Forum Journal 1955-32 May

Submitted by jondwhite on June 3, 2019

32. MAY 1955

32.1 Capitalism and Technical Progress
In last September's FORUM, F. Evans tells us how the competition of capitals compels an ever-greater raising of the organic composition of capital, which he says means taking on more machinery at a faster rate than the taking-on of hands. This, he adds, leads to greater labour productivity and hence to an increased rate of exploitation. Nevertheless, increased productivity via competition of capitals results also in cheapening commodities and allows an ever-increasing number of use-values to be embodied in the production and reproduction of labour-power; which, it seems, more than compensates for the extra intensity of effort on the part of workers so that their living standards are continuously being raised.
But this process of raising the organic composition of capital, i.e., the increase of constant capital relative to the increase of variable capital, is the means by which capitalism brings into being an industrial reserve army. Now, there is no ineluctable process in accordance with any law of progress which automatically brings an ever-rising organic composition of capital, although from Evans's remarks lie plainly thinks there is.
In actual fact the introduction of labour-saving machinery—the type which has predominated in capitalism—as distinct from capital-saving machinery is dependent on. a number of factors. The primary one is the level of wages existing at the time. If the level is high there will be an incentive to employers to invest in labour-saving machinery, which will again in part depend on the availability and the rate of interest on capital. In the case of an invention which enables machines to be more cheaply produced, the level of wages will be less of a factor. In short, where the reduction in labour costs is greater than the increase in plant costs, the tendency will be to encourage a larger proportion of investment in machine production. It was this which led Marx to make the general statement that the demand for labour-power did not increase proportionally with the accumulation of capital. It increases, but in a constantly diminishing ratio to the increase of capital.
It is, in short, this double action of the introduction of machinery and the appearance of an industrial reserve army that regulates the upper and lower limits of wage levels. It not only ensures that workers' wages will not increase to the point where the whole of surplus value is absorbed, but defines the limit of trade union activity. The history of capitalism shows that the increase in the organic composition of capital, by making workers surplus to existing requirements, increases the competition for jobs and acts as a downward pressure on wages. I am, of course, concerned here with the long-term trends of capitalism. Short-term trends gives a less clear picture, but to go into this would take us too far from the present subject-matter. If then the long-term trend in the raising of the organic composition of capital is to produce downward pressure on wages, how can it at the same time be the means which ensures continuous upward pressure? Unfortunately Evans's purple patches of description have never been blended with the sombre grey of factual analysis.
It may be of interest to note that in England, two crises—the last one in the 19th century and the 1929 crisis—saw prices fall faster than wages. In 1929 prices fell by about 15 per cent, and wages "rjy about 6 per cent.; thus the wage rates of those workers who were in employment rose by 9 per cent., although net earnings probably declined. This rise, however, was offset by the tremendous increase in unemployment and short-time working, so the general standard of living remained roughly the same. This increase in wage rates was not due, however, to increased productivity as the result of increased industrial activity, but to its very opposite.
Now the brief outline given above contains what are generally considered by Marxists to be the main factors which regulate wage levels. Evans does not accept them: instead he substitutes a piece of mechanism which he calls " capital's specific mode of existence." This mechanism is self-developing and self-regulating, and human activity is merely a cog in the process. It may help to retard or accelerate the process but its momentum and direction are given.
Its modus operandi is simplicity itself. Technical development via the agency of the competition of capitals turns out use-values in ever-greater mass and more and more cheaply. Workers get increasingly high standards of living, capitalists ever-greater profits. One can hardly resist saying in the light of this that capitalism takes on the aspect of " all this and Evans too." We are asked to believe that the present economy is one of almost unrestricted technical progress and unlimited markets. In Evans's empurpled language: " Through profusion of cheapening products. .. profit, property, power and politics dig their own grave." Or: " In proportion as productive power panting for profit showers indiscriminately on all an increasing deluge of cheap use-values ... dissolving the power of persons to withhold or bestow . . . changing social relations fundamentally, universally, continuously in the direction of socialism."
To put this rodomontade in sober perspective, the question boils down to this : do increases in productive efficiency bring about a continuous fall in prices which results in an increase in purchasing power? If this is so, then some highly interesting implications are involved. It would seem ifaat an automatic regulation of capitalism is involved. No matter how fast the introduction of labour-saving devices, it would cause no net displacement of workers apart from temporary and unavoidable displacements. The rate of consumption and the rate of industrial expansion would be synchronized. Capitalism—vide Evans—may be based on exploitation but it serves certain social ends. Evans's theory of progress looks suspiciously like the " hidden hand ' of Adam Smith.
In actual fact Evans is asking us to believe mat laissez-faire or cut-throat competition e the rule of capitalism. Such a theory might have had some justification in 1855, but it has none in 1955. The free play of the market which was the outstanding though not exclusive) pattern of early capitalism was being replaced even before the turn of the twentieth century by varying monopolistic forms as the dominant pattern of' market behaviour.
It may be asked, however, whether technical changes influence the price level. The answer is to be found not in facile theories but in actual observation. If we make the assumption—and it is a valid one —that all branches of production improve meir productive efficiency (even if not at Exactly the same rate), then workers may be sacked and the same output achieved at lower costs. In that case, profits would increase. Again, if an effective demand for those goods was still maintained there is no reason why prices should fall. It might be liked: but what happens if there is a fall in the volume of employment? The answer could be that as the result of increased profits more is spent on luxury goods and, as a consequence, more workers employed in such trades and employment restored to the old level.
Again, increases in productive efficiency mean increases in investment and conse-cmendy more employment in the machine-making industry. As a result the demand for other goods will increase and prices will rcse. As I have pointed out in the series
:"Notes on Crises," during the revival times of the business cycle, prices rise. Nevertheless when the building-up process isover workers may become increasingly redundant and this may well constitute downward pressure on wage levels. But, it may be said, will not prices fall? Yes, but so will the wage level. It can be seen then that there is no over-riding compulsion in capitalist society to bring about a continuous fall in prices which ensures a permanent and increasing net gain to consumers.
The best way to test a theory is to find whether it fits the facts and phenomena of reality. Only people with the attributes of divinity can discover truth in the way Evans does. From my point of view, I can see only that any selected period of industrial activity fails to show any marked downward influence on the price level. Take 1924 to 1929, one of the most progressive phases of technical progress in capitalism: apart from the distortion induced by the return to the gold standard, it was a period of rising prices.
Again, in the U.S.A. productive efficiency during those years was increasing by 3 per cent, per annum, yet the price level remained practically stable. According . to the U.S. Bureau of Labour Statistics, based on the returns of 16,000 manufacturing concerns, wages paid out in 1926 were represented by 100. The total fluctuated but was again 100 in 1929. Interest and dividends represented by 100 in 1926 rose continuously to 173 in 1929. While we cannot have the controlled experiment in economics, we can apply certain tests, and the test applied here demolishes the airy assertions of Evans.
Another way is to take wages as a proportion of total income (here I am including only wages of industrial workers—in recent years salaried and professional sections have been included—but it will demonstrate the point). In 1890 the wage bill was 38 per cent. In 1925 it was 42 per cent., but fell to 39 per cent, in 1939. In 1944 it rose to 41 per cent, and in 1954 it was a little under 42 per cent. But, it may be argued, suppose production has continuously increased, then the workers will have got a bigger slice from a bigger cake. Here again, the evidence given in Phases of Economic Depression (published by the League of Nations) showed that productive efficiency in the advanced capitalist countries—including, of course, Britain—had increased by about 1 per cent, per annum. According to Colin Clark it is about the same now. Allowing for depreciation charges and some of the benefits of increased productive efficiency going to the capitalists, it can hardly be maintained that there have been sensational additions to the standard of living.
Capitalism remains a system of organized scarcity, and Evans has not offered the slightest evidence to the contrary. In the next article I propose to deal with monopolies and restrictive practices typical of capitalist society, and attempt to show the relation of capitalist investment to technical progress, which is far more fundamental than the preliminaries stated here.
32.2 From the Government's Economic Survey, 1955
The increase of 351,000 in civil employment . . . was made up of an increase of 267,000 in the working population, a reduction of 64,000 in unemployment and a reduction of 20,000 in the size of the Armed Forces. With the growing number of jobs available unoccupied people went out to work in greater numbers, and the campaign to encourage the employment of older workers may also have helped to swell the working population, which increased by more than in any year since the war.
Manufacturing industry alone took on 258,000 more workers. Most of them went into the metals, engineering and vehicles group, which absorbed 177,000, including about 50,000 in vehicle manufacture and 50,000 in the industries making electrical goods and equipment. There were also increases in the other groups of manufacturing industry, except for textiles and clothing.
Now that nearly two million new permanent houses have been built since the war, local authorities will be increasingly concerned with slum clearance, and provision is made in the Housing Repairs and Rents Act, 1954, for the preparation of five-year slum clearance programmes.
The trend in textile manufacture towards increasing use of rayon and other man-made fibres continued, and output of these fibres, and of fabrics made from them, reached record levels. The total labour force employed in textiles and clothing (excluding footwear) remained fairly steady throughout 1954 at about 1.5 million, which was slightly below the peak reached in 1951. There was a further reduction in the number of unemployed from 17,000 in December, 1953 to 15,000 in December, 1954; tne worst figure reached during the recession was 160,000.
Personal incomes rose sharply in 1954, as in 1953 .. . Wages and salaries increased by 7.5 per cent. Part of this increase was due to the higher level of employment and the rise in productivity, but most of it to higher rates of pay .. . Consumers' expenditure is estimated to have risen by almost the same amount, which suggests that there was little change in personal saving. In each of the last two years between 7 and 8 per cent, of total personal income after tax has been saved.
* * *
The amount of short time worked in the manufacturing industries remained low throughout the year, affecting only one operative in every 200. Overtime working on the other hand continued to increase, particularly in the metals, engineering and vehicles group, and in the last week in November 28.5 per cent, of operatives were working overtime as against 27 per cent, a year before. Average hours worked in manufacturing industries rose from 45.9 a week in October, 1953, to 46.3 in October, 1954.
Estimates relating to the financial position of companies are set out... The increase in gross profits (including stock appreciation, but before providing for depreciation) led to an increase of over £200 million in the total income of companies. Tax payments fell by about £80 million as a consequence of the abolition of the Excess Profits Levy and the reduction in the standard rate of income tax in 1953; on the other hand, dividends are estimated to have increased by about £80 million. Undistributed profits after tax therefore rose by over £200 million.
. . . Nevertheless, it would be wrong to conclude from last year's experience that the rest of the world need no longer be concerned about the level of activity in North America. A recession in the United States more serious or prolonged than last year's could always have serious consequences for other countries, particularly if it were to start at a time when activity elsewhere was less buoyant, and the dollar position less favourable.
In the article " The Socialist Movement " the following italicised words were not printed, spoiling the meaning of the sentences concerned:
Page 127, col. 1, line 27, " the change in the operation of government has become big enough to be given a name— Bureaucracy."
Page 127, col. 3, line 11, "but also of providing creative and socially purposive exercise of the faculties."
Page 128, col. 1, line 23, " a social whole in which the fine products of joyful labour nourish faculties of men."
Contributions to " Forum" should be addressed to the Internal Party Journal Committee, at Head Office. If they cannot be typed, articles should be written in ink on one side of the paper only, and contributors are asked to give their addresses and the names of their Branches. Contributors intending series of articles should give an indication of the scope of their series, not send merely a first article.
Historic Materialism and Modern Times
(Part 2)
In recent controversies in the S.P.G.B. on Mass Production, the Materialist Conception of History and other subjects, there has, of course, been at least one nigger in the woodpile, or genius in the background (depending on your attitude to these discussions) that has influenced a number of members. He has shown himself rarely, though his influence appears to have been appreciable none the less. He is Lewis Mumford, the author of " Technics and Civilisation " and a number of other books, which have undoubtedly influenced a number of the " new look " Socialists.
For that reason alone his work is worth reviewing. Here however, we shall mainly be concerned with his contributions to the subject he calls Technics, and space will restrict consideration to his methods and the main framework of his studies in that field.
His method is to follow his teacher, Professor Patrick Geddes, and divide the last 1,000 years into successive, but overlapping and interpenetrating phases. He explains the significance of this classification as follows: —
" While each of these phases roughly represents a period of human history, it is characterized even more significantly by the fact that it forms a technological complex. Each phase, that is, has its origin in certain definite regions and tends to employ certain special resources and raw materials. Each phase has its specific means of utilising and generating energy, and its special forms of production. Finally, each phase brings into existence particular types of workers, trains them in particular ways, develops certain aptitudes and discourages others, and draws upon and further develops certain aspects of the social heritage."—Pps. 109 and no, " Technics and Civilisation." (All refs. are to the 1947 edition made in Great Britain).
We see that he follows Marx (and he acknowledges his debt) in realising the importance of the techniques of the period. However he does not give it the pride of place found in the materialist conception of history, and he tends to describe and classify, while Marx analysed and searched for causes. Of course in that respect each was typical of his time.
He divided the last 1,000 years into 4 phases, calling these the eotechnic, paleo-technic, neotechnic, and biotechnic respectively. He has defined them as follows: —
" Eotechnic." Refers to the dawn age of modern technics and an economy based
upon the use of wind, water and wood as power, with wood as the principal material for construction. Dominant in Western Europe from the tenth to the eighteenth century. Marked by improvements in navigation, glass-making and the textile industries, from the thirteenth century on: by widespread canal-building and increased utilisation of power and power-machines in the later phase.
" Paleotechnic." Refers to the coal and iron economy, which existed as a mutation in the eotechnic period (blast furnace and primitive railway) but began in the eighteenth century to displace the eotechnic complex, and became a dominant between 1850 and 1890. Key inventions: steam engine, railroad, steamship, Bessemer converter, various automatic devices in spinning and weaving. Up to the last quarter of the nineteenth century the eotechnic economy remained as a recessive.
" Neotechnic." Refers to the new economy, which began to emerge in the eighties, based on the use of electricity, the lighter metals, like aluminum and copper, and rare metals and earths, like tungsten, platinum, thorium, et al. Vast improvements in utilisation of power, reaching its highest point in the water-turbine. Destructive distillation of coal: complete utilisation of scrap and by-products. Growing perfection and automatism in all machinery. Key inventions: electric transformer, electric motor, electric light, and electric communication by telegraph, telephone, and radio: likewise vulcanised rubber and internal combustion engine. At the present time, the eotechnic complex is a survival, the paleotechnic is recessive, and the neotechnic is a dominant.
" Biotechnic." Refers to an emergent economy, already separating out more clearly from the neotechnic (purely mechanical) complex, and pointing to a civilisation in which the biological sciences will be freely applied to technology, and in which technology itself will be orientated towards the culture of life. The key inventions, on the mechanical side, are the airplane, the phonograph, the motion picture, and modern contraceptives, all derived directly, in part, from a study of living organisms. The application of bacteriology: to medicine and sanitation, and of physiology to nutrition and daily regimen, are further marks of this order: parallel applications in psychology for the discipline of human behaviour in every department are plainly indicated. In the biotechnic order the biological and social arts become dominant: agriculture, medicine, and education take precedence over engineering. Improvements, instead of depending solely upon mechanical manipulations of matter and energy will rest upon a more organic utilisation of the entire environment, in response to the needs of organisms and groups considered in their —ultifold relations: physical, biological, social, economic, aesthetic, psychological. Pages 495-6. Culture of Cities. (1944 Edition).
Aluminum, phonograph, and airplane are of course usually called aluminium, gramophone and aeroplane in England to-day.
By telescoping down his descriptions, or definitions as he terms them, something of the fuller exposition is lost, so the reader who desires a more accurate description of the technological complexes should read """" Technics and Civilisation." However, this method has intrinsic limitations in the study of history. History is the dynamic of society. It is the study of the development of society. This classification method of looking at the past is only at best social statics and never social dynamics. It is like taking four still photographs, as against the record of a cine-camera. He describes each period, or technological complex, as if in equilibrium. His analogies come from static sciences like geology, where we consider the strata as results of biological evolution, rather than biology, where the mechanisms of evolution are considered. In fact though he predicts a biological age, biology appears to be rather a closed book to him.
He has also shown a partiality to writing of the need for an integrated view of society. An example is the passage quoted on the front page of FORUM of August, 1954, by S.R.P. Unfortunately he does not use the concept of integration effectively when he analyses society. He writes of considering society as an organism, but instead of using that approach, to get the, best out of the classification method, and writing of each of his1 phases in turn, he writes as if it is sufficient to consider the evolution of each aspect of society in turn, and so rather in isolation. Thus he writes four histories on different subjects, or aspects of society, technology, cities, etc., in turn, calling the books: 13 Technics and Civilisation; 2, The Culture of Cities; 3, The Condition of Man; 4, The Conduct of Life; instead of writing a book on each "technological complex,1 considering each aspect of the complex in turn, and then showing the integrated view of the phase, as an organism, how the factors interact, how the era came into being, and how it prepares the way for the next phase. For after all, as Plekhanov wrote: —
" Men do not make several distinct histories—the history of law, the history of morals, the history of philosophy, etc.—but only one history, the history of their own social relations, which are determined by the state of the productive forces in each particular period. What is known as ideologies is nothing but a multiform reflection in the minds of men of this single and indivisible history.—The Material Conception of History. New York (1940), Page 48.
It is important to consider the subject of our study, in this case society, in an integral fashion, but it is even more important not to merely pay lip service to the method, but to use it. It is not, in essence, novel, for it