Evening star., 1951-12-03
Initiation and the West

In its latest report on the problems troubling
the economies of the Western world, the Organi-
cation for European Economic Cooperation has
stated some rather obvious facts about infla-
tionary dangers and about the measures that
must be Internationally and internationally
to keep those dangers from getting disastrously
out of hand
The report-which for the first time covers
the United States and Canada along with the
regular members of the OEEC Che European
participants in the Marshall Plan)-emphasizes
that in varying degrees, some less so than Others
all the nations involved must take appropriate
action because all have vital stake in seeing
to it that the present situation is not allowed
to drift from bad to worse In the reports words
THE immediate danger is not that of run
away imitation, but rather of falling into q
continuous state of mild inflation"-a nom
spectacular but steady upward creeping of wages
and prices, slow but constant trend deteri-
Grating the value of money in way that would
seriously discourage personal savings, long-term
lending, life-insurance investment, bond-buying
and other activities rejecting individual and ma
tional economic stability.
Moreover, apart from it's impact on civilian
economies such a deterioration, if unchecked,
could gravely undermine the defensive effort of
the entire free world The situation, of course
would not be what 1t is today if this were
genuinely peaceful era But the aggression in
Korea-demonstrating that the Red totalitarians
are willing to pursue their dominance seeking
objectives even at the risk of precptating an
all-out war-has made it imperative for the
Western nations to rearm and undertake partial
mobilization. Most of those nations have already
adopted important measures to cope with the
resulting upset in normal trade and with the
infationary preSsures inherent in competing mil
itary and military demands on limited sup
ply and productive capacity. With the excep-
ton of only few countries however the meas
ures now in effect are not enough. According
to the OEEC, further steps will yet be required"
to do the job that must be done to prevent an
economic tailspin.
Addressing itself primarily to Western Eu-
rope-chiefy Britain and France-the OEEC re-
port places particular stress on the need for
internal self-improvement on the part of the
individual nations. Thus while recognizing the
vital Importance of American aid and interna-
tional cooperation in such projects as the Schu-
man Plan and the lowering of trade barriers,
it declares that most of the required anti-inda-
tion measures "can only be taken by each sepa-
rate government and can only be successful if
the people of each country lend their support"
These measures include the following: D Action
to increase production by increasing output per
man-hour, particularly in coal and steel: (2)
reduction of non-miltary demand by proper
taxation, encouragement of personal savings,
tighter control of consumer credit, postponement
of investment in essential public and private
works, and strict budgetary and monetary poll
cies; and 80 better control of prices and costs
through better restraint in wage demands and
the level of profits.
All the members of the OEEC have already
pledged themselves to these and similar meas
ures. If they go forward with them, and if our
own country also fights a good fight along the
same line then the present creeping advance
of imitation can be stopped. Certainly, there is
still time to stop it. Our Western world has been
amply forewarned. II it fails to act accordingly,
the ultimate consequences are likely to add UP
to a great victory for the Kremlin.