘price of gasoline, limitations on installment buying); (c) encouragement of the money market (practical withdrawal of a tax on stocks introduced by the Fanfani regime and hotly contested by the stock-market opera tors and the capitalists in general, and allotment of revenues from supplementary taxes to state or state-controlled industries in such a way that they do not compete to the detriment of private enterprises on the money market); (d) attempts to halt the rise in prices by blocking rent boosts and by buying food products abroad, . In view.of its present. composition (participation of the Soocialist party), and in general for obvious political reasons, the regime must achieve either silently, or under camouflage, in one way or another, a key government objective which the employers! economic
organizations are more openly demanding; namely, a wage freeze. It is precisely in this field that the main battle will be waged to decide who is to pay the costs for the readjustment operation. The outcome, of course, has not been determined in advance; it hinges actually on the political and social relationship of forces in the given context,
As for the measures already taken or projected, they have pro~ voked rather sharp debates and often correct criticisms. It is clear, for example, that the decision to import food products, which might with difficulty result in holding prices, will not help to solve problems created by the deficit in the trade balance, It is also clear that the retreat in’ the question of taxing stocks will incite the stock-market operators to demand more and will contribute nothing in itself to eliminate the distortions in the use of ro-. sources, But it is above all the decisions on taxing automobiles and limiting installment buying which are the most sharply attacked. The Fiat company has even taken the offensive, declaring that a serious reduction in production will become necessary if the measures are put through as projected, The tax on automobiles was almost immediately Lowered and the question of installment buying has not yet been . settled as of the moment, It is not a question, certainly, of deny ing that the development of the automobile industry was absolutely excessive and unbalanced and that it is necessary in principle to take resouroes from this sector and shift them to other, more important, areas, But a line followed for more than a decade cannot be changed by the expedient of partial, very limited measures, without any -preparation for the necessary reconversion, In reality, the consequence of the measures taken could be a limitation of the production of automobiles with a chain reaction on employment in various industrial sectors, The same effect could be produced more generally in other sectors of durable consumers goods if _anstalbnent buying is actually limited,
The wide fears, the more or less veiled threats of the employers, announcing the possibility of a return of unemployment, appeared more conerete after three big enterprises resorted to measures that have not been heard of for some years. Fiat announced a reduction in hours of work (with a reduction in wages); Magnadyne, a lay-off of 2,000 workers; Olivetti (typewriters), lay-offs and a substantial reduction in hours of work for 10,000 of its 17,000 workers. For the moment it is diffioult to determine whether these are limited cases, means of pressure on the government, or symptoms of a new situation which could have a tendency to become general, The fact is that alarm exists and that all this cannot help to again create the climate of confidence in what has been called the Italian miracle.
However, at the moment of greatest uncertainty, the Italian government was able to add to its assets a sizeable American loan (corresponding more or less to the deficit in the balance of payments - for 1963). Without doubt, this is an important respite, The problem . of the deficit in the trade balance can be envisaged in longer terms;
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in addition aid by the Commodity Credit Corporation will facilitate. imports of food products. The bourgeois commentators themselves, however, stress that all that is involved is a respite. The question is whether the available time will be utilized in a profitable way,
For all the reasons we have indicated in this article, this is greatly to be doubted,
"DOCTORS, ARE SICK PEROPLE YOUR ENEMIES 2"
Belgium!s workers are seething with anger. And*the anger is with a sector of society for whom they normally. have the greatest respect and appreciation -~ the doctors. .
“After battling for years ‘for government health insurance, “the. ‘workers won the concession of provisions for the aged and. for’ widows. When it besoame law on April 1, eighty-five per cent of Belgium's 12,000 doctors abandoned- their posts, Hospitals were soon filled to overflowing. The doctors smiled. Perhaps this would pring capitulation to their demands, Some | of them took "vacations,'
The Medical Association. says that government health insuranoe opens the door to socialized medicine. The issue, however, is mush simpler, -They don't want the government to set fees for those coming ‘under government insurance, They want more days to engage in lucrative private practice, . They are against keeping a record of medioal diagnoses and treatments to which other doctors could refer’if the patient wishes them to, And they want higher fees. .
In brief, the vast majority of Belgium! s medical profession agree with the capitalists that profits are more sacred than human lives, That they believe in the unity of theory and practice is shown by the deaths that occurred within a few: (days because patients could get no help,
Dr, Thoné,; head of the Medical Association, was asked if the doctors would refuse to help someone in danger of dying. He indignantly replied, "What do you take us for, murderers?" oe
That, sadly enough, is the exact impression they are “giving. ’ And all over Belgium, the unions are mobilizing demonstrations under » the slogan: "