Prosperity and “Dividing-up”. (1926)

From the February 1926 issue of the Socialist Standard

In spite of the testimonies, plain to the eye of the beholder who observes intelligently, most people do not really grasp the immensity of modern production. When the Socialist puts forward his plea for the common ownership of the means of wealth production he is sometimes greeted with the statement that if all the wealth produced was divided among the whole of the people, the workers would receive little more than they do at present owing to the small number of those who are very wealthy and the multitude of those who are poor. Quotations are given from economic “authorities” who assert that if the wealth of the rich, or the total income of the whole of the people were “divided up” the result would only amount to an extra pound or two each. The insignificance of the amount is then paraded as a demonstration of the unpractical and delusive nature of Socialist proposals.

Although “dividing up” has no place in the Socialist philosophy, and our case, from the point of view of wealth, is built upon modern productive capacity rather than the actual amount of wealth at present produced, yet it is still possible to build up a strong position even on the ground of what is actually produced. The great war furnished us with unanswerable evidence on this side.

Captain B. H. Liddell Hart, dealing with the cost of the war in his little book. “Paris—the Future of War,” makes the following statement : —

“For this country alone it reached a cost of £8,000,000 daily. Our total war expenditure was nearly ten thousand million pounds.” (page 10.)

There are roughly fifteen million families in this country. Taking this and the above figures, a little arithmetical calculation gives us an interesting result. Ten thousand millions for four years is two thousand five hundred millions a year; and this divided by fifteen millions is, roughly, a hundred and sixty-six pounds a year per family, or more than three pounds a week. Modern production, then, is so prolific that this country was able, literally, to throw down the drain for four years the equivalent of three pounds a week per family, and yet produce enough to feed, clothe and house the civil population during the whole of that time and even enable war profiteers to accumulate vast fortunes !

Unreflecting people may raise objections to the view here set forth on the ground that the war was financed, to a great extent, by credit, and brought in its wake a National Debt ten times the size of the prewar debt. In reply to this, it may be well to point out that credit will not fill empty stomachs or the cannon’s hungry mouth. Wealth to the full value was actually produced. An army of approximately four millions was fed, clothed and supplied with munitions of war; munition workers were fed, clothed and housed ; and the rest of the civil population were fed, clothed and housed, during those four years of comedy and tragedy.

The professional economist who claims to “prove” that modern production is incapable of meeting with ease the needs of the whole population, can only do so by playing tricks with figures, an old and oft-used method by the special pleaders for those who rule.

There is another type of special pleader who is constantly urging the worker to work hard, work long, and work cheaply in order that goods may be produced in greater abundance so that there will be more to “divide.” The theory being that cheap wares flooding the market will “stimulate” industry and bring work to the workless and more wages to those working. There has been a minor boom in this stuff lately (I learn that it has also invaded the columns of the “Daily Herald”), and America has been held up as a kind of El Dorado of hard work, peace and prosperity for workers and masters.

As the information is both interesting and conflicting, I will give some specimens.

The New York correspondent of the “Evening Standard” (16. 12. 25.) writes rapturously, “All classes in the country are saving money and making investments in stocks and bonds” ; Trade Unionism as a challenge to Capitalism is practically dead ; “the leaders of the American trade-union movement have long recognised that if they kill the golden goose of financial leadership, they must go without the advantages of high wages” ; class antagonism is breaking down and the United States is well on the way to demonstrating that “Capitalism is its own justification and is the most effective economic system to ensure general prosperity.” The New York Correspondent concludes with the remarks that, “The necessity for trade union threats to secure higher wages is disappearing fast from American industrial relationships. . . . So improved machinery finds no obstacles among the working men, who see in every time-saving device the possibility of more money to themselves, if not immediately, yet in the measureable future.”

So writes the New York Correspondent, and I must say I am “drawn” by his touching reference to the “golden goose of financial leadership.” A golden goose must be a dead thing, and utterly different from the American goose that lays the golden eggs.

Two days after reading the New York Correspondent’s article, I was brought up with a jerk by another article in the same paper, but in the columns headed “A Londoner’s Diary” (18. 12. 25.), and this is what “A Londoner” said :—

“It is too much our custom to believe that wage disputes are indigenous to this country, and that no other peoples are affected by Labour troubles.

“I am advised from New York that a first class industrial crisis is rapidly maturing in that city, as a consequence of a general increase in prosperity. Fifty trades, representing some 120,000 mechanics and labourers, are asking for new wage contracts for the coming year.

“Of these some thirty-seven trades demand increases varying from 50 cents, to four dollars a day, which would mean for the year a total increase of the wages bill of 80 million dollars) or 20 million pounds, in the industries affected.

”The employers, however, are disinclined to consider these demands. . . .

“A typical demand is that of the building trades, who ask for an average wage increase of 14 per cent. There is still, of course, plenty of time for negotiation, but the means for a settlement do not appear favourable.”

Here is contradictory information which suggests that the amicable relations praised by the New York Correspondent partakes, of the stuff of which dreams are made. But there is a point of agreement between the two which it would be wise to make a note of—there is prosperity in America whether the American workers have a part in it or not.

The Washington correspondent of the Sunday “Observer” (10. 1. 26.) also has something to say on this subject. He writes of American prosperity in even stronger terms. He says :

“There was never in any country in any time such a prodigal production of goods or such a wide diffusion of them.” . . .

“America has not only escaped the post-war debacle, but has gone on to unparalleled prosperity.” . . .

“In America, organised labour is so fully committed to the principle which looks with suspicion upon any limitation on individual output, and which favours the largest output by each man, on the theory that the more goods produced the more there will be to divide.”

The correspondent of the “Observer” explains American prosperity by the economies, mechanical short-cuts, standardisation, and other devices that have “made Henry Ford’s automobile factory a model for the maximum output with the greatest economy of labour,” and “America has just seen a combination of conditions that defies orthodox political economy : lowering costs and prices of goods, accompanied by higher wages for labour.”

The last quotation knocks the props away from the case built up by employers in this country who contend that England cannot compete in the international market on account of high prices due to relatively high wages. It is not the work of the low-paid coolie that is threatening English industry so much as the low-priced product of the high-priced American workman. The railwayman, the shipyard worker, and the coalminer would be wise to bear this in mind when fighting wage reductions because American high wages (whether true or false) is boosted by the papers that publish matter serving the interests of the employer.

The “Daily News” (22. 1. 26.) publishes extracts from a report by two young British engineers, who have recently toured America, on the conditions that have brought about American prosperity. They also support the high wages—low prices view as a lesson to European nations.

But to return to the main point—the suggestion that cheapening productive methods brings as a result a greater production of goods and consequently more to divide with greater prosperity for everybody.

It requires very little thought to dispel this pleasant phantasy.

The absolute ideal aimed at by industry is a future when one man can, by pressing a button, set in motion the machinery that will automatically perform all the functions necessary to produce what will meet the needs of the whole world without the help of another labourer. The greater the productivity of machinery and the economy of labour the nearer industry approaches to this ideal. That is to say, that fewer and fewer workers are required to attend to the needs of the world. Given the capitalist method of production, under which the means of production and the products are owned by the employers, it is surely obvious that, after a certain limit has been passed, the greater the productivity of machinery the more workers will be thrown out of work whose labour has been “saved.” How will they stand in the division of wealth? As they will not be receiving any wages they will have no means with which to buy—unless it be the unemployment dole ! So that the future of industry would appear to present a picture of growing prosperity in which wage earners tend to decline and dole receivers tend to increase. A beautiful picture of prosperity !

Gilmac.