Hydra Revisited

Myth has it that Hercules once fought an unspeakably fearsome creature named Hydra, who had the disconcerting ability to sprout two-heads for every one he lost. Old stuff, you may say, but for all its antiquity it is often reenacted even in these unheroic days.

Take Harry Truman, for instance. He has been waving a sturdy halbard at inflation since the voters first moved him into the White House. But it was in 1950 that he took his lustiest swipe by calling in Wilson, DiSalle, and a handful of others, and telling them to begin stabilizing. His blow thus administered, the threat of inflation emerged more menacing than ever.

The clearest proof of inflation's hydra like quality has appeared during the last few months. When the steel dispute rolled into Washington, anyone could see that a dozen knotty issues would roll in with it, all tangled up like the parts of some inscrutable hieroglyph. That no one seems able to disentangle these issues and set them right is not all the fault of Truman's sword-play, for one of inflation's perversities, it seems, is to grow more impregnable with every attack.

Yet, out of this tangle, surrounded by polemic and emotion, three crucial questions take form: first, why is the stabilization machinery necessary anyway; second, is the pattern taken by the steel dispute proceedings--deadlock and seizure--inevitable under the present controls setup; and third, why have the stabilizers been unable to stabilize anything?

As for the first query, even the GOP's own Hercules would admit the inadequacy of his law to handle labor problems in times of national stress. The government's dilemma is this; on one side there are production schedules which must be kept, on the other there is the constitutionally protected right to strike. The Taft-Hartley Law's injunction powers are worthless here because their use simply gives each side eighty days more to think up bigger and better arguments against each other. And if the Miners' strike of 1947 is any indication, the government cannot make an injunction stick anyway. What is needed, then, is some agency which, with the ability of a Solomon to gain everybody's confidence, can ensure settlements without any breaks in production. No one has yet been able to think up a more adequate solution than the WSB and the OPS.

This is all very well, you say, but a system that produces nothing but deadlocks and seizures is not desirable, even if it does provide settlements without messing up the flow of goods. If the deadlock-seizure pattern were inherent in the present controls procedure, this would be a worthy objection, but indications are that personal bungling was responsible for the outcome of the steel case.

In fact, both sides and the middle deserve brickbats. First, U.S. Steel's officers refused to bargain at first. No concessions, they said, strangely reminiscent of George F. Baer arguing with Theodore Roosevelt that management had a God-given duty to ignore the fledgling unions of his day. To gain a majority, the Board's public members could haggle only with their labor colleagues, the result being a one-sided agreement. U.S. Steel offered a compromise later, but it was too late--a catastrophe of mis-timing.

Labor, though relatively pliant at first, stiffened the instant that the WSB made its recommendations. Having caught the Board in one of its weaker moments, the Steelworkers refused to give up their gains, even during the last minute negotiations when management was anxious to compromise.

The President neatly compounded these errors by switching price signals are the dispute was off the crossing. The Steel company could not bargain until it knew where it was on the price level; if the government had told industry what could be expected from the price office, as Wilson tried to do, and had kept to its decision, as Truman failed to do, there might well have been a speedy agreement. As it was, Truman decided to tighten up on prices in the midst of negotiations. The inevitable breakdown occurred, forcing him to seize the mills and so precipitate a political storm which now threatens the whole Defense Production Act.

There is only one question left: why haven't stabilizers been able to keep down prices and wages? A rise in both is bound to accompany the end of hostilities in the steel mills. The reason for this is the twilight of half-peace and half-war that shrouds the nation. There is reason enough for controls, yet not enough to elicit a no-strike pledge. Price-wage control and industrial peace therefore are somewhat incompatible. The President, faced with a choice between the two, choose the latter. Although inflation is a menace indeed, when labor troubles jeopardize America's war efforts and preparedness programs, no decision other than Truman's is possible.

The time may come--a period of full war or of comparative peace--when the government can afford to ignore production in the interests of suppressing inflation rigidly. But until then, the Hercules in the White House must slash away with whatever he has. A little good faith on the part of everyone concerned would sharpen his blade considerably.