Edgar Hardcastle

Some Observations on Production and Productivity

Source: Socialist Standard, September 1934.
Transcription: Socialist Party of Great Britain
HTML Markup: Adam Buick
Public Domain: Marxists Internet Archive (2010). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

In the August issue reference was made to the comparative slowness with which industrial productivity increases. (See “This Age of Plenty.”) As that statement runs counter to a widespread belief, it will be worth while setting out some of the relevant factors in order to justify the conclusion arrived at.

First of all, let us look at the claims made by those who believe that we have entered into an age of astounding productivity, an “age of plenty.”

The American group who call themselves “Technocrats” claim that the output per head of the workers in industry has increased thousands of times within a comparatively short period. Then Mr. J. L. Hodgson, author of “The Great God Waste” (see review in July SOCIALIST STANDARD), claimed in a broadcast talk delivered on April 17th, 1934 (obtainable from Mr. Hodgson at Eggington, Beds., at 2d. a copy), that “we have devised machines which speed up output per man of such things and processes as shoes, flour, pig-iron, bricks, ploughing and reaping, from fifty to three thousand times.”

In “The Great God Waste,” Mr. Hodgson tells us that the tractor and combined harvester and thresher “have during the last fifteen years increased the daily output of the wheatfield worker by some seventy fold&38221; (page 10); and that his experience has revealed to him “a vast and continuous increase in both industrial efficiency and in actual productive capacity” (page 9). These two statements appear in a section headed “Our Immense Potential Productivity.”

Mr. H. Norman Smith, prospective Labour Candidate for Faversham, writing in Forward (August 11th), claims, in complete seriousness, that mechanical progress has gone so far in the direction of increasing output per head that we are within measurable distance of “one immense robot factory, employing no workmen at all,” which “can deliver an unending stream of all the goods mankind needs.”

Black-shirted Sir Oswald Mosley, ever greedy to appropriate the more spectacular theories of his former Labour Party associates, now shares this “age of plenty≵ notion with his green-shirted Douglasite opponents. In his “Greater Britain” (1934 edition, page 61) he says that “Science, Invention, Technique, have recently increased the power to produce out of the range of all previous experience.”

There is no need to multiply instances, they abound in the journals published by the Technocrats, the Douglasites, the Mosleyites, the I.L.P. and the Labour Party. (The Communists, at least in Great Britain, have taken a sounder line on this question, due perhaps to Russian industrial experience.)

Now let us indicate what would be some of the results if these astounding increases of productivity had occurred.

First, it is obvious that if the output of each worker increased enormously, then a given number of workers would produce an enormously greater total output. On the other hand, if the total output were not increased, then the number of workers needed to produce the former total output would be enormously decreased.

By applying that test to industry we can at once dispose of one group of believers in an “age of plenty,” viz., the group that believes this enormous increase of productivity has actually been utilised in industry, in the direction, not of decreasing the number of workers, but of enormously increasing the total product. They can be shown to be wrong, because no such enormous increase has taken place. In Great Britain several reliable inquiries agree that only a very moderate increase in total output occurs year by year.

For example, in 1928 The Economist published “A British Index of National Prosperity,” by Mr. G. D. Rokeling, with a commendatory preface by Sir Josiah Stamp. Mr. Rokeling estimated the annual changes in the amount of “real national income” per head of the population. It is a little difficult to explain briefly what “real national income” meant in this connection, but roughly it represented the amount (not the value) of production of all kinds during each year. Although the final index included also income from abroad, and income from abroad had increased very rapidly, Mr Rokeling showed that the “real national income” per head of the population in 1927 was only four per cent, greater than it was in 1920, while in the intervening “crisis” years, 1921 to 1923, it was actually very much less than in 1920. Mr. Rokeling later extended the index to the year 1929, by which year there had been an increase to eight per cent, above the level of 1920, giving a total increase of only eight per cent, in nine years.

A second set of figures to support the view here put forward, is provided by the London and Cambridge Economic Service, which compiles an index of the “physical volume of production,” covering all the chief groups of manufacture, mining, food production, etc. This index at its peak (end of 1929) reached to only fifteen per cent, above the level of 1924. It then declined in 1932 to a point nearly twenty-five per cent, below the level of 1924, and did not reach the 1924 level again until 1934. (See Royal Economic Society September Reports on Economic Conditions. Memorandum No. 46, April, 1934.)

Estimates compiled by the Board of Trade, and others, give a similar picture. Our first conclusion is, therefore, that even during a period of more or less continuous expansion of production and sales, such as that from 1924 to 1929, the total output of industry increased by only a small percentage; in the above instance an average of two per cent, or three per cent, a year. (At certain periods, and in other countries, a somewhat larger increase has been estimated, but still of a quite moderate size. Some American figures suggest an increase of factory productivity of about five per cent, a year.)

Is Labour Still Needed in Production?

We now come to the second line of defence of the believers in an “Age of Plenty.” The Technocrats, and others, say that productivity per head increases, but not the total volume of production, because fewer and fewer workers are being employed in production. Thus one of the Technocrats, Mr. W. W. Parrish (New Outlook, New York, November and December, 1932), claimed that “man-hours per unit of product and the labour cost per unit have dropped in recent years to levels approaching zero.”

Mr. Norman Smith says (Forward, August 4th, 1934) that “mechanical invention steadily reduces the number of man-hours in production,” so much so in fact that, as we have already seen, Mr. Smith is contemplating the idea of wealth production by machines without workers. He wants the Labour Party to consider dropping its name because there isn’t any “labour” any more, while the Douglasites try to make our flesh creep with threats that “soon ?how soon, nobody knows; Major Douglas has been playing fat-boy for at least twenty years and his “theories” are a century or more old?all the workers, except a mere handful, will be unemployed.

The Census of Production Figures (Board of Trade Journal, February 16th, 1933) are a complete answer to this superficial view of industry. Those figures show that between 1924 and 1930 the total number of persons employed in factory trades, building and contracting, and mines and quarries, did decline, but not by the vast numbers assumed by the Technocrats and others. The decline was from 6,411,000 to 6,013,600, a total decline of only 397,400, or six per cent.?an average of less than one per cent, a year.

The same Board of Trade inquiry shows that in the six years the total volume of manufactured goods decreased by two per cent., while the number of workers in manufacturing industries alone declined by about five-and-a-half per cent.

Again, the Ministry of Labour Gazette, in December, 1933, published figures showing the number of insured workers actually in employment, divided into separate groups according to industry. For the whole group of manufacturing industries the number employed in June, 1933 (in spite of the depression and consequent low output), was within one per cent. of the number at June, 1923. (The number of workers in transport, distribution, building, etc., and also the number of workers in all insured trades increased between 1923 and 1933.)

Perhaps the most convincing disproof of the theory of rapid displacement of workers can be gained by examining an industry?the boot industry?in which, according to these theorists, some of the most striking mechanical developments have occurred. Attack, organ of the green-shirt Douglasites (June, 1934), for example, gave figures purporting to show a vast increase in productivity in the manufacture of boots and shoes. Yet when we look at the number of workers employed in this industry we find that between 1923 and 1933 the decline was actually less than two per cent. (Ministry of Labour Gazette, December, 1933.)

It will take more than two per cent, in ten years to set the Douglasite Thames on fire.

Or take agriculture, the industry in which, so Mr. Hodgson believes, the productivity of wheat-field workers has increased seventy-fold. Between 1923 and 1933 the number of persons employed in agriculture decreased from 772,387 to 715,100?a decrease of seven-and-a-half per cent, in ten years, less than one per cent, a year. (Statistical Abstract, 1934, page 259.)

Before leaving this question of the development of labour, it is interesting to notice how easily the careless use of figures can mislead. At the Conference of the Boot and Shoe Operatives’ Union, on May 21st, 1934, the census of production figures were given quite accurately and legitimate conclusions drawn from them. Several newspapers and propaganda journals, however, seized upon the figures and presented them as proof of the great increase in productivity. Actually the figures pointed to an increase of productivity per worker of less than three per cent, a year, from twenty-two pairs a week in 1924 to twenty-six pairs in 1930.

Incidentally, as the Technocrats have been responsible for much of the nonsense written about productivity, it is as well to remember that their figures have been discredited. When The Economist (London, March 18th, 1933) reviewed Raymond’s “What is Technocracy?” they agreed with his conclusion that the Technocrats’ figures were “wildly inaccurate,” and their researches “worthless.”

Does Waste Increase?

Some of the “Age of Plenty” warriors have still a third line of defence. Productivity does increase very rapidly, they say, but this is offset by a colossal wastage. Mr. J. L. Hodgson claims that “wealth and amenities do not increase one-tenth as fast as they would do if the hidden leaks could be discovered and stopped.” (”Great God Waste,” page 14.)

He went on to say that the effect of these “leaks” more than doubled during a period of a few months last year.

Now before looking for the fallacy in this argument, let us be clear about two distinct ways in which it could operate: (a) in industry itself, and (b) outside industry.

The first assumption (increased waste in industry itself) would work out as follows: Great increases in output per head assumed in each industry, but instead of sacking the redundant workers, or increasing the total output of industry, the employer allows (or is deceived into allowing) the redundant workers to be carried as “passengers” Thus the increased output per head of some of the workers would be offset by the fact that the rest of the workers idled away their time doing nothing. Now that would be one way of explaining how an increase in productivity per head could be offset by a growing “wastage” inside industry, and to some slight and temporary extent it may actually happen. In general, however, nothing of the kind is permitted to occur. Employers do not allow their workers to spend the day amusing themselves.

To be quite fair to Mr. Hodgson, he at least does not offer this as an explanation of the way in which the total output of industry fails to reflect a supposed increase in output per head. He would no doubt agree with us that if a boot manufacturer found that he could turn out as many boots with only one-tenth of the men (and assuming that he could not multiply his sales by ten) he would promptly sack the other nine-tenths.

We all know that the employers and their managers and foremen, and the scientific “sweaters≵ who form so-called industrial-psychology organisations, never cease to seek out ways of economising and increasing efficiency, and reducing staff.

Mr. Hodgson says that he has had much firsthand experience of one aspect of this economising process, and he readily admits that, so far from there being an increase in waste inside industry there is a constant decrease.

In order then to support the theory that an enormous increase in output per head is offset by an enormous increase of wastage, we must seek this wastage outside industry, not inside.

Mr. Hodgson tries to do this. He mentions many obvious instances of “wastage” (known to , Socialists for generations), such as unemployment, destruction of goods, war, advertising, etc., and out of this he constructs his theory of “leaks” which result in wealth increasing only one-tenth as fast as it otherwise would do.

Unfortunately, Mr. Hodgson does not show in full how he arrives at his estimate of the total amount of “wastage,” and when he does give details he exhibits a carelessness which does not encourage us to accept the rest of his estimate with any confidence.

On page 20, for example, he says that unemployment is three millions, plus another million temporarily stopped; being unaware apparently that the first figure already includes those temporarily stopped.

However, that is by the way. The main point is that even if Mr. Hodgson’s estimates of the volume of wastage were accurate they are not what is required to prove his case. His theory of a constant nullification of rapidly increasing productivity in industry, demands not merely evidence of large waste outside industry, but of rapidly increasing waste. He does not supply this and does not even attempt to do so in spite of being challenged several times on the point.

He has not done so for the very good reason that he cannot. No such enormous increase in wastage occurs. Both that and the alleged enormous increase in industrial productivity are myths.

It is probable that during a period of capitalist expansion following a crisis, “wastage” both inside and outside industry decreases as a whole, owing to the decrease of unemployment which is one of the largest components of the latter kind of “waste.”

We may sum up our analysis by saying that productivity per head of the workers in any established industry, and the total output of industry as a whole, are increased by inventions, machinery and new processes, but only at a comparatively slow rate.

In conclusion, it may be noticed that these “high-productivity,” “age of plenty,” “production without labour” theories, are typical by-products of each capitalist depression, born of crisis out of ignorance; just as the contrary nonsense of the Malthusians has its heyday during each period of capitalist expansion, when we are asked to gaze on the horrid prospect of famine through population increasing faster than our means of subsistence.