from our economics correspondent
Professor Frank Paish, in the latest issue of the Hobart papers, Policy for incomes (published by the Institute of Economic Affairs) opens up an attack from the right on the ideas which have been accepted by Mr. Maudling and, as far as we can tell, Mr. jilson. Frofessor Paish is one of the most adamant critics of what he calls “overfull employment", by which he means ‘ the amount of unemployment we have today. If the degree of unemployment is not increased, he holds, then the incomes policies which are advocated by both parties will be self-defeating, With more unemployment, incomes policies would be unnecessary, because wages could be held down in the traditional way, by the threat of the dole queue. If employment levels are maintained at their present position, then any interference with competitively-determined wage-levels will mean, says Professor Paish, that profits will rise and that inefficient firms will be featherbedded. This will mean thats
“the pressure for greater effici-ncywill be relaxed and..in the long run the rate of growth might be slower than in an economy where efficiency was enforced by competition,"
Even if unions agree to restrain wages demands, Professor Paish thinks that the economic pressures of competition for labour wills
"face the employers, the trade unions and possibly also the Government with difficulties so great that they would lead ultimately to its breakdown ." 4ll this reinforces the lesson that capitalism is confronted with deep-seated problems to which it has no solution without returning to high unemployment levels, If ‘Mr, Wilson is to tackle this problem, then he will have to engage in deep-probing structural reforms, unless he is to become the architect of Tory restoration,