Another Economic Blizzard? (1958)

From the April 1958 issue of the Socialist Standard

So the bread lines and soup kitchens have appeared again—in the United States and in Canada.

It looks as if the slump that would never come again is now on its way. At least that is the impression one gets from statements by leading financiers, here and in America, and from articles that have appeared in London papers recently.

The Times for March the 4th, under the heading, “World Unemployment Survey,” gives figures of unemployment in different countries. In the United States in January the figure was 4,494,000. This does not include unemployment among the 30 million who are not covered by unemployment insurance. Since January there has been a considerable increase in unemployment The Times gives the unemployment figure for Canada in January as 520,000. Here also the figure has increased since January.

The News Chronicle for February 28th contains an article on Detroit by Bruce Rothwell. From this article it is evident that the huge empty factories around Detroit, and the empty shops the present writer saw in Dearborn, when he was there last September, were the expression of something more than the shift of industry out of Detroit and the change-over to automation.

The News Chronicle writer has this to say

   “Signs of the slump are everywhere and this is frightening America.
   “For beyond this city millions more jobs depend on the car industry. One business in six is wholly concerned with it.
    “Steel, rubber, glass, leather; they all slump when the assembly lines slow; and soon it spreads to us all.
      “So Detroit, the centre of it, is harder hit to-day than in the ’thirties."

The writer states that there are 250,000 unemployed in Detroit now, and he tells of the soup kitchen run by the Capuchin monks which can only touch a tiny fragment of the thousands of hungry.

He goes on to tell of the workers who are "called in for only a few hours and then sent home with too much pay to qualify for unemployment benefit”; of the cars, bought on the hire system, and almost the only means of transport, that are seized because of failure to pay the instalments: “this is the heyday of the debt collector. In haulage trucks they cruise the streets checking their lists with parked cars. Two hundred a day are seized.” Of the City Welfare Office, where people queue all day in the hope of relief: “They queue all day, and the queue is lengthening for the list of men who have been out 26 weeks is lengthening, too—at the rate of 7,000 a month.”

This is a grim picture of the passing away of the boom times and the fraud of the Welfare State.

The seriousness of the position is emphasised by an announcement in The Observer, March 9th, that Eisenhower is proposing action to mitigate the effects of the slump:—

   “In an unprecedented move, President Eisenhower announced to-day a forthcoming Bill which guarantees that while the recession lasts jobless United States workers will not go without unemployment benefit—a fate that has been staring many of them in the face."

The Observer article points out, however, that only 60 per cent, of the jobless workers will be entitled to benefit under Eisenhower’s proposed measure, just as under the existing law.

The article also makes this general statement:— 

   "As many areas have been depressed for months, there are substantial numbers of United States workers who have exhausted their 26 weeks’ allowance, and many more are about to reach that stage. Without the President’s new measure, these workers would have had literally to stop buying anything at all, and to stop paying the time payments with which every American working-class family is saddled.” 

Another paper, The People, March 9th, had an article headed “They queue for free soup in Canada now” with a picture of a line of unemployed and destitute outside a soup kitchen at Marian Centre, Edmonton, where 400 free meals a day are being distributed. The writer of this article says:—

   “The emergency is not Edmonton's alone. In the last eight weeks an economic blizzard has swept over all Canada.
    “Only eight weeks ago I reported that, according to official figures, 300,000 people were on the dole, including many emigrants from Britain.
     "I forecast then that the figure would increase. It has— to an extent far beyond my worst fears."

From the extracts we have given it will be seen that the indications are that there are tough times ahead; for capitalism is an international disease. A collapse of industry in one part of the world soon makes its effects felt in every other part. So the Cohen Committee need not have bothered to assert the need of arranging for a certain percentage of unemployment—the system will more than take care of that in the fullness of time.

Gilmac.