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21st September 1976

Dear Dr. Kissinger,

As I promised I enclose for your information the full transcripts of the Vermont weekend. I am sorry they took so long; however we are still editing the first twelve programmes.

I do not start editing this programme until the beginning of October. I suspect it will be in "fine-cut", i.e. down to its rough transmission length, by mid-December. That length is still a matter for speculation. However, my guess is 2½ to 3 hours.

In the final version I hope to follow the pattern of the weekend, in other words not to use any speech out of context. Naturally on occasion it will be necessary to summarize how an argument developed, and also to give the audience a note of time and place. Nevertheless, it is still my intention to allow the audience to follow an argument even if it wanders.

Without the accompanying benefit of seeing the pictures, which reflect very well the relaxed atmosphere of the weekend, the transcripts are a little alarming in at least two respects - their length and the serendipitous nature of the syntax in some parts. I must emphasize, though, that they contain excellent material. When we are down to a "rough cut" stage, say 3½ to 4 hours, I propose to send a further transcript. This, one hopes, will be divested of most of the dross and be easier to digest.

Once again, my sincere thanks for your contribution.

(Adrian Malone)
Editor
"The Age of Uncertainty"

Secretary Henry Kissinger,
through Robert L. Funseth,
S-PRS,
Department of State,
Washington, D.C. 20520,
U.S.A.

"THE AGE OF UNCERTAINTY"

IDENT LETTERS FOR VERMONT WEEKEND GUESTS

A The Honourable Mom Rachawonse Kukrit Pramoj of Thailand.

B The Right Honourable Edward Heath, MP.

C The Right Honourable Shirley Williams,
Secretary of State, Department of Prices and Consumer
Protection.

D Mr. Jack Jones,
General Secretary, Transport and General Workers Union.

E Professor Ralph Dahrendorf,
Director, The London School of Economics.

F Dr. Hans Selye,
University of Montreal.

G Mrs. Katharine Graham,
"The Washington Post".

H Mr. Thomas Winship,
Editor, "The Boston Globe".

I Dr. Gyorgy Arbatov,
Institute of U.S. and Canadian Studies,
Academy of Sciences of the U.S.S.R.

J Professor Arthur Schlesinger, Jnr.

K Henry Kissinger

L 'Zee' Persons

THE AGE OF UNCERTAINTY
TAPES ROLL V3A CONTD.
SHOT 52/1

2.

B:
to incomes, to rents, and so on. What is the model
going to be like and if this is the case, well then
let's work it along this basis. Now I think the
interesting thing is that to develop along these lines
is entirely different from what in the past has been
understood as trade union negotiations, and we had a
very interesting - I don't know whether (D) remembers
this - we had a very interesting point when all the
officials having produced the model, they came up with
an answer - well, for this coming year, incomes can stand
an increase for everybody of £2.60 or a percentage
arrangement, and when we discussed this, then the trade
union representative said well, we'll start at £3.40,
and I said where is this likely to end? and they said to
us in discussion, well, it will probably end around
about £3.00 or £3.20. Now that was the normal method
of trade union negotiation, which you start at one point
and you move up and you expect the employer or the
government to move up. If one is trying to do it from
the economic model, saying intellectually now, what will
the economy stand?, let's convince ourselves what is
right in this way, then you come out with a different sort
of answer, and I think that what is important is that
trade union negotiation should really be in a new form
on arguing about the economic model and what it can stand,
and one ought to go to - for example to management, one
ought to go to non-management incomes what is going into
investment in a year. If you want to hold back on one
side and have more investment, well and good. Then you
stand a chance of getting a voluntary arrangement which
is based on an understanding of what the possibilities
are.

C:

... a couple of questions about that. They seem to be
large questions. One is that, as I understand it, both
the Swedes and the Dutch have an even more formalised
arrangement than this over past years in which the allied
for example the Swedish trade unions have set down with
the Government and even argued about the amount that was
to be shared out before they even came to what the share
was, and then within their own share, where it went within
the unions and the Dutch so-called house of labour
system was a bit similar to that. Now in both cases ...
a crisis has been reached quite recently, actually, about
whether the circumstances should alter the basic
divisions. In other words, you look at the model, the
economic model makes some assumptions about the way it's
to be divided between investments, labour, management
incomes and so on, and there comes a point after some
years of operating such a policy where one side or the
other - it may be the union side - it could be in
Britain today the management side - wants to question its
share, what to ask whether this is any longer
representing what would be right in terms of the

THE AGE OF UNCERTAINTY
TAKE ROLL V3A
SHOT 52/1 CONTD.

3.

C: changing circumstances of the economy. The other - and I'd like to, as it were, put that question to the three of you, because in a way I think it's quite crucial whether you can run such a policy from more than a limited period - whether you don't almost automatically then have a break in which the shares themselves open up again and then you can resume, if I can put it that way - but the second question, and to me this is the absolutely central one, and I don't know how one resolves it, is that where in a democratic society you've got a real difference of opinion, as I think we probably have in Britain and probably there also is in the United States, between what the proper shares are, then the problem about this mechanism is how it handles that without itself taking over from the process of argument between the parties, and therefore while I share what John Kenneth Galbraith was saying in his television series about the need for guide lines on incomes, I'd like to have it taken one stage further and ask how long you can run that side by side with a genuine debate where the parties don't share the same view on what the discrepancies ought to be between different sections of society.

JKG: The nasty problem of whether you can avoid accepting as your standard of judgement, justice, what has existed in the past, what the existing distribution of income, rather than something that ...

C: And the differentials too, of course.

B: You know, I think (C)'s question is a very important one and it does get to the heart of the matter. In general, I would say this of any system - any system is liable to have a break or can be broken. The question is where do you put your effort in order to try to prevent a break? If you take an ordinary so-called pre-wage negotiation system, that can have a break by one group forcing the issue so that in fact you get inflationary pressures which finally break through, so that I don't regard that as an over-ruling consideration. One has to face the fact that with any system there can be a break but then surely you come to my original point about understanding and the consequences of it. Now if we go on with discussions which don't allow for sufficient differentials to get people trained in the skills required in the engineering industry, for example, then we just find that we can't meet demands for engineering equipment, and our economy gradually

THE AGE OF UNCERTAINTY
TATE ROLL V3A
SHOT 52/1 CONTD.

4.

B: grinds to a standstill. And it's - the real point is how soon do people realise this in their discussions, say with management? We require much more understanding in our country today, in my view, that management does have to have much higher salaries because they compare so badly with management anywhere else. Well, the consequences of that are that young men with skills and ability will just go off and manage things in Australia or Canada or Germany or Sweden, or wherever it may be, and if we are going to prevent that, well then, in the discussions there has to be an acknowledgement that management has got to get its due rewards.

D: Yes (B) but you see who's to decide what management is worth? Who is to decide what a particular grade of skill is worth? How do you equate the man who is working hard some - the job that requires a lot of effort, with the man who is not working so hard but is highly skillful? This can only be done by negotiation in the individual company, in the individual plant. You can't decide it in talks that government and top trade union level over the whole sort of macro situation ... Certainly for a time you can get understanding, as we have done in the last couple of years, and I think we were moving towards discussions when you were the Prime Minister, but the special situations, how to meet a crisis, and certainly from the British trade union point of view must be related to socially just measures. For example, what we call the social contract, elements were discussed also with you, the question of higher pensions, of looking after school leavers, keeping housing rent costs down and house building programme, these sort of things. If people can see that, they will stand an element of sacrifice for a period, but it's quite erroneous in my view to think that you can solve all these matters tightly in a private enterprise society or a mixed economy by something that you agree ... for a prolonged period at the top. I don't think it works ...

JKG: ... that modern collective bargaining is increasingly between the unions and the government and the unions and the state, rather than between the unions and the employers.

D: No, no, I think there are times when there must be some element of collective bargaining with government. The unions must be in a position to make representations to government and the government might seek the support of trade unions by giving some concessions, for example with pensions and the like.

THE AGE OF UNCERTAINTY
TAPE ROLL V3A
SHOT 52/1 CONTD.

5.

JKG: I get the impression in this country ... may be slightly wrong - putting it in slightly exaggerated terms - then when a real collective bargaining confrontation comes up, in the automobile industry, or the steel industry, or the textile industry, or whatever, that in the end there's some ... conventional exchange of insults and absurdities but in the end the employers meet more or less the union claims, after some scaling down - and the complaint now invariably comes from the government and the public, which suggests to me here that the real issue here as well as in Britain is as between the trade union movement and the state. The trade union movement and the model of the economy that (B) was mentioning, rather than as any longer or appreciably as between the trade unions and the employers. I'm exaggerating but I'm trying to identify ....

D: You've got the line between collective bargaining between top trade union leaders and top companies, or even in the case of (INAUDIBLE) union governments and the application of the wages which are paid, and the share which is given to efficiency, to the breakdown of the point of operation, so that in many cases, even in the so-called best systems, there's got to be some extra reward for the extra effort. There's very few towns in the country who are going to have to pay their refuse collector rather more because it's an obnoxious job - and frankly the same thing with management. You know, it's no good saying ....

SHOT 53/1

D: To test the abilities of management, you must apply the same standards of job evaluation and efficiency to management as the most modern firm would want to apply with its work force. And the unions who are prepared to play that game, and I speak for one that is, must be prepared and must be allowed to negotiate at the local level. They've got to negotiate incentive schemes and so on because then we are talking about unit values of production, unit costs rather than ....

C: .... if you go back to - I mean if you go back to the two levels, the one at which the unions discuss with the government very broadly what the economy can stand and then the Unions discuss with the companies, you know, what each company should give within that broad framework. Can I go back to the first one for a minute. How much can you build into - and this seems to be the question that we've all got to answer in the next couple of years - not a very easy one to answer - how

THE AGE OF UNCERTAINTY
TAKE ROLE V3A
SHOT 53/1 CONTD.

6.

C: much can you create a framework in which you can bring back quite a lot of free collective bargaining, but do it in a way that still recognises the constraints on the economy, especially economy like ours. In other words, how does one move towards a guide-line system instead of a very tight system, such as we have at the present time?

D: ... in say Sweden - you mentioned Sweden before as it's a smaller country but the employers' organisation is stronger, more centralised, more representative of its member firms, and I think the unions also have accepted a degree of central direction, central guidance rather than direction. In Britain it's more fragmented. If you could get more representative institutions on both sides - and I would argue in the T.U.C. we've gone a long way in that direction - I think the C.B.I. - that's the British employers' confederation - is improving, then it may be possible to get broad guide lines, guidance issued generally to the trade unions and the employers, with an emphasis on productivity and efficiency, but not trying to dictate too tightly because then you get a counter-productive situation. Instead of getting efficiency, you get people holding back and being quite satisfied they are going to get an increase every year. And I think, frankly, this is the danger in the United States. It could be counter-productive, what is happening now, and then eventually it will have to deal with incentive schemes and the like rather more than they have done. I think this is happening in Sweden.

E: I agree with (D) absolutely that you want to have the utmost flexibility in dealing with individual situations. What I was arguing for is the working out of these individual arrangements within the overall framework, so that people can see the ... what the economy will stand. If we come down to individual firms in the United States, I remember when I was out there in 1951 General Motors had just worked out their first scheme, and later on it was followed by Fords - you remember we discussed it once at No. 10 - and they did a projection as to what the total production of General Motors had been throughout their history, how it had increased each year, and they said well, we shall get dips and we shall get rises, but over a three year period we shall take it that the line is going to be straight and this is the proportion which is going to management, this is the proportion which is going to capital, this is the proportion which is going to workers and, the end of the three year period, then we do the whole thing. Now, broadly speaking, that has worked.

DUE AGE OF UNCERTAINTY
TARE ROLL V3A
SHOT 53/1 CONTD.

7.

JKG: That's the framework which -

B: That's the framework within which then they operate and that's what I would like to see. But of course you do come up against particular problems and (D) says well, you have to negotiate as to what people are worth and so on. This overlooks one of the main problems which is, so to speak, the imitative performance of different groups in industrial society, and their positions in the league table. Now this at home is absolutely crucial for us because in '72 and again in '74 we had a position in which the miners believed they had lost their position in the league table - from the top where they always ought to be - and as soon as they move, then of course other people say well, we've gone down the league table but we must regain our position - and this really, I think, is a major problem in the sort of negotiations that (D) is talking ....

D: Yes, well, the point I was trying to make was, if you take the miners as an example - and I wouldn't want to interfere with their approaches - but supposing they decided on a productivity scheme pit by pit or nationally for that matter you could have earnings rise well to the top of the league table .. but it might very well be good for society, that could, that must be negotiated as between the pit unions, the coal mining unions and the Coal Board. It's something ....

JKG: Let's get back to a problem that we mentioned earlier which - I had a measure of agreement from you that this also could be an extraordinary way of perpetuating injustice. I remember, like all economists who were reared on Alfred Marshall as you were, that we were instructed that one of the great anomalies of modern industrial life was that those who did the worst jobs got the worst pay, and those who had the nicest jobs, those of us who have the nice jobs, get the best pay -

C: .... actually.

JKG: And the case that he used was in the British language dustbin workers and in our language the garbage workers, garbage collectors - well, I was out in San Francisco the other day - a month or two ago - garbage collectors were on strike for a pay scale above that of some of the other civic workers, on the grounds that they had nastier work and I'm - I couldn't help thinking that old Alfred Marshall, the sainted figure of my past, would have been there applauding, but this would be very much in contrast with the old -

THE AGE OF UNCERTAINTY
tape roll V3A
SHOT NO. 53/1 CONTD

8.

D: Not in contrast with what I'm saying. I'm saying precisely that.

JKG: - notion of the old lead relation, old lead following relationship, isn't it?

D: Well, no. I think that there's got to be some element of job evaluation in anything we seek to do. In other words, you've got to look at the whole job, if it's obnoxious. You want some recognition for that as against perhaps skill on the other hand. If it's both skilful and obnoxious then you put him well to the top of the table.

JKG: College professors come right down to the bottom then because ...

D: Seriously, I think we have reached a situation where we've got to revalue the situation, say as between the college professor and the longshoreman and the miner, partly because there is a hell of a lot of compensation built into the professional job. With respect to the professor, I mean he does have security, he does have better pension opportunities, better holidays and so on, and we've got to allow the working man, the manual worker, to catch up a lot with these security elements. This is what - why I've said before, you've got to have regard - I use the word social contract - word social contract - but I mean the social wage comes into this approach very much indeed. And you can gain a lot of support from working people if they see equity developing from government in terms of old age pensions, and looking after the sick and caring for the underprivileged and so on. You can gain a lot of support on that ...

(ALL TALK TOGETHER)

JKG: We've got a Soviet colleague here, (I). How do you decide - how do you decide in this complex society of yours who gets most and who gets less?

C: Principal difference between one person's pay and another person's pay.

THE AGE OF UNCERTAINTY
TAPE ROLL 3VA
SHOT 53/1 CONTD.

9.

I: I would begin with the notion that you know it's very pleasing for a Marxist's heart to listen to different sorts of representatives of capitalist society out discussing their problems which actually we have mainly solved. And I think, well, unemployment and inflation and for me and my colleagues it would be a new demonstration of the eternal truth found in ..... this major contradiction between socialisation of production and private ownership. I think it cannot be done. Well, it is part of a patient process which capitalist society has learnt to use rather cleverly sometimes, but it doesn't give the final solution of the problem.

JKG: ... after all didn't lay down any firm laws, (I), on wage differentials, so you've had to go on your own. Now how did you decide that?

I: But it is decided together with major, major economic problems of the country, and this I think, in my personal view, is the main difference because this part of the plan - of the general plan - which is very complicated and I won't say that we are perfect at it. We are trying to improve this year the process of planning etc., but when you have a different framework here - when you try to ....

THE AGE OF UNCERTAINTY
TAPE ROLL VA4
SHOT 54/1

1.

I: ... so my main major point is, although many forces work at the bottom, when you have them, this is the difference maybe - a place where it can be reconsidered and planned in the framework of national goals, priorities, and also the evaluation of how just the demands are. Comparisons of this, of course, create stress also on social sides of it. Because for many republics, for instance, the small republics in the north, actually we pay much more maybe for what they produce, much more than would be economical, but we consider it to be important just to support their development, their culture etc., Maybe it is not possible for a small country, but a big country can -

JKG: ... would it be right in thinking that as a broad goal the Soviet Union still seeks the minimum in wage and income differentials, consistent with incentives, consistent with getting people to live in hospitable places, consistent with regional development, consistent with need?

I: Well, yes and no. Yes in the sense that we really are trying to bring up to the middle level the wages of those who were on the lower income brackets, but inside of the groups we put much more stress on incentives, on assessing the quality of the work of the people so they - there can't be even more differences inside groups. But it doesn't - the Soviet has a social problem on the egalitarian basis, I would say, as a social - it goes to broad social stratas, but on individual basis we put greater weight on incentive and evaluation, of quality and quantity of work which was done by ...

C: Can I ask a couple of questions ... I seem to be the question master round here.

(ALL TALK TOGETHER)

JKG: The main idea of these sessions was to avoid excessive discussion by JKG. Nobody is turning to me for permission.

C: Well, I really wanted to ask, to question really on was about - one is a very straightforward question which is about whether the characteristic of the Soviet economy for many years was a rather marked differential between the rural worker and the urban worker, the industrial worker and the farm worker, and I was going to ask you whether that gap has narrowed recently and ....

THE AGE OF UNCERTAINTY
TAPE ROLL VA4
SHOT 54/1 CONTD.

2.

I: Yes, yes, yes, you request that I answer yes ....
I think in last five year plan where the difference was
around thirty or forty per cent in the rise ....

C: Ah, you mean it was more for the lower worker?

I: Yes, more for the rural worker, and the last ten years,
they, they brought in a remarkable improvement in the
conditions of rural workers ....

C: And they are much closer to the industrial worker now.

I: .... Much closer if you take into account everything.
In some regions it is also you know different in our
country, but in well developed agricultural regions -
regions they are better off than the average population ...

C: Now the other question was more far reaching because, I
may be wrong, but I have the impression that some of the
problems that the Soviet economy faces and the some that
we face are not as different as all that, and I'll give
you an example of what I mean. I think one of the
problems that we face in wages policies is, Jack will tell
me that I'm wrong, if I'm wrong, but where you have a long
established skill that has become, that is beginning to
become obsolete like the skill of the boiler maker, and
you have a new skill which has emerged recently like the
skill of the electronic engineer, it's very difficult to
tackle the differential of the old obsolete skill, because
there is an assumption that that man is a skilled man, he's
had a long training and he ought, therefore, to be paid
better, even though his skill is no longer needed. Now
it seems to me that there was a parallel in the case of
one of the eastern European economies recently, which
was Poland where there had been a long assumption that
food prices could remain at a quite exceptionally low
level, and when the Poles came, understandably to adjust
this because there were circumstances which had led to
substantial increases in food prices, they found that very
difficult to do. There was a sharp public reaction, so
that really what I am asking is, isn't it true of both
our sets of economies, that if you have a wages and prices
policy, the public becomes used to certain assumptions
that things won't change and when they do change, there
are very considerable problems whatever sort of society
we happen to live in, and I'd like to put that to you,
because it seems ....

I: Well, of course, there are problems. There are problems
in all societies, but here it depends much more on the

3.

quality of your planning, on your social planning and
professional planning, etc. If you see that something
happens, some discrepancies between old and new professions
it can be introduced into your plans. Until the people
are accustomed to somethings which they don't deserve, you
have also to consider it as a social problem, not only
economic problem. The people, it's very difficult for any
country to put, to downgrade the standard of living of
certain group of hard working people, so this is one of
the things which society must care upon, and - I don't know
the details how it's done in my country, I'm not too deep
involved in it but I would say that in general we do it,
you know, you have to pay for everything and - this is so,
we look to some (INAUDIBLE) bad managers, and sometimes
we manage not very good. We are learning to do it better
but I think many of the things which look not very favourable
in our economy is the pay which we have to bring in for
absence of unemployment, for the payments we give for
social needs, for many other things, and so, well this is
one of the most complicated things maybe of the various,
you know, it's not only in economy, if you can value freedom
very much, but you have to make a choice, either you want
to be so permissive and to let forty million pistols
circulate around the country, or you do want to walk
safely in your streets and I think yet without payment
on human life and human societies.

JKG: There are forms of permissiveness with which we don't necessarily agree, I'm not in favour of those pistols either as a part of liberty. I take it that there's no great support for it in Britain either.

B: No, none at all. Well, it's coming back again I think to the point we were discussing just now that you do want to have the utmost ability for people to negotiate freely amongst themselves and to make adjustments of this kind. What you really come up against are the inbuilt powers of one sort and another, which have developed historically and people's attitudes as to how situations ought to continue. I would have thought that if one is looking ahead, which we want to do, on the particular point that Shirley was mentioning for example, we ought to be having an entirely different form of training system today and instead of people having very specialised crafts, they ought to have a much more widespread and general approach and then as industry changes and techniques change and so on, they can move from one industry to another because they've got a basic approach in their training and this of course, then leads to changes in trade union organisation, really I think, because you no longer have a small specialised craft union, you have a union which covers a much wider

THE AGE OF UNCERTAINTY
TAPE ROLL VA4
SHOT 56/1

5.

JKG: Enquire into the whole structure of incomes and prices are the things that Keynes hoped to be able to leave untouched, and that they, that once we've accepted that, then we find the implications for the labour market, for training, for incentives, for an enormous range of questions have to be examined again. One of the sad, mally one of the sad things is that, my profession, economists, are still so deeply in love with the - have such a vested interest in the old system that they at least are doing very little work to accommodate to this. The real discussion is going on between politicians and trade unions.

D: Yes, you see this whole question of training relates quite sharply to the question of unemployment. The trades go out, become obsolete or firms are no longer producing in a given industry or are reducing the labour force for technological reasons, you ... (INAUDIBLE) ... a lot of people who are then not able to get other jobs because their skills are limited, and even worse, the problem of the school leavers, the youngsters who are without a job and without training. This can be the cause of a lot of vandalism and civil disturbance, but quite apart from that, it seems to me, our society, certainly must devote a lot of time to building in what Ted was talking about, a general appreciation of basic trades, probably before kids leave their secondary modern school, our first state schools, I don't know what the technical term is ....

JKG: ... can anything be done on a point that was implicit in what 'B' just said to make the training, also give it a much broader spectrum so that you don't commit people as in the past to trades that will become obsolete but commit them to the possibility of a much wider range of adaptivity as this was ....

D: But frankly if you start with elementary engineering and electrical skills, the basic training for that leads into most of, most of the skills required in the modern world ...

C: But if we did have that, I mean the engineering training board, I think it was actually originally under the previous Labour government and then was taken on with your administration, did have this basic foundation ... a very good idea.

D: A very good idea, but it doesn't work ....

C: It doesn't work because it then led on insufficiently well for a flexible system but it seems to me that there are two things that flow from what's been said. One is that one has to have an absolute acceptance of lifelong training and the sooner we get the concept of the sabbatical year for every man and woman, whether they're academics or not,

THE AGE OF UNCERTAINTY
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6.

the better because we don't really have yet anything like
an adequate degree of skilling and change of skills.
Once somebody has finished their formal education or
training, at least certainly we don't in Britain, and
I think this is something we have to change a great deal
in respect of but ....

D: .... what would you say to the idea that everybody,
virtually every employed person should be required to
work say at a manual job in a factory, or in the docks or
somewhere where they need to apply, as it were, basic
trade, basic say training which they may have learned at
school as part of the discipline and the approach to life
because it seems to me that we do suffer from, on the one
side unduly academic people who prefer to tell people
like me what we should do, without perhaps a knowledge of
what it means in terms of practical work out.

C: I've thought for a long time that one of the things we ought
to do is to have a requirement that anybody who takes a
university grant must have worked in an approved form
of employment for at least a year. In other words what
I think we're doing is taking far too many kids straight
from school into university without any wider experience
of life at all, and very often as a result, dropping out
after the first year because they're fed up with what they
are doing and I would actually myself want to see
university grants depend upon somebody working for ....
.... either further skills or other things they want to
study so that lives widen out so people really have an
opportunity to ....

(ALL TALK TOGETHER)

I: You know we have a lot of experience in this field maybe
you should study it.

C: Well, I have a little, but carry on.

I: You have a little.

C: Yes.

I: Well you know, we, it's not so easy to get the competition
is very serious to enter a university in the Soviet Union,
so the people who work for two or three years as workers,
have special privileges, and a year and they even are
supported materially to prepare themselves for the entrance
examination and also privileged to .... have privileges
to get into university. Then millions of people are
actually having their education in the evening while working
for the factories. And at some big plants you have simply

7.

an affiliation of institute, of university like Moscow ... (INAUDIBLE) ... and many others where they get diplomas while they are working and this has become, well I have forgotten the exact numbers, but it gets into millions of students who are ... (INAUDIBLE) ... workers ... (INAUDIBLE) ... and of course, they prepare training courses. I witnessed it in my constituency near ... (INAUDIBLE) ... and they decided to build a big plant for air conditioners and while they never need such things, they were in heavy industries for oil refineries and for oil - this is the only thing the working class in ... (INAUDIBLE) ... did know, and they selected a very big group who studied for maybe a year and a half in some factories in Soviet Union and in Japan in some other places and now they have a very modern factory with very good trained labour force there.

JKG: I must say I'm usually in sympathy with my socialist colleague in a great many matters. Here I - old fashioned liberalism intervenes - I feel uneasy about doing this at least on any highly organised basis. I have - I have a deep personal conviction in this. I was born and brought up on a Canadian farm and I've regarded my whole life as being an escape from manual labour and I would hate to think that I would at any juncture been under some obligation to return to the tedium that I have admittedly and bare-facedly tried to escape from.

C: That's your personality you see ....

I: That is different, Professor, you know if you haven't, you want to go to university, you haven't passed the exams, then you go to work, but you have this hope, you work for two or three years, then you have one year preparatory courses and then you can go, you have another chance ....

(ALL TALK TOGETHER)

I: ... not a pressure on you to do so, but ....

JKG: I still disagree. I think the ennobling effect of tedious manual toil is greatly exaggerated and I'm prepared to go through that, both for myself and my children to avoid that ennoblement.

C: No, no. I'm going to jump up and down. I don't think - I don't think it's ennobling. I think that not having ever experienced it means that you don't understand the problems of a very large part of society, and I, the reason why I think it's important to link the grant to it, I wouldn't stop people paying their own way, but if you're going to give people a grant to go to university I think

8.

it's a perfectly fair condition to say that they ought to
have spent some time in the world outside the straight
academic world because the sequence of school/teacher
training college/school, which is very very common in
all our countries, I think is a wholly bad sequence, I
don't think people know what they are teaching.

JKG: We see the enormous influence of China both on the Soviet Union and on England. Do you think it's possible to stop it here?

(LAUGHTER)

B: I agree with you, I haven't got a very great sympathy for this one - after all a lot of people who, going to university are then going on into industry afterwards, at least I hope more and more of them are, but one of the problems is they don't. But I don't really believe that that number is going to be increased by taking them for a year after school, putting them on some job on the shop floor and then saying you can go to university. But looking at it from the other side, what interests me really is this, that what Kenneth is saying is, that from his point of view at any rate, if you're working on a shop floor on a production line, it's a very dull boring business and it's got no ennobling effect. Now surely this goes to the root of our industrial society today. If it is a dull boring business, and I don't really think it requires very much imagination from the outside to see that that is so, then what in fact do you do about it, because to be doing that for eight hours a day, five days a week, year after year and know that it is going on for the rest of your life and that in all probability you'll have reached the top of the acknowledged wage scale, probably by the time you're, what, 25, 28, something like that.

D: Oh, earlier ....

B: Earlier, and therefore for the rest of your life you're on that spot in that groove. That really is the cause of the frustration surely in modern industrial society and what do you do about it and how do you tackle it, and I think all too little has really been done on this aspect of it. Now there are various things which ammeliorate it. You can have very good sports facilities, canteen facilities and so on, and certainly at hom in Britain, we've got one firm I know of which has done a very great deal because it's a very simple process of biscuit making and what they've done there is not only to have their own recording studio for radio and put on the ....

.... (LAUGHTER) ....

9.

B: ... yes, but they've also got to the stage now where they say well, if a process is so automatic that it doesn't really require any mental attention, you can look after that process and put your mind elsewhere. Now you say alright, well the girls put their minds where the boyfriends are and the boyfriends do the reverse but if some of them want to learn Italian, then they can do it by having a cassette in their pocket and it's plugged in their ear, while they're just automatically watching this process, their mind is concentrating on doing something else. I mean that's just one attempt which is being made in a factory but the real basic problem remains that what you describe as a far from ennobling and very boring business is what by far the greater part of the world's industrial population has to do day after day for the whole of their lives.

D: Well the factory owners can do quite a bit about that with the trade unions and of course, some experiments have taken place, some changes have taken place as you well know. But if you add to that repetitious boring job, living in the concrete jungle of the high-rise flats, the whole world becomes bored for twenty four hours a day almost and therefore society must tackle the environmental problems ... If people have got to work in obnoxious or difficult or repetitious jobs, at least the leisure periods should be provided for more adequately and the living conditions should be much better than they are. And I'm certain much more work in that would be as productive eventually in government policies when it comes to asking the population to accept some sacrifice - as anything. It's vital to do work on that. But coming back to this other business, whether you agree or disagree about the idea of people who have much higher education, the majority working for a period, working manually for a period I'm gathering that we all accepted the view that the elementary schooling period should include the teaching of basic skills, of basic trade training to provide for basic trade training which in itself will excite people to perhaps want to either work in a factory or at least do some mechanical repairing of the motor car and this sort of thing, which ultimately will assist us when we, when populations have to move from one job to another. When, when technological change - that people must look for some new opportunity if they've got a basic appreciation of what another, an alternative ....

ENDS

The Age of Uncertainty"

Tape VA5

Shot 59
Take 1

JKG

To do these jobs, as I have suggested in
these programmes because, bad as they are,
they are better than what they did before.
This, to quite a remarkable extent, is the
solution. The only country which has
rather resisted it is Britain, isn't it?

C

Well, not entirely. I imagine quite a
lot of rubbish disposal operatives tend to
be black, but ....

D

Actually, that's not exactly correct. No,
because we've tried, the trades unions have
tried, to ensure that decent wages should
be paid to refuse collectors and therefore
a black man is working with a white man and
he gets the same wage.

C

Well in my area they are but that's perhaps
because nobody wants the job honestly, Jack,
and so people ....

B

By 'rubbish disposal operatives' do you
mean dustmen?

(Laughter)

C

There are so many terms like that ....

JKG

It's called materials recycling

(Laughter)

B

But on this particular point, it only
lasts for a certain period, doesn't it?
For each group. The problem we're just
beginning to face in England is that those
who came in in the big period of 1960-63
from the West Indies or from the Indian

sub-continent have children who have just
now passed through the whole of our primary
and secondary educational system and many
of them will be going to university and
technical colleges and so on. Well,
those people have had exactly the same
education, those children, as British
children, and they are themselves British.

JKG

If I may interrupt there, Ted. Somebody told me a stunning statistic the other day - that the proportion of the children of Indian families going to university is rather substantially higher than the proportion of children of English families. Is that true?

B I think it is, yes. So they ....

C If you count polytechnics as well, it's almost certainly true.

B

They expect to have just as good opportunities as those who aren't coloured and so then you've moved out of your preliminary sphere. They came and were prepared to do menial jobs, you might say, but that's no longer the case.

C

It works for the Swiss, of course, because they've got this very tough system, haven't they? - where you have a contract. You don't bring your family and at the end of the contract you either get the contract renewed in the same job or you don't get it renewed. It's partly because we've had a settlement migration and not just a contract migration

D

A guest worker is by and large a person without rights ...

- 2 -

C And without family in many cases.

D He comes without family - and by and large
is not there long enough to participate in
the social ......

JKG It happens in Germany too, where they
regulate the inflow and outflow.

B And quite deliberately so - on that basis.

D But you said it's a solution - I wouldn't
have thought that's a very good solution
at all. What we meant is to encourage ....

JKG I used the word 'solution' very loosely,
and somewhat ironically.

C But then what do we do, because, if you take
the British case, the one area where we're
heavily dependent upon people from overseas
is the area of ordinary jobs in mental
hospitals. I mean, if you go into a mental
hospital, the number of Mauritian nurses or
ward-maids and so on, is overwhelmingly
great. Now, I don't think there are going
to be enough Indians, or West Indians, or
British who went through our educational
system who will do those jobs and yet they
are crucial to the welfare state, just as
being a dustman is crucial to the city.
And, if we're not going to solve it in this
highly undesirable way of living off the
wretched of the earth, we've got to find
some other solution. It may be what Jack's
saying - it may be the only solution will
be that you have to pay them very much
higher than the past understanding was.
It may be that, as (I) was saying, that you
have got to try and mechanize a lot of it,
but when you get down to the personal service
level, which people don't want to do, of
looking after the old and the mentally ill,
then you have a real problem and I simply

- 3 -

others, to raise the prestige of the
profession, to explain. It helps partially,
it's not the whole answer, but it helps
also that it is not despised, that it's
really a great service to society.

A We have a problem.

(More than one speaker.)

A There is a drain on our medical service from the United States. There are thousands and thousands of Thai nurses all round the country, in this country, and doctors, for the simple reason that they get better paid, they get better incomes here. And listening to you talk just now, there is another problem, which I don't seem to see in the immediate solution. We Thais seem to belong to a country of Galbraiths - that is to say there are lots and lots of farmers. In fact, almost everyone in the farming community, which is the majority of the people in our country, are getting fed up with the ignobling effect of manual labour.

(Laughter)

A And they try to send their children to university so that they can get better jobs or rather, not such ignobling jobs - white-collar workers, government workers - the problem is we haven't got an adequate supply of universities to educate them. We are developing industrially and the question of who is going to decide, by what means we can decide what sort of worker is going to get what sort of wages is there. But I do tend to agree with (D) that it should be a subject of individual agreement between the employers and the trades unions and under a broad outline of government policy. There again, our trades unions are

- 5 -

developing very fast. They are becoming
very articulate, although they are still,
compared to your standard, they are still
very green, very raw, but we have great
hopes that they will represent the workers
as a whole and protect the benefits of the
worker in the end. But it is very
difficult to decide - the Government has
a law deciding on the income of government
workers and fortunately, or unfortunately
I wouldn't know, even in our country college
professors are in government service because
all universities belong to the government
and there they have laws in which, when the
cost of living reaches a certain standard
......

Shot 60
Take 1

A

...... all these government workers,
government officials will be altered to
another list. Whether that would work out
or not, I wouldn't know, but that seems to
be the system. But, as far as the private
sector is concerned, they get much better
salaries than the government workers -
because the government has industrial
enterprises too. The people in the
government industrial enterprises have to
compete with the private sector as regards
wages for their workers. And people who
work in the government enterprises, state
enterprises, get higher wages than just
mere office workers in government departments.
And there is a great deal of confusion
and so there is a problem there, what to
do. And another thing is that most of
our industrial development depends on
foreign investment and when wages go up,
that's the end of foreign investment. People
just pack up and go. The reason why they
come to our country at all is because we
have cheap labour. But during the past
three years, wages have gone up, through
the efforts of trades unions and the
government working together. And, with
the result that foreign investors are
discouraged, they don't come here as much
as they used to and the investors who are

already there are just closing jobs. Now
we have unemployment.

JKG What's the worse problem - the wage increases or the problem of developing labour discipline?

A I would say the wage problem, I wouldn't say the labour discipline. When I was in government I had great dealings with labour leaders and labour unions. They realise the implications of never-ending wage rises. They realise that the resulting inflation would be no good for the country or for anybody. But the problem is there, you see - in individual arguments between labour and employers, because the employers do not have the patriotic ideals at heart - they are foreigners. They can just pack up and go at any moment.

B Let us come back now, then, to the real point of all of this. Why are we discussing things like incomes policies with which Kenneth started off. The real reason is that for the last thirty years we have been battling against inflation. Now, in the thirties, in which I was brought up economically, so to speak, the real battle was against unemployment and economic thinking, Keynes in particular, developed along lines to try to deal with unemployment. In the post-war world, until this recession, the Western world, the problem hasn't been unemployment, it's been inflation and the deterioration of the value of money. And all the implications of that - for savings, for social stress within the community and now finally in the Western industrialised world, for investment. So that's really why we're talking about all of this. If the ordinary mechanisms were able to work without inflation being caused and unemployment being caused, then we wouldn't be sitting here discussing whether governments ought to play some role in this or not.

- 7 -

- 8 -

Because in my experience, the last thing a government wants to get mixed up with is trying to have anything to do with incomes, either overall or in general, or with prices. I think Shirley would probably agree with that. You get into a very complicated system in which Cabinets aren't really qualified to deal with them. It takes up an enormous amount of time. You have to have an increased bureaucracy. It irritates everybody. And so on. So you come back to the point - well then are there mechanisms which are just not functioning? And I think the basic thing is that the ultimate consequence of inflation is that you do lose jobs and that you get out-of-date equipment because you haven't got the money for the investment and that means you lose still more jobs because you can't compete.

JKG

But, surely, we come back to this problem as always as the least of evils. We come back to it only because the alternative is unemployment, or inflation, or the disenchanting combination of the two which has been increasing. But you're not suggesting that there is any way one can avoid these controls and still have full employment and stable prices, are you?

B

No, I'm not. I think my basic position remains what I said - that if one can get it by people meeting together, understanding the situation and then going off and negotiating it themselves, well and good. The former Prime Minister was saying that employers and unions get together. When that happens on the upward movement of the trade cycle, what happens? It suits them both to settle, even though it means that prices go up still further, because they believe they're on a market in which they can still sell. And so the person who suffers is the consumer, and that's where a government comes in, because all the pressure on a government comes from the consumers,

- 8 -

C

Can I pick up one thing that lies behind, I think, what Ted was saying and what Jack was saying and that is that I think what we are looking at really in the Western world is the gradual constraining and finally narrowing down of competition to the point where we can't talk any more about living with competitive markets because we haven't got them. On the employment side, this was brought home to me very sharply years ago when I remember going to West Virginia, and hearing John L. Lewis say that he was going to double miners' wages and when it was pointed out that this would mean that something like two-thirds of the miners in West Virginia would lose their jobs, he said so be it, and they did. And the Appalachians have been a distressed area ever since. Now, his union power - I think it would happen differently in Britain because the concern with employment is different - but his straight union power held the wages in the face of a situation in which Marshall would have said that the wages would have come down to absorb the unemployed and it didn't work that way.

JKG

You're saying that John L. wasn't bothered by any problems with democracy.

C

Well, no - he wasn't bothered by the problems - he didn't react as a competitive chap would have done. Now, if you look at the prices, companies side, the number of competitive markets is much more than it's meant to be according to all the Marshallian theories, and one is looking, as you said in your script actually, at people who are able to establish prices sometimes in a non-competitive market. They are able to establish oligopolistic prices or captive-market prices or dominated prices, which is a hundred miles away from the situation of, say, fifteen food retailers fighting in a High Street, who really do still have competition. So I don't see how, in a situation in which the instruments that depended upon competition

- 10 -

can't operate any more and that leads me
to the next point that I want to make,
which is that if the instruments that
determine competition don't operate any more,
because of the power of companies and the
power in some respects of trades unions, so
that you're looking at a different structure
of society than we used to have, then I want
to make the point - what does this do also
to the structure of democracy, because I
think it's probably done something rather
profound to it. And in the discussion that
we've been having about agreements between
unions and government and the companies' side
- and we all agree that this is necessary -
one has to ask the question, what happens
to the representatives of the people, who
are called parliament, because they don't
come into this at any point at all? And
you could move towards a most benevolent
corporate state, but it wouldn't be
recognizably what most of us believe by
democracy and so I think there is a further
question, which is where do they step in,
because they, in a sense, are the
representatives of the consumers that Ted
was talking about. If by consumers you
just mean the great mass of people in their
non-professional capacities ......

SHOT 61
Take 1

C

..... The question is how do you get the
wide interest represented in your pricing
policy and in your incomes policy, because
we haven't solved that problem at all, we
haven't even really thought about it.

D

It's a question of how we get participating
democracy in a situation where we claim to
have democracy, but it's very limited in its
operation.

ENDS

"The Age of Uncertainty"

Tape VA6

Shot 62
Take 1

B

...... until the oil crisis, with a very
low rate of price increase and with, what,
one per cent unemployment.

JKG

But that's exactly the point, Ted, and it's
one of the great overlooked points, because
what they did was drawn in the Turks as they
needed them and sent them home when they
didn't. Similarly, the Yugoslavs, and the
French have used Portuguese and the Algerians
as this balancing factor.

B

At the same time, they had to take all the
refugees from East Germany without being able
to control them.

JKG

That's right, but a large part of that - I
was on President Truman's Commission on the
refugees, so this takes me back twenty years -
a large part of that refugee population
didn't go into the labour force. There were
women who had lost their husbands, older
people who were beyond working age, and the
other part went into the labour force, just
like that, because of the labour shortage and at
once the currency revaluation was made and
the economy started going. But I would
think that the German problem, or the Swiss
problem, or the French problem would not be
different from yours or ours if they didn't
have this huge balancing flow of workers.
Well, put it in the most extreme form - if
they weren't able to park their unemployed in
Southern Italy, Spain, Yugoslavia and
Turkey, when they don't want it.

C

The Swedes have done it without that. They
are a remarkable case.

JKG

But the Swedes are also using some foreign
workers.

- 1 -

- 2 -

C Some, but not on the same proportion.

JKG Not on the same scale, quite.

C And they've managed to keep it down to about two per cent pretty consistently. I mean they may be much blessed by God, but it's a rather remarkable record. They do it by a lot of retraining, don't they? I mean they have a much higher level of people in training at any one time than either the States or most of Western Europe, I think.

JKG I suppose the Swedes would really argue that they do it by being Swedes and therefore better than anybody else.

C Sure. That's a thought that one is bound to have.

I Well, what limits actually the number of labour force employed? The usual capitalist mechanisms, not the actual needs of society. In the United States you have a lot of areas in which a lot of labour could be really very usefully employed - in your cities.

JKG I'm sure that's true.

I And environmental problems.

JKG This is a very acute point.

I And very many other fields, but it is not done because, well, money can go on military expenditure, but everybody is very shy to give, even to save the biggest city of your country in a time of difficulties. And I think this is just this discrepancy between the work of traditional, even pre-Keynesian, capitalist mechanisms and the new needs and new problems which the country faces, and you cannot tackle and attack them in the old

- 2 -

- 3 -

ways. You have to introduce some new
mechanisms and otherwise, I think, you will
suffer on both points. You will have
terrible unemployment, together with some
inflation, and at the same time you will
have multiplication of problems which need
investment and need labour.

JKG

Well, as an old student of the United States, I'm sure you don't doubt for a moment that there are a large number of people in the United States who agree that our priorities need to be altered. My only disagreement would be that in inscribing this point to the United States, you don't make a distinction between a very large number of people who have held the view that we need to invest much more heavily in our cities and much less heavily in military effort. But I'm sure you don't suggest that there is no dissenting community on this subject.

I Yes. I think many Americans understand it.

JKG And you dismiss us as being helpless.

I

Well, you know I read recently an article written by Les Aspin about how it goes in Congress. It was a very pessimistic article. How helpless they feel when they confront the Pentagon and how the whole mechanism of Congress, of government, work against them. I notice, of course, the fact that here we have had some remarkable changes in the past years. I think that one of the problems which were faced by MacNamara and Johnson was how not to get more money than they asked for military expenditures. Then, the time has come when this holy cow has begun to be questioned and you had some interesting discussions on A.B.M. and some other points. But somehow up till now, a lot of people in the Soviet Union and, I'm sorry to say in the United States as well, have the feeling that the Pentagon receives everything that it wants to receive.

- 3 -

- 4 -

C
I must say, as an outsider, there's not much to choose between you because you both spend a hell of a lot on arms, including the Soviet Union. I mean, you're both very big arms spenders.

JKG
Well, I take a slightly more eclectic view than you do, Gyorgy. I view this as a common problem of both of our countries - to develop the level of understanding so that, as I say, your military budget doesn't become the case for our warriors, and our warriors and our military expenditure do not become the case for yours. And I would look forward most of all to the day when the problem was put in those terms and we could agree on the measures which would keep this reciprocal increase in arms expenditures from operating as between us.

I
I agree with you I would hope on that but I see consistent efforts here just to derail this process, because it might pose some danger to this unlimited military spending. I don't see it on both sides. I see it here.

JKG
It's not my proposal on this pleasant Saturday morning to open up a cold war between us - but are you suggesting that there is no bureaucratic or military interest in the Soviet Union in arms expenditure? Because this would be really quite extraordinary that one could have organisations devoted to their purposes, devoted to their goals, concerned with the problems in the parochial way organisations see them, and not have any power. This is very hard for us to believe.

I
I won't deny that there can be an inventor who has invented something impossible and who tries to press his opinion that this system must be deployed, developed and deployed. There could be, from some military man and this is understandable for this is their responsibility, when they see something happening on the other side, they pull this

- 4 -

- 5 -

problem before them. But in general, the picture is absolutely different. The first thing - you understand it, of course, very clearly - this is the difference of the highest decision-making bodies of the United States and the Soviet Union. Our Politburo is responsible not only for security. It's responsible for security; it's responsible for industry; for agriculture; and in a very direct way. It has to make the decisions on the investments of different kinds, on labour force and on many things here. So I think when it gets to the upper levels in our government, the pressures are much more balanced. Then the industries. Our industries who serve the defence, they are not such a pressure group as it is here with your military industry and it wouldn't make them any different if they produced instead of tanks, good tractors which are in high demand in the Soviet Union, or instead of periscopes, good eyeglasses and some optical equipment for which there is also a terrible demand; and science and industry in our country, etc. And I don't feel there is no such pressure group out of this portion, you know, so I think it would be absolutely false to put on here on one and the same word - military/industrial complex in the United States and look for something like this in the Soviet Union. Of course, in the Soviet Union there are different opinions and Americans give actually reason to such opinions. You know Schlesinger's doctrine was understood as a doctrine of first strike capability by many militarists in the Soviet Union.

B

If your people take this view, and I must say I've never met a general in any army who didn't want something more and if he could use the argument that the other chap has got it, well then so be it. If, on the other hand, he wants to, he uses the argument that the other chap hasn't got it and so it's a very good reason for him to have it. So he gets it both ways. Every general does this and the result is that, of course, they're always pressing for new equipment and better terms for their forces, and so on. If you

- 5 -

- 6 -

say that yours is better balanced and the
Soviet military leadership doesn't produce
this pressure, then all I can say is they
seem to do extremely well without producing
any pressure. And, in fact, far better than
the United States does with the alleged
pressure from the Pentagon, because the
proportion of National Product which is
being devoted by the Soviet Union to military
forces is increasing faster than it is in
the Western world and faster than the United
States. Now, if you spoke to millions of
Russians, I believe that, given the chance,
they would say oh, we'd far rather have
consumer goods and try and reach the stage
which American capitalism has reached, rather
than go on putting more and more of our
resources into military power which is what
is happening at the moment in the Soviet Union.
And so really I think that the whole of
your thesis is untenable.

I

I would say that if you ask a Soviet
citizen what he would prefer, he would first
mention not to have war, which is very
understandable for a country which has lost
twenty million people. And they would say,
even, that we are ready not to have so many
consumer goods, but please have peace. If
it's considered that the major thing for
peace is to have a very strong defence, and
we were provoked to think in these terms
during the post-war years many times by
Americans, mainly, not only by them but by
them especially. Then they are ready to
take these sacrifices, but just because of
this there is a very strong support of the
detente policy in the Soviet Union because
there is a feeling that in this way we could
have peace and also we could have more
consumer goods and more development of the
country. And you know about the role which
the numbers of our military budget - really
I'm astonished at the methodology - it goes
so that if Americans raise the wages of the
soldiers, let's say ten times, it means the
Soviet Union spends fifteen billion roubles
more on defence. If some company like
Lockheed, which has given bribes to foreign
governments and could do it as well here
inside the country and so multiply the cost
of their weapons, it means the Soviet Union

- 6 -

- 9 -

States with the one aberration of Vietnam,
it's not been an aggressive power historically.
And this should lead to a much better
situation for detente, but what certainly
concerns me at the moment is that I think to
a greater extent than you've allowed for in
your remarks, (I), that there are suspicions
on both sides which the actions of the
other side can legitimately set off. Certainly
sitting in Western Europe, one is bound to
see it a little bit that way. And certainly
since the Berlin business and so on, one has
this feeling of some nervousness. And we
aren't strong on the ground in Western Europe
- Western European countries are not at all
strong on the ground.

I

Well, I would say that you are quite correct
about the suspicions - on both sides. After
we have lived through a Cold War, it cannot
go away, we are overburdened by these
hangovers from the Cold War, by suspicions,
etc. It means only that we have to work
harder to remove these suspicions, not to
take them for granted that they will and have
to exist. And as far as the situation in
Europe is concerned, I understand it very good
but you know I think we really could make
good progress in arms reductions in Europe
and here it's not so important, even the
essence of the first steps, of the principle.
We understood it that both sides were free
to do whatever they wanted, both of them have
built up their defences in different manners.
I think (B) while he was a Prime Minister,
stated once that the West has enough. It
was also said by Schlesinger, because no
government will say that they have not enough
at the moment. But now that the negotiations
have begun, we have to make clear what are
we negotiating about. Not about changing
the balance.

- 9 -

ENDS

"The Age of Uncertainty"

Tape VA7

Shot 64
Take 1

JKG

I was going to say that I was going through
the Harvard community and on the edge of
the scientific community. For many years,
the people who have been engaged in
conversations with (I), and while he's a
stalwart defender of the Soviet view, there
also has never been anydoubt in anybody's
mind that he is one of the men who are
genuinely devoted to getting this horror
under control.

I

Well, I think it also corresponds to the
Soviet view, you know.

JKG

That has been one of the sources of the
many meetings that my colleagues at Harvard,
and on occasion myself, have had with him
over the years. I have just one other
question which I wanted to ask him and that
takes us away from this difficult business
and gets us back to the original subject.
As the Head of the Institute for the United
States and Canada in Moscow, and as well a
very close student of American and Canadian
and British affairs, how would you go about
ending this disagreeable crisis between - this
disagreeable choice between inflation and
depression in the capitalist countries, or
the combination of the two? All I'm asking
is that you translate yourself into a
capitalist, forget your entire Marxist
background, and give your solution to the
problem. It should be a very easy matter.

I

Engels was a capitalist. (LAUGHTER)
But he decided that the way out would be a
socialist revolution.

C

I had a feeling you were going to say that,
you know.

- 1 -

- 2 -

I

That would have to be the final answer. There could be partial measures, of course, and one of them we mentioned, I think - the reduction in military spending would be helpful and, I think, the introduction of some planning on a much broader scale, where you can, if you want, learn something from us, from our achievements, from some of our mistakes as well, would help to neutralise partially this problem. But I think I wouldn't like to be in a position of capitalist in trying to solve these problems in general.

JKG

I think that's a fair note on which to end.

B

It's certainly a very clear note.

(LAUGHTER)

C

We may not leave it there - quite there. For one thing I don't believe we are in any clear sense a capitalist country any more. At least I don't know, Western Europe is capitalist but the British .......

I

But this is also the importance of our experiment - what influence we have. Unemployment - who cares about unemployment? Well, people never made mutiny against thunderstorms or .......

C

I think we are having some influence on you too actually and I really believe that we may both teach one another something, but that's another issue. But I don't believe we're capitalists in the traditional sense anymore.

I

..... or earthquakes, and so when we have done away with unemployment, it has become another issue in the West. And many things which were done and experimented in the Soviet Union and in other socialist countries, I can make a compliment to capitalism that it

- 2 -

- 3 -

is rather adaptable system.

C But let me ask you this ....

I .... otherwise it would not have survived.
Would it exist as it was in the 19th Century?
I'm sure it would not survive up till now.

C I think we're seeing something which lies
beyond what even Karl Marx could have seen,
because he wrote a long time ago, and he
showed great perception. But what's
emerging is that the role of government,
the role of the public sector, is now so
substantial, especially in countries like
France, Italy, the United Kingdom and so
forth, that what we're not looking at any
longer is a classical capitalist economy,
we're looking at what people sometimes call
a mixed economy, and I think the mixed
economy will ......

I We call it state monopoly capitalism.

C No you don't, because it wouldn't be right
to say that.

I We do.

C You're quite wrong about that, because it
doesn't involve state monopolies in a lot of
cases. In the French car industry, there
is direct competition between private and
public. That's true about transport, it's
true about many other areas, so it wouldn't
do to call it state monopoly capitalism,
because that isn't what it is. I think that
what it is is something which is new and
emerging and I would have thought that equally
in the Soviet bloc that one is beginning to
see the problems of living with a much more
complex industrial society, with much more
articulate and unreticent people and my own
belief is that you and we will end up in
twenty or thirty years time in not

- 3 -

- 4

dissimilar places - that we're both going to change, and that we're both going to come out with something that is neither traditional capitalism nor traditional communism, but that's something we can discuss later.

B I think this is one place probably where you and I agree.

I We will change. For sure, we don't consider our society as having achieved the ideal state of affairs. And we call it the transitional period to communism and there will be a lot of changes in coming decades, but the changes will go in different directions I am afraid, in your countries and in ours. This doesn't take away that we can have some similarities - the modern way of production, new technology, etc., produce some problems, like environmental problems - they are dealt with differently.

C But they are common.

I They are common and we have some others, but I think the changes will go in a different way.

B I think the one thing on which we might agree is that it is state monopoly capitalism. I agree about this.

C What is?

B Well, if you have in Britain today steel entirely owned by the state and run by the state, that is state monopoly capitalism.

C Oh, I don't disagree with that at all.

B If you take all your energy industries, which

- 4 -

- 5

is coal, electricity supply, gas supply,
nuclear supply and controlling interest in
oil, that is in fact state monopoly
capitalism. It has all the
(B AND I TALKING AT THE SAME TIME.)

It encourages on the other side, union
monopoly power and, after all, so many of
the major conflicts of the last twenty
years have been in the state-owned industries.

JKG Would you agree, Ted, that modern socialism is something that desperate capitalists are forced by their bankers to unload on reluctant socialists?

B Not reluctant socialists - just socialists.

I But it was good that it was stated that there
is state monopoly capitalism, because this
takes away any suspicions that Mr. Galbraith
is preaching socialism.

C I'm not quite clear what he's preaching, actually.

I For improved state monopoly capitalism.

JKG I think before defending myself, we should break up.

C A good point at which to break up, I think - full of controversy for the next round. But, Ted, you can't call our society a state monopoly.

B Society?

C You can't call our type of society that
because you still have very large sectors
which are wholly in the private sector.

- 5 -

- 6 -

B: Yes, if one talks about society as a whole.

C: Sorry, that's what I was doing.

JKG: But are British socialists so undiscriminating that they want to inherit these ghastly shipyards and docks and all the other things that are being unloaded on them?

B: It's quite incredible - they want to take good and bad alike - they don't discriminate at all.

C: They take mostly bad.

B: They take a successful aircraft industry or aerospace industry - and they'll ruin it.

JKG: (C), why don't you follow our policy of doing it in secret. We've just nationalised all the Eastern Railroads in secret.

C: I know you have - that makes your point, doesn't it?

B: They're driven to resort to septuagenarians to try and run these things - retired professors and so on.

C: They're baling their capitalists out - it's still the same thing. You have to bale capitalists out - they can't bale themselves out.

JKG: But by doing it in secret, we avoid all these shocks to capitalism.

B: But you see Shirley has just made the revolutionary decision. She has enormous trouble throughout her party and the trades unions, but the profitability of British

- 6 -

- 7 -

industry this coming year, instead of being 2.2 per cent as it was last year, it is going to be 2.42 per cent in this coming year. Now, if there was ever a revolutionary decision ...

C Now, you know and I know that it's not quite as clear as that.

B Now how can capitalism operate if you limit its profitability to 2.42 per cent?

C Ted, you're being very improperly partisan, because under your government it fell from seven to four. It then fell from four to two and a half under ours, and it's a long, unbroken history of declining profits. Why?

B Yes. That's what I wanted to ask (D) before he disappeared - if you take any reasonable figure for profitability, say eight or ten or twelve, whatever it is, how in fact to move from 2.42 per cent to something which is in fact sensible.

Shot 68
Take 1

G I was told it was George Segal - who was that person who wraps everyone up in Plaster of Paris.

D But what's the purpose?

........

JKG Having made all those valuable points this morning, come and have something.

J How do you know?

- 7 -

- 8 -

JKG Every one of which I've heard many times before.

............

Shot 69
Take 1

B You can get the three o'clock plane which goes up there. Marquette - that's right. Marquette. And I said 'what time do I get to Marquette?' 'Oh', they said, 'you get there at 9.30.' I said, 'what - six hours? I thought it was just round the corner.' And they said 'no - it's a six hour flight.'

Shot 73
Take 1

D Well, you know that he and I were involved in talks? He more or less agreed that you can only apply it far a period, you know. And of course, it's always nice to look over a wall at Sweden and Germany and they can arrive at a consensus because their economies are somewhat different. The desirability of governments, unions, employers .......

D I take the view that to get the elements of price control agreed first. If you can keep that going, then unions and employers would be influenced. Informal guidelines - they can't be any more than guidelines because you've got to negotiate recognition of skills, productivity incentives and so on, depending on the type of job.

- 8 -

ENDS

"The Age of Uncertainty"

Tape VA8

Shot 76
Take 1

JKG There was no doubt in my case - apart from
the fact that I might not have made it
anyway, but that's not the point.

J You could make a constitutional argument
that a man who becomes an American citizen
by naturalization should get all the
privileges applicable to an American citizen,
which includes the right to be elected
President.

D But the Cabinet posts are purely the
selection of the President - he just puts
his friends in there.

J The Senate confirms them and - in other
words - the majority of the Senate has to
confirm the nomination by the President.
But it's very infrequent that a Senate turns
down the Cabinet proposed. It happens from
time to time - and it's most infrequent at
the beginning of a man's Presidency.

JKG In 1812 it was discovered halfway through
the campaign that one of the Vice-Presidential
candidates was born in Geneva.

Who was that?

JKG Gallatin.

J Gallatin was Secretary of the Treasury.

JKG I'm sorry to have to correct you on your
history, but I'm prepared to do so. He
was selected for Vice-President and the
campaign was well under way before it was

- 1 -

agreed that he was constitutionally ineligible and was dumped.

J He was the ablest man in the early Cabinets - a Swiss by birth - Albert Gallatin.

JKG I'm just trying to recover now.

D It's a question of what he's nominating - say the Secretary of State for Industry - it's purely personal preference.

J It's purely personal choice, except that he will keep in mind the importance of retaining the confidence of his own party and so on, but it's very different to the British Cabinet. Of course, the American Cabinet is not a collegial body in the sense that a decision by the government is not necessarily a Cabinet decision in a constitutional sense.

JKG And I think it's fair to say it's declining steadily in importance in modern times.

J Unfortunately.

D Do you think there will be an emergence of a national health service like Great Britain's?

JKG Oh yes, it's coming, anyway, it's promised. The problem - the U.A.W. has been active in agitating for this for years, and on education - the issue is not whether we get it, but whether we can get it without the intervention of the private interest - it must be prevented.

D At all costs.

JKG There is, generally, a Kennedy bill which minimises the role of the private areas - this is the real danger.

- 2 -

D So it could be that they might run it rather than the state.

Shot 78
Take 1

E
...... Ford Dagenham with Ford Cologne and discovered that Ford Cologne had a fifty per cent higher productivity than Ford Dagenham. They also discovered that all the managers were English in Cologne.

B The young Brits now spread themselves all around.

E
Yes. It's very large numbers - fifty to sixty thousand professional people, and managerial.

B It'll be the fourth British Empire, won't it?

E In a sense, yes.

I
They've got the chance of promotion and the chance to show themselves.

E Especially for the salaries after tax.

B Yes. It is horrifying.

E
They leave for reasons unknown - not even for wealth or anything. And at the same time fifty to sixty thousand people come in.

B
Well, they're not even productive most of them now, because they're wives or families and so on who come in.

And don't you think women are productive?

E Well, they don't come to work.

- 3 -

B Wives aren't productive are they?

I suppose if they're from traditional Pakistani families, they're not.

B They don't play any part in the world producing process.

........

E How long has this been going on - this emigration?

B It's become very acute in the last two years. There was a period around '66 when it went on, and then it eased off, and now it's grown again. It's because of the disparity between the incomes of management. This isn't top management - by the time you get to top management, you really can't bother about it, you can't resist or revolt, because you say well, I'm here, I'm 58 and I've got these years to do before I retire and that's that, and you take a perk of some kind or another. When you're in lower management and you're looking to the future, you say, well, alright I've done all my training, I've now done my hard work and here I am at 25 and what's the future? And the future is that I pay 83 per cent as a minimum of everything I earn.

83?

B Yes. You pay 83 per cent on direct tax and if you have any investment, you pay 98 per cent. So the fellow says why should I go on with this sort of thing? I'll go off. And, what's more, the actual salary on which you pay 83 per cent is roughly half of what you would get if you were in the Federal Republic, or in France, or these other countries. And the effect of this. You see, my generation at Oxford never thought of comparing what we would get if we went to a job in Britain or if we did the

- 4 -

same in Germany, or the United States or
anything. What we said was well, do we go
into industry? Do we go into the Civil
Service? Do we go into a profession?
Or something or other. And we knew roughly
what one would get as an income. But
today the young are very well informed.
People in my constituency come to me and say
if I do this job here, I get six thousand
a year; if I do it in Germany I get fourteen
thousand a year; if I go off to the United
States I get whatever it is, eighteen
thousand a year. And after tax this is what
it is worth to me. Now can you persuade
me to stay in this country? That's what
they say to me. And purely on financial
considerations, it's impossible.

Do you think this will change? Will you
be able to persuade people to stay on a
financial basis?

B Do you think it will change?

E It won't. It will change marginally, but
it won't change sufficiently.

B It'll change from, say, 83 to 81 per cent.
It's not enough to change people's decision-
making process, that's really the point.

What about people with land, are they any
more enticed to stay? People who do have
property in England, people who simply aren't
working, having achieved managerial status
- people who have started from that sort of
position.

B The problem of the moment is if you start
from the normal basis, you never get into the
position of having a house and land. Never.

What's the process for a young Oxford student
now who wants to go on and do something,

- 5 -

whose family does have land and he does have
ties that are very strong, he does have
some sort of property - is he going to leave,
or is she going to leave? Would they go
elsewhere, just for salary?

B He will probably go to a tax haven somewhere
or other. He will go to place himself on
Jersey, or Lichtenstein, or the Cayman
Islands.

Shot 83
Take 1

L Any help you get involves you in action
which you don't approve of. Why the hell
don't you go along on your own? What help
do you need?

A
(Off-mic.)

Well, there are things like capital, which
we don't have. I think foreign investment
could be of great benefit in our development,
but that is our job - I admit - it's our
job to make the climate for foreign
investment healthy.

AM

(I), could I ask you - there is in the
popular press in some countries the view that
Russia attaches strings to aid, that
economic imperialism is the phrase that
we hear - obviously you wouldn't agree with
that. Perhaps you could talk a little
about that.

I
(Off-mic.)

Well, I wouldn't agree because I think there
are a lot of examples where it is not so.
Of course we wouldn't render assistance to
a country which is rabidly anti-Soviet or
anti-communist and behaves ....
Because we are considered to be a rich
country, which we are, but we don't have
excess - it doesn't come, our help, from
simply excess of money, equipment, etc. - we
have to take it from other ......
Maybe this problem is a problem of colonies
for the major part of the third world and
I think that there are no easy solutions.

You cannot buy prosperity with this foreign aid. They have to undergo serious changes socially, politically, economically. This is a painful process - a process which requires in many countries, really, a revolution. And we are blamed that we sympathise and support it, but I was very glad to read Senator Church's speech at the Democratic Convention, where he said that there is ferment going on in the world and the United States, celebrating its bicentennial, cannot be always against all revolutions.

JKG

In a rather blunt challenge to (A) which I put forward in all good humour that in the countries which you have aided most - China, Egypt, Indonesia.

I
(Off-mic.
at start)

This was development of the poor countries. And then, you know, our proposal that in case we managed to decrease the military expenditures, a part of this economy would go for assistance of the poor countries and this is the official position of our Government. In general they have a serious task before them ...

L

I couldn't hear you. Keep your voice up a bit.

I

Yes. In general I think the problem is there and the problem has to be solved in the coming decade at least. Otherwise it will become a very acute and a very serious problem, and I think how the so-called rich countries, advanced countries can help it. I have talked about it. The first service would be to end the Cold War and attempts to use these countries for Cold War purposes. Then, not to involve them in the arms race and the conflicts which we have in different parts of the world. And I think also the solution of some problems - well, we have unsolved problems, which are very dangerous, in South Africa and some other places. I think that it is not yet really worked out by economists, by scholars in general,

- 7 -

and by governments, that the whole big
subject of the most effective way of
assistance. There are different opinions
but, of course, education of specialists
go with it. But all of it must go with
internal changes in former colonial countries,
with the creation of such economic climate
and social climate which will be really
favourable to rapid economic development
in these parts of our planet.

AM

Could I ask, (B), perhaps how do you suppose it will help the rich countries? How will it help the world economy, by the provision of aid? Is this just a purely moral thing in which countries should be engaged?

B

I think the whole of this discussion so
far has been out of date and completely
unrealistic. It bears no relationship to
the modern world at all. The plain fact
is that the Soviet Union has done almost
nothing to help any developing country in
the past two decades, unless it was putting
in force. I was leader of the British
deblegation at the first United Nations
conference on trade and aid in 1964 and
without us, UNCTAD and these organisations
would never have been constituted. The
Soviet Union took no part at all. It's
taken no part in any UNCTAD conference
since then. Its contribution towards the
third world has been minimum, unless it
was putting in force which it thought would
change the regime to its own purposes. Now
when you come to look at the question of
the third world and you talk about the
rich world, which is the rich world today?
The rich world today is the oil-producing
countries. That's the rich world, not
Britain, not the rest of Western Europe,
which has got large trade deficits. The
rich world is the oil-producing world which
has got enormous surpluses and which, first
of all, doesn't know what to do with its
surpluses, and secondly, it's shown that
it's very unwilling to use them to any
constructive purpose with the rest of its
third world brethren. Now, the Arab world,

- 8 -

"THE AGE OF UNCERTAINTY"

ROLLVA.9

A Thank you very much.

D Supporting the voice of Thailand.

A That's it.

D You see we in Britain are not quite so altruistic as 'B' has been suggesting. We do get a lot of overseas aid - I'm all in favour and I know he is - but a lot of our overseas aid is related to various goods going to the undeveloped countries. In that British goods, American goods, Russian goods, there's a lot to be said for that if it's to raise the standard of people. If it's to bring them more into line in terms of standard of living (THAT'S RIGHT) with the more developing countries of the world but it's how you do it, without pressures, without problems. You influence not only the political nature, but of an industrial nature and we in the trade union movement are very concerned about the attitude for example of multinational companies that are prepared to exploit the third world and when we try to assist our brothers, our brothers and sisters in the third world, our brothers and sisters say are you doing us damage by trying to raise our standard of living, you are denying us employment because the multinational companies then withdraw and then move to another underdeveloped country, this is a great problem for us, I don't ...

A Yes, I don't see, I haven't found any solution ...

D ... wants to try to ...

A That's right.

- 1 -

- 2 -

B
Well, there is another aspect of this. I
don't know, in fact, of any multinational
companies which were withdrawn from the
third world.

SHOT 86
TAKE 1

B
.... so that what ever it is, fifty or sixty
of seventy per cent, has held in the share
holding and in the directing by the company
in the country of which it bases itself and
this gives you a real partnership, and what
I think has been worrying is that so much of
the developing world is so concerned with
central state control that it hasn't welcomed
individual companies coming in, bringing
expertise and saying we'll go into partnership
with you, you put in part of the money, we'll
put in part of the money, you put in part of
the management, we'll put in part of the
management, and this is by far the best
arrangement, which in fact you can have between
rich countries and poorer countries.

A
Yes I said from the very beginning that to
have the right kind of help, the poor
countries are responsible for conscience (or
accomplishing) within their own country to
encourage the sort of help we're talking
about, the private companies and so on.

B
If you want an example, there you've got
Singapore close at hand. Tremendous
development.

A
That's right - yes.

B
Japanese money, German money, British money,
a bit and all done in partnership with
people who are there at the moment.

D
With a very strong central government control.

- 2 -

- 3 -

A But ...

D Socialist ...

B Well not in ... not intervention, it's a
very free enterprise economy.

A Actually it is a very free enterprise only
the government there has got more power than
most, than the rest of us. Mr. Lee Kwan
Yew seems to have done it very successfully.

JKG Well principally manifested, Jack, in an
incomes policy along British - That you have
now imitated isn't it?

D I'm not sure. I think there's rather more
dictation from the centre.

AM I think the Secretary of the Trade Union is also
a Cabinet Member in Singapore - probably he is.

(INTERRUPTIONS)

D But you see what do you ... What do you do?
You've mentioned an incident in Britain. We
are subjected in not only undeveloped countries,
but developed countries maybe outside of the
United States of America, to the whim and will,
to some extent, of multinational companies and
whilst I accept that many multinational companies
are efficient, that they, in dealing with labour,
they're not at all that bad and we can negotiate
reasonable wages and working conditions. There
is just that threat that can be exercised, and
unduly exercised, by multinational companies ...

(INAUDIBLE)

- 3 -

- 4 -

D .... because you simply cannot be at the beh-
est, you can't act as ....

(INAUDIBLE)

D .... but as countries you can't operate in
the situation where you really must respond
to the behest of privately owned multinational
companies and they cannot only put men and
women out of work in the factories, it can
affect the economies of countries.

AM Is it, however, preferable that there should be this mechanism for aid which - of which is divorced from ideology.

D Yes, I'm in favour of that. That's what I hoped we might be able to discuss.

C That's the big question if I may say so, because, and this is where I think I disagree very much with 'B'. If you look at the history of the United Food Company in Guatemala. Well, this isn't the history of a company without ideology. It's a history of a country with accurate ideology which then plays very heavily on the weakness of the government to get its own ends and if the company which is providing the investment is more powerful than the government of the country which it's coming into, and we took the case of Singapore where the government is probably more powerful. That's certainly not generally true, then you get a travesty of aid. You get an extraordinary situation in which the whole economy becomes distorted towards the needs of the company which is making demands upon it and this was the point that the ex-Prime Minister of Thailand was making about the coming of cash crops, the cash crop may have no relation to the good, the well being of the country which is being exploited, it may have everything to do with the well being of either the imperial country or the imperial company, if I may put it that way. But I think on the other

- 4 -

- 5 -

hand, where I part company a bit from on
the use of aid as a political weapon is that
essentially it seems to me that what we have
to do and I don't think it's going to happen
very quickly, is to see the international
sphere very much more in terms of the
national pattern of the last century which
is basically the acceptance of a redistrib-
ution of income as being one of the goals
of society within a nation, and until we can
move to the concept of some redistribution
of income internationally as one of the goals
of international community, we will go on
living in a world of Victorian charity, which
is what aid essentially is, and I don't
much matter whether it's British aid or Soviet
aid or American aid, it tends to have that
form and it tends to have the formal ...
humiliation of those who receive it and I
vote for it but I think that's a problem
about it and what one really wants to ask
is can one see any mechanism under which the
international community, and this ties up
with what Jack was saying about a code for
multinationals, can take on board the concept
of a redistribution of income of an
international kind, and that's why I think
even the kind of a penny in the pound, a
penny in the dollar, concept of international
levies on nations, not as an act of charity
but as an obligation, would be at least the
very beginning of the move towards what we
need to see in relation to the third world
as much as what we've seen in relationship
to separate nation states.

AM How could this be achieved though? I mean...

I Well I think this is a very painful way but
an inevitable one and the first experience
we had there, here, it was this new
prices in oil.

C Yes, that's right.

I Because this goes about resources and prices
and many things which were produced in these

- 5 -

- 6 -

poor countries were under priced, and from
rich countries were over priced, and this
of course was a very painful process for
many countries but it has begun and I think
it won't stop at oil. It will be true also
for many other resources and goods ....
too many reasons, including this, and I think
that really not Victorian age type, you know
giving some charity to the other countries
but the real solution of the programme must
be connected with many new ideas and provisions
included in international economic order.

AM

But have we any international organisation
which could even start this process. I
mean would the United Nations in any way be
the beginning of such a process?

(CHAT TOGETHER)

B

... through the United Nations Conference on Trade and Aid and has always found the utmost difficulty in getting agreement about this. You see to come back to C's point, what are we really saying, what we're saying is we're asking citizens of Britain or America or Western Europe to accept a reduction in their standard of living in order to contribute to that of other people. Well, if you're asking that you've got to produce powerful arguments as to why they should do it and there is the moral argument or 'D' has mentioned the fact that it provides employment. That doesn't alter the fact that what we are doing is exporting goods for nothing and otherwise it would contribute to the standard of living of the people of Britain and so you come back to the fact you have to have powerful arguments to give to them and you eventually end always at the political aspect of it. Well then are we asking citizens to have a reduction in the standard of living in order to help a country which politically is going to oppose us on issues which we regard of very great importance. And this is really a very difficult issue I've always found that I've always said well, we must not interfere, we must be broad-minded, we

- 6 -

- 7 -

must be liberal in approach. We must accept
that they settle their own destiny and so
on but it is becoming a more and more
difficult problem of how you sell this to
the ordinary elector. I find this in my
own constituency.

C

But Ted if I can just ask this. I mean
there is a certain parallel between
expenditure on defence and expenditure in
this direction. In other words, that there
is an argument for saying that the West, that
we hadn't ....

B

Only if you're using it for political reasons.
If you use defence to protect ourselves and
our friends and you say there's a parallel,
there's only a parallel if you are using
aid to persuade people to support us rather
than ....

C

Sorry, I was on the economic argument, not
the political one, and there's an economic
argument, a straight Keynesian argument for
having production which is directed outside
your own domestic economy and we mostly do
that by defence and one could do that in
a must more imaginative way by directing it
to the needs of the third world and then you'd
be stuck with a political problem but I think
that in some ways 'I' has answered that
because what he's really said and I think
this is terribly significant, if you don't
create a different structure you will end up
with in effect a collective bargaining
situation which the third world will force
upon the first and second world its own
requirements because in the end the oil
lesson is going to be learnt, it seems to me,
much more widely than by the oil producers.

E

The most powerful argument is power.

B

Yes, let's be just a little sceptical about
this. It has happened with OPEC and of
course when we produce oil we become a member

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of OPEC and then we shall have a considerable
influence on ....

I
Then you will raise the prices higher ...
Then you will become a rich country ....

(INTERRUPTIONS AND GENERAL CHAT)

B
Is it really going to happen over aluminium?
Is it really going to happen over tin? Is
it really going to happen over wool? It
could, but is it really in fact going to
happen?

A
That's right. I tend to agree with 'B',
that the discussion is really out of date.
You are talking about things that happened
in the 50s; 40s and 50s. I don't think
we need the sort of help from the so-called
rich countries at the sacrifice of the
welfare of the people in the rich countries.
We need, the kind of help we need I repeat
again, is investment in our country to the
mutual benefit on an equitable sort of basis.
I would like to point out the case between
Japan and my country. We both have problems,
our problem is unemployment, though our wages
are rather low, and their problem is high
wages, costs, they can't afford to produce
the usual sort of cheap things that
they produced before. They transfer the
production of those things to our country
really where labour's cheap. We don't mind
that at all because that created employment,
but there is this. The profit centre of
the whole venture was in Tokyo and not
half way between Bangkok and Tokyo and that's
a sort of thing that used to happen, and if
that could be corrected and then we're quite
happy, we're quite satisfied and we will
discipline our unions somehow to keep the
level of wages within possible ... (COMMENT)
Well, in that case we'll back them on our
bended knees ... to a Thai fashion, yes to
explain the sort of points to them so that
they could ....

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