Unemployment: A Chronic State

When it was announced that the number of unemployed in Britain had reached 1¼ million, the Minister for Employment described the figure as “intolerable”. This apparently meant he would not put up with it a day longer. However, that was before Christmas, and nothing has happened. The question is: what will the Minister (who is Michael Foot) do about it — or, more accurately, what can he or anybody else do?


It is interesting to recall the allegation by Harold Wilson when unemployment rose to 1 million under the Tories in 1972. Pointing out the large number who do not register as unemployed, he said the true figure was “nearer three million” (Financial Times, 8th April 1972). He is not now repeating this, but it has always been the case. Moreover, the people living on unemployment pay include not only those registered but their dependants. In The Road to Wigan Pier, published in 1937, George Orwell says: “A Labour Exchange officer told me that to get at the real number of people living on (not drawing) the dole, you have got to multiply the official figure by something over three.”


Up to 1939 the existence of a million unemployed was regarded as normal. In the inter-war years this was about 7½ per cent, of workers. However, throughout those years it was above that level. In 1919 and 1920 it was 2.4 per cent., but in 1921 rose to 16.6 per cent, and thereafter remained at 10 or 11 per cent, until 1930. In that year it was 15.8 per cent., and in 1932 went up to 21.9 per cent., or 2,745,000 persons. According to The Ministry of Labour Gazette in February 1940, about a quarter of the unemployed in the inter-war period were out of work for at least a year; and of these, 22.1 per cent. were unemployed for five or more years.


Figures for earlier periods are less reliable because, prior to the Unemployment Insurance Acts of 1911, they came almost solely from those trade unions which paid unemployment benefits to their members. From the middle of the 19th century the returns (made to the Board of Trade) show an average rate varying between 2½ per cent. in boom years and 7½ per cent. in bad times. Since they represent chiefly unemployed workers in the best-organized trades, the inference to be drawn is that the position in total numbers was similar to that from 1920 to 1939.


Before the Labour Party fell into the hands of the Keynesian doctrine, it accepted that unemployment could not be eradicated under capitalism. In The Book of the Labour Party (1924) Sir Walter Citrine listed various measures seeking “to alleviate the worst effects of the industrial and economic system”, but said:

We are compelled to realize, however, that by no expedient we may devise, short of the abolition of capitalism and the socialization of the means of production, distribution and exchange, can the unemployment problem be permanently solved.

 Of course this muddled statement shows that Citrine, like other Labour leaders, never understood Socialism. Nevertheless, he knew better than to say the level of unemployment was “intolerable” under government by his party.


The present figure, representing about 5 per cent. of a labour force double what it was before the war, appears less dire than the pre-war ones. We do not know how much higher it may go. In each of the trade depressions since 1950, unemployment has risen to more than the previous time. The full extent is masked in various ways besides the non-registration of numbers of unemployed. The government policy of “putting money into” firms like Chrysler which are victims of the depression amounts simply to providing wages for workers who would otherwise draw their money as unemployment pay. Insofar as Chrysler continue producing cars as a result of this subsidy, the outcome must be unemployment in other car firms in this country as well as abroad; obviously the government is buying time, hoping a general recovery will begin first.


Some post-war social reforms also have the effect of keeping down the numbers of registered unemployed. Before the war the school-leaving age was 14 and is now 16, and more now remain at school and attend colleges after that: a high proportion of over-fourteens would otherwise be out of work. This may be thought a favourable reflection —reform as a means of checking unemployment; but it acts in that way only partly. School-attenders are dependent on “heads of families”. In times of heavy unemployment they are held back from swelling the numbers as compared with pre-war, but they add instead to the larger mass who are unregistered but living on the dole.


The thirty years since the war provide an object lesson to end the supposition that capitalism can exist without its normal consequences. During the war the Tory, Labour and Liberal parties agreed with one another that Keynesian policies would make full employment and economic stability certain. As the post-war era has gone on, there has been a series of increasingly frantic rearguard actions to cover the failures of those policies. The present Labour administration is in a particularly acute dilemma as the result of its efforts to control capitalism. It is urged on all sides, and is itself conscious of the need, to reduce the government spending which has produced inflation. Yet if it does so — if, for instance, it refuses to put money into crisis-hit firms and cuts services like education — unemployment will go still higher.


That is not to say other kinds of policies would do better. On the contrary, Keynes was followed because capitalism’s incessant lurching from boom to slump, and the running sore of unemployment, made political disasters. The fact is that the capitalist system is incapable of anything else, and so long as it continues the working class cannot hope for security and freedom from want. Let us spell out the position. Under capitalism the great majority are called the working class because they own nothing of the means of production and distribution and so are forced to sell their labour-power to those who do. The wage they get is a commodity price: workers can never be better off than that.


But because capitalism produces only for sale and profit, stability is impossible for it. Investment in industry reflects the state of trade. In bad times production is reduced or stops, and the workers are out of work. There is nothing a government can do to change this. Workers themselves can, however. They can view this state of affairs, and decide that employment and unemployment alike are intolerable — that capitalism must end and be replaced by a system of production for use.


Robert Barltrop


As we go to press, it has been announced by the Government that the total of unemployed (20th January 1976) has risen to 1,430,369, or 6.1 per cent. of the work force.