CAN AN INCOMES POLICY BE ADMINISTERED?*
| Published date | 01 November 1967 |
| Date | 01 November 1967 |
| Author | John Corina |
| DOI | http://doi.org/10.1111/j.1467-8543.1967.tb00514.x |
CAN AN INCOMES
POLICY
BE ADMINISTERED?*
JOHN
CORINAt
THE
DIVERSITY
OF
INCOMES POLICIES
THE
significance, form and functioning of an incomes policy differ sharply
according to the type of economy and its social setting. This is natural
since, although an incomes policy
is
essentially an economic instrument
in the steering and control mechanisms of policies for economic growth
and stability, economic organization and policy vary from society to
society. Diversity also occurs because perceptions of incomes policy,
especially by labour market organizations, tend to be overlaid, to a greater
or lesser extent, with various social objectives and aspirations. When
viewed internationally, the macro-economic patterns of evolution of in-
comes policies, and the obstacles encountered during the path of incomes
policy development, seem closely related to the nature of industrial re-
lations systems, labour markets and wage systems, and affected by a com-
plex of environmental social factors. Perhaps the time is not yet opportune
for a generalized evaluation
of
incomes po1icy.l But some tentative obser-
vations can be offered on the basis of recent experience in Britain and
other countries.
The extent
of
diversity amongst centrally planned economies, in the
area of incomes policy, seems to be narrower than that amongst indus-
trialized (and non-industrialized) market economies. Although the degree
of decentralization in wage planning does vary quite markedly, the chief
variations lie more in the techniques of control over money wage growth
at industry and enterprise levels. In market economies, incomes policies
range from intermittent recourse to weak devices which scarcely amount
to
a
coherent system, to strong and comprehensive incomes policy systems.
The category of weak systems includes many devices: government ex-
hortation on wage and price development, attempts to influence or change
collective bargaining processes; policies to curb abuses of economic power
in price determination; policies to intervene in income and price adjust-
ments in particular sectors (such
as
agriculture)
;
programmes of analysis
and forecasting of income and price changes in the economy; policies
designed to affect indirectly general price and wage changes through
market mechanisms; policies to determine national legal minimum wages
;
*
This paper was presented at the first World Congress
of
the International Industrial
Relations Association, Geneva,
1967
l
But many interesting insights appear in:
U.N.,
1965
Report
on
the
World
Social
Situation;
and
also appear in
U.N.,
Economic
Srtrucy
of
Europe
1965,
Pt.
XI,
Incomes
in
Post-war
Europe:
A
Study
of
Policies,
Crowfh
and
Distribution,
(1967)
287
Fellow of St. Peter’s College, Oxford. University
Lecturer
in
Economics.
288
BRITISH JOURNAL
OF
INDUSTRIAL RELATIONS
and national economic goals for incomes and prices, unaccompanied by
efforts to develop and implement criteria for individual wage and price
decisions.
Strong and comprehensive incomes policy systems (perhaps the
British, Dutch and Soviet systems may be placed in this category) are not
clearly demarcated from weak systems by the degree of government inter-
vention in wage and price determination.
A
weak and ‘rudimentary’
incomes policy may characterize an economy which resorts considerably
to government intervention; like Brazil, where there are ostensibly
favourable conditions for intervention, with strong legal support for state
action, weak trade unions, narrowly confined collective bargaining, and
extensive labour courts. Neither do strong and comprehensive systems
constitute a clear category in terms of administrative weapons, because
they incorporate a mixture of devices found elsewhere. The
U.S.
‘guide-
line’ policy approach bears many resemblances to the British ‘norm’
approach, but is much weaker in terms of implementation and less com-
prehensive in terms of the co-ordination of wage policy with price policy.
The identification of
a
strong and comprehensive incomes policy
apparatus is not a matter of degree which can be determined, for example,
by the grading of policies according to the extent
of
policy centralization
or direct wage and price intervention. But neither is it
a
question of
definitional manipulation,
It
is
a matter of policy substance, Subject to
some qualification, strong systems in market economies would appear to
include an array of fairly specific institutions
:
bodies for incomes analysis
and information, advisory bodies, established modes of government exhor-
tation, central consultation arrangements, some apparatus for central
control or intervention, bodies to stimulate productivity and labour
utilization, bodies to influence labour supply, and perhaps central arbi-
tration. Some devices, which appeared at early stages of incomes policy
development, have continued to exist (in modified forms) at later stages.
A
strong system is one which consistently promotes a collective view of
wage policy, whilst transferring previously peripheral problems (for
example, income formation, income distribution, non-wage incomes,
prices policy, labour allocation and labour utilization) towards the centre
of policy vision and influence.
Yet the most significant phenomenon, when incomes policy develop-
ment in various economies is seen in recent perspective, is not so much the
pluralistic development of administrative mechanisms and devices as the
experience of certain common problems of incomes control. At the risk
of over-generalization, similar features and problems may be discerned in
policy approaches, procedures, objectives, social costs and benefits.
Broadly, these tend to stem from a similarity in the economic and social
problems of incomes guidance. In conditions of labour shortage, the
problems of controlling the growth of piecework earnings at enterprise
level in Soviet Russia, for example, bear many parallels
to
such problems
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