When I moved to report progress last night, I was discussing the merits of profits. I asked whether this House had not reached a stage when we ought to ask ourselves in what direction we desired to travel—was it our aim to establish a socialist State or did we believe in free institutions, free enterprise, the profit motive and the standard of living and of social services which I suggest can only be sustained by a free society operating the system of free enterprise? I asked the House to bear in mind that we have evidence before our eyes that those countries that have elected for a socialist system of government have not produced, not succeeded in producing, the Utopia they confidently forecast.
Without going into the ideological foundations of Russia or China, at least we can say that Russia has given 40 years' full scope to a full-blown socialist economy and, dwelling exclusively for the moment on the economic consequences of that, we have the evidence before our eyes that after 40 years' operation of that system in an area which must be one of the richest in the world, stretching from the borders of Poland to Vladivostok, the people of Russia would be hungry today but for the fact that they can depend on the resources of the great free enterprise nations of the world— Australia, Canada and, indirectly, the United States—to provide them with the very food to feed their people which they have been unable to produce themselves.
I believe in a system based on free enterprise in which the profit motive is not regarded as disreputable, because I believe that without the profit motive, decent employment cannot be provided, decent social services cannot be provided and individual liberty, in the last analysis, cannot be preserved. I do not want a system in which we all become servants of the State and I think the time has come when we ought to ask ourselves are we moving in that general direction here. Some of our colleagues hopefully point to what they describe as socialist economies in Europe and say that they have worked successfully without destroying individual liberty and without precipitating a general lowering of the standard of living. One of their principal object lessons is Sweden. Sweden has called itself a socialist democracy for 30 years but there is no country in the world in which capitalism and the profit motive are more ardently promoted and protected than in Sweden.
Of course it is true to say that our real difficulty is to learn to ask ourselves what do we mean by socialism. It is a word that has now become so blurred by general usage that people can mean almost anything when they use it. What I am concerned to preserve is parliamentary democracy, individual liberty and the right of law-abiding citizens to earn their living as independent men and women without being beholden to the Government for the time being for their right to live in their own country. I imagine the Government will claim that they subscribe broadly to these sentiments but acts speak louder than words.
I ask the Minister to answer categorically now to the House and the country what he proposes to do about the situation his Government's policies are producing in the country. The Minister has now committed himself to a policy of price control. He assures the country that he aspires, in a remarkable process of conversion, to an incomes policy. It is a very short time, not 12 months, since he was declaring an incomes policy to be a figment of disturbed imaginations among the Opposition. He was campaigning most energetically to prove it was impossible. I do not believe it is impossible. It is extremely difficult. I remember being asked at a public meeting in Ballina what would happen if the trade unionists did not collaborate, and what sanctions did I advocate in order to make them do it. My reply was that if I needed to employ sanctions, the incomes policy would have failed. I do not believe you can, in a free society, impose sanctions to compel men to work.
I am not much interested in what happens if we abandon freedom for some alleged economic end. I am not so sure these sentiments are shared by all Deputies, particularly on the Fianna Fail benches. I detect a horrible intellectual tendency among some of them to say: "We would sooner be rich than free." If that tendency should grow, the time has come to examine our consciences. That is not what our fathers or our grandfathers wanted. They wanted to be free, whatever the cost. If the new doctrine is to be, "we want to be rich rather than free", we should examine where that dialectic leads.
It is because a change in that mode of thought is being promoted in this country that I have ventured to say in this House, and I now repeat that, that the economic policy of this Government is not only placing our economic independence in jeopardy but placing our political independence in jeopardy as well. I want to remind Deputies, if they regard that warning as extravagant, that it is less than 12 months since I said in this House: "Beware lest the road you are travelling does not send the Government hawking the credit of Ireland throughout the world and finding no takers." When I gave that warning, a great many Deputies, including Deputy Moore, I am sure, were shocked that such words could be spoken in this House, but they have lived to see that happening, to see the Government of this country go to the United States of America to seek a loan at a very onerous rate of interest and find there were no takers.
How vital is this question of profits? We are all concerned to provide additional industrial employment for our people. I recalled last night that it was Deputy Sweetman who inaugurated exemptions from income tax and corporation profits tax for industrialists who provided extra exports. It was the late Deputy William Norton, God be good to him, who first introduced the concept of the Industrial Grants Act. Now we have reached a stage in which we have one of the largest industries in the country pointing out that as a result of Government action the profits derived from their operations in a stated period last year were of the order of £400,000, and that in the corresponding period of this year, their losses were of the order of £100,000. The firm I refer to which elected to have that statement published in the newspapers are Goulding's, the fertiliser factory. What are we going to do about it?
One thing is perfectly certain. Neither that firm nor any other firm can go on indefinitely trading at a loss. We have, therefore, two alternatives. We can either take them over and run them at a loss, charging the loss to the Exchequer as we do in regard to CIE and almost every other Government operated industry or enable them to earn profits. So far as I am aware, every single industry operated by the Government is run at a loss. It is quite true that the ESB operate on the basis of paying their interest and loans charges, but they are in the happy state of being able to fix the rate for electricity, and the public have to pay whatever is requisite to discharge the loan and interest charges the ESB have to meet, to finance the capital they use in their programme of generation and distribution.
It is perfectly true that Bord na Móna ordinarily breaks even, except for seasonal losses. Bord na Móna, a Government-operated industry, simply cut the turf, determine what the cutting of the turf costs, and charge it to the ESB; the ESB pay them and put it on the cost of electricity. I need not go into the financial situation of Irish Shipping, but in common with many other companies, they are losing loads of money. CIE, apart from the sale of rails to countries in Africa and elsewhere, are losing loads of money. I could go down the whole list, but I should like to ask the Minister does he intend to add this fertiliser industry to that list and, if the list grows longer, who will pay the losses? At present we are finding the money to pay the losses out of the profits of individual entrepreneurs who are earning profits. If we make individuals who are making profits unprofitable and take them over, where will we get the revenue to pay for the losses in the enterprises which we have converted from profit-earning enterprises into loss-earning Government-operated industries?
The Minister may say to me: what do you propose? Do you propose to raise the price of fertilisers? In fact, we all know that having carted off the farmers in Black Marias until there was no more room for them in the Bridewell, and having declared that nothing on God's earth would ever alter his inflexible resolve never to talk to anyone who was conducting himself in such a way as to justify his removal in a Black Maria, and in the Minister's words "to talk to no circus clown performing outside Leinster House," the Minister for Agriculture is now beyond in Government Buildings conversing with them most industriously.
The purpose of their discussion is to explain to the Minister for Agriculture that agriculture has become uneconomic and agriculture has become uneconomic because their costs have increased to a point which leaves them no margin of profit on their sales. One of the essential raw materials of the agricultural industry is fertilisers and so if you increase the price of fertiliser —unless you want to crucify the farmers altogether—you will have to increase the price of agricultural produce. If you increase the price of agricultural produce, you increase the cost of living, and if you increase the cost of living, you will have to have another round of wage increases and the losses will grow bigger, or else you increase the cost of the farmer's raw materials and the cost of food and the cost of living and you can go dancing around that maypole until everyone gets dizzy and the community collapses.
These are fundamental facts which nobody cares to face. That is what inflation means. Once you start on that dizzy dance, there is no ending. It is the Government who started that dance and it is the Government who are responsible for telling us how they propose to control it. I told them in this House two years ago that if they put on the turnover tax, they would launch this country into a dialectic of inflation that would bring us to the edge of the abyss. I fought that issue in North-East Dublin and defeated the Government. In Cork and Kildare, the Government proclaimed that it was all an illusion, that there was plenty for everybody, that everybody ought to have a substantial increase. Naturally when the responsible Government of the country certified that this was so, the electorate accepted that view and they triumphantly won these two elections. Then we had the subsequent elections and the general election and now we are in the situation that the Government, having solemnly proclaimed for all to hear that the economic foundations of the State would be utterly undermined if there was any increase in wages or salaries in excess of three per cent, have, with equal publicity and equal solemnity, declared that they approve of the Labour Court recommendation that there should be an increase of some six to seven per cent.
Both statements cannot be true. They were either dealing in falsehood when they spoke of the three per cent or else they are dealing in falsehood today. Deputies of the Fianna Fáil Party know that. I want to ask the Minister for Industry and Commerce when the Government expressed their approbation of the recent finding of the Labour Court, were they telling the truth then or were they telling the truth when they told the House that anything in excess of three per cent would uproot the foundations of the State?