Finance & Industry: Distress in the U.S.A.
There is no one in so much of a hurry as an Opposition politician demanding opportunity to clean up the mess made by an outgoing government—until he gets in, then the plea is for more time. The slump in Canada, the growing depression in U.S.A. and the troubles of the motor industry in Britain and most other countries will give plenty of scope for this kind of evasion by delay. The form it will take will be the demand for more information, the setting up of committees of inquiry, urging employers to be more enterprising and workers to work harder and strike less.
Nearly everyone concerned behaves and talks as if the overproduction of cars and the unemployment of car workers is something strange and surprising, something never before seen by mortal eye, yet in its essentials it is exactly what has happened before in that and every other industry at intervals for a century and a half.
From America a correspondent of the Financial Times (13/2/61) reports towns such as Welch, West Virginia “where 28 per cent of the labour force lacks work” and in which unemployment has been continuous for several years. In the area named it is due to the decline of the coal industry but not all of the “distressed areas” owe their troubles to the growth of rival fuels.
It reads like the years of misery between the wars to note the American government introducing a Bill to provide large sums of money to help depressed area development, and to read further that “there are widespread doubts whether its proposals, any more than the past efforts of the districts involved, can meet the problem “.
Mr. Kennedy has set himself the formidable task of promoting an expansion much more impressive than that which followed either the 1953-54 or the 1957-58 recessions. It will otherwise be impossible to absorb today’s unemployed plus new additions to the labour force and workers displaced by the onward march of automation. But even if more of their unemployed find work elsewhere and the Douglas Bill produces some new industry, the depressed areas will inevitably lag far behind the rest of the economy. The long-term answer may lie in the massive development of a whole region pioneered by the Tennessee Valley Authority, but Mr. Kennedy, with enough economic problems on his plate already, will doubtless wait before plunging into new projects on this scale.
Labour Saving Machines
Because machinery does reduce the total amount of labour required to produce an article, or does get rid of particularly hard or unpleasant work, the fiction is often asserted and believed that these are the purposes for which new machines and new processes are introduced.
In fact the manufacturer is interested in making more profit by reducing costs, and to achieve it he will pay little regard to the convenience of the worker and will be prepared to waste labour if that suits his end.
How little the convenience of the worker counts is shown by the extent to which the use of more expensive machinery and plant in recent years has led to an increase of night and shift work regardless of its effects on health, for the employers’ interest is to avoid having costly machinery standing idle for two-thirds of the 24 hours. Mr. Charles Timaeus, in Reynolds News (12 Feb. 1961) had this to say: —
“I quoted recently from an OEEC investigation into the bad effect on health of shift work. Now comes a second, survey—from the Max Planck Institute for Industrial Hygiene in West Germany. It shows that something like two thirds of workers on alternate shift working suffer from disturbed sleep, disturbed family life, unstable moods and disturbed appetite, half from increased blood pressure; one-third from stomach troubles, a quarter from heartburn.
Percentages for those on permanent night-shift, whose rhythm of life is less disturbed, are generally slightly lower, except for stomach trouble which affects half.”
As regards labour saving, industry in all countries gives innumerable examples of work being carried on by methods which take up much labour in spite of the existence of machines arid processes by the use of which labour could be saved. Marx noted this a century ago and it is still to be observed. He remarked on the seemingly inexplicable happening that labour-saving machines would be produced in one country and not used there but sold in other countries. The explanation was and is that he employer is not interested in the amount of labour he uses but in the cost of the labour-power he pays for, remembering of course that in buying the workers’ mental and physical energies at their value he is obtaining some unpaid labour. If wages in a particular locality or industry are depressed below value it pays the employer to use much cheap labour rather than install improved machinery which will use less labour but at greater cost.
It is only when wages rise to, or above, the value of labour-power that the employer will find it pays to “save labour”’. As a writer in City Press (3 Feb. 1961) puts it when explaining how “high wages” have caused a boom in the industry producing vehicles and equipment for the mechanical handling of materials, “this is the age of mechanisation in industry, of recognition that in his new found prosperity, the working man is a valuable property to be used with the utmost economy“. (Italics ours.)
Of course if wages began to fall under pressure of unemployment the worker would no longer be “valuable property to the employer and the latter’s interest in labour-saving would diminish.
Among other actual happenings under capitalism is that when rival manufacturers are racing to be first to flood a particular market, speed becomes more important than cost and it may pay one of them to use a faster but more costly method of production if it enables him to have his commodity first in the field.
Marx dealt with machinery and labour-saving in Capital Vol. I Chapter XV, (see particularly Section 2) and remarked incidentally on the very different scope for the use of machinery there would be under Socialism than under Capitalism.
American Fears
International politics can never for long present a simple choice of issues for governments. To start with, each government is likely to have behind it rival interests each wanting its own line to be followed. Then as soon as one problem is settled others emerge which may require that the ancient friends shall become enemies and enemies become friends. Added to which, alliances are formed because of the greater strength that comes from unity—but no country wants any one of its allies to become too strong. All of which leads up to the new line that seems to be emerging in U.S.A. -European relationships.
After the war it was the American government that took the lead in trying to get Europe to unite so as to form an economic and military group strong enough to stand up to Russia. Europeans were invited to consider the absurdity of European frontiers and customs barriers and to note what strength would come from a single European market in which large blocks of capital would have room to operate efficiently.
But now that the European Economic Community is a fact for the six countries France, Germany, Italy, Holland, Belgium and Luxembourg, some American interests are becoming as worried about European trade competition as are some British industries which see their continental sales in danger. The City Editor of the Sunday Times (12/2/61) has detected that America’s new President while closely following the lines of a report that he made use of in preparing his statement to Congress on economic policy, omitted one passage which read: —
“It is particularly important to try In prevent the ‘Common Market’ concept, now taking form among various countries, from becoming a focus of trade discrimination unfavourable to us.”
The City Editor does not doubt that Kennedy shares the report’s apprehension and omitted it only because it might give offence.
Of course the problems presented by this single European market can be lessened for U.S.A. and British capitalists by operating inside the customs wall, but this means a double investment of capital.
A “Communist” solution
THE Daily Worker (30/1/61) published an interview with Mr. Dick Etheridge, chairman of British Motor Corporation Joint Shop Stewards Committee, who organised a deputation to M.P.’s at Westminster, and is a member of the Communist Party. His remedy is to export more cars and commercial vehicles to Africa, India, China, the Soviet Union “and other Socialist countries”. His idea of what constitutes Socialism is indicated by the further remark that “even if we achieved Socialism tomorrow we’d still have to sell some of our current passenger-car production to those countries, and they’d want to buy it if we made it easy enough for them to do so “.
The interview did not mention that Russia is itself an exporter of cars and commercial vehicles but did indicate the way in which Mr. Etheridge thinks Russia and other countries could be induced to import British cars, i.e. that the British government “must advance big credits to them so that they can buy our goods “.
Perhaps if the Russian government were to “advance big credits” to unemployed British motor workers they would buy some Russian cars too.
H.