Post War Trade. Another Scheme to Save Capitalism (1942)

From the April 1942 issue of the Socialist Standard

In an article, “World Trade after the War,” a special correspondent of the Times (March 24th and 25th) discusses ways and means of finding work and markets for the highly industrialised countries and thus avoiding a post-war slump when the armament industries come to a standstill. He sees the problem as one of undeveloped countries which will need the help of industrialised countries but are unable to pay for that help. In accordance with the theory of pre-war capitalism such countries could raise loans and use the money to buy machinery, railway plant, etc., and thus build up their own industries, but this failed to work. The countries which had borrowed the money could only repay the interest and capital by exporting goods to the lender countries, but the lender countries used tariffs to keep out imports which competed with home industries. How, asks the writer of the article, is this to be avoided in future? He propounds a scheme under which, through international agreement between the great Powers, surplus products of the industrialised countries would “not be dumped on the market or destroyed to keep up prices” but “would be taken over by a world development committee which would use them to satisfy the needs and promote the development of countries unable to buy them at commercial prices. This committee would be financed by a small percentage levy on the commercial sales, a kind of premium paid by the producers in return for the stability of markets and prices they would enjoy. By developing backward countries, equipping them with roads, railways, and agricultural and other machinery it would open up both new sources of supplies and new markets, and would raise the standard of living all over the world.”

The writer evidently believes that he has discovered some new and revolutionary principle which will solve the problem, when all he has suggested is in fact a slight change in the method by which the capitalist world has worked in the past. Apart from the international committee and the “small levy,” how does his scheme differ from the past practice under which loans have been made to undeveloped countries? The only real difference is the notion of evening things out and achieving some stability. And what will happen to this international scheme and its stability when the undeveloped countries get going and pour out the products of their new agriculture, new mines and new factories on to the world market? The result will be precisely what it was before, and in the ensuing scramble the Powers which dominate the scheme will find themselves in a life and death struggle with challenging Powers, among them the newly developed countries.

The underlying fallacy of the writer’s approach to the problem can be seen from his way of presenting the problem. He writes, for example, about the possibility of undertaking great electrical and irrigation works in undeveloped areas: —

  There is certainly room in China, in the Balkans, and indeed all over the world for innumerable Tennessee Valleys, which would give ample employment to the engineering capacity now employed in war work, and thus solve one of the great problems of the transition from war to peace.

Now why does a writer sitting in Printing House Square, E.C.4, have to cast his eyes on China and the Balkans and all over the world? Why doesn’t he look around him at the abject poverty, slums, and under-nourishment hardly a stone’s throw away from him, just across the river at the Borough and Bermondsey, or northwards to Clerkenwell? Why doesn’t the organ of Banks and City Financiers think of lending a few hundred million pounds to British workers on its doorstep, who, like the Chinese and the peoples of the Balkans, “are unable to buy … at commercial prices”? Why, indeed? for the capitalist is not and will not be concerned with the problem of producing goods solely for the use of those who need them but only with the problem of making a profit. It is possible to think of loans to a Government in China coming back with a nice addition of profit (even if the history of foreign lending is often a story of default and loss), but the Times writer, even without considering the question, feels instinctively that there is a catch in the idea of lending millions to the workers of Bermondsey. He knows at once that money thus transferred from the British capitalist to the British worker is dead loss to the former and the end of the wages system, the end of profit, in short, the end of everything that makes capitalism worth while to the capitalist.

The Times writer, like every other defender of capitalist privilege, will do everything that can be done to solve the poverty problem except abolish its cause, the capitalist system.

Edgar Hardcastle