Can it be Improved under Capitalism.
According to the Tories, Liberals and Communists, the Labour Government have failed to show any initiative or ability in dealing with unemployment. The Labour Party pleads for time. Although it may be true that “the proof of the pudding is in the eating,” it is scarcely necessary for those who can use their brains to wait for the experiments of a Labour Government before passing judgment on them.
It is easy to take their reforms one by one and, examining them in the light of reason, see for ourselves exactly how much they are worth. It is doubtful whether all their supposed remedies can ever stop the increase of unemployment. They are more likely to achieve the reverse.
Such palliatives as afforestation, nationalisation and more economical use of coal, together with others that make for greater efficiency, while they may increase employment in their initial stages, will obviously become responsible for more unemployment as they become effective.
Palliatives like the Capital Levy—if they do what the Labour leaders surreptitiously tell the workers they will : take from the rich and give to the poor—will be resisted by the Capitalists to the last. The advocates of the Capital Levy, Labour and Liberal, however, have yet to prove that it would benefit the workers. Their next job is to convert the employing class.
For many years Labour leaders have urged the necessity of higher wages both from the employers’ and the workers’ view-points. Mr. J. A. Hobson, in the New Leader, June 20, declares that the remedy for unemployment is along this line. “All wealth not required as new capital, if spent, would give full employment. The workers must have wages sufficiently high to buy up the goods they produce when fully employed.”
Most workers would willingly agree ; but, unfortunately, Mr. Hobson does not tell us how to obtain such wages. There is not the ghost of a suggestion throughout the article whether the workers should strike for them, or whether the employers should freely give, after recognising the probability of big returns. He simply ignores these questions and merely tells us that if everybody had enough money to buy all they wanted after working, unemployment would vanish. He says, for instance :—
“It is not true, as is sometimes urged, that there does not exist at any time enough purchasing power to buy and consume everything that is, or can be produced. For everything produced belongs to somebody, that is to say, somebody has the right to take and consume it, or its equivalent in other sorts of wealth. If everybody went on using all the income he received in purchasing consumable goods and services, as fast as possible, there would be no unemployment. But there would also be no provision for industrial enlargement to meet the rising demands of an increasing population.”
Now, the workers spend practically all their income on necessaries. The Capitalists, in their various concerns, set on one side the sums necessary for replacement and enlargement before declaring dividends, or calling for new capital. If they live up to their incomes, or invest a portion as new capital, matters but little, it is spent anyway; and spent “as fast as possible” and capital is always forthcoming for any concerns that promise dividends.
In spite of all this spending, wealth that cannot be used as capital increases in quantity in the hands of the employing class.
Mr. Hobson knows this quite well, for he says :—
“A great deal of wealth cannot get produced because, if it were produced, it could not get consumed. Why? Because there is not enough purchasing power in the possession of those who would desire to consume these goods.”
A relatively small section of the working-class with modern methods and machinery, working at full pressure, can choke the world’s markets in a very short time. Who is to buy the goods? If the Capitalists buy them in order to keep the workers employed their action would be no more stupid than paying extra wages that their workers might buy them. From their point of view it would be more sensible to increase the dole.
If Mr. Hobson wishes to deal with unemployment, he must take things as he finds them. There is no escaping the fact that the employers, as a class, are solely concerned with preserving their present domination over the workers for the purpose of continuing their exploitation. Higher wages would undoubtedly temporarily improve conditions for the workers, but how are they to get them? Capitalists are too careful to allow Mr. Hobson to persuade them that the payment of higher wages would bring them more business. They are clever enough to stop production, or ease up, at the first signs of congestion. But they have not yet arrived at a stage where they can eliminate all competition and fix prices and wages at a level which would guarantee to them a definite proportion of the wealth produced. If they ever arrive at such a stage it is obvious that high or low wages will mean nothing to the workers because prices could be adjusted to any level in accordance with the old standard of living.
There is no form of industrial organisation that could raise wages to the level Mr. Hobson’s ideas would require. The employing class will only raise wages under pressure or necessity : pressure from the workers—where they have the power—or the indisputable necessity of raising the standard of living to produce greater efficiency. For these reasons Mr. Hobson’s remedy is impossible of application and, therefore, scarcely worthy of discussion in other respects. With every reform, brought to their notice by politicians of every school, the worker should always ask himself the question : will it work?
F. Foan
Hat tip to ALB for originally scanning this in.
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