Analysis of Wealth. IV. Accumulation. (1916)

From the September 1916 issue of the Socialist Standard

Link to Part 3.

Capital is an accumulation of surplus-value. Whatever the original capital with which capitalist production started may have been it has long since disappeared, consumed by the capitalist class.

Likewise with the individual upstart. Even if we grant that by “his own exertions” he becomes possessed of a sum of money, this sum does not become capital until he uses it to exploit labour-power. As this process continues his capital comes to consist of accumulated surplus-value, while his original sum disappears in consumption.

Other things remaining the same the accumulation of capital implies an increase in the demand for labour-power ; for capital, in order to remain itself, must grow by the exploitation of ever more labour-power. This in itself gives rise to an increase in the rate of wages, since in the course of time the demand must tend to outstrip the supply as provided by normal increase in the labouring population.

Capital, however, is by no means satisfied with this state of affairs. It sees in the natural limits of population a limit to the rapidity of its own growth. Hence as we have shown in a former article, it exhibits a historical tendency to force on the productivity of social labour by specialisation of individual functions and by the introduction of machinery. Thus it wrings from a given quantity of labour-power a larger proportion of surplus-value. Therefore, along with the accumulation of capital goes an alteration in what Marx calls its technical composition. Its constant portion, i.e., that invested in the passive factors of the labour process, increases at the expense of the variable element which purchases labour-power.

This enables production to be carried on on an ever-increasing scale without the demand for labour-power increasing sufficiently to cause a rise in its price. On the contrary it reduces the demand for labour-power to such a point as to cause a permanent over-supply of workers ; in other words, it creates an industrial reserve army—the unemployed.

The larger the scale on which an individual capitalist does business the more he is enabled to economise and reduce the number of his employees in proportion to work done. The cheaper, therefore, can he sell his commodities (since they embody less labour) and the keener becomes his competition against his rivals. They in turn are forced to economise and to and “extend the scale of their operations as rapidly as possible. In the long run the large capitals become larger while small ones get absorbed or wiped out ; for the market soon refuses to bear the increased weight of goods supplied by this acceleration of production. This centralisation of capital causes further economy and increases the industrial reserve army.

Thus in the process of accumulation we observe on the one hand a tendency to increase the productivity of labour and on the other hand a contraction of the market for its products, seeing that the growth of the unemployed lessens the demand for commodities, both on their part and on the part of those actually employed whose places they are ever ready to take.

These two forces act and re-act on each other to an increasing extent. The competition of the unemployed forces the actual workers to submit to the lowest wages and the maximum amount of work. This increases the accumulation of capital, which in turn intensifies competition among the capitalists for the market, causing further economies and more unemployed.

At one end of the social scale, then, we have the concentration of capital in fewer hands and consequent luxury and idleness ; at the other end, absence of all wealth other than than necessary to secure the workers’ continued existence in a state of overwork, coupled with a deadweight of destitute wretches denied even that questionable privilege. This state of affairs arises inevitably from the very nature of capitalist production, and its special features are aggravated with every step in capitalist progress. Even the statistics compiled by capitalist authorities, governmental and otherwise, bear out this conclusion.

So far we have examined only the growth of capital. It remains for us to consider its origin and destiny. Assuming on the one hand a class with the means of production and on the other a class without these means it is easily seen that the former can exploit the latter to an ever-increasing degree.

The question arises, however, as to how this relationship was established. Orthodox economists and other apologists for things as they are assure us that it is solely due to the virtues of the possessors and the vices of the proletariat. If by virtue we mean work, however, we have already seen that the accumulation of capital by no means bears out this fairy tale. At present and for centuries the workers with all their toil have been unable to accumulate. If the capitalists saved money by work it was an extraordinarily long time ago. We are forced, then, to turn to history for a solution of the problem.

The system of society immediately proceeding the present social system in the course of evolution we know as Feudalism. It consisted of a complex hierarchy of lords and vassals bound to each other by the duties of military support and obedience and the right of protection. As a basis for this system was serfdom. The land was parcelled out among the lords and their subordinates, and while the latter cultivated the land of their lords they had land of their own for their personal use. In the towns chartered freemen carried on handicrafts and commerce. Thus reciprocal obligations existed and were established by feudal law and custom. No man lacked the means of subsistence, or an occupation. The lords exploited their subordinates, but the latter possessed something tho modern wage slave lacks—security!

The decay of feudalism forms the starting-point of capitalist development. In England it was spread over the 14th, 15th, and 16th centuries. By degrees the peasants and handicraftsmen freed themselves from servile duties and became independent producers, while in conjunction with the growth of trade and the production of commodities arose and flourished the merchant class, who sandwiched themselves parasitically between the producers on either side of the exchange and incidentally fleeced both whenever occasion offered.

The feudal nobility, exhausted, in numbers and resources, by friction among themselves, disbanded their retainers, who thenceforth become propertyless men seeking employment for a living. Large estates passed into the hands of wealthy farmers and burghers, who did not hesitate to evict the tenants in order to convert one-time arable land into sheep pastures. The new nobility also confiscated common land for similar purposes spurred on by the increase in the price of wool. The spoliation of the Church during the Reformation aggravated this condition, and by the end of the 16th century a considerable labour-market had come into being, consisting of expropriated agriculturists, disbanded retainers, and forlorn monks.

The process went on in stages till the 19th century, when the last vestige of the old yeomanry disappeared. At first legislation from Henry VII. onward attempted to stem the tide of usurpation, but in the 18th century the law itself had become the instrument whereby the robbery of the people was effected. Private force was supplemented by the force of the State, which has remained to this day the agent of the plutocrats. From the first it penalised the disinherited for their misfortune : flogging and branding them was its most merciful means of dealing with them.

This, as Marx says, established the “discipline necessary to the wage-system,” and encouraged the new-born proletariat to submit to the low wages and long hours at first legally enforced by the State.

As the workers became habituated and resigned to their fate the severity of the penal legislation relaxed, only to be applied with all its original vigour again when the workers found in combination a means of parrying the onslaught of the masters.

If to-day Trade Unions and strikes are legal it is only because the capitalists have been able to circumvent the determination of the workers by counter organisation, increased economy, and the corruption of the unions themselves.

The labour-market once established, the genesis of the capitalist class followed as a matter of course. In agriculture the farmer, one­-time agent for the landowner, was transformed into an independent exploiter. Whereas the independent peasant had previously produced many of his own requirements, such as clothes, in addition to purely agricultural products, now, as a wage-worker for the capitalist farmer, he had to purchase these elsewhere. Hence arose a domestic market for capitalist industry in the towns. Merchants and money lenders were not slow to take advantage of this. Employing numbers of disinherited peasants, etc., they entered into competition with the independent handicraftsmen of the guilds, and owing to the larger scale of their operations and the division of labour in the workshops which they introduced, they were ultimately able to outstrip the guildsmen in the race. In the face of this competition the guilds went to pieces and added more exploitable material to the labour market. 

At the same time there arose the struggle between the capitalist nations of Europe for world domination. Spain, Portugal, Holland, France, and England followed one another in rapid succession in exploration and conquest in Africa, America, and Asia, plundering the natives of their wealth and converting them into slaves for export to plantation colonies. The plunder thus obtained by the agents of the “merchant adventurers” helped to form new capital in England and on the Continent for the exploitation of white slaves.

These are the methods, drawn very mildly, by which the modern “respectable” class rose to power. The depths of their historic depravity are in direct proportion to the “loftiness” of their professed ideals. Champions of Justice, Freedom, and Charity, their career is indelibly stained with robbery, slavery, and murder. Need it be added that it shows no signs of improving from the standpoint of the workers ?

To sum up, modern wealth or capital is a product of social labour, past and present, which has been and continues to be monopolised by a small class of individuals, which grows relatively smaller as the mass of disinherited producers increases. In its origin it destroyed the unity which existed between the producers and their products, including the means of production, thus reducing them to social outcasts, having no access to the means of life as provided by nature and society. This relationship it perpetuates and uses as a means of self-expansion at their expense.

Technically, however, it indicates economic progress. In the place of the isolated workers of the middle ages able to produce but a meagre variety of articles of wealth, we have to-day an international combination of producers using a highly complex organisation of machinery, means of transport and distribution capable of providing comfort and leisure for all.

What prevents this desirable consummation of industrial development ? The reader who has followed this analysis will readily see that it is the capitalist character of this social wealth, i.e., its private ownership, which alone stands in the way. The private property of the many workers has disappeared before the private ownership of a few idlers. To return to the former state is neither possible nor desirable. It is not our business to destroy the fruits of centuries of toiling agony, but rather to enter into possession of them ; and as the means of production become ever more concentrated and incapable of control save in the mass, the only alternative to private ownership by the few is common ownership.

This will reunite the producers with their means of production and simultaneously preserve technical progress, for it is this progress which forces on the revolution. It unites them in the productive process and reduces them all to the level of wage slaves for the maintenance of capital. Hence it breeds a community of interest and a common consciousness. Let us speed on the day when they will unite in one organisation with a common purpose. Let us rally them round the Socialist standard, and establish Socialism, the cooperative commonwealth.

Eric Boden

[Concluded.]

Analysis of Wealth. III. Exploitation. (1916)

From the August 1916 issue of the Socialist Standard

Link to Part 2.

Just as there are two aspects of a commodity, utility and its exchange-value, so there art two ways of viewing its production, or in other words, the labour process.

At one and the same time the labourer produces a use-value and an exchange-value ; the former by transforming raw material into useful articles, the latter by adding labour thereto.

We have already seen that capital in the process of expansion assumes two forms. Part of it becomes represented by raw material, tools or machinery, etc., the passive factors in wealth production, while the rest is invested in a special commodity, labour-power, the active, value-creating agent. Both these factors are obviously indispensable. Without raw material, etc., the labourer would have nothing in which to embody value ; without the labourer raw material would become useless and valueless. For the only use raw material possesses is to serve as the element of the complete commodity, and its exchange-value only counts in so far as it becomes part of the total value of such complete commodity. Raw material, machinery, etc., lying idle, untouched by labour, rot and rust, and lose their exchange-value along with it.

Hence by transforming them into new commodities the labourer does more than add new value ; he preserves old. In so far as raw material, etc., is so transformed, the labour previously expended upon it counts as part of the total labour necessary in the production of a commodity.

On the other hand, the passive factors in the labour process are incapable of transferring a greater value to the finished product than they already possess. The value of the raw material and machinery does not multiply itself ; it remains constant and is called by Marx constant capital.

In realising the utility of the constant capital the labourer preserves it : that is one aspect of his activities. Let us now turn to his function as the producer of new value.

We have seen in a previous article that the amount of value the labourer adds to the commodity is determined by the length of time he inevitably occupies. Thus in our first example he worked six hours and added a value of three shillings ; in the second instance, by working twelve hours a value of six shillings was produced.

We also saw that the object of the capitalist in purchasing labour-power was to take advantage of its capacity for producing more value than it possessed itself. That in the first case the capitalist realised no surplus-value because the labourer produced no more than the equivalent of his value, but that in the second case the surplus amounted to 3s, the product of the extra six hours labour.

In each of these cases the constant part of capital adds no more than itself to the total value. The amount of the constant capital in the second case is twice that of the first in order that the labourer might work twice as long, but this makes no difference to the result. The new value of 6s. is added by the labourer.

Just as any purchaser seeks to obtain the maximum use-value from his commodity, so the capitalist uses up labour-power to its limit ; seeks to obtain the maximum of value, and therefore of surplus-value, from its exercise. It is the object of the present article to show how this is achieved. One thing must be borne in mind, viz., that the rate of surplus-value is not calculated on the total capital, but only on the part which is expended in the purchase of labour-power. Thus in the above instance, whereas the wages of the labourer were 3s. and the total value produced by him was 6s., the rate of surplus-value was 100 per cent. ; that is to say the surplus was equal to the wages.

When the capitalist speaks of his “rate of profit” he would in this case reckon the 3s. surplus-value in proportion to the total capital advanced, viz., 27s., thus making the rate a little over 11 per cent.

Well as this method may serve him in his conventional dealings, it hides the true extent of the exploitation of labour-power.

We have seen that the capitalist obtains his surplus by prolonging tho labourer’s work beyond the time necessary to reproduce a value equivalent to his wages. It is, therefore, to the capitalist’s interest, to extend the working day as much as possible. The limit in this direction is simply the physical capacity of the labourer.

In order to exert his powers the labourer must have time to eat and sleep and recuperate, but beyond this the capitalist, having purchased these powers, has sole right over their exercise during the period for which he has purchased them. The only difference, in fact, between the wage-labourer and the chattel-slave is that the former sells himself piecemeal, i.e., in periods, while the latter is sold once for life.

It is, of course, possible that the capitalist may use up in one day a greater quantity of labour power than the worker can restore in three (“Capital,” p. 217). In other words, he may use more labour power in a day than he pays for. It is the labourer’s business to claim the price of his commodity, and hence a struggle ensues as to the extent of the working-day.

In sections 5 and 6 of Chap X. (“The Working Day”) Marx shows how the manufacturers succeeded in extending the working day by degrees from the normal day of the Middle Ages to twelve hours in the seventeenth century. Then how, with the introduction of machinery in the eighteenth century, a violent encroachment took place on the remaining leisure of the workers. “All bounds of morals and nature, age and sex, day and night, were broken down” (p. 264).

Men, women, and children were worked to the point of exhaustion, until even the capitalist legislature, threatened by working-class revolt on one hand and the extreme physical and mental deterioration of that class (the source of surplus-value) on the other, were compelled to place legal restraint on private greed by limiting the hours of labour. For years they dallied and toyed with the matter, passing laws and abstaining from granting money for their administration and adopting all manner of devices to render their concessions purely nominal. Only when the most distinguished medical authorities had pointed out the danger to the ruling class of persisting in the industrial murder of children, did this class definitely prescribe that no children under 13 years of age should be worked more than 12 hours in one day. Even then it left, all manner of loopholes for the evasion of the Act (1833), of which the manufacturers, in their blind profit-lust, were not slow to take advantage.

With eloquent thoroughness Marx shows how rival sections of the ruling class exploited the misery of the workers on the political field in order to gain their own ends ; how time and again they betrayed them, and finally only conceded the meagre right of sufficient time in which to eat and sleep after a bitter struggle over every inch of ground for half-a-century.

These passages are indeed enlightening as to the character and methods of our masters, which have changed, if at all, only in the direction of greater duplicity.

The very nature of machinery enables the master class to increase the speed at which their slaves work, thus exhausting them more rapidly and reducing a legally limited working day to nominal value. Hence the workers are under the necessity of continually struggling to obtain still further reductions in the hours of labour. For by so much as the speed at which they work is increased, by so much is their life-time shortened.

Hitherto we have considered only one means of increasing the surplus-value, i.e., the lengthening of the working day. Capital, however, by no means rests content with pushing that to its limit. It is for ever seeking to reduce the value of labour-power and consequently the necessary time spent by the workers in reproducing that value, thus leaving a greater portion of a given working day in which they must produce surplus-value. This result is effected chiefly in two ways.

From the time the capitalist class first assumed control of industry there has gone on an increasing splitting-up of the forces of production among the producers. By concentrating numbers of workers in one workshop the earlier manufacturers were enabled to divide a handicraft into separate parts, each part being taken up by a different worker. Instead of being a skilled craftsman the worker became a mere special cog in a machine, and in this way the time spent in learning his calling was considerably reduced. Another effect of this alteration in the process of production was an increase in the product of a given number of men. The specialisation of individuals economised the time necessary to produce each individual commodity. This resulted in reducing the cost of the articles produced and consequently the maintenance of the labourer. Thus in two ways the exchange-value of labour-power fell ; wages suffered a reduction and the increased product went to the capitalist.

The effects of this division of labour, which Marx defines as Manufacture proper, were insignificant compared with those resulting from the advent of machinery and modern industry. Here the worker loses the last vestige of skill and has his productive capacity enormously increased by being converted into an attendant of a monster which operates not one but many tools at once. The time spent in learning his task now falls to almost nil, while the cost of his necessaries is still further reduced and his wages along with it. Surplus-value increases by leaps and bounds, and since machinery is constantly being improved, more universally and economically adopted, there has as yet been discovered no limit to this increase.

We see, then, that capital grows by securing domination over living labour-power and consuming it to the limit of its capacity. In this process the labourer preserves the constant part of capital, reproduces the equivalent of his wages, and adds a surplus which may be converted into new capital.

Despite various theories concerning the “abstinence” of the capitalist, however, the whole of this surplus-value does not become capital. Quite a considerable portion goes to provide the person of the capitalist with the necessaries, comforts, and luxuries proper to his social status. Still, he does “save” !

What specially interests us here though is that his whole consumption fund, large though it may be, involves no reduction of the amount of his wealth. Even if he consumed the whole of the surplus produced by the labourers he would become no poorer. He would remain a capitalist.

There is, however, another aspect of this relationship. In the course of time the capitalist inevitably spends a sum equivalent to his original capital in his own personal consumption. The capital he has invested therefore becomes practically the creation of the labourer : a sum of accumulated surplus value. If, for instance, the capitalist makes a profit of 20 per cent. per annum and consumes the lot, then in five years he will in effect have consumed the whole of his capital. The sum intact which he still retains is the fruit of his exploitation of labour-power, and it is with this sum that he continues to purchase labour-power.

The reason the labourer offers himself for hire is precisely because he does not possess the means of production. By continually yielding to the capitalist all his product over and above his necessary price, wages, he reproduces his own propertyless condition. Saving by the capitalist, nay, the mere existence of the capitalist, involves the absence of opportunity to save for the worker. The process of exploitation perpetuates itself.

The accumulation of surplus-value, the fruits of the process, simply enables the process to be carried on more extensively. In other words, the workers produce the means for their employment on an ever-increasing scale. Their reward for doing this will be dealt with in a further article.

Eric Boden

Capitalism’s road to riches (1985)

From the December 1985 issue of the Socialist Standard

Question: How do capitalists go about the business of making all that money — the legitimate' capitalists, that is? One answer takes into account the fact that they invest their capital, either in direct ownership of production plants or merchandise emporiums; or indirectly through building portfolios in the stock exchanges. In either case the process revolves around commodity ownership. Anything that can be extracted or captured from land, waters, or skies that is potentially saleable at a profit is processed and manufactured with that in mind — commodity production and distribution.

In other words, the only way potential profits and riches can be created is by manufacturing or processing items of wealth through the application of human labour power to natural raw materials. But how is that profit finally obtained? After all, what capitalists have immediately on conclusion of the manufacturing process are warehouses bulging with merchandise — products for which they have no personal need. How do they convert those wares into money and profits?

If we go to conventional wisdom we learn that the costs of production are totalled, to which a percentage is added which will constitute their profit. The merchandise will then be shipped to wholesalers, dealers, jobbers, retailers, or whoever, and each individual entrepreneur involved with the sale of the commodities will, in turn, add a percentage of hoped-for profit, thus raising the cost of the commodity to the ultimate consumer in a purely arbitrary way.

There is, too, an added emphasis that clever merchandising talent helps to separate the men from the boys, to enable those with the good business heads get the better of the rest through wheeling-and-dealing. Also, it must be admitted, is the acknowledgement of an element of luck — being in the right venture and the right place at the right time. But the bottom line on how one is supposed to earn profits is: add a percentage to one's costs.

To be sure, capital invested in production is involved in the business of increasing commodity value through the manufacturing process. And such capitalists, in fixing their selling prices, must add to the costs of the commodities that they need to purchase from other production capitalists. They add those expenditures to the other costs in their production process, and then tack on a figure representing the average profit in their industry to arrive at what Marx termed their ' price of production".

But the merchandising capitalists, who are concerned only with the marketing of finished commodities, would have no reason to jack up the cost of the item since marketing adds nothing to its value. True, they do appear to be doing just this and that is exactly how it shows up in standard bookkeeping. But it is all mere semblance of reality; the merchandisers get their profit by sharing in the surplus value that has been added during the manufacturing process.

To whom do they sell?

The population of industrial and trading nations are made up, generally, of two major elements: capitalists, or employers of labour; and the working class. While there are members of the population that seemingly fit neither category professionals who work on their own for fees, artists, insignificantly tiny business people who hire no help — but their totals are minuscule as against those of the main segments and their income aggregates would be more in the category of working-class levels than capitalist.

Looking at the working class as customers for commodities, the maximum they can afford to consume would have to amount to the total of their wage/salary income. They can hardly spend more without getting into deep trouble which, to be sure, a noticeable percentage of them manage to do from time to time, egged on by the flood of huckstering in the press and over the broadcast media. But there is one outstanding flaw in the argument that profits arise from sales to the wage and salaried section of the population. If that were so, would it not seem practical for the employers of labour to force frequent pay raises in order that the workers might have more to spend on profit-generating merchandise? It should be apparent that the driving rationale of capitalist production is to produce more cheaply in order that commodities can be sold for less with similar, or greater, profit. So the working class, whose labour power applied to raw materials is the source of all wealth, is forever being forced to modify their wage increases while increasing productivity — which is equivalent to accepting a wage cut, even if indirectly. That is the bottom line for the employer.

Profiting from one another?

Now what about that capitalist market? It goes without saying that the capitalist class is the consuming class, although not because of the total values of the necessaries and the luxuries that they buy for themselves whether for simple, personal use or for purposes of conspicuous consumption. The bulk of capitalist purchasing is in production goods needed to operate the industries that turn out and distribute commodities. There are tons of ore and metals of all sorts extracted from ore; there are forests and timber and lumber, crude and refined oil. coal and gas. So individual capitalists indeed seem to get rich from selling to one another.

But we run into another problem when we dig below the surface of what is happening in all that commercial activity. Certainly capitalists do get richer when marketing is enjoying boom times but do those riches arise directly from the sales? The trouble with that theory is simply that it is not possible to sell without also buying. Even a manufacturer of men's trousers must buy buttons or zippers and thread and equipment and machinery of all sorts. So what the wily sales staff would gain for the trousers capitalist would be lost when the equally shrewd people from the firms that supply the accessories and equipment go to work.

There is no question about capitalists needing markets in order to make money. But the profits do not emanate from sales. All that is happening in the area of marketing is a re-distribution of profits that have already been produced. That fact was noted a long time ago by the American author and scientist Benjamin Franklin who wrote: 

Trade in general being nothing else but the exchange of labour for labour, the value of all things is . . . most justly measured by labour.

(The Works of B. Franklin &c. edited by Sparks. Boston. 1836. VoI.ll. p.267.) (Quoted in Capital, Vol I. p.59 footnote. Kerr).

In other words Franklin, like others before him, anticipated Marx in observing that value arises from labour not exchange. Marx, like all scientists, took hold of something already known and added to it, in this case, exposing the legalised swindle of surplus value and wage slavery.

The source of the profit

Actually, it should not take too much reflection to understand why it seems to be so difficult to detect the fallacy in the theory that profits arise from the sale of the commodity. In a society based on production for profit it is even perplexing to most that the question need be raised. From the time we are old enough to comprehend, the proposition that profit is made by adding a percentage to cost, at the selling stage, is seen as self-evident and is taught in the institutions of learning from primary grades on up through university level. Even that common assertion, especially by discount merchandisers, that they buy for less and consequently are enabled to sell for less than their competition, does not alter the fact that their profit is supposed to be traced to their mark-up from cost.

And yet, on dose examination, the concept breaks down. Try asking yourself this question, for example: would you be willing to pay £7,000 or more for a shiny new car at a showroom if you were told that a part of that value was added in the dealer's business office simply by putting pencil to paper or fingering the keys of a calculator? The truth is that every penny of value had been added to that car when it had been inspected at the factory for shipment to the dealer.

Every penny of profit that is garnered by the various entrepreneurs involved with the sale of the car comes from the surplus value that had been extracted from the workers engaged in its production. The production capitalists cannot gobble up all the profit that is left after the expenses associated with plant operation have been subtracted.

To leave nothing for commercial capitalists they would be compelled to market the commodity themselves, thus tying up capital that would be better earmarked for production. It makes more economic sense for industrial capitalists to share the loot with merchant capitalists. This they do by selling their commodities to the merchandising capitalists below their full "price of production"; the merchant's mark-up brings the final selling price which the consumer pays up to a level representing costs plus the average rate of profit in full. But this profit has been created in the manufacturing process as surplus value. When the commodity in which it is embodied is sold this surplus value already created by the labour of the working class is converted into a monetary form: profit. Profits are made in the process of production and only realised on the market.

Harry Morrison

(World Socialist Party of the United States)

Who benefits from mass production? (1926)

From the December 1926 issue of the Socialist Standard

Prominent employers' ideas examined.

Sir Edward Anson, Director of the Birmingham Guild, writing a Trade Survey in the Daily News (17/9/26), says, among other things, of mass production, that it has two obvious advantages : The owner of the business gains if he can keep up his sales, and the consumer benefits because of the resulting reduction in price.

Mr. Frank G. Wollard, Director and General Manager of Morris Motors, Ltd., challenged Sir Edward’s views in a contribution on October 1st, where he claimed that the employees also benefit. As there are not consumers apart from capitalists and workers, according to these two gentlemen, mass production would seem to be an inestimable boon to mankind. We shall see on examination, however, that although differing, both are right in one respect, i.e., the owner of the business gains.

Sir Edward’s attitude towards mass production is mainly critical. His chief objections are the monotonous character of machine tending and the loss of skilled craftsmanship. He says:

“It is the boast of the majority of mass production owners that there is no machine in their shops that an unskilled man cannot work if he has a day to practise on it. This is very useful when it comes to combating unemployment, such as has been so prevalent since the war, when men have been unable to find work at their legitimate trade, but what will be the outcome in the future. . . .

It has been said that half the misery of life is caused by monotony, and what could be more monotonous than spending day after day pulling the same handle or filling the same hopper? It is incredible to me that the human brain can stand such a test of idleness and not become completely atrophied.”

The reference to unemployment in the above is typical of the capitalist viewpoint; they are combating unemployment when one hundred men find work, no matter if they displace one hundred and fifty. The object of mass production, as with every improvement in machinery and methods, is to reduce the amount of labour time required for the production of a given commodity. If it accomplishes this reduction, unemployment will be increased, instead of diminished. Because, as we shall see later, any increase of sales that might follow as a result of lower prices cannot be permanent.

“What could be more monotonous than spending day after day pulling the same handle or filling the same hopper?” questions Sir Edward. Yet that is the lot of millions of men, women and children under capitalism. Their labour intensified and rendered monotonous, with no respite, except for the congenial atmosphere of the labour exchange and the streets, when the factory owners are unable to keep up their sales.

So far as the loss of craftsmanship is concerned, the people who seem most concerned about such a disaster appear to be those who dodge work of any kind. The average worker, whether engaged in making cabinets or filling hoppers, is always eager to quit at the end of his enforced period of labour. It is not craftsmanship or the opportunity to dally with favourite tools that draws men into the factories. It is sheer necessity, their only means of escape from starvation. Moreover, under modern conditions dallying is not permitted. There is no time for pride in workmanship. The slogan is, “Get on or get out.”

Under capitalism the conditions of labour are dictated by supervisors who are driven to maintain or increase profits by the fear of losing their jobs. Under Socialism, where the whole people owned the land and means of wealth production, they would arrange their own conditions of labour. They would naturally adopt the shortest, easiest and safest methods to achieve their object, because such a course would give them the maximum amount of leisure. In any case, freedom to exercise craft pride would be possible under Socialism, under capitalism it is not. The worker’s business is to work. He must work in such a way as to satisfy the capitalist greed for profits; there is no time for him to find pleasure in it.

Returning to Sir Edward’s original claim that those who gain by mass production are the owner and the consumer, and Mr. Frank Woollard’s objection because the employee has not been included, the latter says:

“In the first place, Sir Edward can see only two benefits from mass production—a financial benefit to the owner of the plant and a lower price to the public. He has forgotten the worker, who has his share in the general prosperity, both as an employee and as a consumer.

Even supposing certain owners are so foolish as to forget the employees’ share of their prosperity, there is at any rate something to be shared; whereas if we put the clock back 200 years there would be little or nothing over bare subsistence to divide.”

The cat is out of the bag ! There is something to be shared. There is prosperity; but it is theirs—the owners, or capitalists who are under no obligation to share and can, if they choose, forget. But what is meant by sharing? and why are some owners foolish in not sharing? Every sharing, bonus, or co-partnership scheme that has been introduced up to the present is based on the principle that the workers must first increase production by greater speed and efficiency before they can share. They then obtain as their share a small percentage of what is produced by their increased efforts. In these circumstances the owners who do not share are, as Mr. Wollard states, indeed foolish.

Sir Edward agrees that the owner gains, but adds a proviso, if he can keep up his sales. But every concern is subject to that obligation. That is the capitalist method of converting surplus value into profits. As a capitalist he is supposed to understand that side of the business. That is where the much-boasted directive ability of the owner is supposed to come in. He controls his own factory and directs the workers he employs. If he misjudges the market, or produces goods that do not sell, according to capitalist standards he is a failure. But his disappearance from the arena makes no difference. There is still an abundance of capital functioning on the industrial field. The world’s markets are not starved, though thousands of concerns fail every year. The failures are like water that overflows the banks of a river in flood. The main stream flows on.

So much for the owner, or capitalist, the fact is established that he gains. What of the consumer? Who is he to start with? Mr. Woollard answers the second question :

“And all the time, and every time, it must be remembered that the makers, i.e., the workmen, are the same folk as the purchasers. In the bulk the buyers are not different people living on inherited wealth—that is only for the few.”

This simplifies matters enormously. Mr. Woollard is evidently not deceived by the confusing use of these terms by politicians and would-be economists, who divide society into capitalists, workers and consumers. For him, as for us, there are, in the main, two classes, capitalists and workers. We have already seen that the workers, as workers, do not gain by mass production. We shall see that they do not gain as consumers.

It is no coincidence that, in the years that have elapsed since the war, mass production and improved means and methods generally, have made enormous strides. While the same period has been characterised by a continuous and steady reduction of wages all round, the masters are organised for this purpose more strongly than they have ever been before. Their chief reason when forcing a reduction is that the cost of living has fallen. With one and a half million workers unemployed and trade unions with little or no fighting funds, resistance is almost useless.

Mass production may reduce prices for the consumer, but the consumer who belongs to the working-class lives by the sale of his energy. The cost of reproducing that energy from day to day having fallen, its price on the labour market falls. He is forced to realise that the commodity character of his labour power cheats him of any share in the rich rewards of mass production.

F. Foan

Two questions about value. (1926)

From the November 1926 issue of the Socialist Standard

We have been asked to answer two questions relating to value.

The first question is : “Has land a value?”

The problem is easily solved when once the nature of value is grasped. Broadly speaking, value is embodied human labour-power under particular conditions; that is, human labour-power, or human energy, expended in the production of useful articles for sale. Whether such labour-power is expended at the beginning of the process of production, or at the end, makes no difference to the point in question. That which has not had any human labour-power expended upon it, cannot, under any conditions, have value.

Land, in the sense of virgin soil, natural meadows, ore-bearing soil, or the like, has no value whatever. Land that has been prepared for a productive process, that is, land that has been ploughed, manured, or otherwise worked upon for a productive purpose has, under the given conditions, a value, and this value is preserved in the product wheat, oats, corn, or whatever else the product may be.

The second question is : “Do wage-workers in the distributive processes produce value?”

Here, again, the question admits of an affirmative and a negative answer, according to what is meant by the “distributive processes.”

If by the “distributive processes” the questioner means the transport of an article from its source of production to a spot where consumption requires it, the wage-workers in the transportation industries add value in such distribution. If, however, “distributive processes” means merely the transport of articles to a place where it will be more profitable to the capitalist to dispose of them, then value may not be added by the wage-workers in question.

Perhaps a little enlargement upon the question may make the matter clearer.

An article has no usefulness except in its consumption, and in order that it may be consumed, it may have to be transported. For instance, wheat gathered and sacked in the centre of America has no usefulness to hungry people in London until it has been transported there. Assuming there is no other wheat available nearer than the centre of America, then the labour expended in transporting it to London adds value to the wheat. In other words, necessary labour adds value to products, whether in the actual productive process or in transportation.

It is easy to see that the wheat must be collected and transported to the particular spot in which it is housed, an extension of this process is the transportation to the consumer—providing, of course, the above conditions as to its social necessity are observed. In these circumstances the transportation is an extension of the productive process.

Gilmac.

The Productive Forces (1976)

From the February 1976 issue of the Socialist Standard

What has happened to civilized society when the very purpose for which it is organized cannot be achieved? That purpose is to produce and secure the means of livelihood for all members of that society. This has always been the aim of men throughout history. The way in which this was done, and the way in which men were related to their means of production, provides the key to the understanding of human progress. At every stage in the history of civilized society, that is society based on the division of labour, men organized in social classes have fought over the issue of which social class will dominate the source of society’s wealth and the means of its production. It is only through this struggle that man has made the tremendous leaps forward in the building up of the productive forces at the disposal of society. This antagonism between the classes has produced chapters in history of bloody violence, cruelty and famine on a colossal scale, but without this class struggle the productive forces of society would never have been developed. By developed, we mean that the social organization to produce wealth is equal to any normal social demand which may be made on that wealth.

Production in every sphere has eventually won the battle of science and technology. There need no longer be any natural or physical barriers to the production of wealth, yet there is a constant struggle for survival, and millions do not survive at all. The Oxfam organization claims that 15 million children die annually of diseases caused through malnutrition, whilst the United Nations Food and Agricultural Organization expects the over-production of world dairy products to persist during 1976 (Times, 5th Jan. 1976).

"New Higher Relations"
The working class of all countries is the greatest productive force of all, but they are not aware of it. They regard the productive forces and the political and economic organization of society as something beyond them in which they play no part. Their main preoccupation is with the wages system and the constant fight against capital. This blinds them to the real state of social progress and the potential of production. In the real world, wealth is literally begging to be produced and consumed, whilst the world as the worker sees it consists of organized poverty and scarcity. This arises because of the way the economic structure of capitalism is organized. The working class is related to the means of production by wage-labour and capital, and these are basic conditions of production within capitalism, and no production can take place outside of these relations. These relations of production presuppose the existence of private property in the means of production in the first place, and the private ownership of the products in the second place. The products must be sold or exchanged under a monetary system and this constitutes a further relation of production.

The simple world of production where men reciprocate with nature and where wealth is produced is real enough, but its basic purpose has been obscured. Looking at this weird world of capital and commodities, we find that the productive forces do not exist to produce wealth at all: they exist to produce capital. That is, their function which is to provide the best existence which man can wrest from nature is subordinated and suppressed in the interests of the accumulation of capital. This accumulation can only be achieved by the sale of commodities, which is the economic form wealth takes under capitalism, and which contains within them that proportion of the unpaid social labour which is ultimately converted to capital. Provided there is a continual outlet for goods on world markets, the capitalist can continue to amass and re-invest capital. In the early years of capitalist development, particularly in Great Britain in the late 18th century, there was a market waiting to be served. Society had just moved away from Feudalism with its restricted production and growing population. This gave a tremendous impetus to the development of the productive forces. New inventions and scientific discoveries revolutionized the productive process, but above all, the greatest productive force of all was human labour-power which became a commodity under the domination of capital. The old conditions and relations of feudal production were swept aside by the new ruling capitalist class. Handicraft was replaced by manufacture, serfs were freed from the soil and forced to become wage labourers, merchants were permitted to employ wage-labour where they had previously been debarred. The restrictive practices imposed by the Guilds and Corporations regarding apprentices and journeymen, with fixed quotas of production and monopoly in distribution, were abolished. The rising capitalist class wanted unrestricted production. Therefore new relations of production had to be introduced. The relations of wage-labour and capital arose together with the establishment of private property in the means of production by the separation of the labourer from his means of production, which was mainly the land. The new system of production was vastly superior to feudal production, and the new relation of wage-labour and capital was consequently higher. Social progress, as measured in terms of production, was capitalism’s contribution to mankind.

Contradictions
However, by the year 1825 the first major commercial crisis took place. The seemingly bottomless market had been saturated. Since then, crisis after crisis has taken place up to the present time with similar effects, and by their periodic return expose more and more the contradictions of capitalist society. The forces of production cannot comply with the laws and conditions governing their use. If commodities cannot be sold beyond a certain point, and a surplus accumulates, the productive forces cannot be allowed to produce beyond this point. Capitalist crises arise precisely because of over-production and a shrinking market.

There is a point of view which holds that capitalism can take crises in its stride on the hill and valley principle. It probably could, were production the only consideration and the capitalists were completely free agents. Unfortunately for the capitalist, capitalism is a political system as well as an economic one. Politics involve people who, for the most part, are members of the working class. This is the class capitalism depends upon for its very existence. Whilst the ideal capitalist production arrangements would be to hire and fire, and displace labour by the introducing of machinery, the social and political consequences would be unpredictable. Workers would not accept without a struggle the loss of their livelihood through unemployment. As it is, capitalism is unable to use the available labour force, as world unemployment figures show. America, the largest capitalist country, has an unemployment figure of over 8 millions.

According to Marx, no society ever goes out of existence before all the productive forces for which there is room have been developed. The productive forces, which consist of labour, machinery, natural forces, electricity, steam, etc. and the earth itself, navigable rivers and other means of production, have been developed since 1825, the year of the first general crisis. What has happened since that period is that there has been a constant struggle between capital and labour over the introduction of labour-saving machinery. This amounts to the displacement of one productive force by another, and is not a development. Neither is the increased productivity of labour, which is an expansion of capital. Also the replacement of steam by electricity is not a development but the displacing of one motive power by another. Neither is it correct to claim that the introduction of up-to-date machinery is a development. Before up-to-date machinery can be introduced, existing machinery must be scrapped, which means that capital must be wasted.

Out of Control
The real way to consider the efficiency of the productive forces is by their technical and social capabilities: that is their ability to produce wealth in the concrete form—use value, irrespective of any market considerations. The social powers of production are related to the size of the population, but as the world population grows, the proportion of the population doing productive work is becoming smaller. Every increase in the productivity of labour through introducing machinery, which arises mainly from competition between capitalists for market supremacy, will cheapen the products, but only by creating more of them. A constantly diminishing number of productive workers will support an increasing population. Capitalism however cannot physically remove its relative surplus population and has to find them employment outside the productive labour process. Thus we get hordes of civil servants, salesmen, insurance men, advertising men, public relations men, office workers, and an ever-growing army of bureaucrats, lawyers, politicians, journalists, etc. etc. To bring this section of the population into useful production from whence they have been removed would undermine the whole productive and marketing process. There are no new markets, and neither did the development of the backward countries create new markets in the strict sense. Capital has been exported to the backward countries for over 200 years, and such development as is taking place is done at the expense, so to speak, of the old capitalist colonialists. It is not a development of the productive forces, which are world-wide not national. Competition between capitalists does not produce more surplus value, it moves it to the large capitalists.

Greater productivity is always given as the key to the prosperity of the working class, but greater productivity produces surpluses. Surpluses which cannot be sold result in the laying off of millions of
workers, and the enforced idleness of large sections of the productive forces. Use value can be produced without exchange value, but you cannot have exchange value without use value. Without exchange value you cannot have surplus value, and therefore capital cannot be accumulated. The productive forces are subject to the property relations and the conditions of capitalist production, and these conditions inhibit their proper function, which is to serve society and not capital. The productive forces are fettered, and the powers of production are in rebellion against the conditions of production.

Capitalist society is like the sorcerer’s apprentice who was unable to control the magic powers he had called up by his spells. When this point is reached, the forces of production have come into conflict with the social relations under which they have previously been developed. Social progress demands that there should be a change in the social relations. Men must be related to their means of production without the restrictions of wage-labour and capital. The existing mode of production must be scrapped, and this can only be done by the introduction of a system of production based upon common ownership. Socialism. This is the highest form of industrial and economic relations which can be devised by man. This will be in line with the historical mission of the working class, and mankind will finally conquer the problem of poverty.

Revolutionary consciousness is the recognition that the social powers of production must be brought under social control. This can only be done by the working class using their political power to establish common ownership—Socialism.

Jim D'Arcy

The Mystery of Rising Prices (1957)

From the June 1957 issue of the Socialist Standard

An interesting letter from a reader appeared in the Daily Mail on 26th April of this year: interesting because it put a question that baffles most people and because nobody gave the answer.

Here is the question: —

  “In these days of mechanisation it seems strange that most manufactured goods should get dearer. Our wonderful new methods are claimed to give up to ten times the results achieved by older manual methods. Can anyone explain this apparent paradox?”

It is a fair question, and the facts as stated are beyond dispute. Almost every day our newspapers carry reports of some startling increase of productivity, and alongside them announcements of higher prices. What then is the explanation of what the writer of the letter calls “this apparent paradox”? There are several factors, three of which are important. Firstly, the effects of increases of output are almost always wildly exaggerated; secondly, there are large industries in which productivity is falling; and thirdly, prices rise because it has long been government policy to take actions which inevitably raise prices. This last has by far the largest effect, sufficient to offset other changes that might otherwise lower the price level.

Governments and the Price Level

Continually since 1939 it has been the policy of successive governments, National, Labour and Tory, to inflate the currency; that is, to increase the amount of notes in circulation far beyond the amount that would have been sufficient to keep up with the growth of production, trade and population. The note issue in 1938 was under £600 million; it reached £1,400 million in 1945, and is now over £2,000 million. At one time most economists knew well what the effect on the price level is when an inconvertible currency (i.e., not freely convertible into gold) is excessively expanded: now they have forgotten or, like the politicians, prefer to turn a blind eye. Governments do this because, whatever they may say about wanting prices to fall or to keep steady, they really prefer gently rising prices and wages and profits, which give so many people the illusion of being better off. Also they wonder whether a fall in prices might mean a really big rise in unemployment, which would lose them votes.

The measure of the inflation of the currency can be seen in the fact that a gold pound, the sovereign, can be sold for three times its face value of 20/-. Another mark of inflation is the progressive fall of the pound in relation to the dollar. In 1938 the pound would exchange for 4.86 dollars. In 1940 it was reduced to 4 dollars, and in 1949 to 2.8 dollars. In 1932 the American dollar had already been cut to about half its gold content. Some economists expect a further devaluation before very long in Britain. This inflation is then largely the cause of prices being generally at least three times what they were in 1938.

If the government wanted to do so, they could limit or reduce the amount of currency and thus stop the price rise or bring about a fall. Several governments have done this in the past, including the Russian government in 1947.

Misleading Claims about Increased Productivity

We see, then, that even if there were a big increase in productivity through the use of more efficient machinery and methods or other causes, its effect on lowering prices could be offset by the government’s currency policy. But the claims of increased productivity are themselves widely misunderstood and exaggerated.

It is an elementary principle that if by some means the amount of labour required to produce an article could be reduced to half, the price could be halved, but we would expect this to take place only after the new method had become the typical one in at least a large part of the whole industry. If one firm only had possession of the new method they would not cut their price to half, but would use their favoured position to make larger profits, perhaps reducing the price a little in order to capture trade from their less efficient competitors.

But before we get to this point we have to be sure that what looks like a doubling of productivity really is what it seems. And here we are only too often presented with misleading information by newspapers that probably do not have full information (because firms rarely disclose it) and which, in any event, are more interested in sensationalism than in accuracy.

News of new machinery is usually presented in the form that some new machine attended by a small number of workers will do the work of a much larger number working by hand or with another machine. It is in this form that announcements about the power-driven coal cutters is reported; and recent examples have been the automatic factory and office machines loosely described as “automation.” But though we may reasonably assume that some increase in productivity is expected, this kind of information tells us nothing at all about increased productivity. Increased productivity in the last resort means producing an article with less labour, and to know to what extent this has been achieved we need to know about all the labour, including that required to make and maintain the machine. Often this information is not disclosed, as is pointed out in the booklet on Automation, published by the Department of Scientific and Industrial Research.

An example a few years ago was a report that “the world’s biggest signal box” had been opened by British Railways at York. In almost all the newspaper reports the item seized upon as news was that 27 men could now do the work formerly done by 70 men in a number of separate signal boxes. Doubtless the change over will in time produce some real saving of labour, but most of the Press reports omitted to state that the new box cost £500,000 (Manchester Guardian, 1st June, 1951). It will take a long time before the saving of the labour of 43 signalmen equals the amount of labour taken up in construction.

The coal mines are an interesting example. Astonishing claims have been made about the increased productivity expected from the use of machinery in the mines, but the annual output of coal per worker employed in the coal industry has remained practically unchanged in the years 1951 to 1956, at about 315 tons per year, compared with an output of about 330 tons a year 70 or 80 years ago; which brings us to another important factor often overlooked.

Declining Industries

The coal mines are typical of a number of industries in which the general trend is for output to fall not rise. When coal mining was in its infancy the rich seams near the surface were exploited and output was high. As these are exhausted miners have to go deeper, and poorer seams are extracted—with the result that more and more labour is required for each ton of coal. New machinery helps, but if the labour required to make the increasing amount of machinery produced in the engineering trades for the use of the coal industry is taken into account, the real fall in output is even greater than is shown by the above figures.

In an address to the Rotary Club of Los Angeles (reported in Manchester Guardian, 15th Feb., 1957), the chairman of the Socony Mobil Oil Company, Mr. B. B. Brewster Jennings, surveyed a number of the raw material industries and showed that what is true of coal is true of many other industries:

  “. . . raw materials all over the world are harder and costlier to get. We have seen this very clearly in our own coal industry, in which year by year more non-productive work is needed for every ton of useful coal. For most of our raw materials the picture is much the same.”

He instanced copper, the American oil industry, with more and deeper wells to produce the same output of oil, and iron ore in Canada. His conclusion was that man’s ingenuity will keep up with the rapidly increasing demand for these materials, but only at the cost of more and more capital being invested to do it; which is another way of saying that more labour is required in these industries for each ton of output.

This general trend in the raw material industries shows itself in the fact that raw material prices in the last half century have risen considerably more than the rise of the prices of manufactured goods. And it explains why we so often read that industries which are known to have introduced new machines and methods which reduce the labour required in manufacture (e.g., the motor industry) nevertheless announce higher prices “because of the increased cost of raw materials.”

The Real Increase of Productivity

The real increase of productivity in industry and transport, etc., as a whole is consequently not the very large amount conveyed by sensational newspaper reports, but on a much more modest scale. The Earl of Halsbury, managing director of the National Research Development Corporation, who has written much about “Automation,” was merely restating the accepted view among economists who have studied this problem when, in a recent interview, he said: —

  “Productivity in the United Kingdom rose at one and a half per cent. per annum in the United Kingdom for the first forty years of this century. It’s now rising at three per cent, per annum, double the old rate. . .” (Everybody’s, 16/2/57)

In America, according to the Bureau of Labour Statistics, productivity (i.e., the output per worker) in manufacturing industry rose between 1929 and 1953 by 70 per cent. As the period covered is 24 years, this means an average yearly increase of under 3 per cent. (Times, 18th January 1956).

Is this a gloomy view ?

The real facts about productivity may be a shock to those who believe that “automation” will bring a paradise of a workless world and to those who believe that capitalism can offer a spectacular rise of the standard of living. Actually a 3 percent increase of productivity each year could double output in about 30 years, but capitalism presents another gloomy aspect, that its wars and armaments make nonsense of the increase of productivity. Almost all of the increase of productivity of British industry in this century has been swallowed up in the expenses of armaments (now nearly 10 per cent. of the national income) and in succeeding destructive wars, which in a few years can destroy the achievements of a quarter of a century.

Socialism the Only Way to Secure the Benefits of Productivity

Socialists have the only hopeful answer to these gloomy facts of life under capitalism. Only Socialism can end war and armaments and thus stop that waste of production. Equally important, only Socialism can secure that the labour force and the materials now devoted to the financial, trading, and other activities necessary to Capitalism but needless in a Socialist system of society, can be freed for the production of useful articles and services. In this, Socialism offers the certain prospect that the output of useful articles could in short time be doubled. But this involves the abolition of capitalism and the establishment of Socialism in its place.

And, incidentally, to go back to our starting point, the problem of the writer of the letter to the Daily Mail will be solved in a way he has not thought of. Under Socialism prices will not be high or low; there will be no prices!

Edgar Hardcastle

The Social Nature of Modern Production (1970)

From the August 1970 issue of the Socialist Standard

Capitalism is torn by one major contradiction: that the socialisation of wealth-production has developed to an extent undreamt of in former epochs, whilst ownership of the means of production is concentrated in the hands of a minority. World-wide interdependence in production has made a material abundance possible for all mankind, yet the fetters of private property keep the overwhelming majority in poverty. The socialist answer to the poverty problem is to remove the contradiction by making the means of production the common property of society as a whole.

Most workers who support the social system that keeps them poor think in terms of greater productivity, more technology or other nostrums of capitalism. They fail to grasp that the problem of production has been solved. Nor do they realise that the abolition of private property will end all forms of exchange including barter and will result in free access according to need. Consequently such questions are asked as “say I made bicycles and wanted other things made by other people who don’t want bicycles, how do I get them without money?” These questions show a lack of knowledge of how production is carried out under any form of society. It suggests that individuals carry out the production of objects from start to finish and by virtue of this have rights of ownership. This has never been so and under capitalism, the producers do not even own the places they work in, nor the tools, materials and finished product. These belong to the non-producing capitalist class.

No single person could produce a bicycle right through. Nor in fact does any single industrial combine, huge and diversified as some are. The ores for the metals and their alloys have to be found, mined and processed. The metals have to be shaped and treated to make the tubes for the frame, sprockets, chains, ball bearings, wheels and other component parts. These processes need machinery of many specialised kinds. Transport of all types to move the materials through the various stages and processes, sometimes over great distances; electricity to power the machines, and the fuels to supply the power to generators are also essential. Then there is the paint and chrome-plating to be seen to. No bike can do without tyres, needing rubber from the plantations of South East Asia, cotton for the carcass and steel wire for the beading. The bicycle like other articles is not only the product of co-operative labour, but of a certain form of society. The techniques involved are of a highly sophisticated kind. They are not made in ones and two’s but in millions. The world is involved in producing them and they are available for the markets of the world.

Joe Carter

Capitalism’s Contradiction (1970)

From the September 1970 issue of the Socialist Standard

We see the major problems of today stemming primarily from the basic contradictions of capitalism. By this we mean that the social relationships of production conflict with the technical relationships.

In modern society where wealth takes the form of “a vast accumulation of commodities”, production is “socialised”. This means that no commodity is the result of one person’s work, but that it takes the productive apparatus of the world to produce the commodity.

For example, take the simple match. Someone has to know which trees to cut, how to cut them, how to make the saws to saw them, how to make the right steel to make the saws, how to make the lorries that convey the logs, how to obtain and process the rubber to make the tyres for the lorries, how to extract and process the petroleum to provide the power for them, to indicate only some of the basic processes involved. And of course all these materials and people have to be transported from place to place by air, land and sea with the assistance and support of administrative and agricultural workers. Modern capitalism (including Russia, China, etc.), which is the dominant economic mode, has brought into being a world based on the socialised production of wealth. But (and this is the biggest “but” in history) the wealth when produced is not the property of the producers, i.e. the working population of the world. It is appropriated by a relatively tiny section of society which monopolises the means of production, for reasons of history either in private or in state forms of possession. Furthermore this minority section or class is divided up, generally on a national basis, into particular ruling classes. These can only maintain them­selves as the ruling classes in their own sector (given the acquiescence of the working population) and realise the wealth which the commodities represent by selling them, profitably, on the world market.

The ensuing conflict entails bitter struggles over markets, energy-yielding products, sources of cheap materials and labour, and the strategically important areas, bases and trade routes associated with them. The minor and major wars, together with the criminal stupidities, social and environmental, with which we are confronted are primarily caused by or are traceable to this contradiction.

Our social and political systems derive from this basic mode of organisation and it is absolutely impossible to eliminate these problems, which are specific to capitalism, unless the social relationships of production are brought into harmony with the technical ones. That is, as well as having socialised production, the means of production and the wealth produced must be the property of the whole of society and simply used by society in a rational democratic manner in line with the precept: “from each according to his ability. to each according to his need”. This does not require governments, armed forces and so on. It does require knowledge and a common understanding of aim, purpose and method. It does entail organisation and administration but not permanent organisers and administrators (as individuals).

Education for this kind of world is important but it is not simply a matter of formal education (which is socially derivative anyway), but of social education, i.e. experience, as well. Men learn and modify their behaviour. Our environment is dominated by capitalist competition and this forces the ruling groups to revolutionise continually me techniques of production, including those of communication.

This means that whole sections of the community are confronted by changes in their lives and the need to question the existing situation. This does not mean that their tentative attempts to grasp the meaning of events are always constructive but it does open the way for the valid analysis, presented appropriately. The important point, however, is that, time being money for the ruling classes and communications being important militarily, the means of communication are improved so rapidly that it is harder and harder for rising generations to see themselves as other than “Earthmen”, “world citizens” and so on. This is not simply for reasons of political or moral theory but as something related to experience in a world of short-wave radio, international television, satellites and space shots. No doubt governments attempt to use these techniques for pernicious ends but the inherent universality of some of these media subverts their efforts.

Jack Bradley

What is history? (1999)

Book Review from the October 1999 issue of the Socialist Standard

Marxism and History. By S. H. Rigby, Manchester University Press, 1998.

This is a revised second edition of a book, first published in 1987, which is widely used at undergraduate level teaching. The focus of Rigby’s analysis is G. A. Cohen’s influential book, Karl Marx’s Theory of History: A Defence, published in 1978. Cohen argued that Marx’s account of history is a form of “productive forces determinism” in which society’s productive forces (applied technology) bring into being specific class relations. As these productive forces develop throughout history, they periodically bring about new class relations of production. Thus the growth of the productive forces is said to be the dynamic which creates specific class relations and through them new forms of state and ideology.

Rigby admits that this is a legitimate reading of Marx, most notably found in Marx’s 1859 Preface to A Contribution to a Critique of Political Economy. Marx and Engels often asserted that the productive forces have an inherent tendency to develop throughout history but in practice, says Rigby, Marx was not consistent in applying such a thesis in his historical and contemporary analyses.

He argues that Cohen’s specific argument that society’s relations of production are functional for the productive forces is not an explanation of why the productive forces develop, nor is it consistently supported by historical evidence. Of course human history has seen a growth of productive power, but such developments have been specific to time and place. There have been periods of human history in which the productive forces stagnated or even regressed, other periods in which class relations have changed without any obvious development of the productive forces, and yet other periods where the growth of the productive forces bring no change in class relations. For Rigby, the growth of the productive forces does not explain the change from the Ancient world to feudalism and it was only after feudalism had ended and capitalist relations of property had been established that new productive forces were introduced.

Rigby asks how can the productive forces within capitalism bring about socialist relations of production without invoking some kind of determinist assertion? His contention is that productive forces do not determine class relations. Rather, that class relations determine the direction and rate of advance of the productive forces. Instead of determinism we have a conditional statement: “if the productive forces are to advance then certain relations of production must obtain”. According to him, “whether these relations of production do develop is historically contingent and can only be established through empirical research”; Marx’s theory of history is a guide in that research by supplying the framework for identifying societies and how they change.

A society is not identified merely by its class relations, it is rather a specific mode of appropriation of surplus labour. Feudalism was based on the appropriation of surplus labour as feudal tribute (whether in the form of money, produce or labour services) from the peasantry. Capitalism is a society where surplus labour takes the form of surplus value (ground rent, interest and profit) extracted from wage labour. However, class relations and the mode of appropriation of surplus labour do not always coincide. This can be seen in the Ancient world where the predominant relations of production were the master and slave of chattel slavery. Yet independent producers who were the forerunner of the medieval serf produced the surplus labour, appropriated as taxation. As the Roman Empire declined chattel slavery increased, but the increasing demands placed on the independent producers by an expanding and costly empire brought about (together with external invasion) internal collapse. There then followed four centuries of stagnation of the productive forces. A simple analysis of relations or forces of production would not reveal what was really going on.

Rigby argues that the development of the forces of production in feudalism had a tendency to stall and sometimes to recede, as in fourteenth-century England and seventeenth-century Poland; the process described by Marx as “the primitive accumulation of capital” was largely one of the establishment of capitalist relations of production prior to the “take off” with the productive forces in the industrial revolution. Hence his conclusion: “capitalism was not the result of the growth of the productive forces. On the contrary, capitalism was the cause of that growth.” From which it would follow that the case for socialism does not rest on the assertion that the productive forces have run up against the limits imposed by capitalist relations of production. Instead the argument would be how socialist relations of production will allow the forces of production to be used to meet human needs. If Rigby’s argument is correct, then this is not just a criticism of Cohen but also the theory of history in what is known as “classical Marxism”. You will need to read the book to decide.

Rigby also includes a useful account of state capitalism. At the same time he wrongly identifies Marx’s proposed first stage of communism as “socialism or the dictatorship of the proletariat”. Marx did not say that socialism was a first stage, nor did he equate it with working class political control of the state—which is what he meant by “dictatorship of the proletariat”.

Rigby follows academic convention (as does Cohen) by wanting to keep Marx’s theory of history free from what he regards as Marx’s irredeemably false theory of value. But he cannot have it both ways. Rigby’s main contribution in this book is to emphasise how a society must be identified by its historically specific mode of appropriation of surplus labour. Capitalism is therefore identified as the extraction of surplus value through wage labour, and this clearly requires a theory of value as part of the identification process. Marx’s theory of history and his theory of value are dependent on each other.

Lew Higgins