The attitude of the vast majority of the unemployed is one of more or less patient waiting for something to turn up. Their hopes are based upon a revival of trade, an increase in the demand for commodities, particularly for that commodity they, individually, desire to sell, or are in the habit of producing, and consequently the possibility of a job. “It can’t last much longer,” is a phrase one frequently hears: “the wish is father to the thought ! “
Now what is the probability of the realisation of this great hope of the unemployed ? We were told that the “coal stoppage” came at the very moment when trade was beginning to brighten up. As soon as the miners went back to work the papers proclaimed the millenium. “Now for a good time,” shouted one. ”No more bad trade, no more unemployment, if only the miners get down to it and the workers work with a will.” But the man on the Labour Exchange queue is still looking for the good times.
We are at the present time passing through one of those industrial crises which have periodically swept with such devastating effect throughout the capitalist world. The first considerable crisis took place in 1815 in circumstances somewhat similar to the present one, viz., after a war. From then on till the end of the nineteenth century, these crises recurred at intervals of from eight to ten years, the tendency being for the intervals to decrease. All sorts of explanations of these phenomena were sought. One “economist,” Jevons, earned a place in the capitalist pantheon by tracing them to spots on the sun. They were attributed to the anarchy of production. This was true, but only a part of the truth. The anarchy of production merely accounted for the character of the crises, not the crises themselves. What the real cause is will be made clear in the course of this article.
In the early years of the nineteenth century production was carried on by an immense number of small, independent, competing firms. None knew what the others were doing. As soon as a demand manifested itself there was a rush to supply it. This fact by itself would have been sufficient to produce crises in the acute form in which they took place during the last century. But in addition to this a large foreign trade was done.
Now, before the first successful Atlantic cable was laid in 1866, it took news as long to travel as the ship which conveyed it. The first steamship voyage across the Atlantic was made in the year 1825. But for many years after this, sailing vessels predominated, so that often months elapsed between the sending and receiving of a message. The effect of this was that from the time the demand for commodities abroad slackened cargoes would continue to be dispatched until the information reached home. Consequently, when the crash came it found many business firms with the bulk of their capital locked up in the form of unsaleable goods, hence inability to meet liabilities and wholesale bankruptcies.
Now all this is changed. Anarchy of production has to a considerable extent been done away with. In the cotton, soap, iron and steel, and tobacco industries huge trusts exist, and the production of these commodities which is not controlled by them is negligible. It was stated in a recent Government report that 90 per cent. of the soap production of this country was in the hands of a great trust.
Also news now travels with the speed of light; any falling off in demand is immediately known, and owing to the great centralisation of control the information is instantly acted upon. So that as a decrease in demand is immediately followed by a curtailment of production, we now have long-drawn-out slumps with intervals of brisk trade.
This all accounts for the change in the character of the movement of trade. What is the cause of the crisis? The cause is summed up in one word, overproduction. The powers of producing wealth increase enormously. Continually, labour-saving machines are being introduced, releasing large numbers of the working class to swell the ranks of the unemployed. Here are two recent instances. In an article which appeared in the “Daily Herald” (4.11.19), it was stated that the fitting of the “Aquitania” with oil-fuel burners in place of coal furnaces would save two-thirds of the stoking labour. Three hundred men constituted the stokehole staff prior to the change; slightly less than one hundred men were necessary to operate the oil burners. The utilisation of bunker space for cargo, the different method of loading the new fuel, merely connecting up pipes and turning on taps, instead of armies of coal porters being employed, are further economies effected by the change.
Another instance I cull from the “Evening News” (25.7.21). Their special correspondent at Worthing went to see the working of a tomato-sorting machine which the “Worthing Fruit and Flower Co.” had installed. It is claimed for it that it will do the work of about twenty men in an hour for a cost of just under threepence. The writer goes on to say: “It was particularly amusing to see the tomatoes being bobbed from hole to hole until the right one was found.”
Amusing! To whom? To the twenty men displaced by the machine? Let us hope it affords as much instruction to the latter as amusement to the correspondent, and turns their thoughts in the direction of their own emancipation.
This is going on in all branches of production. The productive powers of labour are growing. We were told recently that the boot industry in this country could supply the needs of the home market in six months. In the event of no foreign market being found for the surplus product, the boot operatives are unemployed for six months in the year. This, of course, in turns reacts on the home market, as, obviously, people who are only partially employed cannot buy as many boots as people who are employed the whole year round. What is true of the boot industry is true of all other industries; in all there is a huge surplus product which, if not got rid of abroad, chokes the home market.
Now, during the nineteenth century England’s chief export was textile goods, but gradually textiles gave place to machinery. This means that foreign customers instead of buying their commodities for direct consumption from England, bought the machinery to make them themselves; later on they make their own machinery and, incidentally, bang goes that beautiful dream of England becoming “the workshop of the world.” Not only do these countries produce their own requirements, but it is not long before they also have a surplus to get rid of. As Marx says (Communist Manifesto, p. 10): “It” (the bourgeoisie) “compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what they call civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”
What is true, then, of English industries is true of industries of all the “advanced” nations of the world; the productive forces are enormously in excess of the home demand. It is patent that to the extent that the competitors grow, the markets relatively shrink and there is an increasing difficulty in getting rid of the surplus.
What is the cause of this overproduction ? Evidently overproduction is a relative term; what appears as overproduction from one point of view appears as underconsumption from another. The reason is that the working class receive in the form of wages a constantly diminishing proportion of their product. From generation to generation the working class, or the vast majority of them, merely get a subsistence, while the product per head grows by leaps and bounds. A simple illustration will show the proportion of his product which the worker gets.
About two years ago a football match, owing to a draw, had to be played in midweek at Sunderland. The papers in that district kicked up quite a rumpus about it. The reason being that the loss in “output and wages” was estimated at £100,000. The “gate” was, in round figures, 50,000. Fifty thousand sons of toil took half a day off and the result was £2 loss in respect of each. Assuming ten shillings to be the average half-day’s pay—an extremely liberal estimate—get your ready reckoner and work out the proportions taken by the worker and capitalist respectively.
It is clear, then, that unless the capitalist class can absorb the surplus, which, in spite of really heroic efforts, it cannot do, there will be more commodities than the market can stomach. With the increasing productivity of labour this situation must become worse and worse.
Therefore, although the anarchy of production has virtually passed away, we still have the phenomenon of the commercial crisis, but in the form of a prolonged slump.
To come from crises in general to the one which now prevails, and to the question we set out to answer, viz., “What are the chances of a revival of trade ?” Ordinarily the process of recovery from a crisis is a long one, and tends to become longer with each succeeding crisis. The present one has not yet reached its depth; the figures of unemployment published from time to time show a monotonous increase. In addition to this, the situation is aggravated by the “Peace,” and the inability of the conquerors to agree about the division of the spoils of war, all of which decreases the possible market for English goods.
Then the ordinary process of substitution of machinery for human labour was considerably speeded up during the war. In fact, this was the war’s most fundamental effect. There was a census of production taken in this country in 1907, and one was taken in the U.S.A. in 1909. A comparison of ten trades in both countries revealed the fact that whereas in England only 0.79 horse-power was used per worker employed, in the United States the horse-power used per worker was 2.62. This difference has now, I think, been considerably reduced, although the U.S. did not remain stationary in this respect.
Finally, Japan’s export trade was four times greater, in money value, in 1919 than in 1914, while the same tale has to be told of the U.S. The “Times Trade Supplement,” April 12th, 1919, says:
“Compared with 1913 the exports have risen by nearly 150 per cent., and when it is added that last year’s exports were equal to the combined pre-war export trade of the United Kingdom, Germany, and France, the stupendous nature of the figures becomes at once apparent.”
We have then, firstly, decreased markets, secondly, a phenomenal increase in the productive powers of labour, enabling a given demand to be supplied in a far shorter time, and, thirdly, an enormous increase in international competition. It does not require a mathematician to work out the result.
The present situation is likely to remain unchanged for an indefinite period. In fact England is no longer the largest producer in the world, and the working class population will have to accommodate itself to the requirements of capital.
What a bright prospect ! Yet there is an alternative. The situation could be alleviated to-morrow and changed entirely in a few months if the working class but knew how and desired it. The means of production being owned by and operated entirely in the interest of a class, obviously the remedy is to deprive them of this ownership, socialise the means of life, enable every able person to take part in productive work, and, by that means, inaugurate an epoch in which the productive process—the mere grubbing to maintain an existence, which occupies most of our waking and many of our sleeping thoughts —take a relatively subordinate place, leaving our time and our thoughts free for the pursuit and enjoyment of art, science, literature, sport, etc.—that high enjoyment of life made possible only by millions of years of evolution in the means producing the necessaries of life.