Building profits versus building homes (Part 1) (1984)

From the Winter 1984 issue of the World Socialist

1. THE CONSTRUCTION INDUSTRY UNDER CAPITALISM

Housing is one problem of capitalism which has been a constant source of difficulty and is part and parcel of working class life. Few members of our class escape some aspect of housing trouble.Whether it is the complete crisis of homelessness, or the stress involved in keeping our homes through paying rent or repaying a loan. Most members of our class live in relative poor housing, some of which is within the bounds of adequacy, while the rest reflects the worst in living conditions.

Our quality of housing acts as good guide to the degree of suffering associated with the many other problems inherent in our class position such as bad health, poor nutrition and inadequate education. We can therefore accept that the problem of housing reflects the problems of capitalism. Accepting this, it is logical to assume that the solution to the housing problem is only attained through the solution of the problem of capitalism.

In the beginning an investigation into housing difficulties, one simple observation should help us overcome our surprise at the absurd nature of our findings: that production under capitalism, not least the production of buildings, is based on he ability to achieve a profit and not to fulfil human needs.

A HOUSING SHORTAGE?

The first fallacy to dismiss is the belief that “housing shortage” is the beginning and end of the problem. As it so happens, there is currently in some areas of the world severe “housing shortage” and this has been the case at different times throughout history. This is not however the source of the problem, because if it were it could be logically assumed that there was some intrinsic inability of society to meet the housing needs of its populus. It has had plenty of time and resources to do so , so this is clearly not the full story.

The problem in the economically developed parts of the world is one of “allocation”. In other words, how best the housing stock is to be distributed to meet human requirements. A scant observation shows that the ability to pay is the deciding factor in gauging the standard of housing to which you are entitled. A walk around the slum areas of your city will tell you that it is the elderly, the mobile poor and the immigrants who are concentrated in the poorest housing stock. It is no coincidence that these lowest financial groups live in the poorest housing conditions; housing conditions which least meet their needs—the elderly with no care facilities, and young children in high-rise flats. It is also important to realise that this group and others such as the homeless, mental patients and ex-prisoners—those who make the poorest section of our class—have little chance of housing themselves, and must accept “being housed”. The limitation on their freedom puts them in a more degrading position than the urban poor in the shanty towns of Latin America and elsewhere who have at least built their own homes, even though living in the most incredible poverty.

NO INHERENT INEFFICIENCY

Another fallacy which tends to cloud our conception of the issue is that which suggests that the housing problem has its basis in the inefficiency and lack of organisation of the building industry. It is true that this industry is not generally well organised in relation to output and the workers employed there; it is also true that at times it can operate in an inefficient manner. The fallacy is however that this is a cause of the housing problem rather than, like the housing problem itself, an effect of an inefficient and unrealisable social system. How can the construction industry possible be efficient when it is subjected to the demands of profitability in a system which produces an uneven flow of work, conflict between employers and employees, and most importantly, the fact that buildings which create the greatest profit in construction are usually the least socially useful and therefore take preference over housing?

In most of the economically developed parts of the world, the construction industry represents (if not the largest) one of the largest employers. Indeed if we include those involved in related industries such as building materials, the number of directly employed and dependent employed increases dramatically. In this current recession the economic stringency is clearly affecting the industry. With inflation of home prices coupled with the wage restraints of workers, our ability to buy property has been depleted. Of greater effect is the reduction of public spending of governments, as they are substantial clients for new buildings. In cases like American, most European countries and Britain, the government constitutes up to half of the building trade clientele. All these things have allowed for substantial unemployment in the industry: in many countries at any given time there is up to 12% unemployment, in this industry alone. This means that we have a situation where people still need housing while those who can build that housing are unemployed because of the economic recession. This is the best illustration against the argument of "house shortage" and it was shown in its most ironic form in Britain in the mid-1970s.

The National Federation of Building Trade Employers represents the largest private firms in the sector in the United Kingdom. In 1976 they initiated a campaign costing a quarter of a million pounds with the title of "Let us Build". The President of the Royal Institute of British Architects led the delegation of employers to the Prime Minister in an appeal for building work. So here was a situation where those who knew the business realised there was no shortage of workers, no shortage of materials, and no shortage in the demand for building work; there was however one thing missing—finance. Of course, these Building Trade Employers were not motivated by anything other than the threat to their profits, but their action did display the real source of the problem.

UNEVEN FLOW OF WORK

The building industries suffer the inevitable slump and peak cycle of capitalist society and therefore suffer the response of the owner of wealth to these trends. The study of building activity acts as a thermometer to the health of the capitalist economy.

Capitalists will, when profitability is high, move surplus value into fixed capital projects such as machinery, equipment and not least buildings. This opportunism of the possessors of capital is a good sign for the building industry and they have little difficulty in finding the resources, men and material, to meet the awakening demands. All is rosy in the garden. Conversely, when profitability is low for the capitalist, particularly the industrialist, in other words in times of economic depression, the first area to be abandoned is that of capital transfer into fixed capital projects. This is equally true of government activity as postponement or cancellation of construction is the easy, obvious way for a government to cut back on its spending. Furthermore, and of much more importance from a supply point of view, in a depression builders ignore housing construction to concentrate on the more profitable area of large building projects, often those of least social necessity.

The nature of the industry diminishes its ability to either prepare for or cope with the advent of slump economic conditions. The overwhelming majority of building firms are very small with 60% employing less than 8 people (taking European countries and America as studied areas), with only the top 2% each employing over 1,000 people. This reflects many features of the industry like localisation, the necessity of specialisation; and most importantly the necessary financial commitment if contractors are to take on the very large contracts. It is relatively easy to start a small building form as the initial capital outlay is low due to the low level of mechanisation and the number of hire firms for the more costly necessities such as mixers, scaffolding etc. All this means is that the small firms concentrate on small sites jobs, improvement work and similar projects. The other side of the coin is the traditionally high tendency for bankruptcy in building firms and in many countries up to a quarter of all industrial bankruptcies can be expected to come from building firms. All this reflects the fluctuation in the demand for building work and is not a general reflection on the inefficiency of these firms to do a good job. One major consequence is that this fluctuation of the building market means that most building firms hire and fire as demands dictate.

The type of unpredictable fluctuation suffered by the building industry puts it in a much more precarious position than most other areas of capitalist commodity production. It tends to attract peculiar action from an economic point of view. For example, one would expect (purely from the economic criteria of capitalism) that if there is inefficiency in an area of production increased investment would be undertaken to improve the productivity of labour. But, as this does not occur due to the accentuated fluctuation in work flow, we see a trend where, in most capitalist countries, the construction industry accounts for up to 8% of the Gross Domestic Product whilst only employing about 4% of all capital employed in production and service industries.

ROADS BEFORE HOMES

The conflict between profitability and human requirements is displayed in abundance in the construction sector. So what is the source of this conflict, how does it manifest itself, and most importantly, what is its effect on a basic human requirement—housing?

Although the methods employed in the building of houses are moving away from the traditional techniques to become more of an industrialised process, it has not been to a sufficient degree to tempt the big investment and concentration of resources from the large building contractors. Since the last world war, the major incentive for firms to put their profits back into fixed capital projects has been in civil engineering. Not coincidentally, this has been the area of the highest productivity in the same period; putting a nail in the coffin of the inherent inefficiency argument.

This trend has its roots firmly fixed in the evolution of capitalism. Contracts grew bigger with post-war development and the growth of motorways and high-rise buildings and the like. These contracts meant big capitalisation and therefore the big firms came into their own. These firms had the ability to invest in the heavy plant machinery necessary to take on these mammoth contracts and dig the foundations and understructures of the tall buildings. The large firms capable of such investment had a degree of monopoly in the new emerging sector where annual turnover and profits were attractive. This is the more productive sector. The only attraction left in housing for the big firms is in industrialised housing or the possibilities of land speculation in areas for home building, as the high cost of the specialised trades in traditional housing is unattractive to these firms. These large firms can also afford the expense of mobility to search for new and more profitable investment areas. The Middle East is an example of such an area, although indications are that there is currently a reduction in available projects there.

So what is left for the house building sector? The small-time builder picks up repair work and extensions and other small jobs connected with house maintenance. This is the life blood of the small one or two-man firms which might employ a couple of workers on a short-term basis as demand dictates. These types of small forms rarely get beyond this stage and few get the opportunity to become tender competitors in the speculative housing market. The larger firms are better able to meet the demands of the system-building of large housing projects, with the financial ability to buy large areas of land and to keep a large work-force of tradesmen occupied, as many have many houses at different stages of production. This type of housing is common to us all and is a feature of the large estates in the cities we live in. The result is large areas of monotonous housing similar and unimaginative. They quickly become modern slums with vandalism and miserable lives common features. The cause is commonly put down to being the disassociation of the designer to the building process, poor management practices and the inefficiency of competitive tendering, but this is just another way of saying that the job is completed in as short a time as possible as cheaply as possible, to ensure the maximum profit. 

NO WAY OUT WITHIN CAPITALISM

The relationship between the housing problem, the building industry and our economic system has hopefully become clearer. The facts tell us the industry suffers many problems which have been related to one thing: the contradictions and conflicts of the system of capitalism. It is us as members of the working class who best know the problems we go through in order to acquire and keep the place we live in and the standard of accommodation we are subjected to. From this experience it is abundantly clear that the provision of housing is not related to our needs. The facts also inform us that capitalism prevents this from happening because of the economic obligation forced on those who do the building. No one decides we should live in slums.

If our slums are a product of the inability of the building industry to supply to us the type of housing we want, then this is because the building industries are clearly responding instead to the realities of capitalism. That reality is the profit motive and the cost is that human needs will not be met. This will continue for as long as this system continues and you will suffer your housing conditions and be aware of the housing conditions of the rest of our class as long as this system continues.

Brian Montague (Ireland.)

Link to Part 2.

Shot at dawn (1985)

Book Review from the December 1985 issue of the Socialist Standard

For the Sake of Example, Anthony Babington (Paladin £3.95)

A festival of glory greeted the First World War. All over Europe young men scrambled and wheedled to enlist in the armies and young women to give them a rousing send off. It did not take long for the dream to die—in the mud, the shellfire, the machine guns raking the wire, the indescribable deaths. It was, to be sure, more than human bodies and minds could bear; those who did stick it out managed through some trick of stoicism or more murderous frenzy called courage. A few did not have the knack and tried to opt out of the carnage. Which could be very serious for them; if they were caught they were liable under military law to execution, as happened to 346 British soldiers.

Their "crime: was, in the vast majority of cases, "desertion", with other offences such as "cowardice" much less common. Some of these men were reservists who had been recalled to the Army in 1914. Others were enthusiastic volunteers in Kitchener's New Army, which was all but liquidated on the Somme in 1916. Some were described by their commanding officer as "worthless" because of their consistent inability to strait-jacket themselves into military routine. One or two had been vagrant before joining the army, for them, at least, the outdoor life presumably held no problems but the repressive disciple did.

In many case, however, the executed men could not, even by British military standards (which in 1914/18 were particularly fierce, compared to those of other countries and to those imposed as recently as the Boer War) be described as cowards or slackers. They had endured years of trench warfare without cracking, until an especially horrible experience like being buried alive or having a companion's brains shell-splattered over their face. But the concept of shell shock was not popular. Medical examinations of the "offenders" were not an automatic part of the proceedings and in any case they could be contemptuously cursory: "There's a fellow here who ran away from the trenches. They are going to shoot him and they want me to say of he's responsible. I shan't be long" was how one doctor put it.

The field courts martial were hurried and incomplete affairs, for the defendant rarely had any adequate representation, such as might have been allowed in any magistrates court, and it was not unusual for no defence at all to be offered. A particularly inhuman procedure prevented the court announcing a guilty verdict straight away; instead it was passed up through the various layers of command, each one making  a recommendation even though they might have no direct experience or knowledge of the man. The final decision rested with the commander-in-chief who very often sent the soldier to execution, not on the circumstances of the case, but on his perceived need for a deterrent example.

Anthony Babington is a circuit judge; during the last war he was twice wounded and obviously sees no reason for fundamentally questioning a social system which requires workers to fight and kill each other to settle a dispute concerning the interests of their ruling class. What worries Babington are the peripheral issues, such as the long-distance bellicosity of those staff officers and the bigotry of doctors who ignored their Hippocratic oath in the interests of the war machine.

Babington's reasoning is flawed by the fact that war is not humane. By no rational process does a person attack and kill someone they have no contact with nor knowledge of. The discipline of a military life is designed to stamp out rationality under the boots on the parade ground, the uniforms, the saluting, the "regimental traditions". To deviate from that can be a threat to the whole grisly edifice, in the past often leading to the firing squad. Nowadays it is more likely to bring down a barrage of mental conditioning into an acceptance of the inhuman demands of capitalism.

For the Sake of Example is an unrelievedly gruesome illustration of the inherent madness of 1914/18, which should not persuade anyone to think that the subsequent wars have been any more sane or acceptable. Perhaps one of the unhappiest aspects of it is that all people at such times are under orders to behave as they do. They are—and what, under capitalism, could be more absolving?—only doing their job.

Ivan

The United States and imperialism (1986)

From the Summer 1986 issue of the World Socialist

The history of US imperialism dates back to the times of the foundation of the nation. Whether making and breaking treaties with various American Indian tribes and "nations"—expropriating their lands—or in adventures in far-flung oceans and climes, US capitalism went all-out from its beginnings in muscling its way into world business and, in pursuit of such ends, into the internal affairs of other nations. To be sure, that is not exactly how such activity was always explained by the official moulders of public opinion. Like ruling classes everywhere, the capitalists of the United States were aided in their expansionism by their educational and religious henchmen who found high-sounding moral justification for their nation's conquests. It must be admitted, though, that the primary motivation has been amply clarified by at least some US historians (as well as by some politicians in their more honest moments—see "Foreign Policy for Beginners"). As a case in point it will be instructive to quote directly from The Rise of American Civilization by Charles and Mary Beard (1927):

The revolution wrought by steam and machinery was by no means limited in its effect to factory districts, corn fields, cotton plantations, and mining camps. It widened the borders of economic empire by the expansion of American commerce into the Far Pacific. Though obscured to the vulgar eye by the dust of domestic conflict, the construction of that commercial dominion went forward rapidly from the foundation of the republic. The very year after Cornwallis surrendered to Washington at Yorktown, the Empress of China, fitted out partly at the expense of Robert Morris, merchant prince and 'financier of the American Revolution,' sailed from New York to Canton, carrying the American flag into the midst of the Dutch and British pennants that fluttered in the breezes of Chinese waters. Before the Fathers completed the framing of the Constitution, at least nine voyages had been made to the Far East by enterprising Yankees.

And the Beards continued their interesting disclosures:

In the year of Washington's inauguration, ten ships from Salem plowed the waters of the Indian Ocean. Before he delivered his 'Farewell Address,' warning his countrymen against foreign entanglements, American captains were at home in the ports of China, Java, Sumatra, Siam, India, the Philippines, and Ile de France. In 1979, the date of his retirement to Mt Vernon, a crew of thirty boys, the oldest not over twenty-eight, took the Betsy, a boat of less than a hundred tons, on a voyage around the world by way of the Horn, Canton, and Good Hope, netting on an outlay of about eight thousand dollars the neat profit of a hundred and twenty thousand. (I, page 661) 

The World Socialist Party (US) has for many years recommended the Beards' Rise of American Civilization as an excellent source for information on the material factors influencing US history. They were not socialists but they did as much, if not more, than most professed socialists (and/or communists) in this country to straighten out the generally mistaken views on subjects such as the causes of the American Revolution, the Civil War and the real reasons behind Wilson's switch on World War I which brought about US entry into that shambles only  some five months after he had been reelected in a platform accentuating the slogan: "He kept us out of the war!" Having been written in 1927, this book does not go much beyond World War I but the Beards did manage, during their lifetime, to bring their chronicle of US history up to the times of World War II with their Basic History of the United States.

MODERN OVERSEAS ADVENTURES

It would not be possible within the scope of an article to list the instances of US imperialist adventure throughout its history completely. At least some of the oldest among the present population are no doubt passingly familiar with most of the thrusts of US military power in defense of her imperial interests - not all of which have been successful - since World WarI. There must be a few, though, who have not been made aware of US "meddling", overtly and covertly, into the affairs of the nations of Southeast Asia and, particularly, the countries of Central and South America . From the time of Fidel Castro's "conversion to Marxism" and embrace of and by the Soviet Union there has been hostile, even at times, violent, reaction by officialdom in this country and indeed, wherever purported Marxists gained or even threatened to gain control in the Americas. Were it not for the Nixon and Reagan flirtations with the head dispensers of Chinese "marxism", one might at least suspect that the basis of this hostility toward leftist regimes in Latin America is truly ideological.

The truth, of course, has to be otherwise. The hostility is obviously based upon the threat to important US capitalist interests by left-radical nationalists in those countries. As is well known, even if the knowledge is sublimated, as it usually is, by the more conservative-minded among capitalism's apologists, bourgeois antipathy towards Bolshevism has not been carved in stone. There have been many occasions since the Bolshevik Revolution of 1917 when US, British, and other heads of the more traditional variety of capitalists have heaped encomium on the heads of the Soviet dictators. Particularly this was true during most of those years of World War II when Western Capitalism was allied with Bolshevik State Capitalism and when the topmost political leaders of Britain and the US hailed Joseph Stalin as a contemporary "genius". In fact, had Stalin not lived on into the period of "Cold War", reverting to his status of "monster", he would quite likely still be depicted in US school texts as the savior of Russia.

CONFLICT OF INTERESTS NOT IDEOLOGIES

In any case. one thing should have been made clear since the times of World War II: it is not professed ideological differences between nations that propel them into open warfare against one another. It is, rather, the fact that their economic foundations and the basic philosophies that arise from them are all but identical, notwithstanding some differences in nomenclature and that they are, at least temporarily, threatening one another's imperial interests. Both Hitler and F. D. Roosevelt put it succinctly: Hitler with his "Germany must expand or explode" and Roosevelt's "Our frontier is on the Rhine".

What should be emphasized, though, is that "anti-imperialism" is, or should be, regarded as of no concern of the working class of either imperial or subject nation. It is just another red herring injected into the class struggle, whether with deliberate intent of confusing or through simple ignorance on the part of the propagandists. The cause of mass poverty, insecurity, and war, is not imperialism but the very relationships themselves of capitalism - wage labor and capital.

Harry Morrison (USA.)

FOREIGN POLICY FOR BEGINNERS

"We want a foreign market for our surplus products."

- William McKinley, 1880's

"In the interests of our commerce  . . . we should build the Nicaragua canal, and for the protection of that canal and for the sake of our commercial supremacy in the Pacific we should control the Hawaiian islands and maintain our influence in Samoa  . . . The great nations are rapidly absorbing for their present defense all the waste places of the earth. It is a movement which makes for civilization and the advancement of the race."

- Senator Henry Cabot Lodge, 1890s

"It seems to be conceded that every year we shall be confronted with an increasing surplus of manufactured goods for sale in foreign markets if American operatives and artisans are to be kept employed the year around. The enlargement of foreign consumption of the products of our mills and workshops has, therefore, become a serious problem of statesmanship as well as well as of commerce."

- State Department 1898

"Concessions obtained by financiers must be safeguarded by ministers of state, even of the sovereignty of unwilling nations be outraged in the process  . . . the doors of the nations which are closed must be battered down."

- Woodrow Wilson, 1907

"The real reason that the war we just finished took place was that Germany was afraid her commercial rivals were going to get the better of her and the reason why some nations went onto the war against Germany was that they thought Germany would get the advantage of them."

- President Woodrow Wilson, St Louis, 1919

" . . . our general diplomatic and strategic position would be considerably weakened - by our loss of Chinese, Indian and South Seas markets (and by our loss of much of the Japanese market for our goods, as Japan would become more and more self-sufficient) as well by insurmountable restrictions upon our access to the rubber, tin, jute, and other vital materials of the Asian and Oceanic regions."

- US State Department, 1940

"The real stake in this war is sea control, is the domination of the avenues of world trade."

- United States News, Sept. 13, 1940

"There never was a war at arms that was not merely the extension of a preceding war of commerce grown fiercer until the weapons of commerce seemed no longer sufficiently deadly."

- General Hugh Johnson (1882-1942)

"As you know, we've got to plan on enormously increased production in this country after the war, and the American domestic market can't absorb all that production indefinitely. There won't be any question about our needing greatly increased foreign markets."

- State Department official, April 1944

"In May of 1962, we stand at the great divide; we must either trade or fade. They (the Russians) are ready to take and sell any area in which we leave a gap. And we do not intend to give way."

- President Kennedy, May 4 1962

"What is the attraction that Southeast Asia has exerted for centuries on the great powers flanking it on all sides? Why is it desirable, and why is it important? First, it provides a lush climate, fertile soil, rich natural resources, a relatively sparse population in most areas, and room to expand. The countries of Southeast Asia produce rich exportable surpluses such as rice, rubber, tea, corn, tin, spices, oil and many others . . . "

- Kennedy's Undersecretary of State, U. Alexis Johnson - Early 1963

"My approach to Africa is in some ways like the Japanese approach to Asia, and approach is not necessarily humanitarian. It is in the long-range interest of access to resources and the creation of markets for American goods and services."

- U.N. Ambassador Andrew Young, 1977

Source: Daily Battle, Berkeley, California; Socialist Party of Canada leaflet