Crying Disaster

The Tory government of Prime Minister Sir Anthony Eden has never brought itself to deal with Britain's hectic inflationary boom as sternly as its danger demanded. Gratified by the boom, relieved to be free of austerity, taking credit for the prosperity, the Tories have hesitated to air their anxieties too loudly. "This is the government that whispered 'Wolf!'" said one London wit. But last week, in the midst of London's gayest and most expensive social season since the war, Chancellor of the Exchequer Harold Macmillan cried it aloud.

Wages had jumped more than 4% in the past three months, and more demands were on the way. "Another round of wage increases, such as we have had in the last two years, could be disastrous," said Macmillan flatly, in a speech at Newcastle upon Tyne. "I do not use the word lightly. I use it advisedly and with a full sense of responsibility."

New wage increases, said Macmillan, "will not bring benefit to anyone. It would only bring benefit to men in a particular industry if they were the only ones to get it. But they will not be. If one starts, others will follow. No one will gain anything except more and more paper money, which will buy less and less."

In countries like the U.S. and Russia, "more or less self-sufficient," the economy can absorb rising prices as long as wages rise with them, said Macmillan. But Britain is an exporting nation whose prices must compete in a world market. "We must export to live at all. Fifty million of us there are, living on a rock--and living better than almost any country in the world. The world boom will continue. Other countries will be forging ahead. But we shall have priced ourselves out of the market by our own folly. Our exporters, masters and men, will be out of work . . . With falling exports we should not have enough money to buy both the food and raw materials we should need. Employment in the home market would collapse as exports began to dwindle. I am not just trying to make your flesh creep. All these disasters may easily come upon us if prices continue to rise at home."

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