1970s >> 1977 >> no-875-july-1977

A Better Kind of Capitalism

    “He is considered the most graceful speaker who can say nothing in most words.”

    Samuel Butler, Notebooks.

At a meeting of business men in San Francisco recently, two speakers put forward their views about the American economic system. They were Michael Harrington, author of The Twilight of Capitalism and the  widely-read Socialism, and Fletcher Byrom, chairman of the board of the Kopper Corporation, a thriving industrial enterprise. Their suggestions for solving American capitalism’s problems turned out to be remarkably similar. Only their descriptions of their views were different.

The debate was reported in the New York Times of 5th May. Harrington, described his standpoint as a “democratic socialist” one, while Byrom’s word for his projected future society was “technocratic”. The symmetry of their proposals makes clear that one or other was using words wrongly; or was it both of them?

Harrington claimed that the American system has undergone changes away from “free-enterprise capitalism” and in the direction of “collectivism”. Byrom argued that, with increased mechanization and automation, making people work hard was less important than organizing society better through government.

Both speakers agreed that there is something wrong with the present management of American society. Both proposed, to solve America’s problems, a better planned administration. In spite of Harrington’s description of the present order as “welfare decadent capitalism”, neither saw the cause of the problems as capitalism itself; both blamed the inefficient use of government resources.

Thus, Harrington’s “democratic socialist” programme included “increasing public sector employment, redistributing wealth towards the poor, and social control of investment in the United States”. And Byrom’s “technocratic” solution included the following measures: “longer terms in office for elected politicians, improvements in health delivery systems, inner city schools and other social programmes to reduce unemployment”.

The reforms suggested have nothing whatever to do with Socialism. On the contrary, increased state intervention is something required by capitalism. Harrington’s ideas are those of a section of the Labour Party, who claim to be able to “reform away” capitalist evils; but they also belong to a school of thought whose roots lie in a book published in 1940 called The Managerial Revolution. Its author, James Burnham, claimed that capitalism was being superceded – it was no longer the owners of capital who controlled society but the “managerial class”: salaried executives, engineers, managers and civil servants.

None of these doctrines is correct or provides an understanding of what takes place in the capitalist system. It is based on the ownership – which may or may not be synonymous with control – of the means of living by a class. Wealth takes one form only: commodities, or articles produced for sale at a profit. In some cases distribution, including transport and communications may need to be centrally organized virtually from the outset: the roads and postal system were “nationalized” at a very early stage in capitalism. In others, the production of basic materials such as coal, electricity, iron and steel eventually appears too important to capitalism as a whole to be left to “free enterprise”, and the state takes control of them; or, as with agriculture, provides money and lays down conditions to ensure production in line with national policies. All this is necessary capitalist practice.

At the same time, the state is obliged to legislate in what are called “social” matters on behalf of the capitalist class as a whole, or dominant sections of it. The working class has to be educated. Beyond a minimum general standard, the introduction of more complex machinery requires workers with technical skill and scientific knowledge. The state has to intervene (e.g. the central aim of Polytechnics is to co-operate with industry and to serve its needs). Subsidies and controls are used to keep wage demands in check; medical welfare, to minimize the losses to industry through illness; and so on.

The measures advocated by Harrington and Byrom are part and parcel of the profit system. For example, “increasing public sector employment” happens as a matter of course – at certain times. They have nothing to do with a change away from capitalism, and therefore (vis-a-vis Harrington’s use of the phrase “democratic socialist”) nothing to do with Socialism.

One last question on Harrington’s contribution. He argues for “redistributing wealth towards the poor”. It sounds humane and unexceptionable, yet it betrays lack of comprehension of what capitalism is about. Why does he think they are poor? They are, of course, wage-workers and the dependents of wage-workers, or the unemployed ones. In a book called The Other America: Poverty in the United States, published in 1962, he spoke repeatedly of “cheap unorganized labour” as the basic problem. But the working class as a whole is condemned to poverty, differing only in the degree of it. Apart from charitable handouts, there is no means for workers to get wealth “redistributed towards” them (whatever that means).

They can and will struggle for higher wages and improved living standards, and the capitalist class at times finds itself forced to pay higher wages for labour-power. The fundamental wage-labour relationship which is the cause of poverty remains. Attempts to redistribute wealth by reform legislation have been going on for a lifetime in Britain – and the reformers now admit that they have failed. In The Other America Harrington calls poverty “needless”, as if it were the result of carelessness or mismanagement. As long as he thinks that, he is not thinking of Socialism.

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