The Development of Capitalism and its Lessons. (1927)

From the July 1927 issue of the Socialist Standard

For many years it has been a platitude with capitalists, and capitalist newspapers, that agitators are the cause of discontent among the workers. Many workers who unquestioningly absorb capitalist ideas and opinions themselves believe it to be true.

The labour agitators are undoubtedly on the increase. There is money in the business. It is a calling that appeals to those who love to be in the limelight, and like most callings is becoming terribly overcrowded.

To become a labour leader, either on the industrial or political field, is one way of escaping from the onerous conditions of capitalist employment, or possibly unemployment. In this we find evidence that it is not agitators who make discontent, but that it is the already existing discontent of the workers with their conditions that makes agitators possible. Capitalist conditions of employment are so wretched that many of those with ability slightly above the average endeavour to escape them by becoming leaders. Too often it must be admitted, such aspirants care little where they lead the workers. Their chief concern is where and what they get themselves. While those who cannot escape in this way, the majority of the workers, are ready to listen to anyone who will promise them some improvement in their lot.

For many years before the possibility of leaders living on the backs of the workers could be foreseen, the workers themselves used to meet secretly to discuss their grievances and agree upon common action against the masters. The chief grievance then and since has always been the low standard of living forced on them by means of the wages system. The trade union movement, as we know it to-day, has grown out of those secret meetings, that had their origin in the early days of the factory system, in the North of England. The degrading conditions of employment and the low standard of living were the cause of discontent then as they are now.

Trade unions were originally organisations to raise or maintain wages. As the workers realised the advantages of combination in this direction, trade unions grew up in one industry after another. While the capitalists were disunited, the unions met with frequent successes. Every success was an inducement to others to organise. It was out of these successes, and the recognition by the workers, that if they did not organise against the masters, their wages would be forced ever lower, that trade unionism grew to its present dimensions.

But side by-side with the growth of trade unions, and in a great measure responsible for its rapid and enormous growth, there took place what has been, in all probability the greatest and most sensational movement in history. This was the invention and introduction of labour saving machinery and methods, which has developed from its simplest forms to its present complexity and importance during the same period.

An adequate idea of the effects of labour-saving machinery and methods on production and employment can be obtained from the S.P.G.B. pamphlet “Socialism,’’ pages 9 and 10. It is there shown what a relatively small proportion of the population can, by modern methods, produce all the wealth for which markets are available. So efficient are these powers of production that capitalists everywhere find it necessary to restrict them. In many industries capitalists have combined for the purpose of ascertaining the market and dividing the amount of production necessary between them. By this means they avoid over-production; competition is eliminated, and prices can be kept up. It is thus seen that by their ownership of the means of wealth-production, capitalists can and do hold up production to suit their own ends. The only useful purpose of labour-saving methods is, consequently defeated. That purpose, for a sane people, can only be to satisfy their material needs with the smallest expenditure of energy. But this is impossible unless the people own the means of wealth-production and use them by common agreement to satisfy their needs.

It would be stupid to denounce capitalists for restricting production, however. It would be absurd from their point of view if they allowed the production of commodities to go on when there was no sale for them. Their need is evidently for wider markets, but where can they be found without elbowing other capitalists out of their preserves? One reform party, the I.L.P. proposes to find them by persuading the capitalists themselves to pay higher wages. In other words, that capitalists should extend their markets by giving the workers more money to spend.

Without questioning the philanthropy of the capitalists or the strength of the trade unions to-enforce higher wages, the futility of such a reform is shown by America’s example. In the United States higher wages are paid than in most other capitalist countries. As a set-off against these higher wages, however, must be reckoned the much higher cost of living. But higher wages are not paid, either in America or anywhere else, unless individual production is increased. In other words, higher wages are paid to a few men for producing as much as had been produced by many. Higher wages, in this sense, by the fact that unemployment is increased, really spell a wage reduction for the workers as a whole.

We should expect to find, if the above is correct, that unemployment in the States is extensive, in spite of the enormous trade they boast. We are not surprised, therefore, to read the following reference to conditions in the U.S.A.

  The Mackenzie report takes a million and a half unemployed at any time as more or less normal; Trade Union evidence suggests a far higher figure. There is no security of employment—the rate of labour turnover is as high as 300 per cent. per annum.

The above is from the “New Leader” (17/6/27, p. 6), the organ of the I.L.P., that advocates the same policy for this country. While nobody would be so fool-hardy as to deny that a high wage is better than a low one, the amount of poverty must necessarily increase as the number of workers who receive wages at all are reduced.

The main fact that stands out clearly is that the number of workers required to produce the world’s wealth is constantly diminishing. As unemployment increases, competition for jobs intensifies in proportion. The conditions of labour become more exacting. Wages, generally, fall rather than rise. The same problem as of old faces the workers. Not only their standard of living, but their security is threatened. But the irony of the situation lies in the fact that the enormous development in the means of wealth-production has made security of life possible at a far higher standard than ever before. Possible, that is, when the workers see the necessity for making those means of production the common property of society.

What is the solution? Evidently not by paying a minority higher wages to do all the work, and sacking the majority. Nor yet by pointing the way to new markets, fighting for them, as in the great war; or even by entering with zest into the competitive struggle to help one capitalist group to win markets from another. None of these things will help the workers.

A few moments' consideration will show that poverty exists for the workers because they are unable to use the means of wealth-production to satisfy their needs. The means of production are the property of the capitalists, who only permit the workers to use them on condition that the product belongs to them. What the worker gets we have seen, while the capitalist controls the rest. Taking no share in the work of production the capitalists nevertheless are able to appropriate in this way approximately two-thirds of the total wealth. In addition to this, by virtue of their ownership, they hold up production until they have found markets for the product.

There can only be one solution for the workers. They must take over the means of wealth-production, making them the common property of society. These means can then be democratically controlled by the people, and used for the purpose of satisfying their needs.

For this organisation is necessary; and history and commonsense alike dictate that the form of that organisation must be political. That its first concern must be with the capture of the parliamentary institutions controlling the forces that make capitalist government possible. This much being achieved, the way will be cleared for the establishment of the new order— Socialism.

F. Foan