The Problem of Production & Distribution

More than a century ago Karl Marx made two seemingly contradictory statements:


  It is not a fact that too many necessities of life are produced in proportion to the existing population. The reverse is true. Not enough is produced to satisfy the wants of the great mass decently and humanely . . . It is not a fact that too much wealth is produced. But it is true that there is periodical overproduction of wealth in its capitalistic and self-contradictory form.

(Capital, Vol. Ill, pp. 302-3)


The statements are not contradictory, and both of them are still true.


In the world as a whole and in the separate parts of it there are always masses of people not receiving enough “to satisfy wants . . . decently and humanely”. United Nations sources estimate that in “the developing nations” there are more than 1,000 million people on a desperately low standard of life, of “bare subsistence and sometimes starvation”, and in the industrialized countries, including the United Kingdom, there are large numbers of people on low wages, unemployment pay, pensions or social security payments insufficient to meet the cost of a decent, humane standard of living.


Moreover, as a continuing process, the production of the articles required by these hundreds of millions — food, clothing, shelter and so on — is not sufficient to meet their needs quite apart from the fact that they have not the money to buy what they lack. This is true in spite of the appearance from time to time and sometimes for longish periods of big stocks of goods held off the market; these stocks, to the extent that they are really surplus and not merely necessary reserves, would not be sufficient to supply the continuing massive deficiency.


How to Achieve Double
The periodic overproduction that Marx referred to, one of the inevitable contradictions of capitalism, was that in the normal — recurring — cycle of expansion, boom, crisis and stagnation there arises the phase of products being surplus to market needs because they cannot be sold at a profit. But by far the greatest defect inherent in capitalism is not that surpluses accumulate from time to time but that production itself is held back or halted without any regard to the fact that the unsatisfied needs of the human race are as great as ever. Much of the accumulation of stocks held off the market by companies (often encouraged by government policies) is due to the fall in demand in a depression caused by unemployment: the unsold stocks increase at the same time that the workers’ purchasing power is reduced.


The insufficiency of the wealth produced and the permanent deprivation of masses of the population is not due to inherent technical limitations on mankind’s powers of production. If it were not for the limitations imposed by capitalism the amount of wealth produced would always be greater, indeed very much greater, than it actually is; both a century ago when Marx wrote and at the present time.


Government spokesmen and economists are telling us that total production this year will be 6 per cent, greater than it was last year but that this unusually large growth cannot continue, even if all the output can find buyers, because factory capacity is being stretched to its limit and there is a growing scarcity of skilled workers for certain processes. But this scarcity of plant and of men to operate it is the result of the way capitalism works. Over the whole of the past six years there have been on average 750,000 men and women unemployed. If they had been allowed to work and to be trained there could now have been a much larger productive capacity already in existence.


This is, however, only a small part of the increase of the production of useful articles that could take place if capitalism was replaced by Socialism. Socialism would make it possible to increase the production of useful articles in two main ways; by utilizing the large numbers of able-bodied people not working at all, and by transferring to useful production all those workers now engaged on operations necessary only to capitalism — war and armament production, the armed services, financial, insurance and similar occupations. Overall it would be possible by these means to increase useful production to something like double the present level simply by revolutionizing the basis of the social system.


Mistaken Policy
When the Socialist Party of Great Britain was formed near the beginning of the century to achieve this social revolution it was opposed by various reformist organizations which offered as an alternative the gradualist doctrine of relying on legislation and trade-union action to make continuing progress towards the abolition of poverty and inequality. As regards the concentration of ownership of accumulated wealth in the hands of the small capitalist minority, all their efforts have achieved practically nothing. They cannot claim that any of the social problems they promised to deal with — housing, unemployment, low wages — has in fact been remedied. At most it can be said that some of the worst aspects of poverty have been lessened.


They set themselves to bring about within the capitalist system the twofold objective of increasing the total production of wealth and of securing a less unequal distribution of it, and these two objectives are still at the forefront of their programmes. Distribution of income is somewhat less unequal than it was, though how much is due to the circumstances of British capitalism and how much to the specific efforts of the reformist organizations is a matter for conjecture.


But as regards total production of wealth, all there is to show is an annual increase averaging little more than 1 per cent, a year. In real terms, i.e. discounting the mere increase of prices, the total production of wealth in relation to a much larger population is now only about double what it was at the beginning of the century — an increase no larger than could have been achieved then by going over to a Socialist system of society. They have wasted seventy years.


Edgar Hardcastle