Retrenchment

Britain's Labor statesmen faced a challenge, too. It was perhaps the most serious challenge since they began, four years ago, to transform Britain into a Socialist state. The question was: Could a nation which stood on the verge of bankruptcy afford Socialism?

No fair and reasonable observer can blame the British Socialists for causing their country's economic crisis. But they can be blamed for aggravating it. London's Economist, while reiterating its opinion that the crisis is "an expression of volcanic upheavals in the economy of the whole world" (see below), last week wrote:

". . . The doctrines of the Left, with their teaching that the ordinary man can make less effort to produce and yet consume more, have, in the hands of both [the Conservative and Labor] parties, contributed to [the crisis] . . . The Labor Government, as the bearers of responsibility, are very much to blame for their stubbornness in refusing to remit anything of their plans . . . It is not enough for a self-respecting Government merely to say that its opponents would have been no better ... In Britain courage pays political dividends. Those politicians who refuse to prolong the rosy illusions . . . and tell the people soberly what needs to be done would be surprised at the response . . ."

Five Percent? There were signs last week that Britain's Labor leaders were shedding their no longer very rosy illusions. With a general election ahead, it would not be easy for Prime Minister Clement Attlee to call for a temporary retreat in the drive to establish the welfare state. But such a retreat was plainly under way.

The new Labor slogan was "retrenchment." It would mean a halt to further expansion and perhaps a cutback in social services, wage freezing and other painful economic measures, all designed to strengthen British competitive power in the dollar market. What retrenchment really added up to was an attempt to inject a strong dose of competition and incentive into an increasingly security-minded Britain.

Prime Minister Attlee was expected to launch the retrenchment policy next week at the convention of the powerful British Trades Union Congress at Bridlington. Last week he ordered all government bureaus to prepare estimates for a 5% cut in expenditures; if this economy could be carried through it would lop $600 million from the nation's $12 billion budget. Board of Trade President Harold Wilson ordered a 5% slash in some retail textile and footwear prices; this might ease workers' pressure for wage increases.

Such economies would bring on personnel dismissals, temporary unemployment and a grave risk for Labor's political prestige. "What of it?" snapped one harassed party chief last week. "It's got to be done. We've got to take the risk."

Forty Percent? The big guns of the T.U.C., led by burly Chairman Sir William Lawther, wheeled up to support retrenchment. Trade union leaders prepared a report and a resolution which served up some bitter medicine for the rank & file (8,000,000 strong), who have been pressing for higher pay and other benefits. Salient points:

P:EUR Wages must be frozen (but not reduced). Otherwise industry may be forced to lay off workers.

P:Business is now taxed to the limit. More levies would kill off the vital incentive of profit.

P:Harder work and more efficient methods, regardless of temporary joblessness and other burdens on labor, must precede any improvement in the standard of living.

P:Retrenchment would not be accepted without a fight. The restive T.U.C. membership would argue long and harshly over their leaders' counsel. To a Washington estimate that the new economic policy would depress the British standard of living by 4%, a harassed Labor policymaker last week made a grim and exaggerated rejoinder: "Four percent! If only it were 4%--it would be paradise. The ghastly truth is that Washington would be nearer the mark if it said 40%!"

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