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Ernest Erber

the Question of Prices and Wages

(21 July 1946)


From Labor Action, Vol. 10 No. 29, 22 July 1946, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).


The end of OPA price controls confronted the working class with a crisis of major dimensions. The spiralling prices wiped out within a matter of weeks the gains of the recent strike wave. Every worker began to understand that the fight to keep wages on a par with soaring living costs was like trying to fill a tub without first stopping up the drain. As a result, labor, fresh from its strike struggles for higher wages, wheeled about to attack on a new front – the price front.

From coast to coast the trade unions took the lead in local actions to oppose price rises. They picketed stores, they demonstrated; they called buyers’ strikes. The American workers, despite their traditional political backwardness, recognized that efforts to tie wages to rising prices was now only a defensive effort to avoid the worst effects of the inflationary movement. They knew that the offensive had to be in the direction of price control, both through their mass struggles and through their political pressure upon government.
 

A Step Forward

This realization by the workers that wage increases have meaning only when linked to the fight to control prices is a tremendous step forward in their social consciousness. It means a break with the old, time-worn concepts of unionism that regard as the sole function of a trade union the fight for “more money.” It means that the workers can no longer be content with viewing only the small segment of the economy marked “wages.” They must concern themselves with the economy as a whole – wages, prices, profits, control of production and, eventually, nationalization of industry.

Wages relate to the immediate employer. Prices are a question of the economy as a whole. This increasing understanding of the broad social and economic questions of the day on the part of the workers is something for the Marxist to seize hold of and drive toward a Socialist solution. This was the tremendous significance of the GM Strike program – linking wages to prices and profits and proposing to make them all subject to check and control by the union. The concepts pioneered by the GM strike are now being forced upon the working class as a whole. The entire labor movement must now make the GM slogan its own – “Wage Increases Without Price Increases.” The settlements of John L. Lewis in coal and Phillip Murray in steel based on price increases for the corporation are now revealed to be hollow victories.

The Workers Party from the outset seized hold of the GM program and sought to pound home its meaning to the working class. It extracted the heart of that program – labor’s control of prices at the point of production and throughout the distributive process – and sought to link it to every fight for more wages. The Workers Party immediately realized the tremendous socialist content in this position because it knew that the workers’ fight along this line would lead beyond the framework of capitalist economic relations, as General Motors itself so well understood when it fought against it. The Workers Party understood what was at stake in the GM program because it had been taught to think in terms of programs that are transitional from capitalism to socialism – programs that the workers fight for as the only effective answer to their problems and which lead in “the effort to realize them, beyond the framework of capitalism. And if not realized, as is more likely at this stage, this form creates a transition in the thinking of the workers from the old routinist union concepts to new, revolutionary concepts. The latter is, of course, the first and foremost function of a transitional demand. The actual realization of transitional demands is related to the revolutionary period.

Having made this introduction to the question of the fight for price control, the GM program and transitional demands in general, we now turn to the specific subject of this article – the miserable role played on these questions by our rivals and would-be teachers in the strategy of working class politics, the Socialist Workers Party and their newspaper, The Militant.
 

The SWP’s False Position

In contrast to the Workers Party and Labor Action, the SWP has understood nothing about the tremendous developments going on about them. To read their press one wonders where it is published or in what year it was written.

Their root error is that they failed to understand the GM strike program. They viewed it merely as a militant trade union program. The demands for union price control were viewed as mere “propaganda” to win public support. They endorsed the slogan of “Open the books” but they saw no connection between this slogan and the demand that wage increases be granted without price increases. As far as they were concerned the slogan of “Open the books” somehow accidentally wandered into the GM program.

But since they regard “Open the books” as their own child, they were able to recognize it no matter where it turned up. The fact that union control of prices at the point of production is the first form of workers control of production never occurred to them because the GM program did not plainly label it so.

As a result they criticized the way in which the slogan of “Open the books” was used. In their reply to Felix Morrow’s criticism of the SWP policy on the GM program they say: “Reuther, however, never agitated for this slogan in the revolutionary spirit of our transitional program which conceives this as a bridge to workers’ control of production.” How else did the SWP theoreticians think that the GM workers could control GM prices except through workers control of production? And what is the first step toward the latter other than “Open the books?” Who cares what Reuther had in mind or what he agitated for? The real question is: once the union has come out for control of GM prices and access to the books, what should we agitate for? Here is the real opening for the Marxist. Here is the real chance to grab hold and go to town. How did the SWP react?

Of this splendid opportunity to press for a drive toward a socialist solution along the road of transitional program – of this they could say no better than the following hair-raising pronunciamento:

“The second slogan ‘Wage Increases Without Price Increases’ is not our slogan and we do not accept it” (!!!)

What the SWP is really saying is this: “How dare they meddle in such matters, these UAW unionists who have not even been issued a license to practice revolutionary politics!’ If what they want is a slogan that goes beyond hum-drum unionism, they should know where to come. Our address is 116 University Place, New York City.”

But not content with consigning the slogan of “Wage Increases Without Price Increases” to perdition, they must speed it on its way with a few vigorous kicks in the form of “arguments.” Says the same statement:

The erroneousness of this formula consists in the fact that it directly links together the struggle for higher wages with the fight against high prices.”

That’s right, re-read it. It still reads the same.

It would be bad enough for a Marxist party to walk right pass the GM program in broad daylight and fail to note anything unusual about it, above all when every two-bit commentator is raging that it is unusual, and outrageously so. But to walk right up to it and spit in its eye for linking wages and prices, the very thing that marks it off from routine union programs, for that it is not enough to be simply ignorant – or even exceptionally ignorant. For this a mad genius is required, capable of intellectual mayhem against all that passes for common sense among men.
 

Prices Under Capitalism

But this is not all. The crime of “directly linking” up the wage and price question is not the sole crime of the GM program and its slogan of “Wage Increases Without Price Increases.” Another charge is hurled after its beaten and battered corpse.

“This formula likewise (!) contains the false implication that it is possible to effectively stabilize commodity prices under conditions of capitalist anarchy and disintegration.”

Not only does this formula proceed on crooked lines which link prices and wages, but, according to the SWP, it also throws sand in the eyes of the workers by implying that the fight against price increases is not a hopeless one.

What sectarian nonsense! Straight out of the book of De Leon, but not of Trotsky! If the slogan “Wage Increases Without Price Increases” is to be rejected because it spreads illusions, what about all the other planks in the transitional program? Will the housing question ever be solved under capitalism? Of course not. Do we tell workers to fight for housing? Of course we do. Does not this apply to every other demand we raise which is incompatible with the continued existence of capitalism? Of course it is. Then wherein is the crime of the slogan: “Wage Increases Without Price Increases”? Again we insist that its real crime, in the eyes of the SWP, is that it had the misfortune of an illegitimate birth instead of being sired by SWP’s Political Committee. This becomes abundantly clear when Felix Morrow is condemned for his efforts to legitimatize the slogan with the argument that Morrow is “proposing a FUNDAMENTAL REVISION of this (transitional) program with regard to the question under discussion.” (their caps)

For them the transitional program of the 1938 Founding Congress is the last word on the subject. That which Trotsky considered a “first approximation” and advised the movement to implement and adapt for the different countries and changing situations has been canonized into an unchanging and unchangeable article of faith to which it is sacrilege to either add or subtract jot or tittle.

As a result, when the GM program was formulated, the SWP strategists placed it alongside of their party’s transitional program and approved everything that was familiar (“Open the books”) while rejecting everything that “is not our slogan” (Wage Raises Without Price Increases).
 

Blind to GM Program

But perhaps they were convinced of more than the fact that the GM price slogan was strange, new, and, therefore, to be avoided. Perhaps they were convinced that it was bad and dangerous. Perhaps they immediately saw that the GM demand was an incorrect substitute for the demand of a sliding scale of wages which is the central wage-price demand in the 1938 program. Were this the case, the SWP had the duty of taking issue with the GM program, of subjecting it to criticism, of proposing the sliding scale formula in place of the “no price rise” formula.

Did they do it? Not a word. During the GM strike, the SWP maintained the silence of the tomb – both in regard to criticism of the GM program and in regard to proposing the sliding scale of wages.

Why? Was it because they decided to be discreet and not get involved until they exactly knew where they stood? No. The real fact is that they remained totally blind to the real significance of the GM program. They could see no transitional demand inherent in the GM program except “Open the books,” which stuck out so that a totally blind Marxist would stumble over it if he could not see it. They viewed the GM program as nothing beyond the level of militant unionism. This is the beginning of all their troubles. After this, refusing to admit their blunder, they sought to extricate themselves with arguments that only led from one contradiction to another and from bad ones to worse ones.

Having failed to see the significance of the GM program initially and having their noses rubbed in it later by the growing price crisis they were forced in RETROSPECT to polemize against the slogan of “ Wage Increases Without Price Rises” and counterpose the slogan of the “Sliding Scale of Wages” as the central slogan in the fight against rising prices.

Now that the price question has become the central issue before the labor movement as a result of the end of OPA, the SWP is driven into the sectarian and reactionary position of trying to force the mass struggle away from the price control front back into the narrow confines of simple wage demands. Now that workers are forced to think of the economy as a unit – to link wages, profits and prices – the SWP tells them that “prices are not our business, let’s get more wages.”

Now that trade unions are forced out of their pure-and-simple collective bargaining role and call mass demonstrations, buyers strikes, political pressure actions – in short, embark upon a political struggle – the SWP tells them to go back to the old narrow wage struggle à la John L. Lewis. When this, the most non-political working class in the world, struggles for its bread by increasingly political weapons, the SWP gives them nothing beyond the advice of “strike at the point of production.”

When trade unions everywhere are swarming down on the heads of the politicians demanding laws for rent control and other price control measures, the SWP says “You’re wasting your time. Go out and get more money.”

The OPA, says the SWP, is nothing but a tool of the monopolists to increase their profits. Good. But now that the monopolists do not need OPA and want to get rid of it (or seriously modify it) don’t they do this too in order to increase their profits? Is this of no concern to the working class? At whose expense are profits increased?

But price control is hopeless under capitalism? So is an attempt to maintain the workers’ living standard through a sliding scale of wages. The fight for price control, above all when its central demand is the GM program formula of price control at the point of production, sets masses in motion on a level far higher than a mere wage struggle and forces them to think in broad social and political terms.

It is the struggle for price control that is paramount today. The struggle for a sliding scale of wages is subsidiary to it and applicable in a far more narrow, trade union sphere.

What would a member of the SWP do in a union where it is proposed to call a mass demonstration in front of the city for rent control legislation? Would he get up and say it is a waste of time and propose a sliding scale of wages as the means of covering rent increases? (In this case he would be following out the party line.)

Or would he get up and call for an “effective bill” and that it is time that “Labor’s voice ... should have been heard in Congress demanding drastic measures against the profiteers and price gougers...” and link it up with a speech for the Labor Party? (In this case he would be contradicting the party line just as it was done in The Militant editorial on page 4 of the July 6 issue.)

The plight of the SWP on the price question is another lesson in the murderous logic with which an initial blunder will raise hob with the political line of a party until it is corrected. Every effort to adhere to the false premise and conduct a political line in consonance with it will not merely perpetuate the error but will drive its proponents into ever worsening predicaments. No half-baked union progressive could have ended up in as reactionary a position in the current price crisis as did the SWP.

A union progressive, operating without theory and unencumbered with the need to be logical and consistent, finds it easier to respond to a correct course on the price question than do the highly-vaunted half-theoreticians of the SWP. Those who use a program as a substitute for thinking end up worse than those who operate without a program. Caught in the contradictions of their sliding scale of wages formula in the midst of a mass fight for price control they arrogantly and stubbornly refuse to re-examine their initial blunder in the GM strike and serve as an excellent example of how to act when one is intent upon breaking one’s neck.


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