Unemployment – Cause and Cure

There are now upwards of 1 1/4 million workers registered as unemployed in Great Britain. How many there are not registered, and how many are working short time, it is impossible to say, but we may safely assume that there will be, before this winter is out, more than 1 1/2 million men and women, boys and girls, able and willing to work, but prevented from doing so. The present depression began at the end of 1920 and shows no sign of lifting, and it is no longer sufficient for Ministers to prophecy improvement; even the most credulous workers are now unwilling to believe in the early coming of the long deferred revival.

There is no lack of freaks, frauds and cranks anxious to gain attention for their fallacious diagnoses and quack remedies — free traders and protectionists, and advocates of imperial preference; deflationists and inflationists, Christians preaching Brotherhood, and others who want another war, bareheaded Daily Mailites, and their ridiculous Liberal Labour opponents, who weep for the wrongs inflicted on the poor German capitalists, emigrationists, and last and most futile of all, the motley crowd of “Socialists,” who have time for these and every vain scheme, but no time for Socialism. We, on the other hand, urge now, as we have always urged, that there is a solution — Socialism; that it is the only solution; and that it is a solution for the present and not for the distant future.

The attempted explanations of unemployment are as varied as the suggested remedies, and it is necessary therefore to make clear a few important points. First, do rot be misled by those who have tried to saddle Poincare with the responsibility. The widespread unemployment began in 1920 and had reached a point in 1922 higher than at any other time since; yet the French occupation of the Ruhr did not take place until January, 1923.

Do not believe that it is an ” abnormal ” after-war development. Apart from earlier times of special distress due to political and economic disturbances, unemployment has been a constant feature of our system since the industrial revolution at the end of the 18th century. There has during that period always been a mass of employable but unemployed workers; the number increasing enormously during trade depressions and decreasing with trade prosperity. It never wholly disappeared, in spite of the big drain of emigration to America and the Colonies. Dr. Macnamara, M.P., speaks of a normal pre-war unemployed army of 200,000 persons (Times, 11th September, 1923.) Unemployment is a normal feature of capitalist production. And what of the future? Macnamara promises that

    ” that even if the unsettlement of Europe were ended and normal trade returned, the permanent unemployment in this country would be three or four times as big as in pre-war times.”

While Sir John Norton Griffiths, M.P., a Tory, tells us (Daily Herald, 11th April, 1923) :—

    ” We have now got, and always, apparently, will have . . . trade boom or no trade boom a million or more unemployed men who cannot be absorbed in industry.”

Neither Macnamara nor Norton Griffiths seems greatly perturbed, but it may be worth your while to consider carefully the prospect before you.

Refuse to be drawn by the Labour leaders into the free trade-protectionist controversy, for it does not concern you. It is no question of principle, but one of capitalist interests, and will be readily scrapped by those who teach you to worship it, when profit-making demands a new policy. The sudden conversion of the traditionally free-trade Bradford woollen industry illustrates this. Moreover free trade is an illusion in the modern world. What does free trade mean to a cotton or soap combine which has a practical monopoly of raw material and the home market? What does free trade mean to an international meat or steel combine, which allocates to its members certain geographical areas and a certain percentage of the sales in the total markets? And remember that the inquiries instituted by the Government immediately after the war brought to light the fact that there is now hardly any important industry which is not controlled in some direction by a federation or central organisation.

Protection is in effect the state support of one industry at the expense of those who pay for the whole cost of administration, that is the capitalist class. Protection or direct subsidies cannot in the long-run overcome the world conditions governing the whole mass of a country’s trade, or better the position of the working class. A subsidy for agriculture, or a bar on the import of agricultural produce (advocated by a section of the Labour Party) will, it is true, stimulate the agricultural industry and lead to the employment of more workers there ? But that is only one of the results. The production of more food at home means a decrease of the import of food products from abroad, and a corresponding decrease in coal or manufactured goods which would ordinarily have gone to pay for those imports. A mere transfer of some miners or cotton operatives to the ranks of the unemployed and the corresponding employment of a number of out-of-work agricultural labourers does not solve the problem of unemployment.

It resembles the emigration schemes which appear to rest on the notion that one can remove unemployment by migrating the unemployed from one country to another. It takes no account of the fact that the problem is a world problem, because this is obscured by certain temporary factors and local peculiarities.

Protectionist U.S.A., which two years ago had six million unemployed, strictly limits immigration, but this has not been the means of fulfilling the late President’s fatuous wish that the boom of last year should be an era of ” permanent prosperity.” Depression is beginning there once more, and during 1922 alone no less than two million farmers and hands had to leave the land and resort to the industrial towns, to swell the unemployed army. Their chief immediate trouble was that there is too much wheat in the world for the capitalist system to dispose of, and yet some of our Labour men still believe that the panacea for agricultural stagnation at home is to grow more wheat!

Canadahas its own problem to face, and cannot even find work for all of a few thousand men who were enticed out there for the harvesting. Unemployment is acute and growing in South Africa, where it is also complicated by the racial hostility between the relatively highly paid (and out-of-work) whites, and the low paid blacks. The South African unemployed actually asked to be migrated to Australia to join the ranks of the unemployed there, many of them want to come “home” to England. South Africa is also asking for immigrants—”with £2,000 capital.”!

France has but little unemployment, because she has remained largely an agricultural country, with a land system of peasant proprietorship. There are relatively few wage-earners, the only ones liable to suffer unemployment, and for some time past French industry, especially textiles, has been doing big trade abroad at the expense of English exporters, owing to the depreciation of the franc. This has led to an amusing clash between one brand of currency-mongers, who want to save us by raising the £ sterling to par, and another brand who can see the millennium in lowering it until Bradford mill owners can undersell French cloths. However, to the extent that French trade prospers and stimulates development of industry (including the Ruhr industries) France, too, will become more and more dependent on the state of world trade, and her growing army of factory workers will be drawn into the pool of, potentially, surplus labour.

It is also quite wrong to suppose that unemployment is a product of over-population. Sir William Beveridge, at the British Association, dealt with this, and quoted elaborate statistics to show that

“Man for his present troubles had to accuse neither the niggardliness of Nature nor his own instinct of reproduction.” — “Daily Telegraph,” 18/9/23.) Unemployment, he said, was ” a function of the organisation and methods of industry, not of its size.”

The British Government has announced its policy of authorising the expenditure of £50,000,000 on relief works for the coming winter. This, in face of the evident hopelessness of expecting any important trade revival in the near future, is merely an admission of the failure of the capitalist class to solve the problem. It is just a form of relief without, what is from their viewpoint, the drawback of idleness, leading to a loss of the habit of work. The capitalists as a whole, and their thinkers and apologists, are in the same fatalistic state of mind as one individual employer who was recently declared a bankrupt. He ascribed his failure to his anxiety not to dismiss some old employees although he had no work for them. He just “hoped” that ” something would turn up.” It didn’t for him, and it won’t for the system as a whole. Nor is there any hope from Labour Governments. Labour Governments in Australia (including the one still left) were just as helpless as any other; they used precisely the same methods to reduce wages when prices fell, and treated the resistance of the workers with the usual brutality. Unemployment is as rife in Queensland as in any other capitalist state, and as little is done for them. In fact the unemployed are better off under our own Government.

The Australian capitalists, like those here and elsewhere, continually have one consideration in mind. At all costs the workers must be kept from determined discontent. First promises, flattery, or the illusive benefits of Labour Governments are tried, then the paltry bribe of relief and doles, and finally, if nothing else will serve, the open violence of the armed forces of law and order.

Our explanation of the problem is simpler than any of these. It may from one aspect be summed up in the statement that the inability of 1 1/4 million British workers to find work although they wish to do so, is due to the frank determination of another million persons not on any account to spoil their pleasant lives by painful toil. You work because it is your only means of getting the means of living. The things you need are the result of the application of your labour to the natural resources, but because these natural resources, along with the railways, the factories and steamships, etc., are privately owned by a small class of wealthy persons, they can and do live without having to work, and they possess the power not only to appropriate the proceeds of your labour, but also when they think fit to prevent you from working at all. In the early days of capitalism these people justified their rents and profits by the services they rendered. But by now they have, as a class, long ceased to render those services. Landowners are no longer the pioneers in agricultural science, they do not lead the way in raising the technique of the industry, or in encouraging their tenants to better methods of production. They lost 35 years ago their last semblance of being a necessary part of the machinery of government, when in 1888 the Justices of the Peace were all but abolished, and their powers handed over to the elected county councils. Industrial capitalists do not now bring brains, enterprise or directive ability to industry; these functions are mainly exercised by salaried officials, members of the working class. Far from promoting economic development, the growing tendency is for the controllers of the chief industries to restrict production in order to save themselves from the world shrinkage of markets. As for the so-called “risks” of capital, it is a commonplace for big business when in difficulties to get the State to help them out and take the risk from their shoulders.

The problem of permanent unemployment arises out of this one fact of private ownership. The owners return to the working class as wages an amount which will purchase only part of the total product. The balance cannot be consumed entirely by the owners and must in any event first be sold. The manufacturer of cotton cloth, for instance, might as well be propertyless as to have on his hands a great amount of unsaleable goods. To sell there must be markets, and owing to the rapid industrialisation of the last 50 years there is now relatively little demand for the manufactured products of the advanced nations.

The competition for the markets causes wars, but far from solving these only aggravate the problem. During the artificial prosperity of war time great strides are made in powers of production, and when peace comes the glut is worse than ever. The Right Hon. C. A. McCurdy, M.P., writing in the Daily Chronicle (14th September) pointed out that the steel industry of this country after the war was developed much above the demand of the market for its products. And it is foolish to suppose that trade depression and unemployment can be avoided by reducing wages or by lowering the cost of production in any other way. The enormous wage reductions in Great Britain which followed the Labour leaders’ campaign for increased production, certainly did not stem the tide of unemployment. And if it were true that lower prices would cause a trade revival, the capitalists are perfectly free now to lower their prices by cutting into profits. They would do so if this policy would lead to a corresponding increase of sales. But the world economic position is such that no reduction of prices would cause any appreciable increase in demand. In fact in many industries (cotton for instance) this has been clearly realised, and the policy is being followed of deliberate and agreed restriction of output in order to raise prices. Sir Charles Macara stated this explicitly for the cotton trade (Business Organisation, March, 1923). He argues that the loss of foreign markets led to cut-throat competition at home without any material growth in home sales. The producers sold no more by lowering prices and merely sacrificed profits. It has been said that the Capital Levy, by reducing taxation, would enable manufacturers to sell cheaper, and thus would revive trade. The argument is fallacious, because it assumes that capitalists who now do not reduce prices, would do so then; ignoring the fact that they could do so now if they wished, and that they would not be compelled to do so then if they did not wish. They do not reduce now because it does not pay to do so, and unless the world situation as a whole were changed, it would still not pay them to do so after a Capital Levy. Assuming a reduction in taxation occurred, only profits would benefit.

If then, as we say, unemployment is a necessary adjunct of capitalist production, there is only one remedy. The workers must deprive the capitalist class of their ownership and control of the means of production. Once made the common property of society, they can be used for the purpose of satisfying society’s needs; not the unstable demands of a market, but the direct human needs of the people.

For the application of this solution only one thing is lacking. The political machinery exists through which the workers can constitutionally express and enforce their will. The knowledge of the productive process in all its branches is contained within the ranks of the working class. But the majority of the workers still support the capitalist system of society. The Socialist party is doing all it can to undermine that trust in capitalism, and it invites the immediate and active assistance of all workers who recognise the accuracy of our contention, that there is no future for our class except in Socialism.

Edgar Hardcastle

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