The Economic Trend (1926)

From the May 1926 issue of the Socialist Standard

When poverty, side by side with the material requirements for its removal, becomes as pronounced as it is to-day, our masters and their agents are driven to find more up-to-date excuses to explain away such contradictions. Once Tariff Reform and Free Trade served the purpose, according to the sectional trade interests of the Capitalists. To the Tariff Reformer, Germany was the paradise of the worker, and working-men were held breathless while the Free Traders told of trade booms, and of imports and exports beyond their comprehension. The outstanding fact the workers fail to understand is that, be “our” prosperity never so great, while wealth production is carried on for trade and profit purposes, such prosperity must here, as elsewhere, always be that of our masters, still leaving the producers in poverty. The latest nostrum, repeated almost daily in the press in the hope that it will be drilled into the workers’ heads as a profound truth, is the prosperity in America. There, we are told, labour-saving devices are a blessing to the workers, and if we were to believe all we are told, the economic laws governing Capitalist Society appear not to operate. Americans, like other Capitalists, however, will allow their workers to produce wealth, only while markets for it are available. All countries vie with each other for what the “ Daily Chronicle ” in a series of articles calls "The World Race for Trade,” but modern methods quickly outstrip the effective demand of such markets. Mere need means nothing to the workers, their power to consume any part of the wealth they alone produce is limited to the fraction they receive as wages. Under the fierce competition of to-day, lower prices of the things wages buy mean lowered wages. Even the relatively higher wage sometimes supposed to be a monopoly of America only means on the whole a lower wage bill. Increased efficiency means fewer workers for a given amount of production. J. Ellis Barker, writing on American industrial methods (“Contemporary Review,’’ March) proves the correctness of the above unintentionally, because he assumes markets to be unlimited in their capacity to absorb products. He estimates that “a single American railway man does as much freight work as 5 Englishmen." “In coal-mining one American produce as much as 5 Englishmen." Obviously, with markets overstocked, for fewer to do the same amount of work as at present would only aggravate unemployment. Hear what the President of the International Chamber of Commerce, Mr. W. Leaf, a prominent banker, has to say (“ Morning Post,” 6/3/26):—

Everywhere, with hardly an exception, there are complaints of the difficulty of finding markets for manufactures. The capacity for production is there and is generally much larger than in pre-war times, but the products are stagnating.

Despite all their increased and cheapened production, despite the Capitalists' own profligate dissipation of wealth, they cannot find markets, and have now in all the principal industries to actually restrict production. Our evidence?—No, again their own:—

Our experience during the past 4 years has been that the lowering of the price of goods has stimulated demand very little . . .  Only by curtailing our production on organised lines have we been able to minimise our heavy losses. Every business man must know that nothing but disaster can follow the making of goods for which there is no demand. (Sir Chas. Macara, Daily Mail Year Book, 1926, p. 31.) 

That ought to be comforting news to the cotton operatives, an industry in which production has been increased, per unit of labour, possibly more than in any other industry. If the American myth were true, then the cotton operatives should enjoy unparalleled prosperity to-day, but short-time working and poverty is theirs as with other industries where similar increased productivity has taken place. America is no exception to the vicious circle in which Capitalism must travel. The greater the boom the greater and more prolonged the depression to follow. America in 1921 had her 6 million unemployed, and according to the New York correspondent of the “Economist’’ (6/3/26) there has been a sudden slump on Wall Street which “marks the end of a long upward movement, and was not

 altogether unexpected." Apart, however from such warning, the crash is inevitable, for the reasons enumerated above. Such are the results of the private possession by an idle few of the means of life, which if held in common by all, to serve the needs of all, could give luxury for every human being with a minimum of effort. Why, year after year, chase each other country in turn down the blind alleys of more production, more trade and more work? These efforts, for others, can never give you more than increased poverty and insecurity. Face and study the situation, then you will learn that though industrially the developed means of production could provide increasing comfort and security for all, the Social Revolution which can bring that condition awaits the mental revolution of the workers for its realisation.

W. E. MacHaffie