Monday, May 16, 2022

The Roots of Capitalism (1941)

From the April 1941 issue of the Socialist Standard

Though Capitalism may change its form and give rise to social structures which differ in many respects, yet at rock bottom it remains the same. Its pillars are wage-labour and capital: these are the constants of Capitalism, which is based upon the exploitation of wage-labour.

With the establishment of Socialism this exploitation will cease. Man is to-day exploited by man, because the means of wealth production are owned by and operated for the profit of a relatively small section of the world’s population. The masses, without any ownership in the means of production, are obliged, in order to get a living, to work in factories, in mines, on railways, etc., so that the owners thereof can reap profits.

The Socialist knows that the ills from which the workers suffer, degrading poverty and the multitude of other evils that accompany it, are due to the present system of society, the roots of which are wage-labour and capital.

Cut Away the Roots
The Socialist, therefore, wishing to put an end to these evils, logically urges upon the workers the need to abolish Capitalism, roots and all, and replace it by a new social system, the basis of which is the common ownership of the means of life by all society.

It will be seen at once that in Socialist society man could not exploit man, because no single person or group of persons would own the instruments for wealth production. The ownership of all these things would be vested in all society.

Of course, with the abolition of private property, capital and wage-labour will disappear. Production will proceed, not to satisfy the profit-making lust of capital, but to satisfy the wants of man.

With Socialism, man will enter upon a new life. No longer exploited by his fellow, no longer grubbing to make ends meet, he will be free. As never before, he will harness nature to satisfy man’s wants. Thanks to the high stage of efficiency industrial technique has now reached, plenty will be assured to all.

When Socialists advocate the abolition of private property, capital and wage-labour, up goes the cry: “Would you deprive of ownership those people who have laboured so hard to build up their businesses?”

This is Capitalism
The question itself is an anachronism today. In the early days of Capitalism, when the Capitalists, the “captains of industry,” worked side by side with the men they employed, there might have been some truth in the statement that owners of industry worked hard to build up their businesses. But that was long ago.

Capitalism to-day is not the Capitalism of the small trader. Present-day Capitalism is large-scale industry, growing ever larger. In growing it becomes more and more impersonal: the worker-owner of yore is replaced by the absentee shareholder and by the bureaucracy of the State.

The first point, then, that the Socialist makes in answer to the above question is that it ignores present-day realities.

Secondly, not Socialism but Capitalism is the great expropriator. Capital has already deprived of ownership the vast majority of the population. Even in his day, in 1848, Marx was able to answer this self-same question by showing that for the masses private property had been destroyed. Since Marx’s day, the tendency has continued; capital becomes concentrated into fewer hands. Periodically we are able to see this closely: when small businessmen are driven out of business by big trusts. How many small capitalists have such firms as Woolworth’s reduced to the ranks of the working-class ?

Referring back to the question, it is worth while thinking for a moment how businesses are built up. Certainly big businesses are not usually built up by the labours of the capitalists. To put but one point of view, one worked out by Josiah Wedgwood in “The Economics of Inheritance,” the capitalist class of to-day inherits a very large portion of its wealth. Wedgwood writes: “The relative proportions of the total property in 1912 acquired by ‘saving’ and inheritance are 34 per cent. and 66 per cent. respectively, or, in round figures, one-third and two-thirds” (p. 138, Pelican Edition).

Big businesses are, of course, built up by the exploitation of workers. Proofs of this can be seen all around us. Who would say, for example, that the shareholders (the owners) of the railways have built them up and make them work ? Long ago, Engels pointed out that the capitalist class has ceased to contribute by its labour to production. Frequently the capitalist never visits the works in which his capital is invested. No longer does the capitalist even figure as a supervisor—his place has been taken by “well-paid” managers—members of the working-class. The role the capitalist plays today is of a parasitical character. He appropriates the profits produced by the exploitation of wage-labour.

Whilst on this point, it is worth while referring to an article which appeared in the Sunday Dispatch (December 22nd, 1940), entitled “400 Scots run Giant Ranch and They’ve Never Seen It.”

The article gave a picure of capitalism true in many respects. It dealt with the origin and growth of the great Matador Ranch in Texas.

It is worthy of note how the Matador company started. To quote from the Sunday Dispatch : —
“Matador started simply; there were big profits in the ranch business, and the five Scots entered the market as a gamble. . . . .The five had one thing in common. They had never seen a ranch, wouldn’t have recognised a steer if they saw one, and knew precisely nothing about cattle. They did not even go over to see their piece of prairie.”
It is obvious from the above that the five capitalists mentioned above could not supervise the ranch, nor did they build up the business by their labours—the prairie was too far off and they knew nothing about ranching.

This example is typical of present-day capitalism. Fortunes come to the capitalists, not because they are intelligent or hardworking, but simply because they own, and because masses of people, without any means of life, are driven to work to provide profits for the owners.

To return to the Matador Ranch, it is interesting to see what the Sunday Dispatch journalist tells us of the people who actually do the work and make the concern go—the cowboys. Says the writer: “They are not a bit like Cecil B. De Mille paints them.” We can believe that; they have hard work to do, and, in return, receive “30s. a week and keep.”

The objection to the Socialist demand for the abolition of private property, wage-labour and capital is not, therefore, a serious one. As we have seen, the question reveals a point of view typical of capitalist society in the days of small-scale industry. As with the passing of time, small-scale industry counts less and less, the struggle becomes one between a capitalist-class who do nothing towards production, and a working-class who do all the work and run industry from top to bottom.
Clifford Allen

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