When the unemployed figure rose to 1¼ million at the end of 1975 the Minister for Employment, Michael Foot, said it was “intolerable”. Early in 1976 the figure became over 1,430,000; it has continued rising, and it is now more than 1,600,000.
Foot’s remark, foolish as it was, can be linked with an assertion in an article in the Daily Telegraph of August 3rd. The writer, Philip Vander Elst, said Marxists “ascribe every crime and every disaster perpetrated or caused by Western democratic politicians to the prior existence of private property and free markets, instead of recognizing that they usually represent a departure from the norms and values of economic liberalism”. This Tory view states the same as Foot implied—that depressions and large-scale unemployment are rare aberrations. Foot should try to explain why his “intolerance” of them cannot be put into effect; Vander Elst, why we do not attain a departure from the “departure”.
This is all moonshine. Unemployment is a norm of capitalism, and we have hardly ever been free from it. Up to 1939 the existence of a million unemployed, or 7½ per cent, of workers, was regarded as normal. From 1920 to 1939 the figure was continuously above that level, the peak being 2,745,000 in 1932. The only fall was in the immediate post-war period 1919-20, when it was 2.4 per cent, but in 1921 it rose to 16.6 per cent. After the second world war the figure again stayed low for a time, rose to 3 per cent, in 1947, and after 1960 started definitely to rise through a series of minor crises. In the third quarter of 1971 it was 5.6 per cent., and reached a million in 1972. The figures are for registered unemployed, and in 1972 it was alleged by Harold Wilson that the true number was “nearer three million” (Financial Times, 8th April 1972).
Certainly to many people, school-leavers in particular, the sharper growth of unemployment in the last few years has come as a shock. The press and politicians have encouraged them to think it is abnormal (what else could they say? the alternative is to acknowledge that this is how the capitalist system works). One way of looking at unemployment is to describe it as waste, putting men on the scrapheap etc. From the individual’s point of view, so it is, but Marx saw that a “surplus labouring population” has a necessary function for capitalism.
It forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost.
He summed up the movement which governs employment and unemployment:
The course characteristic of modern industry, viz., a decennial cycle (interrupted by smaller oscillations), of periods of average activity, production at high pressure, crisis and stagnation, depends on the constant formation, the greater or less absorption, and the reformation of the industrial reserve army or surplus population.(Capital Vol. 1, p. 646, Unwin ed.)
Marx was mistaken in believing the cycle was a ten-year one; but that is a side issue, and in all other respects the experience of the 19th and 20th centuries has borne him out.
Under capitalism, production is carried on exclusively for sale and profit. The wealth produced goes to markets, which may mean international dealings in capital equipment or, equally. High Street shops. As a market, none of these differs from the stallholder’s business. At one time trade is booming; he needs more goods and helpers, and thinks of expanding into other lines. At other times things are bad, and if they stay like it he cuts down his stock and his personal expenditure: thus, other businesses are affected in turn. How wide and deep the process goes depends on various factors, but this is the nature of an economic crisis and the depression which follows it. At the present time evidence of it is plentiful in closed-down shops, price-cutting, bankruptcies — and large-scale unemployment. This is the cycle which Marx described. In due course trade picks up again in the industries affected; the next boom is on its way, to be followed by the next crisis.
The reserve army is a permanent feature of capitalism. In the post-war period it has up to a point taken other forms, by successive extensions of the school-leaving age and earlier retirement. In 1973-74 19.8 per cent, of the population of Britain were full-time pupils and students, as against 9.128 per cent, in 1964-65 (EEC statistics). Nobody thinks of fifteen- and sixty-year-olds as unemployed, since they are exempted by law or agreement from working. But not many years ago the large numbers in these groups would have been among the unemployed, and they are still part of the industrial reserve. School students are always potential workers, of course, and in boom times workers may carry on after their retirement age.
Though unemployment as a social problem cannot be remedied, “solutions” are always to be heard. One of these is “job creation”, the idea that the Government can devise occupations and pay workers (or guarantee their pay) when industry and commerce do not need them. The reasoning is not simply that this would reduce the unemployment figures, but also that it would hold off discontent among the young in particular. If it were practicable on any scale, it would not be abolishing the reserve army but only finding barracks for them. In fact both Labour and Tory governments have done this to some extent by putting money into ailing companies (Leyland and Chrysler cars are examples, but there are several others) to “save jobs”; and by "regional policy” which failed expensively to check the growth of unemployment in the areas concerned.
It is noticeable that no “unemployed movement” has been built up in the present depression. The “Right to Work” campaign appears to have fizzled out (that may possibly account for the adoption of Grunwick as the left-wing’s Cause Célèbre). In the 1930s the National Unemployed Workers' Movement organized marches and demonstrations, and agitated over allowances with local committees. The capitalist class have learned from past experience, and the existence of the Welfare State today has taken some of the heat out of unemployment. Workers should learn to look carefully at proposed agitations; the NUWM run by the Communist Party was its chief source of recruitment when it was faring badly elsewhere.
Unemployment is intolerable, but not in the Michael Foot sense. The wages system itself is the barrier to the fullness of life; pushed out on reduced pay, the barrier is higher and thicker still for the industrial reserve army. There is an alternative — to get rid of the system, and establish Socialism.