Show National Outlook Dy By GEORGE HAGEDORN The Administration h has a s again Invoked the Idea of government gov gov- established guide gulde- posts for private behavior in inthe th the wage and prIce field It has done s so with renewed emphasis emphasis emph- emph asis and with the implied threat of pressure to be applIed ape ap- plIed against those who do not conform TilE THE UNDERLYING Idea Is that wages generally ought to togo togo go up in proportion to the na lanai average of productivity growth Prices of a particular product would then go down or up depending on whether the productivity growth in the Industry concerned exceeded or fell short of the national average The Tho average level of all prices would thus be stable This is an Intriguing idea and it does docs give recognition to toa toa a serious economIc problem problem- the threat of excessive wage increases When wages rise faster than productivity they produce an Increase in the labor la bor cost embodied in each unit of output Then depending on current economic conditions this will produce one of two results either r y price rises or growth growth suppressing sing encroachments on business business busi busi- ness profit margins TilE TROUBLE is that the wage price guideposts are designed designed de- de signed to fit the average case and In practice very few cases are average The man whose height Is exactly equal to the average height of all men is the exception U If we cut aU all clothes to fit the average person person per per- son very few would be able to wear them It Is the function of a free market system to produce results re re- suits in the wage price field which are appropriate to each particular case Of course in the dominated union areas of I the labor market we do not have such a free market tem One may sympathize with the Administrations Administration's desire do- do sire to find a substitute in the form fonn of numerical standards but seriously doubt their work work- ability TilE THE PRESIDENT has announced an his IntentIon to draw public attention to major be- be lions by either r business or labor labor la- la bor that flout Clout the public Inter est in non inflationary price and wage standards Let us hope that he thinks long and hard before belore he engages in any such activity and relIes on something more than general statistical guideposts PrIce and wage controls did not work when they were sot set setup up by legislation and enforced by administrative bodies with defined specially powers They are not likely to work when they take the form fonn of executive tive denunciation guided by vague statistical rules TIlE TIIE WAGE price guideposts guide guide- posts if taken too literally could become guiles guides to economic eco eco- chaos and the destruction tion of business confidence |