The Railway Review (29 July, 1955), publishes an article by Mr. A. B. Cramp, called “Wages in Society,” in which he claims that an earlier article was wrong because it was based on Marx’s theory of value —“which was disproved some 60 years ago by Philip Wicksteed, economist, Unitarian Minister and acknowledged friend of the working classes.”
Mr. Cramp is strengthened in his opinion that Marx was wrong by the fact that G. B. Shaw was won over to Wicksteed’s view. It may be remarked that if we are asked to believe that any attitude must be deserving of acceptance if Shaw supported it, we would have to swallow some very curious doctrines, among them Shaw’s adoration of dictatorship and the dictators, Stalin, Mussolini and Hitler.
However Mr. Cramp tries to prove his points. Having briefly and not very clearly summarised the Marxian explanation of the tendency towards equal rates of profit between industries with much constant capital (machinery, etc.), and little labour and those with little constant capital and much labour, he goes on as follows:
“ The implications of those views which Marx ignored are:—1. That if competition forces prices down, some part of the surplus value created by labour is being passed on to consumers. 2. If machinery made labour “more productive,” it was in fact contributing to increased production in a way that made some return on capital just and equitable. 3. As capitalists were forced to increase orders for machinery, another portion of surplus value was being passed on to labour in the capital goods industries, and labour thus benefitted by increased employment.“Finally, Marx’s contention that competition would continually drive down profits has not been borne out by subsequent history”
Taking point (1) Mr. Cramp, who evidently is not very familiar with the real world, imagines that when prices fall those consumers who are the working class just sit back and watch their standard of living rising. In the real world of course this is the signal for the employers to start a drive to try to reduce wages. Mr. Cramp should look up the price fall of the early nineteen twenties and see what happened to wages, including railway wages.
His point (2) is that if machinery increases production this makes some return on capital “just and equitable.” The logic of this is peculiar. As the machinery is itself produced by the working class why does this justify a return to someone else? Or does Mr. Cramp think, for example, that the locomotives on the railways were designed and constructed by the ex-shareholders who have now been provided with a guaranteed permanent income by a beneficent Labour Government ?
In his point (3) Mr. Cramp appears to have hesitated in the middle and changed his line of thought. The sentence begins with the statement that Capitalists “passed on” surplus value “to labour” in the capital-goods industries; but it lamely ends with the different idea that it wasn’t actually “passed on to labour” (after all the Capitalists still own it), but reached them in the form of “increased employment.” Mr. Cramp might pause to ask himself why, if “increased employment” is a “ benefit,” the Capitalists don’t pass the benefit on to themselves? Why do they bestow that benefit only on the workers and reserve to themselves the real benefit of continuing to own the capital they have invested in the capital goods industries?
Mr. Cramp’s final point here is an alleged prophecy by Marx that profits would continually fall. If Mr. Cramp would turn to Chapter XIV, of “Capital,” Volume III., he would find Marx going into some detail to explain why the rate of profit does not fall. Before examining the factors in detail Marx opens the chapter thus:—
”. . . the difficulty, which has hitherto troubled the vulgar economists, namely that of finding an explanation for the falling rate of profit, gives way to its opposite, namely to the question: How is it that this fall is not greater and more rapid: There must be some counteracting influences at work, which thwart and annul the effects of this general daw, leaving to it merely the character of a tendency. For 'this reason we have referred to the fall of the average rate of profit as a tendency to fall.”—(p. 272).
Mr. Cramp then risks a prophecy of his own, that the Government can always prevent unemployment.
“It was the discoveries of economists in the 30’s, of Lord Keynes and others in England and abroad, that made lasting full employment possible. The Labour and Conservative parties favour different methods of achieving this end but today both are able to achieve it. In the inter-war period neither party knew how to do it.”
We suspect that Mr. Butler and Mr. Gaitskell do not feel nearly so confident about this as does Mr. Cramp. Perhaps they recall that, despite the new knowledge provided by Lord Keynes and others to the Roosevelt Administration in U.S.A., the amount of unemployment in that country was as great in 1939 as it was six years earlier when Roosevelt started curing it with his “New Deal” policy.
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