Saturday, December 14, 2013

Historical materialism (1983)

From the March 1983 issue of the Socialist Standard

The last century has witnessed immense developments in the technology of production. Modern machines can do much of the arduous work which once had to be done by humans; computers can make calculations and pass on information in a fraction of the time it took one hundred years ago; industry can be liberated from the dirty, dangerous, time-wasting methods which accompanied its emergence. The "impossible" has been achieved; the productive ingenuity of modern society has defied the imaginations of even the most advanced scientists at the time of Marx's death.

But there is a contradiction: although technologically we are in the Space Age — the age of science and rationality - socially, our society is still entrenched within the rut of the capitalist system. The way we organise wealth production and distribution is in conflict with our ability to produce enough for everyone. This contradiction is not a modern phenomenon; it is the driving force of all history. For Marx, contradiction is the generator of change - it is out of the antagonism between the way things are and the way things could be that new situations arise.

Non-Marxist historians see social phenomena in terms of design or accident. They regard the study of history as an empirical investigation, and see their role as simply to tell the story of the past without any need to explain the interconnections and classes and forces which occur and reoccur throughout the historical narrative. Such historians often tell us what happened in the past, but they are without an answer when it comes to why social events happened. The "design" historians try to explain the "why", but they do so in an idealist, metaphysical manner; they seek non-material causes for material changes. The theocratic historians, who dominated the study of the past for hundreds of years, were quite clear about why phenomena occur: it was because God wills them to. This divine determination was not only supposed to relate to natural phenomena, such as earthquakes, smallpox epidemics and cancer, but also to social events, such as wars, famines and poverty. If such a myth were true, we should have to seriously consider whether the "all-loving father" should be reported to the NSPCC. Other idealists, such as the German philosopher of history, Hegel, argued that historical change was a process of the gradual enactment of a Universal Idea. Marx spent volumes demonstrating the absurdity of this metaphysical nonsense; in The German Ideology, for example, Marx mocked the Hegelian idealists who conceived their role as freeing people from their false perception of the world, as if the problems of material existence were the result of an error on the part of human consciousness. Imitating the Hegelians, Marx wrote:

Let us liberate them from the chimeras, the ideas, dogmas, imaginary beings under the yoke of which they are pining away. Let us revolt against the rule of thoughts. Let us teach men, says one, to exchange these imaginations for thoughts which correspond to the essence of man; says the second, to take up a critical attitude to them; says the third, to knock them out of their heads; and existing reality will collapse.
Marx turned Hegel on his head. This does not mean that Marx was an expert at martial arts, but that the Marxist approach to history employs a methodology which is reverse to that of Hegel: the latter asserted the primacy of ideas, in the manner of Descartes ("I think, therefore I am"); Marx asserted the primacy of matter: "I am, therefore I think". This is how Marx put it:
Consciousness can never be anything else than conscious existence, and the existence of men in their actual life-process. If in all ideology men and their circumstances appear upside down as in a camera obscura. this phenomenon arises just as much from their historical life-process as the inversion of objects on the retina does from their physical life-process

In direct contrast to German philosophy which descends from heaven to earth, here we ascend from earth to heaven. That is to say we do not set out from what men say, imagine, conceive, in order to arrive at men in the flesh. We set out from real, active men, and on the basis of their real-life process we demonstrate the development of the ideological reflexes and echoes of this life-process. The phantoms formed in the human brain are also, necessarily, sublimates of their material life-process, which is empirically verifiable and bound to material premises. Morality, religion, metaphysics, all the rest of ideology and their corresponding forms of consciousness, thus no longer retain the semblance of independence. They have no history, no development; but men, developing their material production and material intercourse, alter, along with their real existence, their thinking and the products of their thinking. Life is not determined by consciousness, but consciousness by life.
The material environment determines our ideas; we are the creatures of historical circumstance. So, according to Marxism, social change is neither accidental nor designed, but determined by material conditions. When we refer to Marxism as historical materialism we are stating that Marxism takes into account four crucial factors: 1. That matter and energy are independent of control by the human mind or supernatural forces; 2. That all ideas, actions and social phenomena are derivative from matter; 3. That a specific cause, or combination of causes, will always have the same effect; 4. That no accident can exist without causation in material terms, even if knowledge is insufficient to provide a material explanation. These principles are not exclusive to Marxist social science: they are the essential principles of post-Cartesian science.

In explaining why social change occurs historical materialists are concerned with cause and effect. What is the causation of social motion, if it is not pure accident or the will of God or the unfolding of the Universal Idea? In the passage from The German Ideology quoted above, Marx suggests that it is the process of "men, developing their material production and material intercourse" who make history. Why do humans exist socially? Because it is only by existing in relation to one another that we can survive. What must we do to survive? Produce and distribute what we need to survive. So. it follows, that the most important aspect of social organisation — the first characteristic which we must look at when examining a society — is the way in which production and distribution of wealth is organised. Idealists may turn their noses up at such a way of looking at history; they would prefer to examine ideas, which are ultimately only the reflection of economic conditions, rather than the economic structure (what Marx called "the mode of production") itself. Idealist historians far prefer to waste their (and our) time debating the matrimonial affairs of Henry VIII than explaining the growth of mercantile capitalism in mid-sixteenth century Europe.

When Marxists look at history our first question is, What was the social system? A system is simply a network of relationships to the means of wealth production and distribution. For many thousands of years — indeed, most of human history — the system was a primitive form of communism: the means of living were owned in common. With the advent of private property (a process which is well described in Engels' classic work The Origin of the Family, Private Property and the State) came a new social phenomenon: Class. Ever since then these wretched divisions between human being and human being have been with us. The history of property society is the history of class struggle.

The class struggle is not a game invented by Marxists in order to bother the capitalist class. The class war is an inevitable consequence of the division of society between those who own and control and those who do not. The political conflicts of recent history (or post-property society) can be explained in terms of an unceasing war between minorities who possess the means of life and minorities who want to. The English Civil War was such a struggle; so was the French Revolution; often, the subject class has been recruited to support one minority class against another. Non-Marxist historians like to explain such phenomena in terms of individual characters ("Great Men") or supernatural designs. As recently as the 1970s there were a number of reputable Israeli historians who claimed that the victory of the Israeli army over the Arabs was due to the will of god; and in Iran today the Islamic priests are sending off their armies in the war against Iraq with the blessing of Allah — a blessing which is also given by the Iraqi Moslem priests to their cannon fodder. Admittedly, there are fewer people now than there were a century ago who still believe that history is manipulated by an ever-caring string-puller in the sky. But even the most professedly "radical" of social thinkers still apply the "Great Man" theory to history; for example, there are Trotskyist historians of the Russian Revolution and its outcome who argue that if only Trotsky, and not Stalin, had succeeded Lenin. Russia might have been a "socialist country" today. Then there are the Leftist observers of recent economic history who, instead of examining the inherent economic tendencies of world capitalism, make silly condemnations of "Thatcher's Britain" and "Heseltine's attack on the working class". The Marxist analysis of history shows that it is not individuals who govern the system, but the system which governs individuals.

But if the system governs individuals — if ideas reflect the material environment — if we think as we do because we are as we are, then is it not the case that, far from being a revolutionary theory, Marxism is a profoundly conservative doctrine? Like any revolutionary outlook, Marxism can be perverted into a theory which justifies doing nothing because there is nothing you can do. It is now necessary to show that Marx's conception of history was not only about explaining the past, but provided a revolutionary theory for creating the future. Unlike all other conceptions of history Marxism does not stop at the present.

Let us return to the present, which was the point at which we started: in terms of the productive forces there is a current potentiality to satisfy human needs; in terms of the social relations there is mass deprivation of human needs under the capitalist system because use values must come second to exchange values — profits are more important than needs. This, we may say, is the fundamental contradiction of our present stage of history: we could produce for use, but we persist in producing for profit. How did Marx explain this contradiction?

In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which respond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal, and political superstructure and to which correspond defi¬nite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness. At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production. . . From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. (Marx, Preface to The Critique of Political Economy, 1859)
In the above passage can be seen the crucial weaving together of Marx's theory of history and his theory of revolution. The purpose of present-day Marxists is to apply it to the great social contradiction of the present. "At a certain stage" the forces of production conflict with the relations of production. We are right in the middle of such a stage now. What, then, is the key to the social revolution?

If Marxism was a theory of economic determinism, as most of its critics have suggested, there would be no need to do anything about the social revolution except wait for it. To be sure, there are plenty of so-called Marxists whose ideas of social revolution involve no more than anticipating the imminent collapse of capitalism or looking forward to some far-off day when socialism will "come", like an unexpected gift. However, Marxism without activity is not real Marxism, but a useless dogma — and we know from Marx himself (whose favourite motto was De omnibus dubitandum; Doubt everything) that the role of revolutionaries is not to endlessly survey the world as it is, but to actively change it.

All previous revolutions have changed the world in the interest of a class. The capitalist revolutions in Europe, for example, displaced the old monarchies and aristocracies, with their hereditary privileges and assumptions of divine right, and replaced them with rule of capitalists who obtained their right to live in idleness from the new Holy Trinity of rent, interest and profit. The next revolution will be no different from the others. The class which will expropriate the expropriators will not be another minority ruling class. The working class is a majority class and its role is not to climb from the position of the oppressed to that of the oppressor, but to enact the abolition of classes and oppression. Like all previous revolutionary classes, the working class must conquer the powers of government and the armed forces. But, again unlike previous revolutionary classes, the workers, being a majority, can assert revolutionary power by democratic means.

If workers are to make a social revolution we must make it consciously; history is made by those who are aware of the material conditions which they are in and the real possibilities for immediate revolutionary change. Class ignorance produces dreamers and poets at best, and do-nothings at worst, but never meaningful social change. The need for class consciousness does not mean that ideas make history, but that, because we can only develop within the material conditions that surround us, it is better to have a realistic consciousness of what can be done than an idealistic dream of what is impossible.

Socialism — a world without money or wages or states — is often attacked as being an idealistic dream of the impossible. Even a majority of those on the so-called revolutionary Left regard Marx's conception of socialism as a Utopian fantasy which is not to be realised for at least five hundred years (this was Lenin's view). An understanding of historical materialism shows that, although socialism may be as alien to the people of capitalism as capitalism was to the people of feudalism, there is nothing impossible about human society taking a step forward, out of the contradiction of capitalism and into the new system based on production for use. Indeed, the really unhistorical dreamers are the ones, of both the Right and Left, who want to retain the present system, but hope to eradicate its inevitable characteristics. It is the gang of confused reformists, who want to preserve the cause while wishing its effects away, who stand as political obstacles to the onward march of history. We Marxists have a history lesson to teach them; what is will not always be, and today's proposals are tomorrow's reality.
Steve Coleman

Economic Roots (1989)

From the September 1989 issue of the Socialist Standard

Chopping up history is a common method of distorting it and preventing anything being learned from it. Chopped-up history comes to us as a series of largely self-contained, unconnected and accidental events which were crucially influenced by the personalities of the leaders of the time. The implication is that there is no overall pattern in what happens in the world, that things would have been different had other people been in charge or if certain events had not coincided. It follows from this that there is no need to make any fundamental changes in society because a bad historical accident at one time can be redressed by a good one at another time.

Mad Dictators versus The Democracies?
The popular account of the last world war goes something like this. After 1918 the victorious Allies made two big mistakes. Firstly, they did not ensure that Germany had been properly finished off as a military power. Secondly, they imposed the Versailles Treaty, a settlement so stringent as to cause a lingering resentment among the German people which was too easily exploited by Hitler, an unusually mad dictator whose consuming ambition was to lead Germany into a conquest of the entire world. Hitler was in league with Mussolini, another mad dictator who was also comical because his belligerent strutting and posturing were a facade behind which the Italian people were disinclined to go to war. His other ally —Japan — was a different matter, for the people there were tradition-bound into a disciplined savagery. These three countries regarded the persecution and murder of human beings as necessary and progressive and they were intent on extending their rule over the entire world. Other countries — Britain, France and America — were democracies. Their leaders were not dictators, they allowed free speech and free association and they treated their people in a humane way. The democracies could not stand aside and allow the dictatorships to take over the world and so, after a few years delay caused by their natural inability to grasp the enormity of Hitler's madness and their laudable reluctance to plunge the world into hostilities, they eventually had no choice out to go to war. After six years of bloodshed which cost at least 15 million dead the dictatorships were beaten, the world recovered from some very nasty historical accidents and all was well.

One of the most obvious flaws in this version is the fact that on the side supposedly fighting for democracy was one of the world's most fearsome dictatorships When Stalin's Russia was forced into the war on the Allied side it had become enduringly notorious for its iron repression of its people, for its ruthless policy of mass murder and for the brutal and cynical way in which Stalin disposed of any opposition among the leadership — normally by killing them off. The fact that "communist" Russia was supposed to be a sworn enemy of Nazi Germany did not stop the two countries, in a typical example of the dirty game called diplomacy, signing just before the war began, a pact of non-aggression guided, they said, "...by the desire to strengthen the cause of peace between the USSR and Germany..." The pact — which, although it was supposed to last for ten years, did not stop Germany attacking Russia in June 1941 — also carved up part of Eastern Europe: Lithuania. Poland, Bessarabia. Russia was not the only dictatorship fighting on the side of "freedom". Poland and Greece could hardly be described as democracies and they too were in the Allied camp.

Meanwhile, neither the "democracies" nor the dictatorships were completely united. Mussolini's government was alarmed by Germany's expansion, in particular the occupation of Czechoslovakia which they saw as undermining their interests in Central and South East Europe. They did consider developing closer ties with Britain and France but instead asserted that the Balkans and the Eastern Mediterranean were Italian spheres of influence and annexed Albania. The French were mistrustful of British policy which, as the pressure from Germany mounted, did not rule out a settlement through offering Germany some colonies, which the French saw as a potential threat to their interests in the Middle East.

The British Empire
More important —more influential — was the antagonism between American and British interests. One of the reasons for the opposition in America to that country joining the war was the well-founded suspicion that American power would be used to protect British possessions and so shore up the British Empire, which with its system of Imperial Preference hampered American industry's exports to valuable markets and its access to vital raw materials. The "aid" which flowed from America to Britain was thickly festooned with strings. In August 1940 the "gift" of 50 US destroyers (which were in any case well past their prime as death-dealing machines) was conditional on American occupation of 8 bases on British territory, from Newfoundland to what was then British Guiana. Purchases of American war equipment were to be paid for by the liquidation of overseas assets and lend-lease was agreed to only on the condition that the British ruling class had exhausted all other ability to pay. In August 1941 the Atlantic Charter was exultantly publicised as a declaration of faith in the war for democracy and the well-being of the human race. In reality it was an undertaking to ensure self-determination and free trade in the post-war world — which effectively meant the end of Imperial Preference.

So the objectives of the war were not as chivalrous and humane as its supporters would have us believe. Of course it is true that Nazi Germany was a vicious dictatorship where all opposition was ruthlessly stamped out and where millions of people were systematically killed simply because they were Jews or gypsies or homosexuals or handicapped. And of course the Allied victory did mean the end of the extermination camps — at any rate in Germany, for genocide, atrocities and mass political murders did not end in 1945. But these were not the objects of the war, except to those who chop up history. The war came as an episode in an established and continuing system of international relations which were an inevitable result of the social system we live under — of capitalism.

Germany's defeat in the First World War, the Russian revolution and America's withdrawal from the post-war settlements left Britain and France dominant, with the onus to strike a balance between the elite powers. As an outcome of the war these two states, already possessing huge empires, also absorbed former German and Turkish colonies so that Great Britain controlled a quarter of the world and, with France, a third of it. "We have got most of the world already, or the best parts of it" was how it was described in 1934 by the First Sea Lord. The fact that the advantages of empire were largely illusory for the ruling class — and wholly illusory for the working class, who were nevertheless so proud and ready to die for their masters wealth and possessions — did not prevent imperialism being seen as vital to everyone's interests. The "have-not" states — Germany. Japan and Italy — demanded to be let into the power system, to expand to be a part of the balance. "As a result of restrictions our economic situation is such that we can only hold out for a few years... There is nothing else for it, we have to act", said Hitler in August 1939.

These demands were given an emphatic political voice, and a great deal of energy, by the Nazis in Germany and the Fascists in Italy. In many ways the policies of both were, to put it mildly, bizarre; they not only hampered the full development of each state's power but also gave the Allies, when the war came, a brilliant propaganda theme which they worked for all it was worth. Telling us all about the racism of Nazi Germany, they forgot troublesome facts like the collusion and encouragement the Nazis had received from so many respected and bellicose British politicians and the persecution of blacks in America.

German Industry and Commerce
The Nazis were not the first post-war German government to work for the overturn of the Versailles Treaty and the re-establishment of Germany as a major European power. These policies had also been expounded by the politicians of the Weimar Republic and the implications were the same for them as they were for the Nazis — the annexing of Austria, perhaps also of Czechoslovakia and the extension of Germany's sphere of influence into eastern Europe and the Balkans. Behind the policy stood German commerce and industry with their insistent need to throw off the shackles of the post-war settlements and to expand. When Nazi Germany moved militarily the country's commercial and industrial interests eagerly followed the victorious armies. German banks quickly took over their competitors in Austria and Czechoslovakia and the industrial combine IG Farben did the same to its rivals in those countries so that it became the dominant chemical concern in South East Europe.

Although the Versailles Treaty was supposed to have sorted out the world's problems (for what else were those millions of workers killed in the first world war?) the stresses and crises which followed in peacetime produced a clutch of other treaties, each attempting to deal with a separate point of tension. But the diplomatic edifice erected in the 1920s was severely damaged by the world economic collapse. Collective action became distinctly unfashionable as each country scrambled to protect the wealth and the standing of its ruling class. Tariff barriers went up and Britain abandoned free trade in favour of imperial preference. The industrial powers suffered massive unemployment, with up to a third of their workforces being idle. The despair and disillusionment with parliamentary democracy which this caused undoubtedly helped the Nazis rise to power as they could blame the economic collapse on alleged corruption and bungling of the Weimar republic and assert that it would not have happened in a racially pure, virile and disciplined Nazi dictatorship.

In 1931, in response to the slump, Britain went off the gold Standard — that is, declared that the pound was no longer convertible into gold. As a result a number of ad hoc arrangements for international payments emerged with the "outsider" powers such as Germany and Japan entering into bilateral trading deals. This effectively divided the world into two antagonistic blocs — the gold—possessing states and those now reliant on barter. The German ruling class fought their side of the conflict by dumping exports, importing through bulk buying, currency controls and the like. The British government fought back with export guarantees and in 1938 buying up the entire wheat crop of Rumania in an effort to prevent that country being absorbed into Germany's sphere of influence. In general the Germans made the running in this race and British and French capital became more and more excluded from eastern Europe.

For the British and French capitalists the German threat to Poland was the sticking point, beyond which there could be no further attempts at diplomatic appeasement or economic warfare. The invasion of Poland left the Allies with no choice but to try by military means to force Germany back into "normal" trading relationships. Behind all the talk about a war to defeat dictatorships and to liberate Europe from the Nazi thrall the real war aim of the Allies was to restore the financial and trading arrangements which benefitted their ruling classes. In July 1944, while some of the war's fiercest battles were being fought, the bloodless battle of Bretton Woods settled a lot about the economy of the post-war world The Conference set up the International Monetary Fund and the World Bank as the main instruments of a new international payments system based on currencies convertible at fixed rates into gold and, as the Daily Express complained for years afterwards, was another large nail in the coffin of Imperial Preference.

Far from being an historical aberration the Second World War was a predictable episode in capitalism; it was normal to a social system which throws up rivalry and conflict all the time. Those who chop up history, treating the war as if it were a separate incident, unique because of the personalities of the leaders at the time — lunatic Hitler, conceited Mussolini, and Chamberlain — spread confusion and misunderstanding. To understand why that war happened is to understand a lot about society today, and about why it operates as it does. This is a matter of great urgency, if we are to organise the world so that war is abolished. After all, those millions who were killed in the war were supposed to have given their lives to make the world safe for peace yet look at what has happened since 1945...
Ivan

Unemployment - cause and cure (1923)

From the November 1923 issue of the Socialist Standard

There are now upwards of 1 1/4 million workers registered as unemployed in Great Britain. How many there are not registered, and how many are working short time, it is impossible to say, but we may safely assume that there will be, before this winter is out, more than 1 1/2 million men and women, boys and girls, able and willing to work, but prevented from doing so. The present depression began at the end of 1920 and shows no sign of lifting, and it is no longer sufficient for Ministers to prophecy improvement; even the most credulous workers are now unwilling to believe in the early coming of the long deferred revival.

There is no lack of freaks, frauds and cranks anxious to gain attention for their fallacious diagnoses and quack remedies — free traders and protectionists, and advocates of imperial preference; deflationists and inflationists, Christians preaching Brotherhood, and others who want another war, bareheaded Daily Mailites, and their ridiculous Liberal Labour opponents, who weep for the wrongs inflicted on the poor German capitalists, emigrationists, and last and most futile of all, the motley crowd of "Socialists," who have time for these and every vain scheme, but no time for Socialism. We, on the other hand, urge now, as we have always urged, that there is a solution — Socialism; that it is the only solution; and that it is a solution for the present and not for the distant future.

The attempted explanations of unemployment are as varied as the suggested remedies, and it is necessary therefore to make clear a few important points. First, do rot be misled by those who have tried to saddle Poincare with the responsibility. The widespread unemployment began in 1920 and had reached a point in 1922 higher than at any other time since; yet the French occupation of the Ruhr did not take place until January, 1923.

Do not believe that it is an " abnormal " after-war development. Apart from earlier times of special distress due to political and economic disturbances, unemployment has been a constant feature of our system since the industrial revolution at the end of the 18th century. There has during that period always been a mass of employable but unemployed workers; the number increasing enormously during trade depressions and decreasing with trade prosperity. It never wholly disappeared, in spite of the big drain of emigration to America and the Colonies. Dr. Macnamara, M.P., speaks of a normal pre-war unemployed army of 200,000 persons (Times, 11th September, 1923.) Unemployment is a normal feature of capitalist production. And what of the future? Macnamara promises that
" that even if the unsettlement of Europe were ended and normal trade returned, the permanent unemployment in this country would be three or four times as big as in pre-war times."
While Sir John Norton Griffiths, M.P., a Tory, tells us (Daily Herald, 11th April, 1923) :—
" We have now got, and always, apparently, will have . . . trade boom or no trade boom a million or more unemployed men who cannot be absorbed in industry."
Neither Macnamara nor Norton Griffiths seems greatly perturbed, but it may be worth your while to consider carefully the prospect before you.

Refuse to be drawn by the Labour leaders into the free trade-protectionist controversy, for it does not concern you. It is no question of principle, but one of capitalist interests, and will be readily scrapped by those who teach you to worship it, when profit-making demands a new policy. The sudden conversion of the traditionally free-trade Bradford woollen industry illustrates this. Moreover free trade is an illusion in the modern world. What does free trade mean to a cotton or soap combine which has a practical monopoly of raw material and the home market? What does free trade mean to an international meat or steel combine, which allocates to its members certain geographical areas and a certain percentage of the sales in the total markets? And remember that the inquiries instituted by the Government immediately after the war brought to light the fact that there is now hardly any important industry which is not controlled in some direction by a federation or central organisation.

Protection is in effect the state support of one industry at the expense of those who pay for the whole cost of administration, that is the capitalist class. Protection or direct subsidies cannot in the long-run overcome the world conditions governing the whole mass of a country's trade, or better the position of the working class. A subsidy for agriculture, or a bar on the import of agricultural produce (advocated by a section of the Labour Party) will, it is true, stimulate the agricultural industry and lead to the employment of more workers there ? But that is only one of the results. The production of more food at home means a decrease of the import of food products from abroad, and a corresponding decrease in coal or manufactured goods which would ordinarily have gone to pay for those imports. A mere transfer of some miners or cotton operatives to the ranks of the unemployed and the corresponding employment of a number of out-of-work agricultural labourers does not solve the problem of unemployment.

It resembles the emigration schemes which appear to rest on the notion that one can remove unemployment by migrating the unemployed from one country to another. It takes no account of the fact that the problem is a world problem, because this is obscured by certain temporary factors and local peculiarities.

Protectionist U.S.A., which two years ago had six million unemployed, strictly limits immigration, but this has not been the means of fulfilling the late President's fatuous wish that the boom of last year should be an era of " permanent prosperity." Depression is beginning there once more, and during 1922 alone no less than two million farmers and hands had to leave the land and resort to the industrial towns, to swell the unemployed army. Their chief immediate trouble was that there is too much wheat in the world for the capitalist system to dispose of, and yet some of our Labour men still believe that the panacea for agricultural stagnation at home is to grow more wheat !

Canada has its own problem to face, and cannot even find work for all of a few thousand men who were enticed out there for the harvesting. Unemployment is acute and growing in South Africa, where it is also complicated by the racial hostility between the relatively highly paid (and out-of-work) whites, and the low paid blacks. The South African unemployed actually asked to be migrated to Australia to join the ranks of the unemployed there, many of them want to come "home" to England. South Africa is also asking for immigrants—"with £2,000 capital."!

France has but little unemployment, because she has remained largely an agricultural country, with a land system of peasant proprietorship. There are relatively few wage-earners, the only ones liable to suffer unemployment, and for some time past French industry, especially textiles, has been doing big trade abroad at the expense of English exporters, owing to the depreciation of the franc. This has led to an amusing clash between one brand of currency-mongers, who want to save us by raising the £ sterling to par, and another brand who can see the millenium in lowering it until Bradford mill owners can undersell French cloths. However, to the extent that French trade prospers and stimulates development of industry (including the Ruhr industries) France, too, will become more and more dependent on the state of world trade, and her growing army of factory workers will be drawn into the pool of, potentially, surplus labour.

It is also quite wrong to suppose that unemployment is a product of over-population. Sir William Beveridge, at the British Association, dealt with this, and quoted elaborate statistics to show that
"Man for his present troubles had to accuse neither the niggardliness of Nature nor his own instinct of reproduction." — "Daily Telegraph," 18/9/23.) Unemployment, he said, was " a function of the organisation and methods of industry, not of its size."

The British Government has announced its policy of authorising the expenditure of £50,000,000 on relief works for the coming winter. This, in face of the evident hopelessness of expecting any important trade revival in the near future, is merely an admission of the failure of the capitalist class to solve the problem. It is just a form of relief without, what is from their viewpoint, the drawback of idleness, leading to a loss of the habit of work. The capitalists as a whole, and their thinkers and apologists, are in the same fatalistic state of mind as one individual employer who was recently declared a bankrupt. He ascribed his failure to his anxiety not to dismiss some old employees although he had no work for them. He just "hoped" that " something would turn up." It didn't for him, and it won't for the system as a whole. Nor is there any hope from Labour Governments. Labour Governments in Australia (including the one still left) were just as helpless as any other; they used precisely the same methods to reduce wages when prices fell, and treated the resistance of the workers with the usual brutality. Unemployment is as rife in Queensland as in any other capitalist state, and as little is done for them. In fact the unemployed are better off under our own Government.

The Australian capitalists, like those here and elsewhere, continually have one consideration in mind. At all costs the workers must be kept from determined discontent. First promises, flattery, or the illusive benefits of Labour Governments are tried, then the paltry bribe of relief and doles, and finally, if nothing else will serve, the open violence of the armed forces of law and order.

Our explanation of the problem is simpler than any of these. It may from one aspect be summed up in the statement that the inability of 1 1/4 million British workers to find work although they wish to do so, is due to the frank determination of another million persons not on any account to spoil their pleasant lives by painful toil. You work because it is your only means of getting the means of living. The things you need are the result of the application of your labour to the natural resources, but because these natural resources, along with the railways, the factories and steamships, etc., are privately owned by a small class of wealthy persons, they can and do live without having to work, and they possess the power not only to appropriate the proceeds of your labour, but also when they think fit to prevent you from working at all. In the early days of capitalism these people justified their rents and profits by the services they rendered. But by now they have, as a class, long ceased to render those services. Land¬owners are no longer the pioneers in agricultural science, they do not lead the way in raising the technique of the industry, or in encouraging their tenants to better methods of production. They lost 35 years ago their last semblance of being a necessary part of the machinery of government, when in 1888 the Justices of the Peace were all but abolished, and their powers handed over to the elected county councils. Industrial capitalists do not now bring brains, enterprise or directive ability to industry; these functions are mainly exercised by salaried officials, members of the working class. Far from promoting economic development, the growing tendency is for the controllers of the chief industries to restrict production in order to save themselves from the world shrinkage of markets. As for the so-called "risks" of capital, it is a commonplace for big business when in difficulties to get the State to help them out and take the risk from their shoulders.

The problem of permanent unemployment arises out of this one fact of private ownership. The owners return to the working class as wages an amount which will purchase only part of the total product. The balance cannot be consumed entirely by the owners and must in any event first be sold. The manufacturer of cotton cloth, for instance, might as well be propertyless as to have on his hands a great amount of unsaleable goods. To sell there must be markets, and owing to the rapid industrialisation of the last 50 years there is now relatively little demand for the manufactured products of the advanced nations.

The competition for the markets causes wars, but far from solving these only aggravate the problem. During the artificial prosperity of war time great strides are made in powers of production, and when peace comes the glut is worse than ever. The Right Hon. C. A. McCurdy, M.P., writing in the Daily Chronicle (14th September) pointed out that the steel industry of this country after the war was developed much above the demand of the market for its products. And it is foolish to suppose that trade depression and unemployment can be avoided by reducing wages or by lowering the cost of production in any other way. The enormous wage reductions in Great Britain which followed the Labour leaders' campaign for increased production, certainly did not stem the tide of unemployment. And if it were true that lower prices would cause a trade revival, the capitalists are perfectly free now to lower their prices by cutting into profits. They would do so if this policy would lead to a corresponding increase of sales. But the world economic position is such that no reduction of prices would cause any appreciable increase in demand. In fact in many industries (cotton for instance) this has been clearly realised, and the policy is being followed of deliberate and agreed restriction of output in order to raise prices. Sir Charles Macara stated this explicitly for the cotton trade (Business Organisation, March, 1923). He argues that the loss of foreign markets led to cut-throat competition at home without any material growth in home sales. The producers sold no more by lowering prices and merely sacrificed profits. It has been said that the Capital Levy, by reducing taxation, would enable manufacturers to sell cheaper, and thus would revive trade. The argument is fallacious, because it assumes that capitalists who now do not reduce prices, would do so then; ignoring the fact that they could do so now if they wished, and that they would not be compelled to do so then if they did not wish. They do not reduce now because it does not pay to do so, and unless the world situation as a whole were changed, it would still not pay them to do so after a Capital Levy. Assuming a reduction in taxation occurred, only profits would benefit.

If then, as we say, unemployment is a necessary adjunct of capitalist production, there is only one remedy. The workers must deprive the capitalist class of their ownership and control of the means of production. Once made the common property of society, they can be used for the purpose of satisfying society's needs; not the unstable demands of a market, but the direct human needs of the people.

For the application of this solution only one thing is lacking. The political machinery exists through which the workers can constitutionally express and enforce their will. The knowledge of the productive process in all its branches is contained within the ranks of the working class. But the majority of the workers still support the capitalist system of society. The Socialist party is doing all it can to undermine that trust in capitalism, and it invites the immediate and active assistance of all workers who recognise the accuracy of our contention, that there is no future for our class except in Socialism.
Edgar Hardcastle


Is Recovery Under Way? (2013)

The Cooking the Books column from the December 2013 issue of the Socialist Standard

If you go by the official statistics the answer will be ‘yes’ since the quarterly figures for GDP (Gross Domestic Product) have shown a slight increase for a number of successive quarters now.

GDP, however, is made up of various elements – government spending, business spending and consumer spending – but it is only business spending that drives the economy, the other two being dependent on it and following the path it takes. So an increase in GDP due to one of the other two elements might not necessarily signify a recovery. So the relevant question is: is business investment increasing?

The government is anxious to play up the figures both to encourage business confidence, i.e. whistling in the dark, and to attribute them to its policies. ‘I have been vindicated on economy, Osborne claims’ was a headline in the (London) Times (9 September) reporting his claim that critics who had advocated a different policy ‘cannot explain why the UK recovery has strengthened rapidly over the last six months.’

We have not been advocates of a different policy (it’s not the job of socialists to advise governments on how to run capitalism) but we can offer another explanation: that is something that has happened independently of government policy and was always eventually going to happen anyway.

Vince Cable, the Business Secretary, has been rather more cautious. According to the (London) Times (11 September), he has spoken of the danger of ‘complacency, generated by a few quarters of economic data’ and said that ‘the beginnings of a recovery will not become meaningful until there is a strong and sustained business investment, which remains well down on pre-crash levels.’ Indeed it is. According to other figures from the Office for National Statistics:
‘From 1997 to 2008 GFCF was between 16 and 17 per cent of GDP. From 2009 onwards, this has fallen to between 14 and 15 per cent.’
GFCF is Gross Fixed Capital Formation which includes capital investment by the government as well as by businesses. Cable is right to point out that this will have to increase before there can be any talk of a recovery beginning.

Socialists accept that sooner or later there will be a recovery of business investment. As Marx pointed out, ‘permanent crises do not exist’ (Theories of Surplus Value, chapter XVII). Any more in fact that there can be a permanent boom. Capitalist production is a never-ending cycle of booms and slumps.

A slump eventually creates the conditions for a recovery of business investment (just as a boom eventually creates the condition for a slump). Stocks are cleared. Some businesses go under and their assets pass cheaply to their rivals (devaluation of capital). Real wages fall under the pressure of increased unemployment. Interest rates go down due to the supply of money-capital exceeding the demand for it.

With the possible exception of there still being room, even a need, for more business failures, these conditions have been met so the scene has been set for a recovery. But there is no telling how long it will take or whether it will be sustained. The slump won’t be over till GDP and business investment reach pre-slump levels and there’s a long way to go before that happens.