It is hardly possible nowadays to pick up a newspaper or magazine that does not contain articles on bad trade, excessive taxation, and unemployment. In some of these articles the writers try to show that bad trade is largely caused by high taxes; while others insist that high wages and low output is the chief cause. Some writers combine the two, and represent the capitalist as a helpless victim being squeezed dry between the Government and the workers.
Those who understand Socialism know that periods of bad trade are the result of modern methods of production, that outstrip the demand for commodities all over the capitalist world, and that bad trade will recur periodically, or will continue as a chronic social complaint so long as trade governs the production of wealth. Once we understand this clearly it is easy to see the futility of all the reforms suggested by writers who do not appear to understand the nature of the problem. In certain cases the fact that they argue that taxes should be lightened for the capitalist; that he is justified in reducing wages, in demanding greater efficiency and longer hours, arouses at once the suspicion that such writers are either capitalists themselves or are in the pay of capitalists.
One writer in the “Sunday Pictorial” (22/1/22), Mr. J. Ellis Barker, puts the case from the capitalist standpoint and tries to prove that the workers’ interests are identical with capitalist interests. That the capitalist cannot extend his business and employ more workers because the Government takes in taxation the necessary capital. This is one of the stock arguments of the anti-wasters, but everybody should know that there is no shortage of capital wherever there is a promise of dividends. The shortage is in the effective demand for commodities, and if the capitalists were relieved of the whole burden of taxation employment would not increase unless the effective demand were increased.
Moreover, the money taken in taxes by the Government is either spent in wages—to Civil servants, etc.—or in purchase of goods, the manufacturers of which employ workers. These workers spend their wages on commodities placed on the market by other manufacturers. Thus, not only is the demand for goods increased, but the number of unemployed is diminished by Government expenditure. From the workers’ standpoint, therefore, Government expenditure, coming on top of ordinary capitalist outlay, is all to the good. This is easily seen, without going into the purpose and object of government, when we remember how unemployment figures fell during the war and wages rose in many industries. During the war Government expenditure reached the highest level ever known.
Mr. Barker argues that the lack of capital forces capitalists to act along certain lines : in bad times, and faced with the competition of countries less heavily taxed, they must either sell at a loss or close their factories. In good times they raise prices and thus pass the burden on to the masses. He says :—
“In good times income tax and super-tax are paid by the masses as a whole in increased prices, while in bad times unbearably high taxes lead to general unemployment and distress. The poorest pay income tax and super-tax, estate duty and succession duty in their bread and their boots, in their coal and their rent, and sometimes in unemployment and distress. It is chiefly in their interest that taxation should be as low as possible.”
Here, the exponent of capitalist economics, in his eagerness to clear the capitalist of blame for bad times, unconsciously exposes the rottenness of the system he is trying to defend. What do the workers get out of the system? In bad times they suffer from unemployment and distress and in good times they suffer from increased prices.
A Socialist knows that the workers suffer acute distress in periods of bad trade and are forced to study the strictest economy in the best of times in order to live on their wages, but he has yet to learn that while in this condition they can pay any of the taxes enumerated by Mr. Barker. Whilst wages are based on the cost of living they rise or fall generally, over a given period, as the prices of necessaries rise or fall, and the worker never gets much more out of industry, even when he is lucky enough to be always at work, than the necessaries of life required to keep him fit and to support his family.
The cost of living is the mean level around which the industrial war takes place. Supply and demand plays its part, but nearly always on the side of the masters, because there are nearly always more workers than jobs. Represented by leaders who do not understand the economic laws of the capitalist system nor how to direct the workers in times of crisis, the latter are always at a disadvantage in disputes over wages.
Mr. Barker’s unsolicited and unconscious admission that the workers suffer whether trade is good or bad is true in substance, though based on a fallacy. Let us examine his proposed remedy and see how much that is worth.
There follows half a column of statistics on the comparative values of English and American production, a few cheap sneers about workers who restrict output, and a piously-expressed opinion that no one wants to see the old evils of sweating restored, and then he openly advocates mass production as a remedy for bad trade and unemployment. He says : —
“It is clear that we can treble British production, and with British production our national wealth and national income, by improving our industrial methods.”
Now, mass production means not only the adoption of labour-saving machinery and devices, but production in such vast quantities that waste is eliminated. In mass production capitalists reduce their wages bill for the production of a given quantity of wealth to the lowest level yet reached. Factories worked on this principle in America turn out commodities in such vast quantities that they are forced to close down for weeks at a stretch, or discharge thousands of workers, until the surplus is sold. The very company cited by Mr. Barker as a shining example of mass production prosperity has given him the lie. In 1920 the Ford Company employed 52,000 persons to make 100,000 cars a month. In 1921 they employed 32,000 persons to make 87,000 cars per month, and had to close down owing to over-production. What became of the 20,000 workers not wanted—and what happens as mass production becomes more general? The answer is obvious, yet Mr. Barker further outrages common-sense by stating in black type that
“There is no fear of over-production,”
and following this in italics :
“There is an unlimited demand throughout the world for cheap goods.”
Ford cars are cheap. Why did the Ford factory close down and reduce the number of its employees if the demand is unlimited ?
When Mr. Barker writes about unlimited demand, he is writing unlimited nonsense, because there is no such thing. Production and demand, or production and consumption, may be likened to a tank with water continually running in from a tap and out through a waste pipe. If two gallons flow in every minute and during the same time only one gallon can pass the waste, the flow will have to be stopped periodically or the tank will overflow. In filling the social tank with commodities, however, human labour functions. Human labour-power is the worker’s only commodity ; he lives by the sale of it and starves if he cannot sell it. Unable to take out of the tank more than the value of their wages, or go on producing when demands fall off, and a constantly diminishing numher of workers are required. Mr. Barker gives figures that credits the American worker with producing as much as three British workers. According to his reasoning, unemployment in America should be less severe than in this country. Is it ? Everybody knows that the number of unemployed in the United .States is treble the number of British unemployed
To sum up, let every worker understand once for all the real meaning and significance of labour-power as a commodity. Let him realise that his wages can seldom rise above what it costs to maintain himself and his family. That wages are more likely to fall below that level as competition increases ; he, therefore, only deludes himself when he imagines that high or low taxes affect him in the long run. The inevitable consequences of mass production are increased unemployment and lower wages. Mass production is the latest and most callous form of capitalism; it manufactures cheap and shoddy goods to feed and clothe its overworked and poverty-stricken slaves. It drives the slaves to despair through long periods of unemployment and dread of the sack. Mass production is not a thing of the future; it is with us now in all its hideousness, and promise of worse to come. May it startle the workers of all lands out of their lethargy, strip the scales from their eyes, and force them to examine the claims of the Socialist; for only then will they understand that they are slaves, why they are slaves, and how they can be free.