Not-so-Welfare State

The most welfare-minded economy in Latin America has fallen on sickly days. The cause: too much government interference. The effect: a general disillusionment expressed in endless strikes.

Last week a rubber-products company, a soft-drink bottling works and the national airline were shut down, bringing the strike total since last January to more than 175. Close to 5,000 employees of the government-owned telephone company voted to strike this week unless wages are boosted. Ranging from five minutes to five months, the strikes cost the country an estimated 6,200,000 man-hours and uncounted millions of dollars in productivity.

The strikes reflect the tensions and distortions of Uruguay's economy. On rolling land that could provide some of the lushest cattle and sheep pasturage in the world, wheat is being grown, encouraged by government price supports despite the world wheat glut. Ranchers, penalized by taxes and government cheap-meat policies, are producing less beef and wool--the country's mainstay exports. So serious are the shortages that 4,000 packinghouse employees have been laid off and the government has even been forced at times to import cattle, both for local consumption and for export as corned beef. Moreover. Uruguay's Swiss-style federal-council government must continue to pay 150, 000 government employees (in a population estimated at 3,000,000). carry on an elaborate pension plan, and absorb the losses of at least seven mismanaged nationalized businesses, e.g., liquor manufacturing, a repertory theater, railroads. The result is deficit spending on a grander scale each year--and consequent inflation.

The strikers, variously hit by the economy's contradictions, have more than higher wages on their minds. Packinghouse workers demanded that the government import more Argentine cattle to provide work. A group of Montevideo doctors struck for duty-free automobiles. Teachers-college students struck for preference in teaching appointments. There is a growing tendency toward brief general strikes in support of particular union's demands. Communists, tolerated by the government, energetically back every strike, prolonging each as long as possible.

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